Insights

Why MacroGenics Stock Is Skyrocketing Today

What happened

Shares of MacroGenics (NASDAQ: MGNX) were skyrocketing 27.8% higher as of 12:47 p.m. ET on Tuesday. The sharp gain appears to be related to insider buying of the stock. A filing to the U.S. Securities and Exchange Commission on June 17 revealed that MacroGenics CFO James Karrels recently bought 40,000 shares. Karrels now owns 191,776 shares after the purchase.

So what

It’s not unusual for clinical-stage biotech stocks to jump when key insiders buy shares. Other investors view such insider transactions as hints that the companies are headed in the right direction. The idea is that top executives wouldn’t put more of their own money on the line if the companies faced major problems.

The biggest of these insider-related moves come when a company’s CEO or CFO significantly add to their stakes. In this case, MacroGenics’ CFO increased his position in the drugmaker by close to 26%. 

MacroGenics doesn’t have any approved products yet. However, the company’s pipeline includes several promising programs. MacroGenics is evaluating three monoclonal antibody candidates in phase 2 clinical studies targeting various types of cancer. It also plans to advance antibody-drug conjugate MGC018 into phase 2/3 testing in treating prostate cancer later this year. 

Now what

Other programs in MacroGenics’ pipeline are also progressing. The company recently kicked off a phase 1 dose-escalation study of MGC018 in combination with lorigerlimab (another drug in its pipeline) in treating advanced solid tumors. It expects to begin a phase 1 study of MGD024 in hematologic malignancies, including acute myeloid leukemia, within the next few months.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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