What happened

MacroGenics (MGNX -8.26%) investors were suffering from a case of the Mondays, as their stock lost more than 8% of its value on the day. That compared rather unfavorably to the more than 1% gain of the S&P 500 index. MacroGenics’ decline came about because of a fresh price target cut from an analyst.

So what

Said analyst is H.C. Wainwright’s Robert Burns, who before market open on Monday took a big ax to his target. Burns now feels that MacroGenics is worth $10 per share, quite a far distance down from his previous $35 per share evaluation. Yet even with that big chop, the prognosticator is maintaining his buy recommendation. 

The analyst is concerned that Enhertu, a drug developed by Japanese biotech Daiichi Sankyo, could be more efficacious than a similar treatment from MacroGenics.

On Monday, Daiichi Sankyo announced that a phase 2 trial of Enhertu “demonstrated clinically meaningful tumor responses” in patients previously treated with other therapies for certain types of lung cancer. The company added that it observed a favorable safety profile in the trial’s participants.

Now what

MacroGenics continues to develop a potentially competing treatment. Currently known as MGC018, it’s being tested in a phase 1/2 dose expansion study in patients with both metastatic castrate-resistant prostrate cancer (mCRPC), non-small cell lung cancer, squamous cell carcinoma of the head and neck (SCCHN), and melanoma. 

In August, MacroGenics provided a clinical update within its latest set of quarterly results. The company said that “following constructive interactions with the U.S. Food and Drug Administration (FDA) and European Medicines Agency,” it expects to launch a phase 2/3 study of MGC018 for mCRPC patients by the end of this year.

It is also recruiting for a planned phase 1/2 dose escalation study of the drug as a combination therapy for patients with solid tumors.

Eric Volkman 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.

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