Cohen’s Point72 Asset Management buys a stake in MacroGenics

Market Realist

Steven Cohen's Point72 Asset Management updates its portfolio (Part 3 of 5)

(Continued from Part 2)

Point72 Asset Management and Macrogenics

Steven Cohen’s Point72 Asset Management, which was earlier known as SAC Capital, revealed a 6.6% stake, representing 1,817,430 shares, in MacroGenics Inc. (MGNX).

MacroGenics is a clinical-stage bio-pharmaceutical company focused on discovering and developing innovative monoclonal antibody-based therapeutics for the treatment of cancer and autoimmune diseases. It creates both differentiated molecules that are directed to novel cancer targets, as well as “bio-betters,” which are drugs designed to improve upon marketed medicines. The company has entered into several strategic collaborations with global pharmaceutical and biotechnology companies. These collaborations provide MacroGenics with funding and allow it to leverage the additional expertise of these collaborators to advance the development of its product candidates.

MacroGenics has two oncology product candidates in clinical development. Plus, it has several proprietary product candidates in pre-clinical development and it expects to commence Phase 1 clinical trials on two of these product candidates in 2014. Margetuximab, also known as MGAH22, is a monoclonal antibody that targets HER2-expressing tumors, including breast, gastroesophageal, bladder, and other cancers. The company is in Phase 2a clinical trial in metastatic breast cancer and MacroGenics plans to commence a Phase 3 potential registration clinical trial in advanced gastroesophageal cancer in the second half of 2014. MGA271 is a monoclonal antibody in a Phase 1 trial for a variety of solid tumor types.

MacroGenics is collaborating with Les Laboratoires Servier and Institut de Recherches Servier to develop and commercialize MGA271 in all countries other than the United States, Canada, Mexico, Japan, South Korea, and India. It also entered a drug development deal with Gilead Sciences Inc. (GILD) worth around $1 billion for the research, development, and commercialization of up to four Dual Affinity Re-Targeting (DART)-based molecules. It also has an agreement with Boehringer Ingelheim GmbH to discover, develop, and commercialize up to ten DART-based molecules, which may span multiple therapeutic areas. It also entered into a three-year agreement with Pfizer (PFE) to discover, develop, and commercialize up to two DART-based molecules. MacroGenics’ proprietary technology platform, DART, enables the targeting of multiple antigens or cells by using a single molecule with an antibody-like structure, and also includes the ability to recruit any T-cell in a patient’s body to destroy targeted cancer cells.

MacroGenics raised $80 million in its IPO in October of last year. The stock, which was priced at at $16 in the IPO, surged 50% on its debut and currently trades at $20. It raised an additional $77.2 million through a follow-on public offering in February 2014. The filing stated that through December 31, 2013, MacroGenics had an accumulated deficit of $175.7 million. Due primarily to upfront fees and milestones paid by its collaborators, the company realized a profit of $8.4 million and $6.7 million for the years ended December 31, 2012 and 2011, respectively. It incurred a net loss of approximately $0.3 million for the year ended December 31, 2013, primarily due to the conclusion in late 2012 of the teplizumab Protégé clinical trial-related reimbursement from Eli Lilly (LLY). The biotech company received a $10.0 million milestone payment under its agreement with Servier, a $5.0 million milestone payment from Boehringer.

MacroGenics believes its competitors include Amgen (AMGN), which is now in late-stage clinical development of cancer product candidates that work by targeting antigens both on immune effector cell populations and those expressed on certain cancer cells. Plus, other companies are developing new treatments for cancer and autoimmune diseases that enhance the Fc regions of antibodies to create more potent antibodies, including Roche Holding and Xencor Inc. (XNCR).

Continue to Part 4

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