Head shot of MacroGenics President and CEO Scott Koenig, MD, PhD
MacroGenics president and CEO Scott Koenig, MD, PhD

MacroGenics (MGNX) shares cratered 77% on Friday, a day after the company acknowledged the deaths of five patients—three of them potentially treatment-related—in the company’s Phase II TAMARACK trial (NCT05551117) assessing its antibody-drug conjugate (ADC) vobramitamab duocarmazine or “vobra duo” in metastatic castration-resistant prostate cancer.

The company said it continues to investigate the potentially treatment-related deaths, in which two patients dosed with 2.7 mg/kg of vobra duo developed pneumonitis, both Grade 5 events—while a third patient in the cohort died following a Grade 3 pleural effusion.

“The teams are working very hard in finding out the details on the patient study and evaluating comorbidities and other things that may have contributed to the specific deaths,” MacroGenics president and CEO Scott Koenig, MD, PhD, told analysts Thursday on the company’s quarterly earnings call. “We have not seen in the large number of patients here any association with pneumonitis. So, that again raises questions of what is the ultimate cause of these patients associated with the pneumonitis.”

The other two patient deaths, both Grade 5 events, have been deemed unrelated to vobra duo. A patient in the 2.0 mg/kg dosing cohort developed acute myocardial infarction, while a patient in the 2.7 mg/kg cohort succumbed to cardiac arrest.

“[Thursday’s] data likely represent one of the worst-case scenarios, with initial efficacy results at or below expectations, and the safety profile demonstrating a meaningful deterioration,” Jonathan Chang, PhD, senior managing director, emerging oncology and a senior research analyst with Leerink Partners, wrote in a research note.

Vobra duo is a humanized B7-H3 monoclonal antibody conjugated via a cleavable linker to the prodrug seco-DUocarmycin hydroxyBenzamide Azaindole (DUBA), which MacroGenics licenses from Byondis.

During the first quarter, MacroGenics spent $9.7 million in research and development expenses related to vobra duo, up nearly 7% from $9.1 million in Q1 2023, the company disclosed in its Form 10-Q quarterly report for the first quarter.

“Promising target”

“Overall, we continue to believe that B7-H3 is a promising target in oncology. However, we are discouraged by the vobra duo update,” Chang added. “We view the update as disappointing, and likely falling short of investor expectations.”

Investors punished MacroGenics with a stock selloff that sent shares plunging Friday from Thursday’s close of $14.67 to $3.31. Chang chopped Leerink’s 12-month price target on MacroGenics shares 73%, from $30 to $8, but maintained the firm’s “Outperform” rating on the stock.

However, at deadline at least three other analysts downgraded MacroGenics shares on the tragic news:

  • Stephen Willey (Stifel)—From “Buy” to “Hold” and shredding price target 76%, from $29 to $7.
  • Etzer Darout (BMO Capital Markets)—from “Outperform” to “Market Perform” and slashing price target by two-thirds, from $24 to $8.
  • Boris Peaker (TD Cowen)—from “Buy” to “Hold,” no price target set.

Two additional analysts lowered their price targets:

  • Peter Lawson (Barclays)—down 44% from $25 to $14, maintaining “Overweight” rating.
  • Silvan Tuerkcan (JMP Securities)—down 27% from $22 to $16, maintaining “Market Outperform” rating.

Vobra duo isn’t the first MacroGenics drug candidate to be studied in a clinical trial that saw multiple patient deaths. In 2022, seven patients died in the 62-patient Phase II CP-MGA271-06 trial (NCT04634825), though only one of the deaths was assessed as possibly related to the study treatment—while the other six were evaluated as secondary to disease progression and/or unrelated to the treatment.

MacroGenics responded by halting studies of combinations of enoblituzumab (Fc-optimized B7-H3-directed monoclonal antibody) with either retifanlimab (anti-PD-1 monoclonal antibody) or tebotelimab (PD-1 × LAG-3 bispecific DART® molecule) as first-line treatments of patients with recurrent or metastatic HNSCC.

CytomX plummets 53% on early CX-904 data

CytomX (CTMX) shares plummeted a total 53% Thursday and Friday as investors appeared to take issue with the company’s glass-half-full lens on initial results from an early-stage trial of its lead pipeline candidate, a cancer treatment being co-developed with Amgen (AMGN).

Head shot of CEO and Chairman Sean A. McCarthy, DPhil
CytomX CEO and chairman Sean A. McCarthy, DPhil

CytomX declared Wednesday in a press release that its results were positive from an ongoing Phase Ia CTMX-904-101 dose escalation study (NCT05387265) assessing CX-904 (masked EGFRxCD3 Probody® T-cell engager) in adults with metastatic or locally advanced unresectable solid tumors.

The company cited CX-904’s safety profile, which it described as favorable because it showed no cytokine release syndrome (CRS) of any grade in step-dosing cohorts, and no CRS of a grade above 1 seen overall.

CytomX also cited what it called encouraging initial signs of efficacy seen for CX-904 in advanced pancreatic cancer. Of six evaluable patients for whom data could be evaluated, all six showed disease control, while two of the six showed confirmed partial responses to treatment as measured via RECIST 1.1.

One partial-response patient dosed with 6 mg of CX-904 achieved an 83% tumor reduction, while the second, dosed at 5 mg, achieved a 51% tumor reduction and remained on study treatment as of the data cutoff. CytomX added that a third pancreatic cancer patient maintained stable disease with no evidence of tumor growth through 3.5 months of study treatment and remained on treatment as of the data cutoff.

“We see the data that we’re sharing today as a very promising initial step in the development of CX-904, and this work positions CytomX at the forefront of the T-cell engager field,” CEO and chairman Sean A. McCarthy, DPhil, told analysts Wednesday on the company’s quarterly earnings call.

Wall Street tailspin

The following day, investors rebuffed McCarthy, sending CytomX shares tailspinning. The shares began nosediving 32% in premarket trading before Thursday’s trading session. When the opening bell sounded, the downward spiral accelerated, deflating CytomX’s stock price from Wednesday’s close of $4.19, to $2.04, a 51% plunge. The shares fell another 3% Friday, closing at $1.98.

It didn’t help that CytomX set Wall Street expectations for the data high last week, also via press release, when it announced plans for the public update about CX-904. Investors flocked to CytomX on the news with a buying surge that more than tripled the stock price from $1.63 to $5.13 on May 1.

Unlike investors, analysts following CytomX were neutral to positive. Most bullish on the company is Robert Driscoll, PhD, a biotech-focused senior vice president, equity research with Wedbush, who upgraded the firm’s rating on CytomX shares from “Neutral” to “Outperform,” and more than doubled the firm’s 12-month price target on the stock from $3 to $8.

In a research note, Driscoll called the early data for CX-904 encouraging, while acknowledging it was early. He added that he anticipated confirmation of the efficacy signal in pancreatic cancer patients, as well as future insight into the drug’s activity in other tumor types.

Wedbush’s upgrade was not solely due to CX-904. Driscoll cited CytomX entering into a supply agreement and collaboration of undisclosed value with Merck & Co. (MRK) for a future first-in-human Phase I clinical trial. The companies plan to evaluate CytomX’s dually-masked interferon-alpha2b cytokine CX-801 in combination with Merck’s blockbuster cancer immunotherapy Keytruda® (pembrolizumab) in a variety of solid tumors.

CytomX’s progression of several pipeline programs was also appealing to Wedbush, Driscoll added.

Roger Song, MD, equity analyst with Jefferies, said he was encouraged by CytomX’s plans to enroll more patients at higher doses; focus on pancreatic cancer and two other types of solid tumors, non-small cell lung cancer (NSCLC) and head and neck squamous cell carcinoma (HNSCC); and share data from 10 additional patients by year’s end. CytomX said that data will inform CytomX’s Phase Ib strategy for CX-904, with future enrollment aimed at determining a recommended Phase II dose or doses.

“A path forward”

“We are encouraged by the early data, particularly for the safety that validates masking tech platform and supporting higher doses,” Song wrote Wednesday in a research note. “The early but meaningful RECIST responses and sustained disease control in late line pancreatic cancer clearly suggest a path forward.”

Phase Ia dose escalation and optimization activity for CX-904 continue, with CytomX saying it expects to offer an additional Phase Ia dose escalation update by year’s end. These additional data will inform discussions with Amgen toward launching Phase Ib expansion cohorts in specific EGFR positive tumor types.

McCarthy told analysts his company’s goal for Phase Ib was to enroll specific EGFR positive tumor types, “of which one now quite obviously would be pancreatic [cancer].”

“We do want to bring in a few more patients, get some additional experience in those tumor types before we have the conversation with Amgen later in the year about what the Phase Ib strategy would be,” McCarthy added.

“While data are preliminary, signal suggests viable EGFR engager and validates platform,” Song added.

Etzer Darout, PhD, managing director, senior research analyst covering the biotechnology sector at BMO Capital Markets, raised his firm’s price target on CytomX shares 10.5%, from $3.25 to $3.59, while maintaining its “Market Perform” rating.

At H.C. Wainwright & Co., analyst Mitchell Kapoor maintained his firm’s “Neutral” rating and $3.25 price target on CytomX shares.

“While we believe the dataset in pancreatic cancer looks most encouraging, this is a subtype that has historically faced numerous clinical challenges, leading to setbacks for other biotech firms,” Kapoor wrote. “As such, we would like to see a broader pancreatic cancer dataset to become more comfortable in this indication.”

Leaders and laggards

  • Novavax (NVAX) shares all but doubled, zooming 99% from $4.47 to $8.88 Friday, after the company joined Sanofi (SAN and SNY) to announce an exclusive co-licensing agreement to co-commercialize Novavax’s stand-alone adjuvanted COVID-19 vaccine and develop novel flu-COVID-19 combination vaccines. The COVID-19 vaccine agreement applies worldwide except in countries with existing Advance Purchase Agreements—and in India, Japan, and South Korea where Novavax has existing partnership agreements. Sanofi also received a sole license to Novavax’s adjuvanted COVID-19 vaccine for use in combination with Sanofi’s flu vaccines; and a nonexclusive license to use the Matrix-M adjuvant in vaccine products. Sanofi also agreed to take a minority (<5%) equity investment in Novavax.
  • RAPT Therapeutics (RAPT) shares tumbled 42% from $7.98 to $4.66 Thursday, after the company halted and unblinded both its Phase IIb trial (NCT05399368) evaluating zelnecirnon (RPT193) in atopic dermatitis (AD) and its Phase IIa trial (NCT05935332) assessing zelnecirnon in asthma. The FDA placed both trials on clinical hold in February after one patient in the AD trial required a transplant due to liver failure. Before the clinical hold, 229 patients had been enrolled in the Phase IIb trial, of which approximately 110 completed the 16-week dosing period. “We anticipate that our analysis of the data will be completed in the third quarter of this year,” RAPT president and CEO Brian Wong stated.
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