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

Thank you, and thank you for the opportunity to present at the Goldman Sachs Healthcare Conference. I'll be making forward-looking statements today. So please refer to our SEC filings to understand the risks associated with an investment in MacroGenics. For those unfamiliar with MacroGenics, we are a fully integrated immune therapeutics company, pursuing early research discovery to late-stage clinical development, including the production of marketed products and molecules for our clinical studies and those of our partners on our on-site commercial manufacturing facility. We've been 24 years in operation, three molecules from our pipeline received FDA approval and are commercialized. We have multiple molecules in clinical development derived from our proprietary antibody drug conjugate, bispecific DART and Fc engineering technologies. We have near term clinical readouts in 2024 and 2025 and a deep preclinical pipeline with expectations to file an IND for a new molecular entity annually. These assets provide opportunities to derive non-dilutive capital and organic growth for the company. Since our IPO, for example, we have brought in more than $1 billion in non-dilutive capital from partnering and milestones. We are confident in our ability to execute on our plan and to advance the clinical and preclinical pipeline. We are primarily developing cancer therapeutics for liquid and solid tumors, with a significant footprint in prostate cancer. Illustrated here are three unique molecules addressing different lines of therapy for patients with prostate cancer. Given the proof-of-concept activity of these molecules already observed in prostate cancer and their broadly applicable mechanisms is that expanded our opportunity to develop these same molecules for other tumor types as well. This is the clinical pipeline where we retain commercial rights. We are pursuing first-in-class, best-in-class molecules. As you see here, we are developing three molecules for B7-H3, a ligand expressed on most solid tumors. We are taking advantage of their different effective mechanisms to prevent or control tumor growth. We are the first company to develop two ADCs with different linker toxins to this target. Since different tumor types may respond to one toxin, but not the other, or development of resistance to one toxin type may be overcome by sensitivity to the other as it has been shown for HER2-directed ADC molecules. These are our partnered programs that could provide future cash flow and platform validation. From 2022 to 2023, we brought in $335 million in non-dilutive capital from licensing partnerships, milestones and royalty monetization. For two of these approved products, over $1 billion of milestones remain with increased opportunities to realize some of these milestones near term, either through successful outcomes for either of the two Phase III studies for ZYNYZ, or additional regulatory approvals for TZIELD. In the last 2 years, we have increased our commitment to developing ADCs, taking advantage of more than 20 years of antibody engineering expertise, our commercial scale manufacturing capability and ADC supply chain partnerships and the recent development of a broad relationship with Synaffix, where we can access their linker/toxin technology for up to 7 molecules in addition to our partnership with Byondis on vobra duo. I will be discussing the Synaffix platform shortly. Now focusing on vobra duo. This is an ADC molecule targeting B7-H3, an ideal cancer target, enabling us to capitalize on its broad expression across multiple tumor types. The molecule has a duocarmycin payload with a cleavable linker with a toxin that alkylates DNA and promotes apoptotic cell death. Our Phase II TAMARACK study was designed to test 2 lower doses of vobra duo compared to the dose we used in our Phase I study in patients with metastatic castration-resistant prostate cancer. Patients who enrolled in TAMARACK had disease progression on an androgen receptor targeting agent and had been treated with up to 1 taxane. The purpose of the study is to ultimately choose one dose to advance to Phase III studies if the activity and safety objectives are achieved. The interim update on vobra duo demonstrated encouraging antitumor activity from the analysis of PSA50 reductions, overall response rates, disease control rates and showed improved manageable safety compared to our Phase I study. We are on track for full TAMARACK results in the second half of 2024. These are the waterfall plots of the interim analysis of the study in April, showing that both doses tested achieved PSA reductions in the majority of patients. Independent of the level of B7-H3 expressed on archival tumor specimens. On the right are the changes in target lesions and resist evaluable patients compared to their baseline. And as noted, all these patients, but one in each dose either had tumor reductions or stabilized lesions as of this interim analysis. The majority of the patients shown here are still being treated in April as denoted by the asterisks on this figure. More specifically, for this interim analysis, PSA50 reductions compared to baseline values showed 50% confirmed and unconfirmed responses in both the 2.7- and 2-mg doses. 44% confirmed on 2.0, 37% on 2.7. As of the April cut, the majority of the patients were still on therapy. So chances for increased confirmed rates may be subsequently seen. More specifically, for ORR, 25% confirmed responses were observed for the 2.7 dose. This has already achieved our targeted ORR responses for one of our doses. 18% were confirmed for 2.0, but amazingly, confirmed and unconfirmed responses of 44% at 2.7 exceeded our expectations to date. 24% at 2.0 confirmed and unconfirmed. Again, confirmed ORR responses will increase with time. Notable is the RECIST evaluable patients with measurable disease. Disease control rates of 91% and 88% for 2.0 and 2.7, respectively. Now with regard to safety, head-to-head comparisons of 16 weeks of treatment in TAMARACK versus the Phase I data showed 50% of greater improvement in AE parameters, grade 3s, dose discontinuations, dose reductions and dose interruptions on a percentage basis. The rate of adverse events is generally in line with other commercially approved ADCs and other metastatic castration-resistant prostate cancer therapies. Five deaths among the 176 treated patients reported as of the April interim analysis, two were deemed to be unrelated to vobra duo. Their deaths were ascribed to their underlying cardiac disease. There were two patients with pneumonitis and one patient with a pleural effusion who subsequently died. Pneumonitis is a known toxicity associated with DNA alkylating agents as a class. All three of these cases were complicated. These patients had comorbidities and in some cases, other active diseases and in some cases, less than optimal medical management. We are working closely with our team and scientific advisers as we continue to investigate these deaths. Historical Phase III data on approved metastatic castration-resistant prostate products show AE to death rates ranging from 2.9% to 12%, higher than -- less than 2% rate seen in these three patients that have been observed here to date. The interim analysis of treatment-emergent adverse events on this Tornado or Butterfly plot shows that they are primarily Grade 1 or 2 with a smattering of Grade 3 or higher. With the top ones being constitutional in nature. We continually work to mitigate adverse events and prevent AEs associated complications by implementing better medical management and education of healthcare providers. So in summary, so far, vobra duo antitumor activity looks promising, with manageable safety profile, and we look forward to providing final results of the TAMARACK study in the second half of this year. Now turning to MGC026, we recently presented preclinical data at AACR, our investigational ADC incorporating a novel topo-I-isomerase inhibitor-base linker payload. We review MGC026 as a complementary approach to vobra duo for targeting B7-H3. With distinct mechanisms of action, vobra duo and MGC026 may address different tumor stages or may be used in combination with alternative agents or potentially with one another to enhance their clinical utility. This molecule uses the Synaffix-topo I inhibitor, SYNtecan E, which enables site-specific conjugation to the glycan site in the Fc domain. And based on Synaffix and our own data, potentially better safety, more potency than DXd SN-38 containing molecules. This is summarized on this table with a comparison to DXd, the toxin in Daiichi and HER2 and 7,300 molecules and SN-38 in Gilead's Trodelvy. The figure on the bottom illustrates better antitumor effects of trastuzumab with exatecan with a DAR of 4 compared to trastuzumab with DXd with a DAR of 8 in a mouse model system. We are currently enrolling a dose escalation Phase I study of MGC026 and anticipating having results to present in 2025. MGC028 is the second molecule using the same exatecan linker/toxin technology from Synaffix. The target here is ADAM9, a metalloproteinase overexpressed in many tumor types. Preclinical data, including results in CDx and PDx models and preliminary cynotoxicology was also recently presented at the AACR meeting. Of note, no ocular toxicity was observed in cyno monkeys, unlike what was observed in an earlier molecule we tested along with Immunogen containing a maytansinoid payload. On the left, this slide shows expression patterns of ADAM9 on specimens of different tumor types from patients with pancreatic, lung, triple-negative breast, gastric and colorectal cancers. Antitumor activity is illustrated in PDx models for pancreatic, non-small cell lung cancer and colorectal cancer on the right. An IND is expected to be filed later this year. Turning our attention to our checkpoint molecules. Lorigerlimab was designed to have the T-Cell activating properties observed with combination therapies of PD-1 and CTLA-4 targeting agents, but with greater tolerability and less toxicity than combinations such as nivolumab and ipilimumab. By designing this molecule as a tetravalent bispecific DART molecule with two binding sites for PD-1 and two binding sites for CTLA-4, we greatly enhance avidity for T cells co-expressed along in the tumor microenvironment. And by creating this molecule as an IgG4 molecule, we avoid depleting Treg cells that express CTLA-4 and thus to achieve enhanced T cell activation and preserve function of Tregs to minimize immune mediated adverse responses such as GI toxicity, which is seen in ipi/nivo combinations. It appears from preclinical and clinical studies to date, we have achieved this such balance. Here are the results of an expansion study in metastatic castration-resistant prostate cancer patients presented at ASCO GU last year. We were able to achieve PSA50 reductions of 29% and confirmed overall response rates of 26% with all patients who achieved ORRs attaining PSA90s or greater as seen here on the right. These results far exceeded the ipi/nivo treatments of similar patients presented at the same meeting. And some of our patients remained on therapy on a every 3 weekly basis for about 2 years. In contrast to ipilimumab 1-milligram and nivo 3-milligram combinations where ipilimumab is given to patients for only a maximum of 4 doses. Here is the safety profile of the 127 patients treated with 6 milligrams every 3 weeks in our expansion studies. Of note, only one patient developed a Grade 3 colitis during treatment. Currently, we are enrolling a metastatic castration-resistant prostate cancer chemo-naive patient population in a Phase II study where combining lorigerlimab with docetaxel versus the control of docetaxel treatment alone. A 2:1 randomization of 150 patients is ongoing and the enrollment is expected to be completed by the end of the year with data updates in 2025. Of note, there is no approved checkpoint molecule for patients with prostate cancer. Plans for treating patients with other tumor types is in development. Finally, we continue with our T cell redirected next-generation molecules with a Phase I dose escalation study progressing targeting CD123 and CD3 for AML and other CD123 bearing disorders. This was designed with our platform to achieve maximum tumor killing with reduction in incidence and severity of CRS by altering a single amino acid in the CD3 variable domain. Gilead is an option to license this molecule MGD024 anytime by the end of the Phase I study. As part of this partnership, a second research molecule is being developed. Now we remain disciplined as we continue to invest in our pipeline and advance our most promising therapies. Consistent with our prior guidance, we anticipate that our cash, cash equivalents and marketable securities together with projected and anticipated future payments from partners and product revenues should provide a cash runway into 2026. Our anticipated funding requirements reflect expected expenditures related to the ongoing Phase II TAMARACK and LORIKEET studies as well as our other ongoing clinical and preclinical studies. And finally, our anticipated 2024 program milestones for vobra duo, we have provided the interim safety data and preliminary efficacy data with additional updates in the second half of '24 expected with the initiation of cohorts ongoing. For MGC026, we initiated the Phase I study and have presented the preclinical data at AACR. For lorigerlimab, we completed -- we will complete enrollment in the LORIKEET study in 2024 and initiate dose expansion for combo studies with vobra duo [Technical Difficulty] For MGC 028, as stated, we have presented the preclinical data at AACR and plan to submit an IND in the second half of this year. And as noted for our partnered assets, we have expectations of ZYNYZ, clinical and regulatory updates from Incyte as well as potential future updates on the regulatory status of TZIELD. So finally, over the past several years, MacroGenics has made a tremendous progress across our pipeline with our diverse portfolio of oncology product candidates. We have a proven research and development track record with three approved products that came from our pipeline. We're advancing multiple Phase II programs in prostate cancer with prostate cancer being the second leading cause of cancer death in the U.S., and we are well funded with our cash runway into 2026. We look forward to presenting further updates later this year, and thank you for your attention.