MacroGenics, Inc. (NASDAQ:MGNX) is a biopharmaceutical company that discovers and develops antibody-based treatments for cancer. A key way to measure its financial efficiency is by comparing its Return on Invested Capital (ROIC) to its Weighted Average Cost of Capital (WACC). This helps show if a company is creating value for its shareholders.
ROIC measures how much profit a company generates from the money it invests in its operations. WACC represents the average cost the company pays for that capital, from sources like loans and investors. A healthy company has an ROIC that is higher than its WACC, which indicates it is generating value.
MGNX currently has an ROIC of -49.59% and a WACC of 9.30%. This leads to an ROIC-to-WACC ratio of -5.33. The negative ROIC shows the company is not yet generating returns that cover its cost of capital. This is a common situation for biopharma firms investing heavily in research and development.
When compared to its peers, MGNX's performance is put into context. Karyopharm Therapeutics shows the most significant challenge with an ROIC of -177.79% and a ratio of -10.86. Atara Biotherapeutics has a ratio of -7.55, while Xencor has a ratio of -3.01.
Among the group, CytomX Therapeutics stands out as the most efficient operator. Although its ROIC of -19.70% is negative, its ROIC-to-WACC ratio of -1.40 is the highest. This suggests that relative to its peers, CTMX is destroying value at the slowest rate, indicating better operational discipline.
