A month after its stock plunged 53% when it halted the dosing of one patient cohort in a Phase I/II dose escalation trial of its MGTA-117 in relapsed/refractory acute myeloid leukemia (AML), Magenta Therapeutics (MGTA) suffered a much greater setback this week that threatens further erosion of its shares—a patient death in that study that the company acknowledged may be related to the drug.
The patient, whose age and gender were not identified in a terse company statement, experienced what Magenta described as “respiratory failure and cardiac arrest resulting in death”—a Grade 5 Serious Adverse Event (SAE) which according to the company was “deemed to be possibly related to MGTA-117.” Information related to the death has been reported to the FDA as a Suspected Unexpected Serious Adverse Reaction (SUSAR).
Magenta said it voluntarily paused dosing in the clinical trial after consultation with the trial’s safety Cohort Review Committee “and with the highest regard for patient safety.” The company added that it “is working to evaluate the totality of available data and determine next steps for the development of MGTA-117.”
It didn’t take long for at least three analysts to respond: David Nierengarten, PhD, Managing Director and Head of Equity Research for Wedbush Securities, cut the firm’s rating on Magenta from “Outperform” to “Neutral” and slashed the firm’s 12-month price target on the company’s shares by two-thirds, from $3 to $1.
Yun Zhong, a Director and Biotechnology Analyst at BTIG specializing in gene therapy, genetic medicine, targeted therapy, rare disease and hematology, also downgraded his firm’s rating on Magenta shares to “Neutral” from “Buy.” Zhong had halved BTIG’s price target on Magenta from $6 to $3 in December, after the partial dosing halt.
At Cowen & Co., Mark Frahm, PhD, Managing Director, Health Care-Biotechnology, also downgraded Magenta shares from “Outperform” to “Market Perform.”
It’s too soon to tell how long the Phase I/II trial will be delayed as a result of the patient death. Magenta reported having approximately $128.3 million in cash, cash equivalents and marketable securities at the end of Q3 2022—a financial runway long enough to extend operations into the second quarter of 2024. The sufficiency of Magenta’s cash resources to fund foreseeable and unforeseeable operating expenses and capital expenditure requirements is among risks the company has disclosed in its “forward-looking statements” disclosure.
Magenta announced the patient death Wednesday after the close of trading, and after it halted the start of after-hours trading in the company’s stock. When after-hours trading resumed, investors reacted with a stock selloff that sent Magenta shares tumbling 20% in premarket trading Thursday, falling to $0.397 a share as of 9:08 a.m. When the market reopened on Thursday, shares dipped further to $0.37 before settling for a 11% decline as of 11:56 a.m., to $0.44.
Shares had closed Wednesday at $0.495, reflecting something of a bounce-back for Magenta during January, after the stock price fell from $0.83 to $0.39 on December 20.
Behind the plunge was Magenta’s decision to halt dosing participants at the Cohort 4 dosing level (0.13 mg/kg) of the Phase I/II trial (NCT05223699) of MGTA-117, the company’s most advanced targeted conditioning product candidate. At the time, Magenta acknowledged that it observed dose-limiting toxicities (DLTs) in the cohort’s second and third dosed participants, with the second experiencing a Grade 4 Serious Adverse Event (SAE) (respiratory) considered possibly related to MGTA-117.
Magenta responded to the DLTs in Cohort 4 by disclosing in a regulatory filing that it planned to dose additional trial participants at the Cohort 3 dosing level (0.08 mg/kg). The company cited data that it presented at the 2022 American Society of Hematology Annual Meeting on December 12, showing that no DLTs were observed in the 13 participants dosed in the first three Cohorts in the clinical trial.
“Three out of the four participants in Cohort 3 for whom paired bone marrow samples were collected at baseline and post-dosing had depletion of cancer blast cells in both blood and bone marrow,” Magenta stated in the filing. “The Company continues to believe that the benefit/risk profile at the Cohort 3 dose level is acceptable to continue enrolling participants in this trial.”
MGTA-117 is designed to selectively deplete stem cells from patients before transplant or hematopoietic stem cell (HSC)-based gene therapy to reduce the need for high-dose or high-intensity chemotherapeutic agents—or, in the case of gene therapy applications, to potentially eliminate the need for chemotherapeutic agents altogether.
MGTA-117 targets the CD117 receptor, which is highly expressed on the cell surface of HSCs and leukemia cells. Magenta reasons that as a result, the CD117 receptor is an ideal target for conditioning across broad sets of diseases, including certain blood cancers, hemoglobinopathies such as sickle cell disease and beta-thalassemia, and inherited metabolic disorders.
In addition to AML, Magenta is developing MGTA-117 through collaborations in:
- Lysosomal disorders, where the company is evaluating the utility of the drug for conditioning patients before they receive one of AVROBIO’s investigational lentiviral gene therapies,
- Hemoglobinopathies, where the company is evaluating the utility of MGTA-117 for conditioning patients with sickle cell disease and beta-thalassemia who receive Beam Therapeutics’ base editing therapies.
In April 2022, early positive data for MGTA-117 prompted Magenta to more narrowly focus its spending on the conditioning program, as well as IND-enabling activities for a second targeted conditioning program, the antibody-drug conjugate CD45-ADC for heme-oncology and autoimmune disease, and MGTA-145, which is in a Phase II trial in combination with plerixafor for mobilization and collection of stem cells in patients with sickle cell disease, partnered with Bluebird Bio. The company eliminated 14% of its workforce, or about 10 employees based on the 75 employees it reported at the start of 2022 in a regulatory filing.
Headquartered in Cambridge, MA, Magenta was co-founded, seeded, and incubated by Atlas Ventures in 2015 as HSCTCo Therapeutics, and changed its name to Magenta Therapeutics a year later, the company was founded with the aim of revolutionizing stem cell transplant as a new treatment paradigm for autoimmune and blood-based diseases. Three years later Magenta went public through an initial public offering (IPO) that raised $90 million in net proceeds through the sale of 6,666,667 common shares at $15 per share.
At the time, Magenta committed itself to more effectively preparing patients to receive stem cell transplants and delivering higher quality replacement stem cells, in order to make curative stem cell therapies available to substantially more patients than are currently receiving the treatments.
Leaders and laggards
- Altamira Therapeutics (CYTO) shares tumbled 29% on Tuesday, from $5.00 to $3.53, after the company acknowledged that its COVAMID trial assessing its nasal spray Bentrio® in acute COVID-19 patients in Bulgaria and North Macedonia missed its primary endpoint of statistically significant change in PCR cycle threshold compared with no treatment at day 11. Altamira cited other more positive results, such as more patients treated with Bentrio and modified-Bentrio (lacking one mineral ingredient) achieving full resolution of COVID-19 signs and symptoms by Day 11 than untreated patients (93.7 and 92.5 vs. 85.0%) and showing themselves uninfected or asymptomatic (59.5 and 65.0 vs. 45.0%).
- Axcella Health (AXLA) shares soared 65% in after-hours trading Monday, to $0.71 from $0.43 a share at the closing bell, after the company said it submitted an Investigational New Drug (IND) application to the FDA for a Phase IIb/III trial of AXA1125 as a treatment for long COVID fatigue. Axcella also said it received regulatory guidance from the U.K.’s Medicines and Healthcare products Regulatory Agency (MHRA) supporting a single trial that could serve as the registration trial for patients with Long COVID fatigue, and aligning on key measurements, including primary endpoint and trial design.
- Baudax Bio (BXRX)shares more than doubled, rocketing 104% early in trading Tuesday from $3.15 to $6.43 at 9:36 a.m., before settling for a 32% gain, to $4.17. Baudax announced a successful first interim data analysis for its Phase II trial (NCT05687253) of BX1000 for neuromuscular blockade in 80 patients undergoing elective surgery. In one 20-patient cohort, 19 were successfully intubated at 60 seconds and the remaining patient, at 90 seconds. The 80-patient trial is designed to compare three different doses of BX1000 to a standard dose of rocuronium.
- Pliant Therapeutics (PLRX) shares jumped 35% on Monday, from $22.51 to $30.28, after the company announced 12-week interim data from the 320 mg dose group of the company’s Phase IIa INTEGRIS-IPF trial (NCT04396756) assessing bexotegrast (PLN-74809) in patients with idiopathic pulmonary fibrosis (IPF). The 320 mg group met its primary and secondary endpoints, showing that bexotegrast was well tolerated over a 12-week treatment period and displayed a favorable pharmacokinetic profile. INTEGRIS-IPF is evaluating bexotegrast at once-daily doses of 40 mg, 80 mg, 160 mg, 320 mg or placebo for 12 weeks in 119 patients with IPF.