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

Hello and welcome to the Morgan Stanley 18th Annual Global Healthcare Conference. I'm one of the biotech analysts here. My name is David Lebowitz. And I'm happy -- I guess before I get started, let me just read the requisite disclosures. Please note that this webcast is for Morgan Stanley's clients and appropriate Morgan Stanley employees only. This webcast is not for members of the press. If you are a member of the press, please disconnect and reach out separately. For important disclosures, please see Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. And with that, I'm happy to welcome to the virtual stage with me from MacroGenics, CEO, Dr. Scott Koenig.

I guess, Scott, if you could start out by giving me the whole top line on MacroGenics. You obviously have a very large pipeline and a lot of different ways to approach fighting cancer. If you could tell us a little bit about the pipeline, that would be great.

It's my pleasure, and thank you, David, for the invitation today. It's very exciting. We're in the 20th year of operation and the company. The company has been built around immune-based therapeutics. We have currently 8 molecules in clinical development, using our proprietary technologies. As you recall, we were one of the leaders of developing Fc engineering technology, where we've shown the effectiveness of promoting both innate and adaptive specific immunity. We have one of the best bispecific platforms called DART, where -- we have exploited this using multiple mechanisms of action. And then more recently, we have added a number linker/toxin technologies to add on to our antibody specificities to generate ADC molecules. So these 3 platforms together have been advanced forward, both as individual therapeutic agents to treat cancer and with the mission of the company is we've been combining these molecules to give an even more effective therapeutic response across the board. Currently, as I said, we have 8 molecules in clinical development and between 4 and 6 preclinical molecules that are in mid- to late-stage development. Our programs in the clinic go from Phase I to Phase III. As you know, we have 2 Fc engineering programs, the lead one most advanced margetuximab is being developed both in late-stage metastatic breast cancer as well as frontline gastric cancer. And we have a PDUFA date coming for the breast cancer study later this year in December. We have data coming up early next year on the first part of our gastric cancer study called MAHOGANY. Our first DART molecule that we went into the clinic, I'm very happy to say, called flotetuzumab, targeting CD123 and CD3, has advanced into a registration-directed study in refractory AML patients, where we hope to enroll more than 200 patients in a single-arm study that we expect to enroll by the end of next year. And we will be providing updates on that program at ASH later this year. Coming up at this upcoming ESMO meeting tomorrow and over the weekend, there will be data on retifanlimab, which we partnered with Incyte, in registration-directed study in anal cancer; there'll be results in Merkel cell cancer; and we're very excited about the oral presentation we have this coming Sunday on our DART molecule called MGD019, our PD-1 x CTLA-4, where in this Phase I study, we are going to show objective response rates, very good safety profile and very strong data associated with activation of both the PD-1 and CTLA-4 pathway. As you also know, we have a very large portfolio focused on B7-H3 as a target, 2 molecules. At this last ASCO meeting, we highlighted our Phase I study for MGC018, our first ADC molecule, where we showed in patients with a late-stage castration-resistant prostate cancer, 5 out of these 7 patients had a greater than 50% reduction in PSA levels in this late-stage population as well as evidence of tumor reduction in other tumor types. And we have recently announced that we are going to expand that study into 40 additional castration-resistant prostate patients. We'll begin enrolling that very shortly as well as expanding into 2 other cohorts, patients with late-stage lung cancer and late-stage triple-negative breast cancer; add on to that the second B7-H3 molecule called enoblituzumab, where we've had very promising historical data in combination with anti-PD-1s, we will be starting a frontline study in head and neck cancer in combination with retifanlimab in PD-1-positive patients. And in PD-L1-negative patients, we're going to combine that with our bispecific PD-1 LAG-3. Just to refresh your memory, at ASCO this year, we presented our first Phase I data of the PD-1 x LAG-3 and showed very nice responses as monotherapy in a number of different tumor types, and we added on an additional cohort of patients that were HER2-positive and combined it with margetuximab, which we showed very strong data in these late-stage HER2-positive patients, where 6 out of 14 patients had objective responses, and we're now expanding that study into 30 -- up to 30 additional patients with breast cancer, 30 patients with gastric cancer and 30 patients in a basket study in late-stage cancer. And then finally, not for least, we have a new molecule called IMGC936, which is targeting a very novel target called ADAM9, where we have a 50-50 collaboration with ImmunoGen to develop the next-generation maytansinoid called DM21, and that will begin dosing in the fourth quarter of this year. So as you see lots of activities across the board with very exciting molecules. David? Hello? Hello? [Technical Difficulty] Well, I haven't heard David, so I don't know what questions he wants to ask. Maybe I can go in a little more depth on some of these programs until I hear back from him. So as you know, for margetuximab, we have a PDUFA date in this coming December. The -- we've had very nice interactions with the FDA, and we continue -- we had the mid-cycle review with them. We expect a late-cycle review. The PDUFA date is in December. We have responded to questions. We have a scheduled time for the FDA to review the manufacturing facility where margetuximab is being produced. So we look to be on target. As you know, we hit our primary endpoint of progression-free survival in that study. We're still waiting for the 385 events for overall survival. It looks like patients are living longer, so while we originally projected that result later this year, it looks like more likely that will occur sometime in 2021. We have also on planned is a IST study in new adjuvant treatment of patients with the epithelial variant, which -- where we show the greatest therapeutic benefit in that CD16-positive population, which represents 85% of the patients. As I noted, we're moving forward with a very exciting data that we published this summer in gastric cancer where in second-line therapy of margetuximab in an anti-PD-1, we were seeing overall survival benefits of over 20 months, which compared favorably to ramucirumab and paclitaxel, which is the second-line therapy and the HERCEPTIN and chemotherapy in frontline. And so with that, we proceeded into the subpopulation of IHC 3+ positive patients, PD-L1-positive patients, and as I said earlier, we hope to enroll about 40 patients and then make a decision based on the response rate and safety profile to proceed more aggressively towards an accelerated approval based on previous interactions with the FDA. We'll make that decision early in 2021. We also are looking at the conventionally defined HER2-positive population, where we're combining margetuximab with chemotherapy and either retifanlimab or the PD-1 LAG-3 tebotelimab. And we're doing this in collaboration with our partner in China Zai Lab. They'll begin enrolling very soon, and then we will add on patients next year on this gastric cancer study. In the upcoming presentations at ESMO, you will hear about our MGD019, our PD-1 CTLA-4 molecule. We're very excited about the prospects there. As you recall, we designed this molecule to have all the activating properties of Ipi/Nivo, but a dramatically improved safety profile. Preclinically, we had demonstrated in monkeys dosing up to 100 mg per kg all the activating properties of T cells based on expansion of T cells and division of T cells, without the side effect profile of Ipi/Nivo. And we then proceeded into an all-comers dose escalation study. And what that is what you'll see at this upcoming presentation on Sunday, where we've seen objective responses in the 3 to 10 mg per kg dosing range, and we've seen very significant biomarkers, demonstrating activation of both the PD-1 and CTLA-4 pathway with a safety profile that is not dissimilar to anti-PD-1 therapies. What will be very interesting, I hope, as you observe the data is that patients that seem to have responses are not those that are traditionally associated with response to checkpoint molecules. And what we will announce on Sunday is our plans for next steps of advancing these as monotherapy in expansion cohorts. You'll also see some of the first data coming out on retifanlimab, the anti-PD-1 that we have presented -- that we had licensed to Incyte, and they will present the first data on the anal cancer data in a late breaker, a mini oral presentation tomorrow as well as a poster session on Merkel cell cancer. With regard to later this year, it is likely that we will have a presentation at SITC, where there will be some updates on the data we presented on PD-1 x LAG-3, tebotelimab in combination with margetuximab. Just to refresh your memory, we had shown that in this very low-expressing PD-L1 LAG-3-positive population, we could use our Fc engineering...

You can hear me all right?

Now I can hear you. I was hoping to fill in. So now I hear you.

If I may, I [indiscernible] here. If you want to catch me up where you are, and then I can pick up.

Yes. No, I was just sort of going over the portfolio, again, a little bit more in depth. I was just talking about upcoming events. I just went through what was being presented at ESMO for the PD-1 CTLA-4 as well as retifanlimab. And I was just on that in the -- we had submitted an abstract into SITC about tebotelimab, where we will provide an update on the marge cohort plus tebotelimab, which we have expanded further from the original 14 patients that we have already tested. So let me turn it back to you for questions.

Sure, sure. Certainly, one of the big topics that people talked about earlier this year was when you brought up your data from MGD013. And I guess, if you could run us through the data that you presented earlier this year and why you think it's particularly exciting?

Yes. So I've commented a little bit already, but let me go a little bit over it. We were -- we've dosed patients all the way up to 1,200 milligrams on a q2 weekly basis, showed wonderful pharmacokinetics of this molecule, did not hit dose-limiting toxicity at the highest dose. We ultimately expanded this into 9 different tumor types at 600 mg per -- mg flat dose on a q2 weekly basis. And the data that we presented as monotherapy showed objective responses in patients with triple-negative breast cancer, with ovarian cancer, with lung cancer, both in PD-1 experienced as well as PD-1 naive. And we showed a very exciting patient with lymphoma post CAR-T that after a single dose totally resolved his lymphoma, and that patient then went on to transplant and is still tumor-free. What we had demonstrated as monotherapy is that there was a close association with various biomarkers where we showed that patients with the highest expression of LAG-3 are the ones that were most likely to respond to monotherapy. And furthermore, showed that through a collaboration with NanoString that there were other activation markers, particularly a series of gamma-interferon-associated genes that also associated with response to the PD -- to MGD013, which we call tebotelimab. So what I have said is that we are now expanding that database. Currently, a patient's already treated to see if we can nail down a marker or a combination of markers so that we can enrich prospectively for patients that we expect to respond to tebotelimab. And we should have that data by late this year, and then if that turns out to be true, then we would then design monotherapy studies in a couple of different tumor types. Then in addition, as I -- we reported at ASCO is that in patients with very low LAG-3 expression and very low PD-L1 expression, we took advantage of our Fc engineering technology, where we had previously shown that we could activate both innate and specific immunity. With that activation of those parts of the immune system, we also saw association with upregulation of various checkpoint molecules, including PD-L1 and LAG-3. So we took advantage of that observation to combine it with tebotelimab in patients that were late-stage HER2-positive tumors. And that was the one data I've already described where we saw 6 out of 14 patients having objective responses, some that were confirmed, some that hadn't been confirmed yet. And that is the data that we've now expanded. We will provide an update likely at SITC if our abstract is accepted. So that's sort of the status of that program.

I look forward to seeing that updated data. Could you, I guess, run through -- similarly, at the same time frame, you announced data for your ADC on the targets B7-H3 or MGC018?

Yes. So very exciting data. Clearly, when we first submitted the abstract in February, we didn't expect such robust data by the time we were getting to ASCO. But that obviously was very exciting when the data unfolded. Just to refresh your memory, B7-H3 is highly overexpressed in most solid tumors, is expressed on the vasculature of endothelial cells that are growing into tumors. We -- this is a -- MGC018 is an antibody B7-H3 with a cleavable linker, called duocarmycin, which alkylates DNA. So it binds to B7-H3-positive cells and then intercolates with the DNA of both dividing and nondividing cells. So it hits 2 compartments of the tumor. We did a dose escalation in an all-comer study. We started to see responses at both 2 mg per kg and 3 mg per kg dosing. It turned out, one of the early responders were patients with prostate cancer. So the investigators began, they had additional patients with prostate cancer. And it turned out, we treated 7 patients at the 2 and 3 mg per kg with the castration-resistant prostate cancer, of which we saw greater than 50% responses in reduction of PSA in 5 out of the 7 patients. Just to give you the lines of therapy. These patients were very late line. 6 out of the 7 patients had already received docetaxel and progressed, 6 out of 7 patients had received both abiraterone and enzalutamide, and many had seen checkpoint molecules and other therapies. So these are very late-line patients that don't have a very long lifespan expected. So with that very favorable data, we then did a -- looked at the pharmacokinetics, saw a very favorable pharmacokinetics with regard to Cmax and circulating levels of the antibody in the toxin. So we've then decided to expand into 40 additional patients at 3 mg per kg every 3 weeks. And that's what I said, we will begin to enroll very shortly in the next month or so and then hope to enroll in the first part -- finish enrollment in the first part of next year. We also saw data that was positive in patients with lung cancer. We had 2 patients with lung cancer treated at 0.5 mg per kg and 1 treated at 2 mg per kg. The 2 mg per kg patient had a 24% reduction in the pleural-associated tumor mass in lung cancer. And so we have now decided to expand additional cohort there where we will dose up to 20 patients in that cohort. And then the third cohort we've added is triple-negative breast. So that's basically where we are on that program.

Thanks for that. If we jump back, I'm sure you talked about this briefly during my momentary hiatus. On margetuximab, certainly there's a PDUFA date coming up later this year. You're not going to panel. There will be some OS data coming up. And I guess could you just reiterate the timing of when the PDUFA date is and when the OS data will come in? Whether or not the OS data gets any consideration in the actual application process? And then after that, go into a little bit more detail on MAHOGANY and what your expectations are there?

Yes, so thank you. I did comment, but let me just go over that again. The PDUFA date is December 18 of this year. As I said, we've had some very good interactions with the FDA, and they obviously have tossed over questions that we've responded, mostly CMC-related, and we come back with the responses. With regard to the question about OS, as we had earlier this year commented on, the expectation was that we would reach OS by the end of this year. And of course, you can never predict that, and it still might occur. But looking at more recently at the rate of the deaths that have been cumulated, it's really unlikely that it will occur before the end of the year, and looks like it will occur sometime in 2021. That's good for the patients because that means that the patients are living longer, but it will not be ready for a PDUFA date. Now -- but it's up to the FDA whether that bit of data is going to be required. There -- we have no idea at this point. We hope that they will make a positive review in the absence of that data given that margetuximab on the interim analysis, though it wasn't statistically significant on the intent-to-treat population, it did save one of the patients treated with margetuximab over HERCEPTIN. And furthermore, even on the F allele population, which represents 85% of the patients, again, while not hitting stat significance or nominal significance, we saw a 4.3-month overall survival benefit for the margetuximab over the trastuzumab in that exploratory subpopulation. So all in all, we hope the FDA will review that in the absence, though that looks like it will not occur by the end of this year for the 385 events for OS. Now back to the other question, which was MAHOGANY. As you know, we are enrolling in that so-called module A, where we're based on some very favorable responses in second-line therapy for combination with anti-PD-1. We've moved ahead in frontline metastatic gastric cancer in IHC 3+ positive patients and PD-L1-positive patients. Our target is to enroll 40 patients, which we hope will occur by the end of the year or just into early 2021, and then make a decision based on the overall response rate and safety profile. Just to give you a perspective, historically, TOGA regimen in frontline, which is HERCEPTIN and chemotherapy, gave a 47% response rate. So we would obviously like to be north of that response rate to continue proceeding and enrolling in that arm of the study. So we should be able to provide in the first half of next year and update on the results that we've seen and progression going forward. In addition, as I mentioned earlier, we are looking also at the conventionally defined HER2-positive metastatic gastric population in collaboration with Zai, who has rights in China. They will begin enrolling that part of the study where we will be looking at the effect of marge in frontline plus chemotherapy and then assess whether the PD-1 LAG-3 tebotelimab or retifanlimab, the anti-PD-1, will work better in that setting. And again, given the data that we've seen to date on tebotelimab, we're very excited about the prospects of that arm of the study. And we will then join that study adding additional patients from the U.S. and Europe beginning next year.

Thank you for that. I guess lastly here with the remaining time, if you could just comment on the flotetuzumab and the pivotal trial coming up? What that's going to look like? And maybe tell us -- kind of give you -- give us a preview into the data update we could see in the fourth quarter?

Yes. So clearly, there's been a lot of activity around flotetuzumab. There's been presentations on -- both on some biomarker data in collaboration with Sergio Rutella, who had a leadership position. We had a wonderful paper that was published in Science Translational Medicine regarding that. Actually, I'm happy to announce that there is an online result of our Phase I data that's in Blood this week, and there will be some additional data coming out in another publication. But as you recall, we announced that in collaboration discussions with the FDA, our plans to move forward, which they gave us the go-ahead to start a registration-directed study, a single-arm study where we will enroll up to 200 patients. And we've actually begun enrolling in that trial. Our plan is to expand the number of sites in Europe, U.S. and Australia, but that study is now ongoing. Just to give you a historical perspective, we're going to be looking with agreement of the FDA for the CR/CRh rate in this population. Based on historical data on patients who are refractory to high-dose chemotherapy or multiple rounds of hypomethylating agents or targeted therapy. We saw in the intent-to-treat subset, a response rate of 20 -- about 27% in that targeted population based on CR/CRh rate. We will provide updates on patients that have been enrolled since last ASH at the upcoming ASH meeting in this December as well as some more biomarker data going forward. We hope to enroll -- complete enrollment in the study no later than by the end of next year.

Well, thank you so much for that. I'm sorry, we ran out of time. I'm also apologizing for the technical difficulties.

No problem.

And hopefully, we get the chance to talk to you soon -- again soon without said difficulties.

Okay. Well, stay well and stay safe, and thanks, everybody, for tuning in. And we appreciate it.