MacroGenics, Inc. Q2 FY2024 earnings call

• Clinical programs: Vobra duo is an ADC targeting B7-H3; TAMARACK Phase II study in mCRPC is ongoing with immature interim results; MGC026 is a B7-H3 ADC in Phase I dose escalation; enoblituzumab is an Fc-optimized monoclonal antibody; lorigerlimab is a bispecific PD-1 × CTLA-4 DART molecule in LORIKEET study; MGD024 is a bispecific CD123 × CD3 DART molecule; MGC028 is a topoisomerase 1 inhibitor based ADC with an IND submitted. - Sale: Global rights to margetuximab (MARGENZA) sold to TerSera Therapeutics for $40 million upfront with potential milestones. - Leadership: Scott Koenig to step down as CEO early next year, with Board initiating search for successor.

MacroGenics reported total revenue of $110.7 million for the quarter ended September 30, 2024, compared to $10.4 million in the same quarter of 2023. The increase was primarily due to $100 million in milestones from Incyte. Research and development expenses were $40.5 million in Q3 2024 versus $30.1 million in Q3 2023, driven by increased costs for the preclinical ADC pipeline and TAMARACK clinical trial. Selling, general and administrative expenses were $14.1 million in Q3 2024 compared to $12.4 million in Q3 2023, mainly due to higher stock-based compensation and professional fees. Net income was $56.3 million in Q3 2024 versus $17.6 million in Q3 2023. Cash, cash equivalents, and marketable securities balance as of September 30, 2024, was $200.4 million, with a cash runway expected into 2026 considering the MARGENZA transaction and other factors.

• Cash runway: Anticipates cash balance of $200.4 million plus $40 million from MARGENZA deal minus $8 million amendment fee provides cash runway into 2026. - Funding: Anticipated expenditures for ongoing Phase 2 TAMARACK and LORIKEET studies and other clinical/preclinical studies.

• Factors affecting forward-looking statements, including those discussed in SEC filings' Risk Factors section.

Q: What do you need to specifically see from the data next year to make a decision about going forward or not for vobra duo?

A: Need to look at final rPFS, safety profile, competitive landscape, and resource allocation across portfolio. It's too early to specify exact parameters.

Q: Can you provide color around the search process for the next CEO and timelines for the transition?

A: Board has selected a subgroup to initiate search with an outside firm; process just started, expectation is Scott will stay until new CEO is selected, taking a few months.

Q: How is the Phase I dose escalation for MGC026 progressing and when could initial clinical data be seen?

A: Phase I dose escalation is going well, expected to complete in 2025 and report data in 2025.

Q: What triggered the decision to pause the vobra lori combo and details on pausing?

A: Paused to assess final TAMARACK data, evaluate vobra dosing for potential future combination studies; data from dose escalation in combo is from double-digit patients in three plus three design, dose expansion not commenced.

Q: Differences in safety profile between vobra duo and MGC026?

A: Expected distinct safety profiles as vobra is DNA-alkylating and MGC026 is Topo 1 inhibitor, but too early to spell out specifics.

Q: Benchmark for LORIKEET trial update in first half of next year?

A: Looking for significant increase in rPFS compared to standard docetaxel alone which has ~8 to 8.6 months rPFS, with hope for OS benefit, but exact numbers not declared yet.

Q: Timing of Gilead's opt-in for MGD024?

A: Study proceeding well, but Gilead's decision on opt-in can't be determined yet as it depends on Phase I data and FDA position on slow dose escalation.

Q: Strategy shift and data from MGC026 in 2024?

A: Company focused on solid tumors, MGC026 dose escalation in wide range of B7-H3 positive tumors, data expected in 2025 for responses in various tumor types.

Q: TAMARACK learnings and efficacy comparison?

A: TAMARACK data shows good responses in chemo-naive and chemo-experienced populations, will assess final data for rPFS, safety, and potential new treatment paradigm.

Q: LORIKEET trial enrollment and OS results?

A: Population similar to TAMARACK, rPFS data expected in 2025, OS likely too early to report in 2025.

Q: Second-generation B7-H3 molecule and data timeline?

A: 026 molecule in Phase I, data expected in 2025; vobra duo data depends on final rPFS and safety, stay tuned for updates.

Q: MGC028 Phase I dose escalation and tumor types?

A: Will limit tumor types based on preclinical and IHC data, including lung, pancreatic, and others, to assess activity and safety, unlike previous molecule with high toxicity issues.