ROCKVILLE, Md. & DEERFIELD, Ill. - MacroGenics Inc. (NASDAQ: NASDAQ:MGNX) and TerSera Therapeutics LLC have announced an agreement granting TerSera global rights to the cancer drug MARGENZA® (margetuximab-cmkb). The deal, which is expected to close in the fourth quarter of 2024, includes an upfront payment of $40 million from TerSera to MacroGenics, with potential sales milestone payments totaling up to $35 million.
MARGENZA, an FDA-approved treatment for adult patients with metastatic HER2-positive breast cancer, was developed by MacroGenics as an antibody-based therapy. The drug is indicated for patients who have undergone at least two prior anti-HER2 regimens, with one for metastatic disease. It was approved in December 2020, following a pivotal Phase 3 clinical trial that demonstrated its efficacy in comparison to Herceptin® (trastuzumab), both in combination with chemotherapy.
MacroGenics' President and CEO, Scott Koenig, M.D., Ph.D., expressed confidence that TerSera's established U.S. commercial infrastructure would expand patient access to MARGENZA. Edward Donovan, CEO of TerSera, echoed this sentiment, highlighting the importance of MARGENZA in treating metastatic HER2-positive breast cancer and its addition to TerSera's oncology portfolio.
The safety profile of MARGENZA includes a boxed warning for left ventricular dysfunction and embryo-fetal toxicity. The drug has been associated with potential reductions in left ventricular ejection fraction, requiring evaluation of cardiac function before and during treatment. Additionally, exposure to MARGENZA during pregnancy can cause harm to the fetus, necessitating effective contraception for women of reproductive potential.
The acquisition aligns with MacroGenics' strategy to focus on advancing its pipeline of oncology product candidates. TerSera, recognized as a 2024 Healthcare Top Workplace, continues to expand its presence in the oncology and non-opioid pain management sectors.
This news is based on a press release statement and provides a factual account of the agreement between MacroGenics and TerSera for the acquisition of MARGENZA. The transaction is subject to customary closing conditions, and further details can be found in the companies' respective public disclosures.
In other recent news, biopharmaceutical company MacroGenics has experienced significant developments in its financial and clinical trials. The company reported a first-quarter net loss of $0.89 per share, surpassing the forecasted net loss of $0.70 per share, and a decrease in total revenue to $9.1 million from $24.5 million in the prior year's quarter. After halting its TAMARACK study due to safety concerns, the stock ratings were downgraded from "Buy" to "Neutral" by BTIG, B.Riley, and Guggenheim. In response to these developments, other firms such as Stifel and Citi adjusted their price targets for MacroGenics.
H.C. Wainwright maintained a Neutral rating on MacroGenics shares, with a price target of $4.00, after the company presented updated results from its Phase 2 TAMARACK study. The study focuses on vobramitamab duocarmazine (vobra duo), used in treating metastatic castration-resistant prostate cancer (mCRPC) patients. Preliminary data from the study revealed promising results, however, the final results are anticipated no later than early 2025.
Despite the halt of the TAMARACK study, MacroGenics plans to continue monitoring the participants for efficacy and safety outcomes, anticipating to present mature data from the study later in 2024. These are recent developments that investors should keep track of.
InvestingPro Insights
MacroGenics' deal with TerSera for MARGENZA comes at a critical time for the company, as reflected in recent financial data and analyst insights from InvestingPro. The $40 million upfront payment could provide a much-needed cash infusion for MacroGenics, which has been facing financial challenges.
According to InvestingPro data, MacroGenics has a market capitalization of $242.11 million, with a revenue of $41.02 million in the last twelve months as of Q2 2024. However, the company has experienced a significant revenue decline, with a 73.1% decrease over the same period. This context underscores the importance of the MARGENZA deal in potentially stabilizing the company's financial position.
InvestingPro Tips highlight that MacroGenics "holds more cash than debt on its balance sheet" and "liquid assets exceed short term obligations," which could provide some financial flexibility as the company navigates this transition. However, the tip that the company is "quickly burning through cash" suggests that the proceeds from the MARGENZA deal could be crucial for sustaining operations and advancing its pipeline.
The agreement with TerSera aligns with MacroGenics' stated strategy to focus on its oncology pipeline. This move is particularly significant given that InvestingPro Tips indicate "analysts anticipate sales growth in the current year" and "5 analysts have revised their earnings upwards for the upcoming period." These positive analyst sentiments could reflect expectations surrounding the company's strategic decisions and pipeline potential.
Investors should note that MacroGenics' stock has shown volatility, with InvestingPro data reporting a 74.95% price decline over the past six months. However, there has been a strong return of 17.68% over the last month, which may be related to anticipation of this deal or other positive developments.
For those interested in a deeper analysis, InvestingPro offers 12 additional tips for MacroGenics, providing a comprehensive view of the company's financial health and market position.
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