What happened

After reporting on July 8 that it was terminating a phase 2 clinical trial for its treatment aimed at metastatic squamous cell carcinoma of the head and neck (SCCHN), MacroGenics' (MGNX -14.75%) saw its stock drop by more than 10.8% on Monday as of 10:36 a.m. ET.

The company said that it ended the trial because of safety concerns, as seven of the enrolled patients had died. But the study's investigators found that only one of the deaths was possibly linked to the treatment, which consisted of its drug enoblituzumab paired with either retifanlimab or tebotelimab.

So what

The termination of the enoblituzumab trial is a significant setback, and it might cause regulators to scrutinize the company's other projects in more detail. Without the trial, MacroGenics still has a trio of programs in phase 2 testing as well as a medicine that's currently on the market. Nonetheless, it's unprofitable, and its quarterly revenue has fallen by more than 40.6% in the last three years, so shareholder sentiment might continue to sour if positive results from other programs remain elusive.

Now what

It's unclear whether the biotech will work to develop enoblituzumab further and attempt another trial in the future. Discussions with its collaborator, I-Mab, are sure to play a role in whatever management decides. MacroGenics claims that its other SCCHN therapy in phase 2 trials isn't impacted, so it could still potentially enter the market down the line.