A week after pausing a leukemia trial due to the death of a patient, Magenta Therapeutics is halting development of all its programs and exploring a potential sale or other measures to wind down operations.
In a short, after-market press release Thursday, the company revealed the results of a business review that covered the state of its research programs, resources and capabilities. Magenta said it determined that the best path forward is to stop further development and conduct a more comprehensive review of the potential strategic alternatives that will maximize shareholder value.
That means Magenta will consider an acquisition, merger, business combination or other transaction. There’s no timeline for the review, and Magenta said these efforts cannot be guaranteed to find a transaction or one that “will be completed on attractive terms.” No further comment will be made until the company’s board approves the next move.
The news comes just a week after Magenta reported that a patient had died in a phase 1/2 clinical trial studying its anti-CD117 antibody-drug conjugate MGTA-117 in people with relapsed or refractory acute myeloid leukemia and myelodysplastic syndrome. The company voluntarily paused the study. Magenta had previously dropped a higher dose cohort after seeing side effects listed as grade 3 and 4 serious adverse events.
Last week’s news sent Magenta’s shares tumbling 25% to 37 cents. The shares have since recovered slightly, and today’s announcement of the hunt for strategic alternatives sent them up 32% after hours to 75 cents, compared to 56 cents at close.
Magenta had $128 million in the bank at the end of September, which was expected to pave a runway into the second quarter of 2024. Back in April, Magenta did a round of layoffs that impacted 14% of the organization, or around 11 people from a staff of 75.