What happened
MacroGenics (MGNX 1.31%), a small-cap cancer-therapy company, saw its shares rise by as much as 14.6% in early morning action today. The biotech's stock perked up in response to another positive clinical update for the late-stage breast cancer candidate margetuximab.
This time around, margetuximab reportedly produced a superior progression-free survival rate in HER2-positive metastatic breast cancer patients -- who have previously been treated with anti-HER2-targeted therapies -- than the current standard of care consisting of Roche's Herceptin plus chemotherapy. The data reportedly come from the Phase 3 trial known as SOPHIA. The drugmaker's shares have pulled back slightly from their intra-day highs, but they were still up by 10.1% as of 12:01 p.m. EDT.
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So what
Breast cancer therapy is on track to become a $10 billion drug market by 2025. So, even as a later-line treatment for a particular segment, margetuximab should have no trouble raking in at least several hundred million in sales. Moreover, there are no treatments approved by the Food and Drug Administration for patients who have stopped responding to the current cohort of front line anti-HER2-targeted therapies. Margetuximab would thus fill an important unmet medical need -- one that should come with a built-in competitive moat.
Now what
MacroGenics plans on giving a more thorough clinical update on SOPHIA's progress at next month's American Society of Clinical Oncology meeting. Meanwhile, this small-cap drugmaker is sure to start making the rounds on the buyout rumor mill. Breast cancer drugs with a well-differentiated clinical profile are a highly coveted commodity in the pharma world, after all.
Whether or not a buyer steps into the picture, MacroGenics' shares should have more room to run from here based on margetuximab's hefty commercial opportunity. Therefore, risk-tolerant investors might want to consider buying into this intriguing growth story soon.
