MGNX - MacroGenics stock slips after SMBC Nikko downgrades to neutral

Shares of micro-cap company MacroGenics ( NASDAQ: MGNX ) fell ~19% to $3.41 in Monday trading, as a rating downgrade by SMBC Nikko Securities weighed on the stock.

SMBC Nikko lowered its rating on MGNX to neutral from outperform, citing the halt of the company's mid-stage head and neck cancer study along with several other challenges.

MGNX last week said it had decided to end its phase 2 study to evaluate a drug combination including its monoclonal antibody enoblituzumab for the treatment of squamous cell carcinoma of the head and neck. The decision was taken after a review of safety data revealed seven fatalities.

SMBC Nikko also said that the dose-reduction of MGNX's lead program, MGC018, in its upcoming phase 2/3 trial in prostate cancer could increase the risk of a negative efficacy outcome.

Additionally, SMBC Nikko sees a lack of meaningful near-term catalysts for MGNX and increased financial risks associated with the need to raise additional capital in the next 12 months.

SMBC Nikko's neutral rating on MGNX compares to a Wall Street average rating of buy.

However, Seeking Alpha's Quant system, which consistently beats the market , rates MGNX strong sell , with poor grades for growth, profitability and momentum.

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