MGNX a biotechnology penny stock LONGMacrogenenics sold-off 75% from a moderately bad earnings miss 2 weeks ago. It will be a slow
and gradual recovery in the 10 -12 weeks until the next earnings unless a favorable catalyst
appears. 5 patients died in a clinical study about the same time as earnings were due. This was
a news catalyst amplifying the earnings miss. What is unclear is the total number of patients
being studied, how many who died got the developmental drug and how many got the placebo.
Two deaths were deemed to be unrelated to that drug possibly because they did not receive
it. No matter, the investigation continues. I suspect the clinical trial is at least suspended
and could get terminated. MGNX has six other drugs in development. None are past Phase 3
and so none are revenue producing. MGRX could fail financially or clinical but then again it
could recover. If fialing it could sell-off its intellectual property and clinical trials data or
look for a rich uncle looking to get in to the cancer drug market. Only time will tell.
I see this as a very risky long trade targeting fib levels. I will devote a small capital position
here anticipating anything from a 200-250% return to hitting a 25% stop loss and calling it
finished. IF MGNX can move up I will make sure the stop loss is raised and diminshed a bit.
Those without risk appetite and a pinch of greed should take a pass on this one. Another piece
of bad news could be catastrophic while on the other hand clearance of liability by the FDA and
resumption of the clinical trial would be quite uplifting. It could be a coin flip.
