Michael Sacerdote

MacroGenics: Big Dreams, Good Molecules

Although the IPO market has become relatively frothy, the opportunity remains for biotech investors who carefully vet the offerings to buy great science on the cheap. This week, MacroGenics (NASDAQ:MGNX) brings solid drug prospects, albeit in a highly competitive opportunity space. Using conservative risk discounting, I estimate the true value of the company to be $568-$628 million, or $21.85-$24.15 per share.

Underlying technology

While MacroGenics is like many other young biotech companies in that one prospect dominates its valuation, MacroGenics also owns bona fide development platforms for further drug discovery beyond its lead compound. MacroGenics has two core scientific platforms for drug discovery: Fc-optimized antibodies and dual affinity re-targeted antibody-related molecules (DARTs).

(click to enlarge)

Figure 1. Pipeline....

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