MacroGenics Q4 2024 Earnings Call Transcript

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March 20, 2025

There are 11 speakers on the call.

Operator

Good afternoon. We will begin the Microgenics Fourth Quarter and Full Year twenty twenty four Corporate Progress and Financial Results Conference Call in just a moment. All participants are in a listen only mode and we will conduct a question and answer session at the conclusion of the call. At this point, I will turn the call over to Jim Carrolls, Senior Vice President and Chief Financial Officer of Microgenix. Please proceed.

Speaker 1

Thank you, operator. Good afternoon, and welcome to Microgenix conference call to discuss our fourth quarter and full year twenty twenty four financial and operational results. For anyone who has not had the chance to review these 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 thirty days beginning approximately two hours after the call is completed.

Speaker 1

I'd like to alert listeners that today's discussion will include statements about the company's future expectations, plans and prospects that constitute forward looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the Risk Factors 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 Doctor.

Speaker 1

Scott Koenig, President and Chief Executive Officer of MacroGenics and Doctor. Steven Eck, our Senior Vice President, Clinical Development and Chief Medical Officer. And now, I'd like to turn the call over to Scott.

Speaker 2

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.

Speaker 2

I'll now turn it over to Steven to discuss those clinical updates.

Speaker 3

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 lorazirumab, our bispecific tetravalent DART molecule designed to enable blockade of PD-one and CTLA-four with potentially enhanced CTLA-four 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 LORIKET Phase II trial, a 150 patient randomized study of lorazirumab 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.

Speaker 3

Given that this endpoint is an 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 LORIKET in the second half of this year. Based on our cumulative experience to date from our Phase one and Phase two studies of loragirilumab, including in metastatic castrate resistant prostate cancer, a tumor setting historically insensitive to checkpoint inhibition, we plan to initiate the LINITS Phase two study. This clinical trial will evaluate lorazirumab 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 therapy.

Speaker 3

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 in linnet, which is expected to commence by mid-twenty twenty five. 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, Synafix, a launch company. I will now walk you through these three candidates.

Speaker 3

First is MGC-twenty six, which is a TOPO1 inhibitor based ADC that targets B7 H3, 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 MGC-twenty six given the molecule was constructed using a clinically active variable domain also contained in vogradoodle as well as the use of SINNIFYX's TOPO1 inhibitor linker payload, which has shown potentially superior preclinical profile compared to that of other TOPO isomerase one inhibitors. MGC-twenty six is currently being evaluated in a Phase one dose escalation study in patients with advanced solid tumors. We anticipate dose expansion in selected indications will initiate in 2025. We plan to disclose these indications at a later date.

Speaker 3

Second is MGC-twenty eight, a topo one inhibitor based ADC that targets ADAM9, a member of the ADAM family of multifunctional type one transmembrane proteins that play a role in tumorigenesis and cancer progression and are over expressed 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-twenty eight in in vivo models. Also in a non human primate study, MGC-twenty eight 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 IND for MGC-twenty eight 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 MGC-thirty, a preclinical TOPO1 inhibitor based ADC that targets an undisclosed antigen expressed across several solid tumors.

Speaker 3

There are currently no approved therapies to this target. We anticipate submitting an investigational new drug or IND application for MGC-thirty in 2026, further expanding our already deep clinical pipeline. In terms of our T cell engagers, we're calling MGD024 is our next generation bispecific CD123xCD3 DART molecule that incorporates a CD3 component designed to minimize cytokine release syndrome. 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 myelocyst plastic syndromes. Gilead has the option to license MGD024 at predefined decision points during the Phase one study.

Speaker 3

Finally, I'll update you on vovirimitimab dorkromycin or VOBR Duo, which is our ADC designed to deliver DNA alkylating durachromycin cytotoxic payload to tumors expressing B7H3. We announced today results from the Tamarac Phase II study of VOBR Duo in patients with mCRPC who were previously treated with one prior androgen receptor access targeted 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 02/21/2025 showed mature median RPFS of 9.5 for the two point zero mgkg cohort and ten point zero months for the two point seven milligrams per kilogram cohort in patients with mCRPC. Safety data from the study remained consistent with our prior data disclosures.

Speaker 3

Based on our internal review and assessment of Tamarac efficacy and safety to date, we've decided not to pursue further internal development of OBERDUO and are exploring potential alternatives for partnering the program. We believe the B7 H3 target continues to have potential and are pleased with the progress being made with our alternative anti B7 H3ADC MGC026. 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.

Speaker 1

Thank you, Steven. This afternoon, MacroGenics reported financial results for the year ended 12/31/2024, which highlight our financial position. As described in the release this afternoon, MacroGenics total revenue was $150,000,000 for the year ended 12/31/2024, compared to total revenue of $58,700,000 for the year ended 12/31/2023. The increase was primarily due to a net increase of $85,000,000 in revenue recognized from milestones achieved under the Insight license agreement. Our revenue for the year ended 12/31/2024, included $118,900,000 in revenue from collaborative and other agreements, Margensa net sales of $16,400,000 and contract manufacturing revenue of $13,100,000 Our research and development expenses were $177,200,000 for the year ended 12/31/2024, compared to $166,600,000 for the year ended 12/31/2023.

Speaker 1

The increase was primarily due to increased research, development, manufacturing and clinical costs related to MGC-twenty eight, our preclinical ADC pipeline and lorazirumab, offset by decreased development and clinical trial costs related to our previously discontinued projects and margetuximab. Our selling, general and administrative expenses were $71,000,000 for the year ended 12/31/2024, compared to $52,200,000 for the year ended 12/31/2023. The increase was due to an $8,000,000 amendment fee we paid to our former commercial partner pursuant to the asset sale of Margenza to Tercera Therapeutics, which closed in the fourth quarter of twenty twenty four, as well as increased noncash stock based compensation and accrued severance expenses related to the separation agreement with our Chief Executive Officer. During the year ended 12/31/2024, other income reflected a $36,300,000 gain recognized on our sale of Margenza to Tercera. Our net loss was $67,000,000 for the year ended 12/31/2024, compared to net loss of $9,100,000 for the year ended 12/31/2023.

Speaker 1

Our cash, cash equivalents and marketable securities balance as of 12/31/2024, was $201,700,000 compared to $229,800,000 as of 12/31/2023. Finally, in terms of our cash runway, we anticipate that our cash, cash equivalents and marketable securities balance of $201,700,000 as of 12/31/2024, plus additional projected and anticipated future payments from partners should extend our cash runway into the second half of twenty twenty six. Our anticipated funding requirements reflect expected expenditures related to the ongoing Phase II lowercase study of lorazirlimab 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.

Speaker 2

Thank you, Jim. As I previously mentioned, 2024 was a year of strong execution and important progress in MacroGenics. We're excited about our innovative and proprietary pipeline of product candidates, including loradirlimab, 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 Marjensa to TECERA Therapeutics in the fourth quarter. The non dilutive capital from this deal along with $100,000,000 received from Incyte during the year has allowed us to continue to invest in our clinical pipeline and R and D efforts.

Speaker 2

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?

Operator

Thank you so much. And it comes from the line of Peter Lawson with Barclays. Please proceed.

Speaker 4

Great. Thanks so much for taking the questions. On the LINET study, what are the gating factors to starting? And then on the B7H3 to one ADC, where are you for the in the dose expansion?

Speaker 3

Yes. I'm happy to answer that. So with regard to LINET, as you know, the standard of care for in later line ovarian cancer is quite low. You typically see overall response rates of ten percent to fifteen percent with anti PD1s in the experimental therapy setting. Some selected experimental trials of ADCs are in combination checkpoint inhibitors have demonstrated ORRs size of about thirty percent.

Speaker 3

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-twenty six, a Phase I study. So that study has enrolled quite well. We're very pleased with the progress we've made. We're well into a very nice dosing range and we should be selecting a dose for further expansion sometime later this year.

Speaker 4

Got you. Thank you so much.

Operator

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

Speaker 5

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

Speaker 3

Yes. 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 '26. With regard to lorodilumab in ovarian cancer and clear cell gynecologic cancers, I would take that indication because it's basically untreated areas as far as checkpoint inhibitors are concerned.

Speaker 3

The checkpoint inhibitors that are currently available have not shown as much promise as one would like. We think our checkpoint inhibitors lorodilumab differentiates well because we specifically target the T cells that are already in the tumor microenvironment and that co express both PD-one and CTLA-four. And 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-four inhibitors.

Speaker 2

Yes, 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 MORA KEED 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 scientific effects of lorogerlamin.

Speaker 5

Got it. Thanks for taking the questions.

Operator

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

Speaker 6

Thanks guys. This is Nick on for Tara. The first one for me is given the RPFS data that you guys just reported for VOBER 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 should we expect to see any RPFS data from that?

Speaker 6

Or is this primarily just going to be RRR? Thanks.

Speaker 3

Well, we certainly will see I may ask the second question first, Nick. We certainly will see RRR. The whether we see PFS on us, event driven. And so, we just have to wait and see how the cards fall and how quickly we progress. So, I can't speculate beyond that.

Speaker 3

Now your first question was regard to '26 and how that differentiates. '26 is considerably different than of overdue 18. They have a different decidedly different laker and a completely different payload. So we think there's opportunity for activity beyond what we saw with 2018. And also, it's unlikely we will see and so far haven't seen the some of the toxicities you saw with the overdue, most notably the pleural effusions.

Speaker 2

And Nick, 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 '26 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 will prioritize for further expansion.

Speaker 6

That's very helpful. Thank you very much.

Operator

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

Speaker 7

Hi guys. Thanks for taking my question. I'm going to build on the other Jonathan's question on the Linnet indications. I noticed that you're not including any of the indications where AstraZeneca is developing their PD-one CTLA4 bispecific. 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-one CTLA4 combinations?

Speaker 7

And then secondly, speaking of combinations, if Linett really does have a superior tox profile relative to CTLA4s, are there places where you might proactively be targeting combinations of Lannett with non IO agents in those indications?

Speaker 2

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 LORERGYN melon Rakeets study comes out. We'll see how the LINET proceeds.

Speaker 2

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 LORAQUETE study and now demonstrating that we can combine with a chemotherapeutic like docetaxel, which by itself has its own toxicity, we will look at other combinations in the future as we get the final results on LORAQUETE. Given particularly the mechanisms by which LoRaquita is working, the ability to combine this with other ADCs, TKIs and other therapeutics is certainly planned in the future.

Speaker 8

Thanks so much.

Operator

Thank you. Our next question is from Stephen Willey with Stifel. Please proceed.

Speaker 9

Yes. Thanks for taking the question. I guess in the context of potentially getting an update of LORqueat 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?

Speaker 9

Is it in line with its expectations? Is it going a little bit slower than expected? I know the randomization scheme here is two:one in favor of Lori. So just curious.

Speaker 3

Yes. I mean, it's a two:one randomization study, a study designed for 150 patients. We're very pleased with how quickly it enrolled. We started in later part of 2023 and closed that enrollment for the end of twenty twenty four. So the site is fully enrolled and we're just waiting for events.

Speaker 3

I think it's too early to comment on the event rate. So beyond that, we just have to wait and see. It's just too early to know.

Speaker 2

Just an addition is that we had a sizable number of patients that were enrolled early in 2024 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.

Speaker 9

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 lower key whether that's a response rate data point of PSC?

Speaker 3

Yes, 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 good bit of variability in our docetaxel performance in the clinical setting and varies from trial to trial.

Speaker 3

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 cut down the effect size and bigger the effect size, the sooner you find out.

Speaker 9

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

Speaker 3

Yes. The ORR is something we can look at and you would expect hope agents could contribute to ORR. So you could see differentiation on ORR alone. And that's not asset event driven.

Speaker 9

And then

Speaker 3

There is a signature time that it takes to get an ORR sometimes.

Speaker 9

Yes, yes. Understood. And then just on the ADC portfolio, can you just remind us what the highest non toxic dose for '26 was in preclinical primate trials? And is there any kind of differential in that dosing threshold between twenty six and 28 just as we try to think about the relative TI for each of these targets?

Speaker 2

So Steve, this is Scott. We achieved doses of fifty 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're 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?

Speaker 9

I'm just wondering if that fifty mg per kg is both candidates or just zero point two six?

Speaker 3

Both.

Speaker 8

Okay.

Speaker 9

Okay. Very helpful. Thanks for taking the questions.

Operator

Thank you. Our next question is from Silvan Cherkken with Citizens. Please proceed.

Speaker 8

Thanks for taking my questions. Mine is on the bispecific MGD024, you're almost one point five years 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 then? Thank you.

Speaker 3

Well, hopefully, it will 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.

Speaker 3

So we're certainly getting near, but we are not at MTD yet.

Speaker 8

Great. Thanks for the color.

Operator

Thank you. One moment for our last question, please. It comes from Mayank Mamtani with B. Riley Securities. Please proceed.

Speaker 10

Yes, good afternoon team. Thanks for taking our questions. Just quickly on the lower key, are you able to talk to your expectations for the discontinuation rate, given the CDLF4PD1 experience previously? And I was also curious to learn what learnings, if any, from the Phase two experience informed you prioritizing the linnet program? Just sorry if I missed that earlier.

Speaker 3

Yes. So I think your first question has to do with the what we expect in terms of discontinuation rate. We think we'll do better than some of the prior checkpoint inhibitors simply because lordrelimab is very well tolerated in patients. We've had patients stay on the lordrelimab 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 larderilumab with docetaxel due to intolerability.

Speaker 3

Obviously, you can have some, but we think there's a much better tolerated drug than say giving ipilimumab with nolumab, for example.

Speaker 10

Yes. And any learnings from that study that contributed to the Linnet program?

Speaker 3

Well, I think I mean, after that they're very different programs, they're different indications. So the learnings are indirect, principally around what dose we want to use and what safety profile we should expect. Now the Lannett study is an open label non combination study. It's a single agent study. So it's a simpler study than the first step.

Speaker 2

This is Scott. The totality of the data which encouraged us to go into ovarian cancer was not only based on our experiences in Wauraki, 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 serious 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.

Speaker 10

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

Speaker 3

Yes. So that study just got underway a few weeks ago. We typically have plenty of patients lined up. I think that will go in a very expeditious manner. It's too early to comment on that.

Speaker 3

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.

Speaker 2

But I just want to say we did limit initially to particular tumor types where we know ADAM9 has up regulation, 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.

Speaker 10

I'm good. Thank you.

Operator

Thank you. All right. As I see no further questions in the queue, I will conclude Q and A session. I will turn it back to Scott Koenig for his final remarks.

Speaker 2

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 thank you to our employees for their continued commitment and we look forward to sharing updates on our progress during future calls. Have a good evening.

Operator

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

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