Shares of cancer drug developer MacroGenics (NASDAQ:MGNX) fell by as much as 32% today on over 10 times the average daily volume. What sparked this massive sell-off?
MacroGenics' shares are heading lower today in response to the Food and Drug Administration's (FDA) decision to place a partial clinical hold on the biotech's bispecific DART molecule MGD009. The hold reportedly stems from liver-related side effects. Per the press release, MacroGenics will suspend enrollment in the drug's current studies, but patients already receiving treatment may continue to do so at their pre-assigned dose.
MacroGenics' stock rebounded somewhat since earlier this morning. But the biotech's shares were still down by a noteworthy 23% as of 1:43 p.m. EST on Monday.
This partial hold reportedly covers an early stage study assessing MGD009 as a monotherapy across a host of solid tumors, as well as a combination study with Incyte's (NASDAQ:INCY) anti-PD-1 inhibitor MGA012. Incyte licensed MGA012 from MacroGenics late last year as part of a wider immuno-oncology collaboration. Fortunately for MacroGenics and its shareholders, the hold does not extend to any of the biotech's more advanced clinical candidates that employ a broadly similar mechanism of action.
Immediately after this news broke, MacroGenics' management responded by stating that this partial hold should be resolved quickly, allowing the drug's clinical trials to continue as planned perhaps as early as next month. To achieve this goal, the company plans to tack on additional supportive care efforts into MGD009's ongoing studies to lower the risk of adverse events. And if the FDA accepts MacroGenics' proposed modifications, the company's shares should end up reclaiming most, if not all, of their lost ground in the not-so-distant future. Bargain hunters, therefore, might want to take a long, hard look at this promising cancer stock in the wake of this hefty downturn.