MacroGenics, Inc.

President and Chief Financial Officer of Microgenics. Please proceed.

Thank you, Operator. Good afternoon and welcome to Microgenics Conference Call to discuss our fourth quarter and full year 2024 financial and operational results. For anyone who has not had the chance to review the results, we've issued a press release this afternoon outlining today's announcements. This release is available under the Investors tab on our website at macrogenics.com. You may also listen to this conference call via webcast on our website, where it will be archived for 30 days beginning approximately two hours after the call is completed. I'd like to alert listeners that today's discussion will include statements about the company's future expectations, plans, and prospects that constitute forelooking statements for purposes of a safe harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forelooking statements. as a result of various important factors, including those discussed in the risk factor section of our annual, quarterly, and current reports filed with the SEC. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change except to the extent required by applicable law. During today's call, I will be joined by Dr. Scott Koenig, President and Chief Executive Officer of Macrogenics, and Dr. Steven Eck, our Senior Vice President, Clinical Development and Chief Medical Officer. And now, I'd like to turn the call over to Scott.

Thank you, Jim. I'd like to welcome everyone participating via conference call and webcast today. 2024 was an important year for Macrogenics, as we achieved several significant clinical development milestones and are well positioned to build upon that momentum in 2025. We have a diverse and promising clinical portfolio, and we look forward to a year of continued progress. On today's call, we will provide key updates on our business and clinical programs. I'll now turn it over to Steven to discuss those clinical updates.

Thank you, Scott. We made meaningful advancements in 2024 and look forward to continued execution as we develop and grow our portfolio of antibody-based cancer treatments in 2025. First, from our proprietary investigational pipeline, I will talk about loridrolumab, our bispecific tetravalent DART molecule designed to enable blockade of PD-1 and CTLA-4 with potentially enhanced CTLA-4 blockade on T-cells co-expressing these immune checkpoint molecules that are highly enriched in the tumor microenvironment. I'm pleased to share that enrollment is complete in the ongoing Laura Keet Phase II trial, a 150-patient randomized study of loridromab in combination with docetaxel versus docetaxel alone in second-line chemotherapy-naive patients with metastatic castrate-resistant prostate cancer. The current trial design includes a primary study endpoint of radiographic progression-free survival. Given that this endpoint is event-driven, The availability and subsequent presentation of final RPFS data will depend on the eventual RPFS event accrual rate. We anticipate providing a clinical update for lorikeet in the second half of this year. Based on our cumulative experience to date from our phase one and phase two studies of loridrilumab, including in metastatic castrate-resistant prostate cancer, a tumor setting historically insensitive to checkpoint inhibition, We plan to initiate the LIMITS Phase 2 study. This clinical trial will evaluate loridurumab monotherapy in patients with either platinum-resistant ovarian cancer, PROC, or clear cell gynecologic cancer, CCGC. Both represent unmet need and historically have been relatively insensitive to checkpoint inhibitor therapies. The study's primary endpoint is ORR, with multiple secondary endpoints to be explored. The company anticipates enrolling up to 40 patients with PROC, and up to 20 patients with CCGC and LINET, which is expected to commence by mid-2025. Next, I'm very excited to update you on our emerging ADC portfolio. We have three antibody drug conjugate molecules, two in clinical development, one in preclinical studies, that each incorporate a novel glycan-linked topoisomerase inhibitor-based payload, which are developed by our collaboration partner, Cinefix, Alonzo Company. I will now walk you through these three candidates. First is MGC026. which is a topo-1 inhibitor-based ADC that targets B7H3, an antigen with broad expression across multiple solid tumors, and a member of the B7 family of molecules involved in immune regulation. We are excited about the potential for MGC026, given the molecule was constructed using a clinically active variable domain, also contained in VOBRDU, as well as the use of Cinefix's topo 1 inhibitor link or payload, which has shown potentially superior preclinical profile compared to that of other topo isomerase 1 inhibitors. MGCO26 is currently being evaluated in a phase 1 dose escalation study in patients with advanced solid tumors. We anticipate dose expansion and selected indications will initiate in 2025. We plan to disclose these indications at a later date. Second is MGC028, a TOPO1 inhibitor-based ADC that targets ADAM9, a member of the ADAM family of multifunctional type 1 transmembrane proteins that play a role in tumorigenesis and cancer progression, and are overexpressed in multiple cancers such as pancreatic, gastric, adenocarcinoma of the lung, and squamous cell lung cancer, among others. As a reminder, we previously presented preclinical data showing antitumor activity of MGC-028 in in vivo models. Also, in a non-human primate study, MGC-028 was well-tolerated at high dose levels with mild reversible side effects and no ocular toxicity, which is often a concern with tubulin inhibitor-based ADCs. The IMD for MGC028 was cleared by the FDA early this year, and the first patient was recently dosed in a phase one study in patients with advanced solid tumors. And third is MGC030, a preclinical topo-1 inhibitor-based ADC that targets an undisclosed antigen expressed across several solid tumors. There are currently no approved therapies to this target. We anticipate submitting an investigational new drug, or IND, application for MGC030 in 2026, further expanding our already deep clinical pipeline. In terms of our T-cell engagers, recall that MGD024 is our next-generation bispecific CD123 by CD3 DART molecule that incorporates a CD3 component designed to minimize cytokine release syndromes. Our phase one dose escalation study of MGD024 is ongoing in patients with CD123 positive relapsed or refractory hematologic malignancies, including acute myeloid leukemia and myelosusplastic syndromes. Gilead has the option to license MGD024 at predefined decision points during the phase one study. Finally, I'll update you on Vobramidamab durochromycin, or Vobraduo, which is our ADC designed to deliver DNA-alkylating durochromycin cytotoxic payload to tumors expressing B7H3. We announced today results from the Tamarack Phase II study of Vobraduo in patients with MCRPC who were previously treated with one prior androgen receptor axon cytotoxic therapy. Study participants may have received up to one prior taxane-containing regimen, but no other chemotherapy agents. These results, based on a data cutoff of February 21, 2025, showed mature median RPFS of 9.5 months for the 2.0 milligrams per kilogram cohort and 10.0 months for the 2.7 milligrams per kilogram cohort in patients with MCRPC. Safety data from the study remained consistent with our prior data disclosures. Based on our internal review and assessment of Tamarac efficacy and safety to date, we have decided not to pursue further internal development of OBRADUAL and are exploring potential alternatives for partnering the program. We believe the B7H3 target continues to have potential and are pleased with the progress being made with our alternative anti-B7H3 ADC MGC 026. As you can see, there are several upcoming milestones expected across our portfolio in 2025. We're excited about the progress we made in 2024 to advance our programs and look forward to providing further updates in 2025. And now I'll turn the call over to Jim.

Thank you, Stephen. This afternoon, MacroGenics reported financial results for the year ended December 31, 2024, which highlight our financial position. As described in a release this afternoon, MacroGen's total revenue was $150 million for the year ended December 31, 2024, compared to total revenue of $58.7 million for the year ended December 31, 2023. The increase was primarily due to a net increase of $85 million in revenue recognized from milestones achieved under the Insight License Agreement. Our revenue for the year ended December 31, 2024 included $118.9 million in revenue from collaborative and other agreements, Margenza net sales of $16.4 million, and contract manufacturing revenue of $13.1 million. Our research and development expenses were $177.2 million for the year ended December 31, 2024, compared to $166.6 million for the year ended December 31, 2023. The increase was primarily due to increased research, development, manufacturing, and clinical costs related to MGCO28, our preclinical ADC pipeline, and lorajirumab, offset by decreased development and clinical trial costs related to our previously discontinued projects and margituximab. Our selling general and administrative expenses were $71 million for the year ended December 31, 2024, compared to $52.2 million for the year ended December 31, 2023. The increase was due to an $8 million amendment fee we paid to our former commercial partner pursuant to the asset sale of Margenza to Tresera Therapeutics, which closed in the fourth quarter of 2024. as well as increased non-cash stock-based compensation and accrued severance expenses related to the separation agreement with our Chief Executive Officer. During the year ended December 31, 2024, other income reflected a $36.3 million gain recognized on our sale of Margenza to Tercera. Our net loss was $67 million for the year ended December 31, 2024, compared to net loss of $9.1 million for the year ended December 31, 2023. Our cash, cash equivalents, and marketable securities balance as of December 31, 2024 was $201.7 million compared to $229.8 million as of December 31, 2023. Finally, in terms of our cash runway, we anticipate that our cash, cash equivalents, and marketable securities balance of $201.7 million as of December 31, 2024, plus additional projected and anticipated future payments from partners, should extend our cash runway into the second half of 2026. Our anticipated funding requirements reflect expected expenditures related to the ongoing Phase II lorikeet study of lorajirulumab in metastatic castration-resistant prostate cancer, as well as our other clinical and preclinical studies currently ongoing. And now I will turn the call back to Scott.

Thank you, Jim. As I previously mentioned, 2024 was a year of strong execution and important progress for Macrogenics. We're excited about our innovative and proprietary pipeline of product candidates, including Laura Gerlamab, MGCO26, and MGCO28. And we look forward to continuing to advance these candidates and sharing our progress with you. Our development efforts are complemented by our continued business development focus, and we were very pleased to complete the sale of Margenza to Tessera Therapeutics in the fourth quarter. The non-dilutive capital from this deal, along with $100 million received from Insight during the year, has allowed us to continue to invest in our clinical pipeline and R&D efforts. Lastly, the Board continues its diligent search for my successor, and I remain committed to supporting the company during the transition period. We look forward to providing you with updates when available. In closing, 2025 looks to be an exciting year for Macrogenics as we work to advance our pipeline, expand our partnerships, and drive value for both patients and our shareholders. We would now be happy to open the call for questions. Operator?

Thank you so much. And as a reminder to our teleaudience, to ask a question, simply press star 1 1 on your telephone and wait for your name to be announced. To remove yourself, press star 1 1 again. Thank you. Please stand by for our first question, please. And it comes from the line of Peter Lawson with Barclays. Please proceed.

Great. Thanks so much for taking the questions. the Linnet study? What are the gating factors to starting? And then on the B7H3 type 1 ADC, where are you in the dose expansion? Yeah.

Yeah, I'm happy to answer that. So, with regard to Lynette, as you know, the standard of care for, in the later line, ovarian cancer is quite low. You typically see overall response rates of 10 to 15% with anti-P1s in the experimental therapy setting. Some selected experimental trials of ADCs or in combination check point inhibitors have demonstrated ORRs. a size of about 30%. This is a small study, but it is a well-selected patient population, which I think will be able to inform us about whether we can further develop in these indications. And then you had a question about the MGC 026 Phase 1 study. So that study has enrolled quite well. We're very pleased with the progress we've made. You know, we're well into a very nice dosing range, and we should be selecting a dose for further expansion sometime later this year.

Gotcha. Thank you so much.

Thank you. One moment for our next question, please. It comes from the line of Jonathan Chang with Learing Partners. Please proceed.

Hi, guys. Thanks for taking my questions. First question, can you discuss the rationale behind developing loradrolumab in ovarian and clear cell gynecologic cancers? And second question on MGC026, when could we see initial clinical data for that program? Thank you.

Yeah, hi, this is Steven. So I'll answer the second question first. We probably won't get to show you data until the latter half of this year, for 026. With regard to lorajirulumab in ovarian cancer and clear cell gynecologic cancers. We take that indication because it's basically an untreated area as far as checkpoint inhibitors are concerned. The checkpoint inhibitors that are currently available have not shown as much promise as one would like. We think our checkpoint inhibitor, loragilumab, differentiates well because we specifically target the T cells that are already in the tuber microenvironment and that co-express both PD-1 and CTLA-4. And in doing so, largely, but not completely, spare the T regulatory cells that are in the periphery that give rise to the classic toxicities that you see with the available CTLA-4 inhibitors.

Jonathan, this is Scott. I'll just add on the other note. Looking at open spaces for treating combination checkpoint molecules, our encouraging data that we have seen both in reported late-stage castration-resistant prostate cancer and the ongoing Laura Keefe study, which is, as you know, an indication in which is considered a coldish tumor, has not successfully been treated with checkpoints before. We think ovarian is another case here where the similar mechanisms might prevail on the value and the side effects of lorajerolamin.

Got it. Thanks for taking the questions.

Thank you. Our next question is from Tara Bancroft with TD Callen. Please proceed.

Thanks, guys. This is Nick on for Tara. The first one for me is, given the RPFS data that you guys just reported for VOBR Duo, how does this help clarify the path forward for MGC026? For example, do you plan to move this forward in pre-chemo or post-chemo patients, assuming that MCRPC is still an indication of interest? And then the second question is, For the lower key data that's coming in the second half of the year, should we expect to see any RPFS data from that, or is this primarily just going to be RR? Thanks.

Well, we certainly will see, I may ask the second question first, Nick. We certainly will see ORR. Whether we see PFS or not, it's event driven. And so, we just have to wait and see, you know, how the cards fall and how quickly we progress. So, I can't speculate beyond that. Now, your first question is regarding 026 and how that differentiates. 026 is considerably different than of overdue 018. They have a different, decidedly different LACR and a completely different payload. So we think there's opportunity for activity beyond what we saw with 18, and also it's unlikely we will see, and so far haven't seen, some of the toxicities you saw with the overdue, most notably the pleural effusions.

And, Micah, this is Scott. I just want to add your question alluded to the fact of comparing that in a prostate setting. We have not decided at this point on 026 and which indications will let the clinical data guide us. Obviously, the competitive landscape and what we see in prostate and other tumors to decide what particular tumor types we'll prioritize for further expansion.

It's very helpful. Thank you very much.

Thank you. Our next question is from the line of John Miller with Evercore. Please proceed.

Hi, guys. Thanks for taking my question. I'm going to build on the other Jonathan's question on the Lynette indications. I notice that you're not including any of the indications where AstraZeneca is developing their PD-1, CTLA-4 biospecific. Can you speak to any plans you might have in those more traditionally hot tumors or places where we already know that there is a good potential for PD-1, CTLA-4 combinations? And then secondly, speaking of combinations, If Lynette really does have a superior tox profile relative to CTLA-4s, are there places where you might practically be targeting combinations of Lynette with non-IO agents in those indications?

John, thanks so much for your question. With regard to the pathway we are going to proceed, obviously, we have to prioritize our studies. And given the open space in ovarian, we figured that this was an opportunity for us to take advantage of. But we have not excluded the opportunities for other tumors as well. We'll see how the Laura Gerlach and Laura Keith study comes out. We'll see how the Lynette proceeds. And then clearly, we are certainly open to looking at other indications in a timely manner. With regard to combinations, you hit the nail on the head. If, in fact, by completing the lorikeet study and now demonstrating that we can combine with a chemotherapeutic like dosetaxel, which by itself has its own toxicities, we will look at other combinations in the future as we get the final results on lorikeet. particularly the mechanisms by which lorikeet is working, the ability to combine this with other ADCs, TKIs, and other therapeutics is certainly planned in the future.

Thanks so much. Thank you.

Our next question is from Stephen Whaley with Stifel. Please proceed.

Yeah, thanks for taking the question. I guess in the context of potentially getting an update of more key that maybe does not include RPFS before the end of this year, is there just anything that you can say? I know it's really early at this point, but is there anything that you can say just about how the event rate appears to be accruing at this point? Is it in line with expectations? Is it going a little bit slower than expected? I know the randomization scheme here is two to one in favor of Lori, so just curious.

Yes, I mean, it's a two-to-one randomization study designed for 150 patients. We're very pleased with how quickly it enrolled. We started in the later part of 2023 and closed that enrollment for the end of 2024. So the study's fully enrolled, and we're just waiting for events. I think it's too early to comment on the event rate. You know, so beyond that, we just have to wait and see. It's just too early to know.

You know, just an addition is that we had a sizable number of patients that were enrolled early in 24 as well, and given what the expected control population would progress, it would not be unreasonable to think that having a PSS event rate in the second half of the year is possible. But as Stephen commented on, until we achieve the actual numbers, we won't discuss it.

Okay. And I think maybe the question was asked. I might have missed the answer. But could there be some data that's disclosed here in the back half of the year from Laura Key, whether that's a response rate data point, a PSA?

Yeah. Yeah, there certainly could. We just don't know. I mean, so it's, there are two factors. One, you don't know how well your, how the control arm performs. There's a good bit of variability, you know, dosetaxel performance in a clinical setting varies from trial to trial. So, there's that factor. And then there's, you have the experimental arm, so we'd like to see how much added benefit we have. If it's going to come down to the effect size, and the bigger the effect size, the sooner you find out.

Okay. I guess the question is just whether or not there's disclosable data in the absence of having that RPFS trigger.

Yeah, the ORR is something we can look at, and we would expect both agents could contribute to ORR, so you could see differentiation on ORR alone. And that's not as event-driven. There is a tincture of time that it takes to get an ORR sometimes.

Yep, yep, understood. And then just on the ADC portfolio. Can you just remind us what the highest non-toxic dose for 026 was in preclinical primate trials? And is there any kind of differential in that dosing threshold between 026 and 028, just as we try to think about the relative TI for each of these targets?

So, Steve and Scott, we achieved doses of 50 mgs per gig in the primate studies and did not hit a toxic dose. Just from at that point, the magnitude of the effect here, we were over 20x in terms of human dosing expected. in terms of area under the curve. So at this, what was the second part of the question?

I'm just wondering if that 50 mgs per kg is applicable for both candidates or just 026?

For both, for both.

Okay, okay. Very helpful. Thanks for taking the questions.

Thank you. Our next question is from Sylvain Churkin with Citizens. Please proceed.

Thanks. Thanks for taking my questions. Mine is on the bi-specific MGD024. You're almost one and a half years here into the phase one. Can you provide any more details on when we could see data and when Gilead, I know you mentioned that they have points where they can opt in, but are we getting close to one of these points? Could that be this year or would that be next year? Thank you.

Well, hopefully it'll be this year. I mean, we're locked into a relatively slow dose escalation design based on what the FDA expects. And so we're taking a very slow incremental approach to dose escalation and characterizing all of the adverse events very carefully. So it is a bit of a slow-going trial compared to your typical phase one study. We knew this from the beginning just based on where we started, started very low doses, and slowly worked our way up. So we're certainly getting near, but we are not at MTD yet.

Great.

Thanks for the call. Thank you. One moment for our last question, please. It comes from Maya Mamteni with B. Riley Securities. Please proceed.

Yes, good afternoon, team. Thanks for taking our questions. Just quickly on the lorikeet, are you able to talk to your expectations for the discontinuation rate, you know, given the CTLF4 PD1 experience previously? And I was also curious to learn what learnings, if any, from the Phase 2 experience informed you prioritizing the limit program? Just sorry if I missed that earlier.

Yeah, so I think your first question has to do with what we expect in terms of discontinuation rate. We think we'll do better than some of the prior checkpoint inhibitors simply because larderilumab is very well tolerated in patients. We've had patients stay on the larderilumab for considerable lengths of time in other studies. So, we're not anticipating that we'll have a significant dropout from the experimental arm, that is the combination of loradrolumab with docetaxel due to intolerability. Obviously, you can have some, but we think this is a much better tolerated drug than, say, giving ipilimumab with nolumab, for example.

Yeah, and any learnings from that study that contributed to the Lynette program?

Well, I think, I mean, actually, they're very different programs. They're different indications. So, the learnings are indirect, principally around, you know, what dose we want to use and what safety profile we should expect. Now, the Lynette study is an open-label, non-combination study. It's a single-agent study. So, it's a simpler study in that respect.

And, you know, this is Scott, the totality of the data which encouraged us to go into ovarian cancer was not only based on our experiences It was from the phase one expansion studies in prostate. But I should also remind you that in the dose escalation study, we were seeing good tolerability. And in fact, one of the patients that had an objective response was a patient with a carcinoma of the fallopian tube, which is essentially similar to ovarian cancer. So, again, all these points in aggregate and our experiences of improved tolerability of giving this combination checkpoint encourage us to seek other indications like ovarian cancer.

Thank you. And just one more, on MGC028, are you able to comment on how far along you are in the Phase 1 study and if there is any specific time enrichment you have started doing already? Thanks for taking our questions.

Yeah, so that study just got underway a few weeks ago. We have plenty of patients lined up. I think that will go in a very expeditious manner. It's too early to comment on that. With regard to the second part of your question, we're not pre-selecting patients with respect to the level of ADAM9 expression. I think that's what you were alluding to. We'll have a look later on and see if there is a differential effect. But for now, we're not pre-selecting.

But, you know, I just want to say we did limit initially to particular tumor types where we know ADAM9 has upregulation, particularly pancreatic, lung, and cholangiocarcinoma, and we have ideas by adding other tumor types subsequently. So we hope that during the dose escalation, we'll see evidence of activity as well as tolerability.

Sounds good. Thank you.

Thank you. And as a reminder to our teleaudience, if you do have a question, simply press star 1-1 to get in the queue. Well, as I see no further questions in the queue, I will conclude Q&A session, and we'll turn it back to Scott Koenig for his final remarks.

Well, thank you. In closing, I'd like to thank everyone for joining us on this call and for continued interest in macrogenics. A special thanking to our employees for their continued commitment, and we look forward to sharing updates on our progress during future calls. Have a good evening.

Thank you. And this concludes our program. You may now disconnect.