FDA clinical hold on Magenta Therapeutics' MGTA-117 trial

US clinical-stage biotech Magenta Therapeutics’ (Nasdaq: MGTA) shares closed down more than 9% at $8.07 on Wednesday, after the company revealed it has received a clinical hold letter from the US Food and Drug Administration related to its Investigational New Drug Application (IND) filed in June 2021 to initiate a Phase I/II clinical trial of MGTA-117 in patients with acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS).

The FDA is requiring that Magenta develop an additional bioassay to be used in conjunction with the PK/PD model to inform dose escalation decisions in addition to safety monitoring. This was the only clinical hold item identified by the FDA and does not relate to the toxicology or manufacturing of MGTA-117. Magenta has initiated the development of the bioassay and intends to work closely with the FDA to determine the application of the bioassay for dose escalation. The FDA has indicated its willingness to continue its engagement on this issue through its “Type A” meeting structure, which Magenta anticipates will help facilitate communication and resolution of the clinical hold.

Given the bioassay was the FDA’s only concern and management’s firm plan to address it, Wedbush analyst David Nierengarten doesn’t expect any significant changes to the development process outside of the delay. Wedbush reiterated its “Outperform” rating on Magenta, but reduced its price target to $20 from $22, adjusting for the six months postponement.