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ROCKVILLE, MD - MacroGenics, Inc. (NASDAQ:MGNX), a biopharmaceutical company specializing in cancer therapeutics with a current market capitalization of $103 million and an overall "Fair" financial health rating according to InvestingPro, announced today it has entered into a royalty purchase agreement with Sagard Healthcare Partners. The deal grants Sagard a capped royalty interest on future global net sales of cancer drug ZYNYZ (retifanlimab-dlwr) in exchange for an upfront cash payment of $70 million to MacroGenics.
ZYNYZ, a PD-1 inhibitor used in certain cancer treatments, was developed by MacroGenics and licensed globally to Incyte in October 2017. Despite the sale of royalty rights, MacroGenics will maintain other economic interests in ZYNYZ, including potential future milestones and a role in commercial manufacturing.
Under the terms of the agreement, Sagard will receive royalty payments until a total of $140 million is reached, double the initial investment. Following this, MacroGenics will once again collect all future royalties from ZYNYZ’s global sales.
The financial injection from Sagard, combined with MacroGenics’ cash balance of $154.1 million as of March 31, 2025, and anticipated revenue streams, is projected to extend the company’s cash runway through the first half of 2027. With a healthy current ratio of 3.28 and more cash than debt on its balance sheet, as highlighted by InvestingPro, MacroGenics plans to invest these funds into ongoing clinical and preclinical programs. However, investors should note the company is currently burning through cash rapidly, with negative free cash flow of $72.4 million in the last twelve months.
ZYNYZ is currently indicated for use in combination with chemotherapy for certain squamous cell carcinomas and as a single agent for cases where patients show disease progression or intolerance to chemotherapy. In the U.S., it is also approved for treating advanced Merkel cell carcinoma, under accelerated approval contingent on further clinical validation.
Sagard Healthcare Partners is part of the larger Sagard Holdings, a multi-strategy alternative asset management firm with a global presence and over $25 billion under management.
This agreement, detailed in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission, signifies a strategic financial move for MacroGenics, allowing it to sustain operations and advance its pipeline while sharing the commercial success of ZYNYZ with its investment partner, Sagard. The stock, which has shown significant volatility with a beta of 1.63, currently appears undervalued according to InvestingPro analysis, which offers comprehensive research reports covering 1,400+ US stocks, including detailed financial health metrics and expert insights.
The information in this article is based on a press release statement from MacroGenics.
In other recent news, MacroGenics announced its fourth-quarter 2024 earnings, reporting a smaller-than-expected loss per share of -0.07, compared to the forecasted -0.40. The company’s revenue for the quarter reached $49.4 million, surpassing the expected $29.19 million. This strong performance was primarily driven by collaborative agreements, contributing significantly to the total annual revenue of $150 million in 2024, up from $58.7 million in 2023. Meanwhile, H.C. Wainwright adjusted its price target for MacroGenics, reducing it to $2 from $4, following the company’s decision to halt the development of its drug candidate vobra duo. Stifel also revised its price target for MacroGenics to $5 from $6, maintaining a Hold rating, while emphasizing the potential impact of upcoming clinical trial results for the drug lorigerlimab. Additionally, Citizens JMP reiterated a Market Outperform rating on MacroGenics, highlighting the potential for strategic partnerships that could enhance the company’s value. MacroGenics continues to advance its clinical pipeline, with several trials in progress that could influence investor sentiment and the company’s strategic direction.
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