Friday, December 13, 2013

MacroGenics A Biotech Stock For Investors That Like A Floor Well Above Zero

Looking for a chance to reap huge rewards with a promising biotechnology company, but would like some sort of safety net high enough off the ground that you won't get bruised on the slightest hint of bad news. The Monoclonal Antibody (MAB) discovery machine that is MacroGenics $MGNX has enough steady milestone payments to keep afloat even if the worst happens to its wholly owned programs. Here's a snip from a report I published recently at Seeking Alpha (Full analysis here).
Big Pharma's hunger for access to monoclonal antibody development and production technology hasn't grown much over the past few years, but it isn't slowing either. Five of last year's top 20 drugs by sales contained antibodies. Although there has been a disconcerting amount Big Pharma dollars funding university based discovery, innovative biotechs are still getting plenty of attention.
Rookie deal maker of the decade
Fresh off its October IPO, MacroGenics (MGNX) has been getting a great deal of attention from deep pocketed deal seekers both in the US and abroad. The 13-year-old Rockville, Maryland company discovers and develops monoclonal antibody-based therapeutics for the treatment of cancer, autoimmune, and infectious diseases. Its candidates are generated via a suite of proprietary platforms that the drug industry values quite highly. The Company has entered into deals with titans like Gilead Sciences (GILD), Pfizer (PFE), France's Servier, and Germany's Boehringer Ingelheim.
Failure of a lead program during Phase 3 trials is the sort of news you would expect to cripple a budding biotech. MacroGenics suffered just this calamity, and promptly entered something of a golden age. The company quickly peeled itself off the lab floor after teplizumab, the diabetes treatment in-licensed by Eli Lilly (LLY), failed in October 2010. Less than a week after the disappointing announcement, the company announced deals with Pfizer and Boehringer Ingelheim potentially worth billions.
Read the complete analysis here.