What happened

Shares of MacroGenics (MGNX -1.73%) were down more than 18% in early trading on Tuesday. The stock closed at $6.37 on Monday. On Tuesday, it opened at $5.99, then fell as low as $5.05 in the couple of hours of trading. The stock has a 52-week high of $19.73 and a low of $2.13 and is down more than 67% so far this year.

So what

The clinical-stage biotech focuses on cancer treatments, using monoclonal antibody therapies. There are two likely reasons for the stock's decline on Tuesday. An analyst from Cowen & Co. downgraded the stock, and after a recent jump in the stock's price, investors are taking profits. 

Last week, the company's shares rose when it got word that a $60 million milestone payment was coming its way after the Food and Drug Administration approved the Biologics License Application (BLA) for teplizumab to delay the onset of type 1 diabetes.

MacroGenics developed the drug, but it was purchased by Provention Bio in 2018. Provention is on the hook to MacroGenics for payments of $170 million for certain milestones regarding teplizumab, including the $60 million for the drug's BLA approval.

Now what

While MacroGenics doesn't have any marketed drugs of its own, the biotech company's science has been on a roll, meaning Tuesday's dip will likely be short lived.

In October the company reached a deal with Gilead Sciences regarding a blood cancer drug, MGD024, that is said to reduce cytokine release syndrome (CRS), an inflammatory condition where the body's immune system responds too aggressively to an infection or an immunology treatment. 

The agreement, worth potentially as much as $1.7 billion in payments to MacroGenics, gives Gilead the licensing rights to MGD024, along with the rights to two other biospecific programs, unnamed in the release, that MacroGenics is developing. That deal alone, the MacroGenics said in its third-quarter release, is enough to fund operations into mid-2024. Now, with a second milestone payment coming from Provention, that runway is extended.