Health

MacroGenics Signs $586 Million Licensing Deal With Synaffix for Antibody-Drug Conjugate Technology

February 3, 2022

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2 min read

Image source: MacroGenics

Rockville, Maryland-based MacroGenics MGNX announced a licensing deal Thursday for multiple antibody-drug conjugate (ADC) technologies from Synaffix, a Netherlands-based biotech firm developing ADCs, bispecific antibodies and other targeted therapeutics under an out-licensing business model.

MacroGenics, which went public on The Nasdaq Stock Market in 2013, is a clinical-stage company focused on developing monoclonal antibody-based therapeutics for the treatment of cancer. The company will use Synaffix technologies to develop next generation ADCs for three clinical programs.

Deal terms

MacroGenics will gain access to these Synaffix technologies:

GlycoConnect antibody conjugation technology
HydraSpace polar spacer technology
Select toxSYN linker-payloads (SYNtecan E, SYNeamicin D and SYNeamicin G), each designed to enable ADCs with best-in-class efficacy and tolerability

Synaffix will be eligible to receive up to $586 million in payments spanning upfront and milestone payments, in addition to royalties on commercial sales.

The first program will commence immediately with the option to expand the deal to a further two programs by March 2023.

MacroGenics will be responsible for research, development, manufacturing and commercialization, while Synaffix will provide research and be responsible for the manufacturing of components that are specifically related to its proprietary technologies.

Investment thesis

Image source: BigCharts

MacroGenics stock has collapsed nearly 70% since hitting $36.48 last spring after it received its first FDA approval in December 2020 of Margenza (margetuximab-cmkb) for the treatment of adults with metastatic HER2-positive breast cancer who have received at least two prior anti-HER2 regimens, at least one of which was for metastatic disease.

Even before the Margenza approval, MacroGenics had a track record of generating revenue through collaborative and government agreements to the tune of $690 million since going public.
The company had $299 million in cash and marketable securities as of Sept. 30, 2021, which gives it a runway through 2023, assuming continued collaborative and government agreements. At the current market cap of $674 million, the market is valuing the entirety of MacroGenics clinical program at under $400 million.
MacroGenics has multiple clinical milestones anticipated for 2022.
At $11 per share, with this new licensing deal in place, and a demonstrated ability to get a drug through the FDA gauntlet, we think investors with a high risk appetite can effectively view MacroGenics stock as a low-priced call option on a diverse portfolio of potentially breakthrough cancer therapies.