MacroGenics, Inc. (MGNX) Earnings Call Transcript & Summary

So thank you, Boris, for the invitation today. I'll be making forward-looking statements during the course of this presentation, so please refer to our SEC filings, understand the risks associated with investment in MacroGenics. MacroGenics is the leader in development of antibody-based therapeutics for the treatment of cancer. We've built our company around 2 proprietary platforms, a bispecific DART platform that exploits multiple mechanisms of action and an Fc-engineering platform, which enhances innate and adaptive immunity. Our focus right now is to advance our very large clinical portfolio forward into late-stage development. We recently announced the filing of a BLA, and we have a PDUFA date in 2020 with our most advanced clinical program, and we anticipate 3 additional ongoing or anticipated registration-directed studies in the course of this and next year. Our pipeline right now incorporates 7 clinical assets of which we retain major market opportunities for 6 of them. Here's the listing of our end clinical programs, margetuximab, which is 1 of our 2 Fc-engineered molecule, is being pursued in late-line metastatic breast cancer and frontline gastric cancer, in combination with anti-PD-1 and a bispecific PD-1 LAG-3. Flotetuzumab, which is our first DART molecule, targets a CD123 and CD3 receptors as being pursued in AML in -- particularly in refractory disease. MGA012, which is our anti-PD-1 molecule, partnered with Incyte, is being pursued in over 20 different clinical studies, 6 which are registration intent. And enoblituzumab, our first of 2 B7-H3-directed molecule, also an Fc-engineered molecule, is being pursued in frontline head and neck cancer in combination with various checkpoint molecules. Our combination bispecific DART molecule, PD-1 LAG-3, called MGD013, is being pursued in solid tumors and hematological malignancies. And MGD019, our PD-1 x CTLA-4 is being advanced in solid tumors. Finally, our first ADC molecule, MGC018, targeting B7-H3, is also being pursued for treatment of solid tumors. I will talk more at length about the first 5 molecules listed here. I just want to make 2 comments quickly on MGD019 and MGC018. These are in Phase I dose escalation studies. As I've previously commented on, the MGD019 molecule targeting PD-1 CTLA-4 was designed to achieve all the value of a T-cell activation and the combinatorial effect of putting these 2 checkpoint molecules together with a marked reduction in toxicity that is observed with Ipi/Nivo. As I've commented before, we've achieved dosing of patients at 10 mg per kg. We are finishing our dose escalation here. We've seen objective responses with this molecule in a number of different tumor types, and we will complete the dose escalation and hope to update the market with regard to activity later this year. MGC018, our first ADC molecule, is also now in a dose escalation study, where we're seeing biological activity with an acceptable safety profile and plan to have a dose defined by midyear and then define a specific tumor pathway going forward, which we will again update the market. So now let's look at the first 5 molecules in a little more depth. Margetuximab, our anti-HER2-engineered molecule, has recently completed a study called SOPHIA in late-line metastatic breast cancer. The idea here is we're targeting the same epitope recognized by trastuzumab. But by the 5 modifications we incorporate in the Fc region to engage the family of Fc receptors, we intend to promote both innate and adaptive immune activity. We have advanced this program through the initial analysis for PFS, and we have conducted interim analysis on the OS. And as we recently announced, we now have a PDUFA date in the middle of December, this coming year. The study was designed to treat patients who have progressed on other anti-HER2 therapies. Typically, these patients have all received HERCEPTIN, PERJETA. And 91% of the patients in this study received KADCYLA. They were given a choice of 1 of 4 chemotherapies and then randomized either to receive margetuximab or trastuzumab in a one-to-one randomization. The primary sequential endpoints were PFS and OS, and we also had a prespecified exploratory subpopulation for CD16 based on the allelic variations seen in this particular gene, of which the major targeted population, the so-called F allele population, represents 85% of the overall population. As we have announced earlier last year, we achieved the PFS primary endpoint in the intent-to-treat population, with a hazard ratio of 0.76 or a 24% reduction in disease progression, with a P value of 0.033, and the prespecified F allele population, we saw a 1.8-month benefit, with a hazard ratio of 0.68 or 32% risk reduction, with a nominal P value of 0.005. With regard to the interim overall survival analysis, we conducted a second interim analysis at 270 events, where we saw it trending positively for the treatment with margetuximab, although not statistically significant, of about 1.8 months benefit. And with regard to the F allele population in the CD16 158F carriers, we saw a median difference of 4.3 months benefit of margetuximab. Again, the P value, not statistically significant, but it is now at 0.087. A final analysis will be conducted later this year at 385 events. Just to put this in perspective, recent data announced for a study of a TKI inhibitor, tucatinib, had an overall survival benefit of approximately 4 months. So this is quite comparable in that population. We've also been exploring the use of margetuximab in gastric cancer. We announced last year, very positive results in patients with -- and treated in second-line metastatic gastric cancer. Here, shown here in the IHC 3+ population, approximately a 33% overall response rate. And then the subpopulation of patients that were PD-L1 positive, approximately a 50% response rate. And as you see here in the asterisk on below on the right-hand side, a number of these patients are still on therapy. What is quite remarkable is the effect on survival in this population, where you see that in the PD-L1 positive population, we were having a survival benefit even at this cut of over 20 months, which compares quite favorably to standard of care, which is ramucirumab and paclitaxel in the second line, where survival is about 9.6 months, but with a much dramatically reduced side effect profile of 20% grade 3 treatment-related adverse events. This data also compares quite favorably to the frontline treatment, which is the TOGA regimen, which patients have seen trastuzumab and chemotherapy, where an overall survival of 13.1 months survival compared to the 20.5 we were seeing in the PD-L1 positive population. But as noted here, a very high effect in the safety profile, with 68% Grade 3 responses. So as a result, we had approached the FDA to design a pivotal study, a Phase II/III study registration path. In frontline gastric cancer, based on the second-line data, this is designed as 2 separate modules. First module looks like the one we just described, which is our HER2 3+ positive, PD-L1 positive population based on a 1% CPS. We are currently enrolling the study of this patient population. And as I have commented on previously, we hope to have sufficient number of patients enrolled and evaluated in the first part of the study to make a decision to go forward to complete this study. And based on interactions with the FDA, the chances of accelerated approval are quite high if, in fact, we achieved the response rate and the safety profile that we discussed with them. Later this year, we will start a study in module B in association with Zai Lab, who will initiate that study, where here, we're looking at the conventionally defined HER2-positive population. But now we are looking at the ability of not only treating with our anti-PD-1 MGA012 plus chemotherapy, but also the bispecific PD-1 LAG-3 molecule with chemotherapy. We will compare this with the TOGA regimen. And then based on overall response rate, we will then collapse that study on the best responding checkpoint inhibitor to compare it to the traditional TOGA regimen, as seen on the lower right-hand side, looking for overall survival as the endpoint in that study. So now let's turn our attention to our anti-PD-1 -- I'm sorry, our first DART bispecific flotetuzumab, our CD123 x CD3 molecule. CD123 is targeting the alpha chain of the IL-3 receptor, which is highly overexpressed in AML blasts as well as leukemia stem cells. The idea here is to recruit T-cells in an MHC unrestricted fashion to destroy the tumor and the stem cells. We have an ongoing study in Phase I/II in patients with relapsed/refractory AML as well a combination study combining this with our anti-PD-1. Last September, we engaged the FDA on discussing a registration study, going forward, in the refractory population. This was based on very promising data, which we presented at ASH this last December, where we see in this so-called refractory population, let me define this as noted, which is these patients fail high-dose chemotherapy on multiple lines of hypermethylating agents, or who have a very quick relapse in a few months, even if they have response to chemotherapy. And what you see here is we were seeing a CR/CRi rate of a little over 30%, or a CR/CRh rate of 28.6%. Again, if you look at the historical data of patients treated with chemotherapy, we're in the low double digits, approximately 12.5% response rate at first salvage. And then at later salvage therapies, you're down to single digits or 0 beyond that. So given this favorable response and an actual favorable safety profile based on CRS, we engaged the FDA. We are providing them with some additional data, expect to interact with them very shortly. And then our plan is by midyear to discuss next steps forward for registration. Here is the results of the responding population. As I noted before, not only have many of these patients failed high-dose chemotherapy as listed here, but they have failed many of the more recently approved drugs like venetoclax and experimental drugs like CD33 x CD3 bispecifics. So what are our future plans? As I again note, we're looking forward to move into the refractory population. This represents at least 30% of overall AML pop patients, given that there's an incidence of about 20,000 patients annually in the U.S. that represents at least 6,000 patients who are at risk on an annual basis. We're also pursuing a combination with our anti-PD-1 based on an upregulation of PD-L1 on an AML blast and very favorable preclinical results on that combination. This is being conducted right now outside the U.S., but in the future, will include U.S. sites as well. And then we have in development an Fc-bearing alternative, anti-CD3, which has a dramatically reduced cytokine profile, which we see to have the ability to expand in other hematological malignancies, and we'll provide further updates on this later this year. Now turning our attention to our anti-PD-1, which we have a global collaboration with Incyte. This is designed as an IgG4 mAb. But we have on currently with Incyte, 6 registration-directed studies and overall 20 studies being conducted. As we have noted previously, we have a very significant economics associated with this deal. Future milestones of $750 million, which includes at least $405 million of clinical and regulatory milestones with tiered royalties in the 15% to 24% range based on overall sales. And of course, as I've noted previously, we are actually making the molecule in our commercial manufacturing facility for both clinical studies being conducted by us, Zai Lab and MacroGenics, and we'll provide a significant part of the commercial market material for them. Incyte is now conducting studies in various niche indications. They noted recently a completion of enrollment in an anal cancer study with expected analysis of this data later this year as well as enrolling patients in MSI-high endometrial cancer and Merkel cell cancer. They recently announced the 2 studies called POD1UM-304 and POD1UM-301, where they'll look at the effect of the anti-PD-1 in non-small cell lung cancer in registration-directed studies, which is expected to start soon. And then as I've noted already, we are combining margetuximab with the anti-PD-1 MAHOGANY study. Now we're turning our attention to our combination bispecifics, MGD013, a PD-1 LAG-3 first combination checkpoint molecule, is obviously focused to reactivate exhausted T-cells by combining simultaneously 2 checkpoint molecules. We have conducted a dose escalation study, established a dose for this molecule and have expanded this into 9 different tumor types. As we have previously announced, we have treated over 150 patients. We have recently submitted the abstracts for ASCO. And if it's accepted and presented there, we should be able to present data on the dose escalation as well as specific tumor targets based on objective response rates that we intend to move forward. The early studies in preclinical, showing the merits of this molecule, is sort of outlined here. Here, we took samples from a dozen normal volunteers, activated them to upregulate all the checkpoint molecules on the T-cells. And then we gave back either individual antibodies to PD-1 or LAG-3. Both the specific specificities that are contained in MGD013 as well as the gold standard at that time, which was the BMS molecule, 25F7 for LAG-3 and nivolumab. As noted here, in terms of T-cell activation, the readout here is gamma-interferon production. As you see on the top, the bispecific DART molecule was quite superior compared to the individual antibodies alone, or in combination as individual antibodies in restoring T-cell activation. Now turning our attention to enoblituzumab. We believe this is the potential leading anti-B7-H3 monoclonal antibody. Again, using the same 5 amino acids substituted in margetuximab, the same specificities are contained here. We have demonstrated both for margetuximab and enoblituzumab, the ability to activate both the innate and specific immune responses, we've called expansion of T-cells. We have demonstrated activity quite favorably in both head and neck cancer and lung cancer in combinations with anti-PD-1. And as we've announced earlier this year, our plans to initiate a lead-in strategy where we're combining enoblituzumab with our anti-PD-1 or with a bispecific PD-1 LAG-3 to then pick the best one to move forward in a Phase II/III study. We have already gotten the buy-in from the FDA to conduct a Phase II/III study in frontline head and neck cancer. This was based off of a very favorable data in late-line patients with head and neck cancer, which we presented at SITC 1.5 years ago. As you see here, we were seeing approximately a 33% response rate in a small population, irrespective of B7-H3 expression, and over 40% in those who had greater than 10% B7-H3 expression. And as you see, these are -- many of these patients have long-lived antitumor response in the inset shown here on the upper right-hand panel. If you look now compared to the historical data in a similar population of late-line post-chemotherapy patients, either using nivolumab or pembrolizumab, as you see, the 33% overall response rate is at least 2x greater than those individual studies conducted alone. And even in the setting of the approved drug, which is frontline chemotherapy in pembrolizumab, where they're seeing a 36% response rate, the combination of pembro and enoblituzumab without chemotherapy compares quite favorably. And so again our plan is to pick the best checkpoint molecule going forward and then move that into a front-line study in head and neck cancer, likely to start sometime next year. So with regard to the key milestones anticipated in 2020, we have margetuximab. As noted here, we filed the BLA, it was accepted in the first quarter. We will have final OS in the second half of this year. We expect an ODAC in the second half of this year, likely in the fall. And our PDUFA date is on the 18th of December of this year. As I noted earlier, we are accelerating the enrollment in the module A of the gastric cancer study and hope to be able to provide data later this year on the response rate in that population. As I previously said for flotetuzumab and the refractory AML population, we'd like to define the registration path following another interaction with the FDA and expect to update by midyear. We expect Incyte to provide disclosures further on the MGA012, which obviously, in many of these cases, if successful would trigger milestone payments, which I've described before. And then on the 013 molecule, if accepted at the ASCO presentation, present the initial data on that and discuss the next indications going forward. And finally, with regard to our financial position, as we announced on our fourth quarter earning call, we had $216 million in cash. We have guided that this will take us into 2021 and anticipating through 2021, and we're working hard with the current cash position plus some anticipated milestones to get us into 2022. As noted in the bottom here, we've been very successful, historically, in bringing nondilutive capital into the company through various partnerships, with over $500 million of nondilutive capital through these partnerships since our IPO. And with that, I'm open to questions, so I'll turn it to the audience. Thank you very much.

I guess maybe I'll start one out here for the rest before the breakout session.

Sure.

The key questions from investors has been on margetuximab, your plan and strategy on the commercial side?

Yes. Thank you very much for that question, Boris. As indicated last year, we had...

Can you repeat the question for the webcast?

Yes, I'm sorry. So question was, what is the commercial plans for margetuximab going forward in breast cancer? And as I noted last year, we had engaged a number of different companies with the intent of finding a partner to commercialize this, either in the U.S. or outside the U.S. We had engagement with a number of parties. Given the change of landscape with regard to late-line treatment of metastatic breast cancer, in the case of 8201 and tucatinib, we have decided that rather than putting more effort on this right now, given that there will be a regulatory review now out for the molecule, we would -- we'll wait until later this year, particularly around the time of ODAC, making sure that, that has a possible review process. In addition, as I've noted previously, much of the additional gastric cancer data will be coming out later this year. And so we think that, that would provide us with the greatest opportunity for finding the appropriate partner going forward.

Thank you.

Thank you.