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Why MacroGenics Stock Is Tumbling Today

By Keith Speights – Jul 30, 2021 at 11:47AM

Key Points

  • MacroGenics missed the consensus earnings estimate in Q2 with a net loss of $0.66 per share.
  • The primary things to watch with the company are its commercialization of cancer drug Margenza and its pipeline progress.

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The company provided its Q2 update.

What happened

Shares of MacroGenics (MGNX -6.81%) had tumbled 4.8% lower at 11:27 a.m. EDT on Friday. The decline came after the company provided its second-quarter update. MacroGenics reported revenue of $30.8 million, slightly higher than the consensus estimate of $30.03 million. It posted a net loss of $39.9 million, or $0.66 per share. This result missed the average analyst estimate of a net loss of $0.46 per share.

So what

In some ways, today's sell-off after MacroGenics missed the consensus earnings estimate doesn't make much sense. Analysts probably just underestimated the company's operating costs.

A scientist looking through a microscope.

Image source: Getty Images.

However, MacroGenics has a market cap of close to $1.5 billion with not nearly enough revenue yet to justify that valuation. Any blip, therefore, is likely to cause the biotech stock to fall.

The more important things to watch with MacroGenics are its sales for Margenza, which launched commercially in the U.S. in March of this year as a treatment for breast cancer, and its pipeline progress. 

Now what

MacroGenics should have plenty of pipeline updates on the way. The company expects to report top-line results from the final analysis of overall survival data from its Sophia late-stage study of Margenza by the end of Q3. It also plans to announce interim results from a phase 2/3 study evaluating the drug in treating advanced gastric and gastroesophageal junction cancer in September. Updates on other programs, including flotetuzumab and tebotelimab, are expected later this year as well. 

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

MacroGenics Stock Quote
$6.43 (-6.81%) $0.47

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