Q3 2021 MacroGenics Inc Earnings Call

Operator: 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 Chris James, Vice President of Investor Relations and Corporate Communications at MacroGenics. Thank you, operator.

Good afternoon.

We will begin the Macrogenics 2021 third quarter corporate progress and financial results conference call in just a moment.

All participants are in a listen only mode. We will conduct a question and answer session at the conclusion of the call.

At this point I will turn the call over to Chris James Vice President.

Of Investor Relations and corporate communications of Macrogenics.

Unknown Executive: Good afternoon, and welcome to MacroGenics' conference call to discuss our third quarter 2021 financial and operational results. For anyone who has not had the chance to review these results, we issued a press release this afternoon outlining today's announcements, which 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 30 days, beginning approximately two hours after the call is completed.

Thank you operator, good afternoon, and welcome to Macrogenics conference call to discuss our third quarter 2021 financial and operational results.

Anyone who has not had the chance to review. These results we issued a press release. This afternoon outlining todays announcements, which is available under the investors tab on our website at Macrogenics Dot com.

You May also listen to this conference call via webcast on our website, where it will be archived for 30 days beginning approximately two hours after the call is completed.

Unknown Executive: I would 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.

I would like to alert listeners that todays 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.

Unknown Executive: 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. And now I'd like to turn the call over to Dr. Scott Koenig, President and Chief Executive Officer of MacroGenics.

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.

And now I'd like to turn the call over to Dr. Scott Koenig, President and Chief Executive Officer of Macrogenics.

Scott Koenig: I'd like to welcome everyone participating via conference call and webcast today. This afternoon, I will provide key highlights from our clinical programs, but before I do so, let me first turn the call over to Jim Karrels, our Chief Financial Officer, who will review our financial results for the third quarter.

Thank you Chris.

I'd like to welcome everyone participating via conference call and webcast today.

This afternoon, I will provide key highlights from our clinical programs.

Before I do so let me first turn the call to Jim Carroll, Our Chief Financial Officer, who will review our financial results for the third quarter.

Thank you Scott This afternoon Macrogenics reported financial results for the quarter ended September 32021, which highlight our financial position as well as our recent progress.

As described in our release this afternoon Macrogenics total revenue consisting primarily of revenue from collaborative agreements was $15 7 million for the quarter ended September 32021, compared to total revenue of $18 3 million for the quarter ended September 32020.

James Karrels: Thank you, Scott. This afternoon, MacroGenics reported financial results for the quarter ended September 30, 2021, which highlight our financial position as well as our recent progress. As described in a release this afternoon, MacroGen's total revenue, consisting primarily of revenue from collaborative agreements, was $15.7 million for the quarter ending September 30, 2021, compared to total revenue of $18.3 million for the quarter ending September 30, 2020. Revenue for the quarter ending September 30, 2021 included $3.6 million net sales of Margenza.

Revenue for the quarter ended September 32021 included.

$3 6 million net sales of March agenda.

Our research and development expenses were $49 8 million for the quarter ended September 32021, compared to $44 7 million.

For the quarter ended September 32020. This increase was primarily related to increased clinical trial and development costs related to the companys product and product candidates.

As well as research cost related to preclinical molecules, partially offset by decreased clinical costs and BLA support activities for March <unk> and decreased development and manufacturing costs related to flight to the map.

James Karrels: Our research and development expenses were $49.8 million for the quarter ended September 30, 2021, compared to $44.7 million for the quarter ended September 30, 2020. This increase was primarily related to increased clinical trial and development costs related to the company's product candidates, as well as research costs related to preclinical molecules, partially offset by decreased clinical costs and BLA support activities for margitoximab and decreased development and manufacturing costs related to flutatuzumab Selling, general, and administrative expenses were $17.2 million for the quarter ended September 30, 2021, compared to $9.7 million for the quarter ended September 30, 2020.

Selling general and administrative expenses were $17 2 million for the quarter ended September 32021, compared to $99 7 million for the quarter ended September 32020. This increase was related to the Mark gender launch labor related costs and legal expenses.

Macrogenics net loss was $52 9 million for the quarter ended September 32021, compared to a net loss of $36 million for the quarter ended September 32020, our cash cash equivalents in marketable securities balance as of September 32021 was $298 9 million.

Compared to $272 5 million as of December 31, 2020.

Finally in terms of our cash runway, we anticipate that our cash.

Cash equivalents and marketable securities as of September 32021. In addition to anticipated potential collaboration payments should enable us to fund operations through 2023, assuming our programs and collaborations advance as currently contemplated and now I'll turn the call back to Scott.

Thank you Jim we are very pleased by the continued progress towards our goal of providing patients with multiple potentially life changing therapeutics and the pursuit of fighting cancer.

As you know in September we presented encouraging preliminary clinical results from the ongoing phase one study of <unk>, our anti <unk> three antibody drug conjugate.

James Karrels: This increase was related to the Margenza launch, labor-related costs, and legal expenses. MacroGenics' net loss was $52.9 million for the quarter ended September 30, 2021, compared to a net loss of $36 million for the quarter ended September 30, 2020. Our cash, cash equivalents, and marketable securities balance as of September 30, 2021 was $298.9 million, compared to $272.5 million as of December 31, 2020. Finally, in terms of our cash runway, we anticipate that our cash, Cash Equivalents, and Marketable Securities as of September 30, 2021, in addition to anticipated and potential collaboration payments, should enable us to fund operations through 2023, assuming our programs and collaborations advance as currently concentrated. And now, I'll turn the call back to Scott.

October we submitted an IND application for Mgd owed 24, our next generation Dart molecule targeting <unk> hundred 23, and <unk> three for the potential treatment of AML and other CD 123, expressing hematological diseases and.

And finally, the FDA recently approved our GMP manufacturing facility to produce more agenda drug substance, representing an important achievement for the company.

With that backdrop, let me use this time to walk you through updates on our portfolio of clinical molecules, starting with our molecule targeting <unk> three.

Let me first discuss <unk>, our investigational antibody drug conjugate designed to deliver a DNA alkylating <unk> cytotoxic payload to tumors expressing <unk> <unk> three.

Macrogenics presented an encouraging update of clinical data from the ongoing phase one study of <unk> in patients with advanced solid tumors.

The presentation at ESMO in September.

The safety analysis included all enrolled patients with the activity analysis focused on the metastatic castration resistant prostate cancer or <unk>, and CRP C and non small cell lung cancer.

Expansion cohorts as enrollment continues in the other three tumor cohorts.

As of August 16, 2020 data cutoff, the preliminary results demonstrated a PSA reduction of 50% or greater and 21 of 39 or <unk>, 54% of patients with and CRP C.

Scott Koenig: Thank you, Jim. We are very pleased by the continued progress towards our goal of providing patients with multiple potentially life-changing therapeutics in the pursuit of fighting cancer. At ESMO in September, we presented encouraging preliminary clinical results from the ongoing Phase I study of MGC018, our anti-B7H3 antibody drug conjugate. In October, we submitted an IND application for MgD-024, a next-generation DART molecule targeting CD123 and CD3 for the potential treatment of AML and other CD123-expressing hematological diseases. And finally, the FDA recently approved our GMP manufacturing facility to produce Margenza, representing an important achievement for the company.

Antitumor activity was observed intend up $16, 63% of resist evaluable patients.

For 2016 or 25% of patients achieved a partial response, including two confirmed and two unconfirmed partial responses.

As presented at ESMO preliminary results and the non small cell lung cancer cohort expansion demonstrated antitumor activity in 13 up <unk> 16, or 81% of patients with measurable disease, who had their first nine week imaging results available.

Including four up 16 or 25% of patients with unconfirmed responses.

The adverse events for all 86 patients in the dose expansion was reported to be manageable and included most notably hematologic toxicity and low grade fatigue skin toxicities and the fusions.

Overall, we continue to remain pleased and encouraged by the growing data from our ongoing study of <unk>.

Following ESMO, we had multiple discussions with practicing prostate cancer physician researchers and we look forward sharing our future development plans for <unk>.

<unk> and M. CRP C. During the first quarter of next year.

Scott Koenig: With that in mind, let me use this time to walk you through updates on our portfolio of clinical molecules, starting with our molecules targeting B7H3. I will first discuss MGCO-18, our investigational antibody drug conjugate designed to deliver a DNA-alkylating duochromycin cytotoxic payload to tumors expressing B7H3. MacroGenics presented an encouraging update of clinical data from the ongoing phase one study of MGCO-18 in patients with advanced solid tumors in a poster presentation at ESMO in September.

In addition, enrollment in the <unk> phase one study is ongoing and the triple negative breast cancer squamous cell carcinoma of the head and neck and melanoma cohorts.

We expect to provide clinical updates on multiple expansion study cohorts in the first half of next year.

In addition to monotherapy based studies, we anticipate commencing a combination study of <unk> with one of our PD one based product candidate in the first half of next year.

Another of our investigational molecules exploring the over expression of <unk> in solid tumors is a notebook Tuesday mab an FC engineered antibody created using our FC optimization platform.

Scott Koenig: The safety analysis included all enrolled patients, with the activity analysis focused on metastatic castration-resistant prostate cancer, or MCRPC, and non-small cell lung cancer. Expansion Cohorts as enrollment continues in the other three tumor cohorts. As of August 16, 2020 data cutoff, the preliminary results demonstrated a PSA reduction of 50% or greater in 21 of 39, or 54% of patients with MCRPC. Antitumor activity was observed in 10 of 16, or 63%, of resist-evaluable patients, and 4 of 16, or 25%, of patients achieved a partial response, including two confirmed and two unconfirmed partial responses.

In March we initiated a combination study of a novel to the Mab in a chemotherapy free regimen in frontline squamous cell carcinoma of the head and neck with either tebo tell them that for patients who are PD lone negative.

With Red a family Mab in patients who are PD lone positive.

Enrollment in this study continues to progress across sites in the United States, Europe and Australia.

In September our partner I, Mab, Biopharma announced that it's indeed to initiate a phase II trial of our novel to the Mab in combination with <unk> in patients with select solid tumors was accepted in China, which triggered a net $4 $5 million milestone payment to macro.

<unk>.

Next let me discuss our efforts to bring products to market to help treat patients with acute myeloid leukemia, or AML and our investigational Bispecific CD 123 by CD three dart molecules.

We continue to enroll the single arm clinical study to evaluate Florida Tuesday, Mab in patients with refractory AML and we anticipate providing further updates on the clinical development of Florida do the math in 2022.

Scott Koenig: As presented at ESMO, preliminary results in the non-small cell lung cancer cohort expansion demonstrated anti-tumor activity in 13 of 16, or 81% of patients with measurable disease who had their first nine-week imaging results available, including 4 of 16, or 25% of patients with an unconfirmed response. The adverse events for all 86 patients in the dose expansion were reported to be manageable and included, most notably, hematologic toxicity and low-grade fatigue, skin toxicities, and effusion.

In addition, I'm very pleased to share that we recently submitted a 90 application to the FDA for LGD Oh 24, our next generation CD 123 by CD three dart molecule that we intend to study in patients with relapsed or refractory hematologic malignancies.

The IV application is pending clearance by the FDA.

G D O 24 incorporates a C D. Three component designed to minimize cytokine release syndrome, while maintaining antitumor side, a little bit activity, along with an FC domain to prolonged circulating half life and permit intermittent dosing.

We expect to present preclinical M. G D O 24 data at Ash in December.

Next let me walk you through our PD one based assets.

Scott Koenig: Overall, we continue to be pleased and encouraged by the growing data from our ongoing study of MGCO-18. Following ESMO, we had multiple discussions with practicing prostate cancer physician-researchers, and we look forward to sharing our future development plans for MGCO-18 in MCRPC during the first quarter of next year. In addition, enrollment in the MGCO-18 Phase 1 study is ongoing in the triple negative breast cancer, squamous cell carcinoma of the head and neck, and melanoma cohorts.

<unk> is our investigational bispecific PD, one by lag three dart molecule <unk>.

Tebo tell him that blocks the binding of T cells, expressing PD, one and lag three to their log ins and allows for the reactivation of exhausted T cells and enhancement of the immune capacity against tumors.

Teva tell them that has demonstrated synergistic T cell activation in vitro superior to that seen with other PD, one and lag three combinations with PD, one or lag three as single agents.

We are currently evaluating tebo tell them admin patients as both monotherapy as well as in combination with other agents.

XI lab, our partner in greater China expanded the phase <unk> two study of turbo telematics in combination with a PARP inhibitor niraparib into new indications in greater China, including gastric cancer triple negative breast cancer and biliary tract cancer.

In addition, <unk> lab enrolled the first patient in the endometrial cancer cohort in October 2021.

Next M. G D O Tel O 19 is our investigational bispecific checkpoint dart molecule that targets PD, one and <unk> four we are conducting a phase one dose expansion study in cohorts of patients with microsatellite stable colorectal cancer checkpoint.

Scott Koenig: We expect to provide clinical updates on multiple expansion study cohorts in the first half of next year. In addition to monotherapy-based studies, we anticipate commencing a combination study of MGCO-18 with one of our PD-1-based product candidates in the first half of next year. Another of our investigational molecules exploiting the overexpression of B7H3 in solid tumors is inoblituzumab, an Fc-engineered antibody created using our Fc-optimization platform. In March, we initiated a combination study of enoblutuzumab in a chemotherapy-free regimen in frontline squamous cell carcinoma of the head and neck with either tebotelumab for Enrollment in this study continues to progress across sites in the United States, Europe, and Australia.

I leave non small cell lung cancer.

See RPC and melanoma.

We look forward to providing an update on this study next year.

Let me next turn to Red Fatima map, the investigational anti PD one antibody that we licensed insight inside is exploring development of bread of Allomap as monotherapy and potentially registration, enabling studies in patients with anal cancer MSI high endometrial cancer Merkel cell carcinoma.

OMA and lung cancer.

In addition, insight it's evaluating the molecule in combination with other assets in their immuno oncology portfolio.

At the 2021 society for immunotherapy of cancer was tipsy virtual meeting next week inside will present clinical results in poster presentations from both the phase II study of Red Osama Mad in patients with advanced or metastatic Merkel cell carcinoma.

And a tumor specific expansion cohort study in patients with recurrent MSI high or deficient mismatch repair recurrent endometrial cancer.

Next our second investigational ADC I M. G. C O 93, six which targets Adam nine is being advanced under our co development agreement with Immunogen.

There are 50 50 collaboration Immunogen is leading clinical development and they have indicated they anticipate disclosing initial data from our phase one study in multiple solid tumors in 2022.

Scott Koenig: In September, our partner IMAB Biopharma announced that its IMD to initiate a Phase II trial of inoblituzumab in combination with pembrolizumab in patients with select solid tumors was accepted in China, which triggered a net $4.5 million milestone payment to MacroGenics. Next, let me discuss our efforts to bring products to market to help treat patients with acute myeloid leukemia, or AML, and We continue to enroll the single-arm clinical study to evaluate flotatuzumab in patients with refractory AML, and we anticipate providing further updates on the clinical development of flotatuzumab in 2022.

Last but not least I will provide an update on margin tuck the map.

We have been evaluating module talk to Nab in the phase II three mahogany study in patients with advanced gastric and gastroesophageal junction cancer.

This trial consists of two modules designed to evaluate module talks a mab as an investigational agent in combination with a checkpoint inhibitor with or without chemotherapy as a potential first line treatment for patients with advanced or metastatic her two positive GC or gastroesophageal junction.

<unk> cancers.

At ESMO in September clinical results from cohort eight part one of the phase two three mahogany study of margin talks and that in combination with Red family Mab in patients with advanced gastric and gastroesophageal junction cancer were presented.

21, or 40 or 53% of resist evaluable patients in mahogany cohort day achieved confirmed responses by independent review.

Although the number of confirmed responses exceeded the prespecified futility boundary for the trial. After further evaluation of company resources and priorities, we have decided to discontinue enrollment of cohort eight based on a number of factors, including the prioritization of our other product.

Scott Koenig: In addition, I'm very pleased to share that we recently submitted an IND application to the FDA for MGD-024, our next generation CD123 by CD3-DART molecule that we intend to study in patients with relapsed or refractory hematologic malignancies. The IND application is pending clearance by the FDA.

Candidates given the competition in this indication and the accelerated approval of combination therapy with pepper Iliza map.

Our partner for margin tucks in Nab in Greater China XI lab continues to enroll patients in cohort b.

Also in September the company announced final overall survival analysis from the Phase III Sophia study, which did not demonstrate a statistically significant advantage for my agenda plus chemotherapy.

Scott Koenig: MGD-024 incorporates a CD3 component designed to minimize cytokine release syndrome while maintaining anti-tumor cytolytic activity along with an FC domain to prolong circulating half-life and permit intermittent dosing. We expect to present preclinical data for MGD-024 at ASH in December. Next up, let me walk you through our PD-1 based assets.

Trastuzumab plus chemotherapy in patients with her two positive metastatic breast cancer.

We plan to present these results at the San Antonio breast cancer Symposium in December and.

In addition to the results from the intent to treat population a prespecified not non alpha allocating analysis of CD 16, a genotyping in the trial showed a numerical OS advantage in favor of margin types of map and F homozygous patients and a numerical one.

Scott Koenig: Tebotelumab is our investigational bispecific PD-1 bilag-3-DARP molecule. Tabotelumab blocks the binding of T-cells expressing PD-1 and LAG-3 to their ligands and allows for the reactivation of exhausted T-cells and enhancement of immune capacity against tumors. Pebotelumab has demonstrated synergistic T-cell activation in vitro superior to that seen with other PD-1 and LAG-3 combinations or with PD-1 or LAG-3 as single agents.

<unk> advantage in favor of Trastuzumab in V homozygous patients.

With regard to margin tuck <unk> in metastatic breast cancer recall that Mark Jensen was launched in mid March in coordination with our commercial partner ever Sona.

Our agenda is approved in combination with chemotherapy for the treatment of adult patients with metastatic her two positive breast cancer, who have received two or more prior anti her two regimens at least one of which was for metastatic disease.

In October <unk> lab announced that its bridging study of margin tuck them at plus chemotherapy and advanced previously treated her two positive breast cancer met its primary endpoint with acceptable safety and Tolerability.

The study showed that efficacy of this combination in Chinese patients was consistent with that seen in the global population and the Sophia trial.

Scott Koenig: We are currently evaluating Tebotelumab in patients as monotherapy as well as in combination with other agents. Xi Lab, our partner in Greater China, expanded the Phase 1b2 study of tebotelemab in combination with the PARP inhibitor norepirib into new indications in Greater China, including gastric cancer, triple negative breast cancer, and biliary tract cancer. In addition, Xylab enrolled the first patient in the endometrial cancer cohort in October 2021. Next, MgD019 is our investigational bispecific checkpoint DART molecule that targets PD-1 and CTLA-4. We are conducting a phase 1 dose expansion study in cohorts of patients with microsatellite-stable colorectal cancer, checkpoint IV non-small-cell lung cancer, NCRPC, and Melanoma. We look forward to providing an update on the study next year.

<unk> has indicated that it anticipates submitting a BLA in China for pretreated metastatic her two positive breast cancer by approximately year end 2021.

We continue to believe patients may benefit from our agenda as another marketed cancer therapy option.

As reported net sales were $3 $6 million from our agenda in the third quarter.

Given the competitive realities that have taken place in the her two positive breast cancer market, including multiple new approvals, we continue to have modest expectations for margins as sales.

We expect to provide more genesis sales guidance. After the product has been on the market for at least a year.

Finally, we recently received U S FDA approval to manufacture margins a drug substance at our GMP manufacturing facility in Rockville, Maryland.

The supplemental BLA approval for my agenda represents another important achievement for Macrogenics.

We look forward to continuing to build momentum and advancing our pipeline of innovative product candidates throughout 2021 and into 2022.

We would now be happy to open the call for questions operator.

Thank you.

As a reminder to ask a question you will need to press star one on your telephone.

Withdraw your question press the pound key.

By while we compile the Q&A roster.

Yeah.

Scott Koenig: Let me next turn to retifanilimab, the investigational anti-PD-1 antibody that we licensed to Insight. Insight is exploring the development of retifanilamide as monotherapy and potentially registration-enabling studies in patients with anal cancer, MSI high endometrial cancer, Merkel cell carcinoma, and lung cancer. In addition, Insight is evaluating the molecule in combination with other assets in their immuno-oncology portfolio at the 2021 Society for Immunotherapy of Cancer, or CITSI, virtual meeting next week. Insight will present clinical results in post-presentations from both a Phase II study of retifolamab in patients with advanced or metastatic Merkel cell carcinoma and a tumor-specific expansion cohort study in patients with recurrent MSI-high or deficient mismatch repair recurrent endometrial cancer.

And our first question comes from the line of Peter Lawson with Barclays.

Hey, Scott Thanks for taking my questions.

I guess Im B seven H, three just any sense of timing.

Around melanoma triple negative prostate and lung for for next year, what's the kind of the sense of the order there.

Thanks, very much Peter.

As we come into <unk> and ESMO, we had completed the enrollment in the non small cell lung cancer cohort with regard.

Obviously to the <unk>.

Milstead castration resistant prostate cohort.

The triple negative breast melanoma and head and neck.

<unk> to enroll have not completed enrollment of that we expect.

The the melanoma and the.

The triple negative breast to enroll before the end of the year and obviously the head and neck to continue into 2022. So obviously you want to follow those patients.

After all the patients had been enrolled.

Certainly at scientific conferences in the first half of the year, we'll be available to provide additional updates and of course.

We will provide continued updates on the <unk>.

Other too.

The prostate and the lung.

Lung studies at an appropriate time as well.

I'd also say with as I've commented on earlier today are very encouraged by the progress on prostate we have.

Engaged.

A large number of key opinion leaders in prostate cancer, who are very encouraged by the data to date.

Thank you and then.

It is it a sense of like in the first half if you want to have kind of a meaningful update from.

Two or three kind of indications.

At this point.

I would say that the priority right now is around the advancing the prostate we did.

Well the greatest number of patients we have obviously, a very significant dataset.

Scott Koenig: Next, our second investigational ADC, IMGC0936, which targets ADAM9, is being advanced under a co-development agreement with Immunogen. Under our 50-50 collaboration, Immunogen is leading clinical development, and they have indicated they anticipate disclosing initial data from a Phase I study in multiple solid tumors in 2022. Last but not least, I will provide an update on margituximab.

And therefore, we'd like to focus on looking at the next stage of development for that opportunity.

For many of the other cohorts, where we didn't roll less patients for instance, 20 patients in a cohort.

Have to make a decision whether additional patients will be required before we make a final decision going forward on registration so until we see the data I can't really make a comment on that.

Got you. Thank you and then just final question kind of a similar question just around your PD one lag three.

Scott Koenig: We have been evaluating margituximab in the Phase II-III mahogany study in patients with advanced gastric and gastroesophageal junction cancer. This trial consists of two modules designed to evaluate margitoximab as an investigational agent in combination with a checkpoint inhibitor, with or without chemotherapy, as a potential first-line treatment for patients with advanced or metastatic HER2-positive, GC, or gastroesoph At ESMO in September, clinical results from Cohort A Part 1 of the Phase 2-3 Mahogany Study of Margin Tuxomab in combination with Retifanilamab in patients with advanced gastric and gastroesophageal junction cancer were presented. 21 of 40, or 53%, of resist-evaluable patients in Mahogany Cohort A achieved confirmed responses by independent review.

When do we get to see data further data around that.

You know Peter as we've spoken before and as I commented publicly about it.

Yes.

We provide a sizeable amount of data last year at three different conferences, we've had the incremental data on the ongoing trials.

And.

Again from the studies that we were conducting.

The data remains very encouraging.

As I reported earlier today.

We're going to expect additional data both from the combination studies that we're conducting.

And as you heard many other additional trials that XI is.

Conducting right now I can't speak about the timing of when they will update their result, my sense is is that we have sufficient amount of data right now to make decisions on.

Further development of that molecule and specific.

Our solid tumor and liquid tumor indications what is taking time for us is.

Gauging.

These parties.

That would be working with us on any of these indications so right now.

Patient given all the efforts right now on <unk> III that obviously has the highest priority within our portfolio, but we have not lost sight of the opportunity on tebo telematics.

Both as a potentially single agent or combination agents and expect probably to provide updates in the first part of two.

2022.

Thank you.

Your next question comes from the line of Caveri, Poland with B P. I G.

Scott Koenig: Although the number of confirmed responses exceeded the pre-specified futility boundary for the trial, after further evaluation of company resources and priorities, we have decided to discontinue enrollment in Cohort A based on a number of factors, including the prioritization of our other product candidates given the competition in this indication and the accelerated approval of combination therapy with Pembrolizumab. Our partner for margituximab in Greater China, Xylab, continues to enroll patients in cohort B.

Yeah. Thanks for taking my question I guess my first question is for the M. D D.

Q4.

Maybe if you can give us some guidance.

I'll try to do that.

Tell us a little bit about that.

What how do you find a molecule.

Okay.

Yes it.

It is like the difference.

Alright different 83 binding affinity.

Scott Koenig: Also in September, the company announced final overall survival analysis from the Phase 3 SOFIA study, which did not demonstrate a statistically significant advantage for Margenza plus chemotherapy over trastuzumab plus chemotherapy in patients with HER2-positive metastatic breast cancer. We plan to present these results at the San Antonio Breast Cancer Symposium in December. In addition to the results from the intent-to-treat population, a pre-specified non-alpha allocating analysis of CD16A genotyping in the trial showed a numerical OS advantage in favor of margituximab in F-homozygous patients and a numerical OS advantage in favor of trastuzumab in V-homozygous patients.

Larry Thank you very much and welcome to the call today.

With regard to NGL 24, we're very excited about the prospects of this platform from which wouldn't first now applying.

To the.

123 by CD three specificity as we have spoken before we have.

Conducted comprehensive studies.

And incorporating a slightly modified CD three variants.

That was in the Florida Tuesday molecule that has the ability.

Two we reduced theoretically cytokine release, particularly based on our preclinical studies both in vitro and in vivo. This also has as you note an FC domain. So that we are able to give this molecule intermittently.

Because of the longer half life as compared to Florida to the map.

Scott Koenig: With regard to Margenza in metastatic breast cancer, recall that Margenza was launched in mid-March in coordination with our commercial partner, Eversana. Margenza is approved in combination with chemotherapy for the treatment of adult patients with metastatic HER2-positive breast cancer who have received two or more prior anti-HER2 regimens, at least one of which was for metastatic disease. In October, XyLab announced that its bridging study of margituximab plus chemotherapy in advanced previously treated HER2-positive breast cancer met its primary endpoint with acceptable safety and tolerability. The study showed that the efficacy of this combination in Chinese patients was consistent with that seen in the global population in the SOFIA trial.

With regard to your specific questions around decreased affinity it does have a decrease.

Affinity for CD, three but that is not the whole story a lot of it is the relative on and off rates for the specific molecules and what this will allow us to do is.

To achieve a C Max without precipitating what we believe is a significant cytokine release. So if this performs clinically as we've seen pre clinically there should be a major advance that could be applied not only for the AML indication.

And other CD 123 bearing malignancies, but also can be used.

For.

Solid tumor indications as well with regard to the specific design of this study this will be it.

Conventional.

30, plus redesign dose escalation, but I think we can do given our experience with further to the lab.

Our rapid dose escalation and then get to a proposed dose moving forward.

Got it.

Scott Koenig: Xylab has indicated that it anticipates submitting a BLA in China for pre-treated metastatic HER2-positive breast cancer by approximately year-end 2021. We continue to believe patients may benefit from Margenza as another marketed cancer therapy option. As reported, net sales were $3.6 million for Margenza in the third quarter. Given the competitive realities that have taken place in the HER2-positive breast cancer market, including multiple new approvals, we continue to have modest expectations for Margenza sales.

You'll be mahogany study evaluating patients regardless of their PD one status.

In melanoma at least the knievel and BP combinations, what smell for PD Lone negative disease do you think Nicola mining okay.

Well when we bought nine PD, one PD L F will make sense before starting a large cohort.

So I think there are two questions module b in the use of 19 in melanoma. So with regard to module will be correct. This is being the.

Scott Koenig: We expect to provide Margensis sales guidance after the product has been on the market for at least a year. Finally, we recently received U.S. FDA approval to manufacture Margenza at our GMP manufacturing facility in Rockville, Maryland. The Supplemental BLA Approval for Margenza represents another important achievement for us. We look forward to continuing to build momentum and advancing our pipeline of innovative product candidates throughout 2021 and into 2022. We would now be happy to open the call to questions. Operator?

Advanced in patients.

Irrespective of PD lone status.

Patients are being enrolled currently right now in greater China by XI lab with regard to the melanoma and the utility of <unk> 19.

We have a monotherapy study ongoing obviously, we have had very positive data for instance, with the <unk> study in the dose escalation in melanoma, we have an expansion study ongoing there as well. So there are a lot of prospects from our portfolio.

Being able to address patients with late stage melanoma.

That had progressed on current standard of care, so stay tuned for our next steps forward.

For a potential molecules in our portfolio that can address the needs in melanoma.

Thank you and our.

The next question comes from the line of Yoga Docomo <unk> with Citi.

Operator: As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. And our first question comes from the line of Peter Lawson with Barclays. Hey, Scott, thanks for taking my questions. Just, I guess on B7H3, any sense of timing around melanoma, triple negative? prostate and lung for next year. What's the kind of sense of the order there?

Alright. This is <unk> on for Yigal, Thanks for taking my question.

I guess can you provide any additional color on the decision to discontinue the mahogany cohort.

Cool.

I'm sorry, the cohort module.

And were you able to speak with the FDA on the bar for accelerated approval and I'm also just curious about if you think there might be any benefit to adding chemo to that to that regimen in PD or PD lone high gastric cancers.

Ashley. Thank you very much for the question. It was a very tough decision for us with regard to modulate.

Scott Koenig: Thanks very much, Peter. As we commented at ESMO, we had completed enrollment in the non-small cell lung cancer cohort with regard, obviously, to the metastatic castration resistant prostate cohorts. The triple negative breast, the melanoma, and head and neck continue to enroll. We have not completed enrollment in that yet. We expect the melanoma and triple negative breast cancers to enroll before the end of the year, and obviously, the head and neck cancers to continue into 2022.

Given that we achieved what we hope to with regard to response rates.

Meaning a pre defined <unk>.

Responsive.

53% and a chemo free regimen I should.

Again, reemphasize, which we've discussed before the side effect profile was dramatically better than what has been previously reported for toga and then the more recent 811 study.

Obviously caught us a little bit by surprise is that eight of 11.

Data came out probably a good year before we expected and led to accelerated approval.

And as a result, we asked the question.

With continuing.

Putting our resources behind this for an accelerated approval in a chemo free regimen be the best use of our funds and for also for patients. We certainly believe that this.

Has.

Potential use.

Scott Koenig: So obviously, we want to follow those patients after all the patients have been enrolled. So certainly, at one of the scientific conferences in the first half of the year, we'll be available to provide additional updates, and of course, we'll provide continued updates on the other two, the prostate and the lung studies, at an appropriate time as well. I should also say, as I commented earlier today, I am very encouraged by the progress on prostate cancer. We have engaged a large number of key opinion leaders in prostate cancer who are very encouraged by the data to date.

Particularly in patients that may not tolerate chemotherapy, but when we assess the market opportunity here.

Deemed it too small to pursue this at this time, but we will publish.

The data from the ongoing and recently discontinued study so youll get a good sense of that this is a very good combination of use of margin tux map and the anti PD, one read a family man experimentally.

So we did have.

<unk> with the FDA.

Again, there was <unk>.

And that will continue to be raised about contribution of components in how to best address that so that there was no real clear pathway to really get in.

And accelerated approval without putting a lot more resources behind this molecule with regard to the combination with chemotherapy in fact.

Scott Koenig: Thank you. It is a sense of like in the first half, you want to have kind of a meaningful update from two or three kind of indications.

If you look at the 811 study.

87% of the patients.

Scott Koenig: You know, at this point, I would say that the priority right now is around advancing prostate cancer. We've enrolled the greatest number of patients. We obviously have a very significant data set, and therefore, we'd like to focus on looking at the next stage of development for that opportunity. For many of the other cohorts where we've enrolled fewer patients, for instance, 20 patients in a cohort, we'll have to make a decision whether additional patients will be required before we make a final decision going forward on registration. So until we see the data, I can't really make any comments on that.

In that triple combination of Herceptin.

Chemotherapy in timberlands and that were PD lone positive and so the majority of these patients with new newly.

Newly diagnosed gastric cancer gastroesophageal cancer are PDL one positive. So the addition of chemotherapy, which is essentially what is being done in module b.

We should be able to achieve that goal and again, our expectations is that the Marge rather fathom potentially tebo tell them they have a combination with chemotherapy.

Hope would have performed very well.

Okay. Thank you very much.

Thank you and our next question comes from the line of Jonathan Chang with SBB Leerink.

Hi, guys. Thanks for taking my questions.

First question what are your latest thoughts on what the potential opportunities for M. D C at zero and they could be.

Scott Koenig: Gotcha. Thank you. And then just one final question, kind of a similar question just around your PD-1 and LAG-3. When do we get to see data, further data around that?

Indications beyond prostate cancer.

Well, Jonathan I'm again, there's nothing has really changed since ESMO as you know we are in.

Five.

Total expansion cohorts says as monotherapy, we've also indicated that we're going to.

Scott Koenig: You know, Peter, as we have spoken before and as I've commented publicly about this, you know, we provided a sizable amount of data last year at three different conferences. We've had incremental data on the ongoing trials, and, you know, again, from the studies that we were conducting, the data remains very encouraging. As I reported earlier today, we are going to expect additional data both from the combination studies that we're conducting and, as you heard, many other additional trials that ASAI is conducting right now.

Begin a combination study.

Which will be open to many different tumor types with one of our checkpoint molecules and that at this point.

I see this opportunity is quite vast in the solid tumor space. It's just too early at this point I'm not having.

Some of the data yet completed on these additional expansion cohorts.

That any one of these or multiple of the <unk>.

Ones, we've been already testing.

Could be good opportunities I should also point out.

Given that there are competitors moving into the space, who are also identifying other b seven H three expressing tumors, having responses to alternatives to our molecules. There's no reason to think that.

<unk> offer that or even a noteworthy was the lab in combination with checkpoints shouldn't work as well there. So we are very high on the opportunities in <unk> III the ones in the clinic now we have also additional ones pre clinically that we are developing and so we will be putting a lot of efforts going forward.

Scott Koenig: I can't speak about the timing of when they'll update their results, but my sense is that we have a sufficient amount of data right now to make decisions on further development of that molecule and specific solid tumor and liquid tumor indications. What is taking time for us is engaging the various parties that would be working with us on any of these indications. So right now, be a little patient. Given all the efforts right now on B7H3, that obviously has the highest priority within our portfolio, but we have not lost sight of the opportunity for Tevo Telemed, both as a potentially single agent or combination agent, and expect to provide updates in the first part of 2022.

Towards this target.

Got it thank you.

She answered my.

Follow up question on the competitor data, so maybe I'll switch to another question on M.

<unk> 018, and that is on the next development steps, how are you thinking about which dose and regimen to move forward with.

Excellent question Jonathan.

As I commented on earlier, our number one is we stayed out was to engage the kols.

And we have a huge number of kols that we have inter.

Interviewed and and net in groups.

To discuss the ongoing study.

To dress.

Hey, there.

The results to date number one number two the safety profile and number three the dosing regimens.

Scott Koenig: Thank you. And our next question comes from the line of Kaveri Pohlman with BTIG.

Again very encouraged on all fronts from the feedback that we've received from them.

As we have noted before we are looking at the 40 additional patients in the expansion cohort.

Scott Koenig: Good afternoon. Thanks for taking my question. I guess my first question is for MGD-024. Maybe you can give us some insight on your development strategy there. And tell us a little bit about how different the molecule is from flotatilizumab besides Epi. Is it like a different CD1-23 epitope or a different CD3 binding affinity?

For pharmacokinetics of the patients looking at the various doses that these patients receive and modifications of the dose and how they correlated ultimately with their responsiveness.

We have.

I identified a potential pathway forward again, we are fine tuning that with regard to the dosing strategy.

This has not been finalized but could include.

Some initial reduction of the initial dose.

Or.

Or we do reducing the frequency of the dosing going forward, but we have not.

A final decision about that.

These decisions will come very shortly though as we get the additional data on the 40 patients.

Before the end of the year and then we will also engage the regulatory agencies on design clear.

Scott Koenig: Kaveri, thank you very much and welcome to the call today. With regard to MGD-024, we're very excited about the prospects of this platform, which we're now applying to the 123 by CD3 specificity. As we have spoken before, we have conducted comprehensive studies incorporating a slightly modified CD3 variant that was in the flotatuzumab molecule that has the ability to reduce theoretically cytokine release, particularly based on our preclinical studies both in vitro and in vivo.

Clearly identifying control populations that we would.

Use going forward in a registration intent study.

Got it thanks for taking the questions.

Johnson.

Thank you and our next question comes from the line of Jonathan Miller with Evercore ISI.

Thanks, So much for taking my question guys, even if I am your second favorite Jonathan.

I would like to read into it.

Now I'd like to revisit the PD one lag three by specific I know you gave some commentary earlier on the call about the data that you presented this year, but it seems like we're still waiting on a development path forward for that molecule Ah trial designs and indication expansions and that sort of thing but.

Scott Koenig: This also has, as you note, an FC domain so that we are able to give this molecule intermittently because of the longer half-life as compared to flotatuzumab. With regard to your specific questions around decreased affinity, it does have a decreased affinity for CD3, but that is not the whole story. A lot of it is the relative on and off rates for the specific molecules.

Scott Koenig: And what this will allow us to do is to achieve a C-max without precipitating what we believe is a significant cytokine release. So if this performs clinically as we've seen preclinically, this should be a major advance that could be applied not only for the AML indication and other CD123-bearing malignancies but could also be used for solid tumor indications as well. With regard to the specific design of the study, this will be a fairly conventional study, a 3 plus 3 design, dose escalation, but I think we can do, given our experience with flotatuzumab, a rapid dose escalation and then get to a proposed dose moving forward.

But given the value competitive like these are getting.

Im surprised youre not pushing that program, even harder and I wonder what the gating factors are for next steps in getting more clarity on that development path moving forward.

Well John.

I will say you are a favorite Jonathan.

In the ones that we know so don't feel.

<unk>.

Your second call was.

Reflective of our interest in speaking to you.

With regard to the PD, one and lag three competitive landscape, yes, we do recognize that there are many comp.

Companies working on separate antibodies in combination and a couple working on.

Bi specific molecules I would say that if we didn't have such a robust 783 portfolio.

There will certainly be more accelerated effort here on this specific molecule, but given the wealth of a number of other molecules not the least of which is also our PD one by <unk> four by specific.

Scott Koenig: Got it. And for Module B of the Mahogany study, you're evaluating patients regardless of their PD-1 status. And in melanoma, at least, the NEVO and IPI combination works well for PD-L1 negative disease. Do you think a cohort combining with 019 PD-1 CTLA-4 makes sense before starting a large cohort?

We obviously have had to make some tough choices in terms of prioritization given that we do are looking very closely at the appropriate design going forward of four solid tumor indication.

As well as potentially.

Scott Koenig: So I think there were two questions, Module B and the use of 19 in melanoma. So with regard to Module B, correct, this is being advanced in patients irrespective of PD-L1 status, and patients are being enrolled currently right now in Greater China by Xi Lab.

A liquid tumor indication.

Again, a lot of this work.

I would like to have completed before we discuss next steps again as you pointed out there is a competitive landscape and I'd, rather not tip of exactly where we're going here some of the other things that one should consider about this.

In the context of what Bristol has shown in their data with melanoma and others is what is the utility for instance of <unk>.

Scott Koenig: With regard to melanoma and the utility of NGD-019, we have a monotherapy study ongoing. Obviously, we have had very positive data, for instance, with the 018 study in dose escalation in melanoma. We have an expansion study ongoing there as well. So there are a lot of prospects from our portfolio for being able to address patients with late-stage melanoma that have progressed on a current standard of care. So stay tuned for next steps forward for potential molecules in our portfolio that could address the needs of melanoma.

<unk> three expression is a diagnostic valuable and those are the some of the things.

We are working through going forward and deciding what the appropriate studies. So please be patient we do like the activities molecule, we expect as I pointed out earlier additional data.

XI lab in a lot of indications going forward over the next few months. So I think that will also help us.

To hone in on what the appropriate next steps for this molecule.

Great. Thanks, so much for the clarity there and for the reassurance because I appreciate that.

Scott Koenig: Thank you. And our next question comes from the line of Yigal Nochomovitz with Citi. Hi, this is Ashik Mubarak on Fertigall.

We'll follow up.

Earlier in the call it sounded like you might not disclosed data from the smaller.

Scott Koenig: Thanks for taking my question. I guess, can you provide any additional color on the decision to discontinue the mahogany cohort A module? I'm sorry, cohort A. And were you able to speak with the FDA on the bar for accelerated approval? And I'm also just curious about whether there might be any benefit to adding chemo to that regimen in PD-L1 high gastric cancers. Thanks. Asha, thank you very much.

Initial expansion cohorts for <unk>.

If you decide to increase cohort size later before making.

Decisions about about later stage studies can you clarify what your criteria would be for disclosure in any given up those multiple expansion cohorts. So that we could get next year.

Yeah.

Haven't made any specific decisions about what and when what is what are the criteria going forward again, we're very wary of the competitive landscape here and rather than tip of somebody on which ones we.

Pursuing for a.

Registration study, we'd like to sort of hold this close to the best until we make that decision. So please be patient with us with regard to that having said that.

Scott Koenig: Asher, thank you very much for the question. It was a very tough decision for us with regard to Module A. Given that we achieved what we hoped to with regard to response rate, meaning a predefined response of 53 percent in a chemo-free regimen, I should again reemphasize, as we've discussed before, the side effect profile was dramatically better than what has been previously reported for TOGA and then the more recent 8.11

We are trying to set very high bars on assurances.

And so sometimes for instance.

Give you a perfect example.

Presented the initial data very quickly on the non small cell lung cancer that was 20 patients of which there were three different.

Histological types. So you know.

Before we want to make a decision.

And what's the next step possibly for lung cancer, you want to make sure that you are picking the right tumor.

Tumor types going forward.

<unk> has decided to be pursued so those are the some of the things we're thinking about going forward.

Scott Koenig: You know, what obviously caught us a little bit by surprise is that 8.11 data came out probably a good year before we expected it and led to accelerated approval. And as a result, we asked the question, would continuing putting our resources behind us for an accelerated approval in a chemo-free regimen be the best use of our funds and also for patients? We certainly believe that this has potential use, particularly in patients that may not tolerate chemotherapy, but when we assessed the market opportunity here, we deemed it too small to pursue this at this time.

Excellent.

Thanks, So much one follow up from earlier.

Earlier presentation from the prostate cancer cohorts in the K well call you had after after high school and I'm pleased to hear that you are having productive dialogues with the kols in the indication.

Thus far and when we look forward to that update and first quarter next year can you give us a little hint as to what people have been saying about the updated safety profile that you've observed.

Scott Koenig: We will publish the data from the ongoing and recently discontinued studies, so you'll get a good sense of that this is a very good combination of use of margituximab and the anti-PD-1 retifalamin experimentally. And we did have, you know, engagement with the FDA. Again, there were questions that continued to be raised about the contribution of components and how to best address that, so there was no real clear pathway to really get an accelerated approval without putting a lot more resources behind this molecule.

And how.

<unk> regimen modifications or dosing modifications.

He's worked in the context of that indication.

Yeah, I think I'm very.

Very consistent with what I've said before which the toxicity is manageable that the strategies, we've taken with regard to mitigate them.

Some of these side effects seem to be working well and even further changes of what we've.

Discuss with regards to some dosing strategies should further improve the safety profile here. So all in all as the data stands now obviously I can't predict what's going on in the future.

You know, we're very encouraged on what we have implemented and where the safety dataset stands right now.

Scott Koenig: With regard to the combination with chemotherapy, in fact, if you look at the 811 study, 87% of the patients in that triple combination of Herceptin chemotherapy and Pembrolizumab were PD-L1 positive. And so the majority of these patients with newly diagnosed gastric cancer and gastroesophageal cancer are PD-L1 positive. So the addition of chemotherapy, which is essentially what is being done in Module B, should be able to achieve that goal. And again, our expectations are that the margituximab or potentially tabotelumab combination with chemotherapy, we hope, would perform very well.

Thank you and our next.

Next question comes from the line of Philbin Tour King with JMP Securities.

Hi, congrats on the quarter and thanks for taking my questions.

My first question is if you could please comment on what goes into future planning a float to choose them up and do you need human data from.

Next follow up molecule G T O 24.

Is there a certain bar you're looking for for M D.

For maybe even the ash data in this early dataset or.

Is it one or the other molecule maybe both could you just comment about your options around that thank you.

Silvan, Thank you very much and welcome to the call and.

Scott Koenig: Thank you. And our next question comes from Jonathan Chang with SVB Lettering. Hi guys, thanks for taking my questions. First question, what are your latest thoughts on what the potential opportunities for MGC018 could be in indications beyond prostate cancer?

Again, you know with regard to the opportunities in AML. This is a landscape that continually.

Becomes more complex as you.

You know more opportunities are being provided to patients and so again.

Very encouraged on what we have achieved.

With Florida Tuesday map with regard to dosing strategies identifying populations that would be most responsive to the drug these particularly primary induction failure population.

As you know we are conducting this single arm study with Florida Tuesday that we will be taking interim looks during the enrollment are those patients with regard to the rose robustness of.

All of that data and and we'll continue to look at that while we are moving forward with the dose escalation on Mg two for which in theory could provide some additional benefits with regard to the.

Scott Koenig: Well, Jonathan, again, nothing has really changed since ESMO. As you know, we're in five total expansion cohorts as monotherapy. We've also indicated that we're going to begin a combination study, which will be open to many different tumor types with one of our checkpoint molecules. And at this point, I see this opportunity is quite vast in the solid tumor space. It's just too early at this point not to have some of the data yet completed on these additional expansion cohorts so that any one of these or multiple of the ones we've already tested could be good opportunities.

The patient convenience and obviously potential side effect profile. So I would say that we will we are continuing to push forward on Florida Tucson lab.

We hope to have in 2022 some of the initial data on seeing if Oh 24 meets our anticipated.

Profile and then we'll make decisions going forward on how to address the AML space and larger space in general So we.

We will provide updates in 2022 as more data comes in.

Great. Thank you.

From a side effect profile.

Crs that we've seen with float to choose them up to date.

Scott Koenig: I should also point out that given that there are competitors moving into the space who are also identifying other B7H3-expressing tumors having responses to alternative molecules, there's no reason to think that MGCO18 or, for that matter, even an ovaltuzumab in combination with our checkpoints wouldn't work as well there. So we are very high on the opportunities in B7H3. The ones in the clinic now, we also have additional ones in preclinical development that we are developing. And so we will be putting a lot of effort going forward towards this target.

That molecule is by itself a competitor.

The space that the trial is studying.

We do think it's competitive in the particular indications that we are pursuing is particularly primary induction failure, if it obviously meats.

Some of the criteria that we.

We anticipated through our discussions with the FCA.

There are additional opportunities.

Also based on much of our preclinical data, which we have not shared with you at this point that could even expand those.

Two other AML populations.

Yes, I do think that AML has great opportunity.

But again, if a N G D. O 24 meets all the criteria that we have set out to achieve it could be even a much more effective drug and a larger opportunity than Florida Tuesday map.

Great. Thank you for taking my questions.

Scott Koenig: Got it. Thank you. You actually answered my follow-up question on the competitor data. So maybe I'll switch to another question on MGC-018, and that is about the next development steps. How are you thinking about which dose and regimen to move forward with?

Thank you and our next question comes from the line of Stephen Willey with Stifel.

Yeah. Good afternoon, thanks for taking the questions.

Just going back to O two four.

Have you guys contemplated a dosing strategy for the phase one dose escalation in terms of whether or not youre going to start off with flat dosing or.

Scott Koenig: Excellent question, Jonathan. As I commented earlier, number one, as we stated out, was to engage the KOLs. And we have a huge number of KOLs that we have interviewed and met in groups to discuss the ongoing study and to address A, the results to date, number one, number two, the safety profile, and number three, the dosing regimens. Again, we are very encouraged on all fronts from the feedback that we have received from them.

Based upon exposure relationships, you've seen pre clinically is there is there a step up dosing regimen that you have in mind and then I guess, maybe second to that have you thought about at all.

<unk>, a subcutaneous formulation to further block C Max a little bit thanks.

So with regard to the current dosing again based on our experience in Florida Tuesday Mad.

And the opportunity here.

We're gonna start out as as intravenous dosing as one would expect.

Scott Koenig: As we have noted before, we are looking at the 40 additional patients in the expansion cohort for pharmacokinetics, looking at the various doses that these patients received and modifications of the dose, and how they correlated ultimately with their responsiveness. We have identified a potential pathway forward. Again, we are fine-tuning that with regard to the dosing strategy. This has not been finalized but could include some initial reduction of the initial dose or reducing the frequency of the dosing going forward, but we have not made a final decision about that.

But with regard to the.

Dose escalation, we think given our experiences here and what we have shown pre clinically in terms of a much better.

Safety profile and reduced cytokine release, we should be able to move up.

Quickly.

In a dose escalation.

A typical phase one study.

Yes, we have obviously sort of the opportunity.

In giving.

Q.

Again, you have to be a little wary in AML leukemic patients with a certain complications there.

Scott Koenig: These decisions will come very shortly, though, as we get the additional data on the 40 patients before the end of the year. And then we will also engage the regulatory agencies on design, clearly identifying controlled populations that we would use going forward in a registration-intense study.

But certainly that has been something that we have discussed going forward. It probably is not something we're going to highlight immediately but it certainly has been discussed internally.

Thank you.

Your next question comes from the line of David Lebowitz with Morgan Stanley.

Scott Koenig: Got it. Thanks for taking the question. Thanks, Jonathan. Thank you. And our next question comes from the line of Jonathan Miller with Evercore ISI. Thanks so much for taking my question, guys, even if I am your second favorite, Jonathan.

Hi, This is avatar on for David today.

So another question on the gastric cancer opportunity for emergency Tux man.

Following the results from mahogany module, a can you provide any granularity on your expectations for module B in terms of just incremental benefit when response rates.

Scott Koenig: I would love to revisit the PD-1 LAG-3 in particular. I know you gave some commentary earlier in the call about the things that you presented this year, but it seems like we're still waiting on a development path forward for that molecule, trial designs, indication expansions, and that sort of thing. Given the value competitive LAG-3s are getting, I'm surprised you're not pushing that program even harder, and I wonder what the gating factors are for next steps in getting more clarity on that development path moving forward.

And at minimum what would you view as a successful outcome would be.

Thank you very much for the question.

But our expectations would likely require obviously.

Adequate safety profile that was.

At least as good, but certainly better would be preferred than what we've seen in the 811 study in combination with Pembroke.

With regard to overall response rate.

You'll recall in that Triple combination that is 74% response rate, we would certainly like to meet or exceed that one of the things that still is very open because we don't have the data from them is theyre PFS rate was.

Scott Koenig: Well, John, I will state you are a favorite of Jonathan's among the ones we know. So don't feel that your second call was reflective of our interest in speaking to you. With regard to the PD-1 and LAG-3 competitive landscape, we do recognize that there are many companies working on separate antibodies in combination and a couple working on bispecific molecules. I would say that if we didn't have such a robust B7H3 portfolio, there would certainly be more accelerated effort here on this specific molecule.

Not that good if you recall their PFS was $10 six months, our chemo free regimen with mahogany a was 10 three months given that it was also a smaller number of patients. So it's quite comparable so ultimately we're going to have to take a look at what their benefit.

With regard to PFS is and potentially overall survival and again that would be something that we would look to exceed.

That.

Whatever it turns out to be 411.

Understood. Thank you.

Yeah.

As a reminder, ladies and gentlemen, if you have a question. Please press star one on your telephone.

And I'm showing no further questions so with that I'll turn the call back over to management for any closing remarks.

Thanks, everyone for participating in the call today, we look forward to updating you on our programs.

Scott Koenig: But given the wealth of a number of other molecules, not the least of which is also our PD-1 bispecific, we obviously have had to make some tough choices in terms of prioritization. Given that, we are looking very closely at the appropriate design going forward for a solid tumor indication, as well as potentially for a liquid tumor indication. Again, a lot of this work I would like to have completed before we discuss next steps. Again, as you point out, there is a competitive landscape, and I'd rather not tip off exactly where we're going here.

In the near term and hope that you have a great Thanksgiving holiday.

This concludes today's conference call. Thank you for participating you may now disconnect.

Yes.

[music].

Scott Koenig: Some of the other things that one should consider about this, in the context of what Bristol has shown in their data with melanoma and others, is what is the utility, for instance, of LAG-3 expression? Is it a diagnostic valuable? Those are some of the things we are working through going forward in designing the appropriate study. Please be patient.

Scott Koenig: We do like the activity of this molecule. We expect, as I pointed out earlier, additional data from Xi Lab on a lot of indications going forward over the next few months. I think that will also help us to hone in on what the appropriate next steps for this molecule are.

Scott Koenig: One follow-up question. Earlier in the call, it sounded like you might not disclose data from the smaller initial expansion cohorts for 2018 if you decide to increase cohort size later before making decisions about later-stage studies. Can you clarify what your criteria would be for disclosure in any given of those multiple expansion cohorts that we could get next year?

[music].

Scott Koenig: You know, we haven't made any specific decisions about what and when and what the criteria will be going forward. Again, we're very wary of the competitive landscape here, and rather than tip off somebody on which ones we are pursuing for a registration study, I would like to sort of hold this close to the vest until we make that decision. So please be patient with us with regard to that. Having said that, you know, we are trying to set very high standards for assurance. And so sometimes, for instance, I'll give you a perfect example.

Scott Koenig: You know, we presented the initial data very quickly on non-small cell lung cancer, and that was 20 patients, of which there were three different histological types. So, you know, before we want to make a decision on what's the next step possibly for lung cancer, you want to make sure that you're picking the right tumor type going forward if that is decided to be pursued. So those are some of the things we're thinking about going forward.

Scott Koenig: Excellent. Thanks so much. One follow-up from earlier presentations from the prostate cancer cohorts and the KOL call you had after ASCO. I'm pleased to hear that you're having productive dialogues with the KOLs in the indication thus far. And when we look forward to that update in the first quarter next year, can you give us a little hint as to what people have been saying about the updated safety profile that you observed at ESMO and how regimen modifications or dosing modifications have worked in the context of that indication? Yeah, I think

Scott Koenig: Yeah, I think very consistent with what I've said before, that the toxicity is manageable, that the strategies we've taken with regard to mitigate some of these side effects seem to be working well, and even further changes to what we've discussed with regard to some dosing strategies should further improve the safety profile here. So all in all, as the data stands now, obviously, I can't predict what's going on in the future. We're very encouraged by what we have implemented and where the safety data set stands right now.

Scott Koenig: And our next question comes from the line of Silvan Tuerkcan with JMP Securities. Hi, congrats on the quarter and thanks for taking my question. My first question is... Please comment on what goes into future planning for Flotatuzumab and whether you need human data from the next follow-up molecule, MGD-024? Is there a certain bar you're looking for in MGD-024, maybe even in the ASH data in this early data set?

Scott Koenig: Is it one or the other molecule? May it be both? Could you just comment about your options around that?

Scott Koenig: So, Silvan, thank you very much and welcome to the call. And again, with regard to the opportunities in AML, this is a landscape that continually becomes more complex as, you know, more opportunities are being provided to patients. And so, again, very encouraged by what we have achieved with FLOTA-Tuzumab with regard to dosing strategies, identifying populations that would be most responsive to the drug, these particularly primary induction failure populations. As you know, we are conducting this single-arm study with FLOTA-Tuzumab.

Scott Koenig: We will be taking interim looks during the enrollment of those patients with regard to the robustness of that data, and we'll continue to look at that while we are moving forward with the dose escalation on MgO24, which, in theory, could provide some additional benefits with regard to patient convenience and, obviously, potential side effect profiles. So I would say that we're continuing to push forward on FLOTA-Tuzumab. We hope to have, in 2022, some of the initial data on seeing if O24 meets our anticipated profile, and then we'll make decisions going forward on how to address the AML space and larger space in general. So we will provide updates in 2022 as more data comes in.

Scott Koenig: Do you think that molecule is, by itself, competitive in this space, the trial space? We do think it's competitive.

Scott Koenig: We do think it's competitive in the particular indications that we are pursuing, particularly primary induction failure, if it obviously meets some of the criteria that we anticipated through our discussions with the FDA. There are additional opportunities also based on much of our preclinical data, which we have not shared with you at this point, that could even expand us to other AML populations. So yes, I do think that AML has a great opportunity, but again, if MGD-024 meets all the criteria that we have set out to achieve, it could be a much more effective drug and a larger opportunity than Zimep.

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Scott Koenig: Thank you. And our next question comes from the line of Stephen Willey with Stiefel.

Scott Koenig: Yeah, good afternoon. Thanks for taking the questions. Just going back to O2-4, have you guys contemplated a dosing strategy for the Phase I dose escalation in terms of whether or not you're going to start off with flat doses, or, based upon exposure relationships you've seen pre-clinically, is there a step-up dosing regimen that you have in mind? And then, maybe second to that, have you thought about at all pursuing a subcutaneous formulation Thanks. So, um, with regard...

Scott Koenig: So with regard to the current dosing, again, based on our experience with flotatuzumab and the opportunity here, we're going to start out with intravenous dosing, as one would expect. But with regard to the dose escalation, we think, given our experiences here and what we have shown preclinically in terms of a much better safety profile and reduced cytokine release, we should be able to move up fairly quickly in a dose escalation study, a typical phase one study.

Scott Koenig: Yes, we have obviously thought of the opportunity to give a sub-Q. Again, you have to be a little wary in AML leukemic patients with certain complications there, but certainly that has been something that we have discussed going forward. It probably is not something we're going to highlight immediately, but it certainly has been discussed internally.

Scott Koenig: And our next question comes from the line of David Lebowitz with Morgan Stanley. Hi, this is Avatar on behalf of David today.

Scott Koenig: We have another question on the gastric cancer opportunity for Margie Tuck's math. So following the results of Mahogany Module A, can you provide any granularity on your expectations for Module B in terms of just an incremental benefit on response rates? And at minimum, what would you view as a successful outcome in Module B?

Scott Koenig: Avatar, thank you very much for the question. Our expectations would likely require, obviously, an adequate safety profile that was at least as good, but certainly better, than what was seen in the 811 study in combination with PEMBRO. With regard to overall response rate, if you recall, in that triple combination, they had a 74% response rate. We would certainly like to meet or exceed that.

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Scott Koenig: One of the things that are still very open, because we don't have the data from them, is that their PFS rate was not that good. If you recall, their PFS was 10.6 months. Our chemo-free regimen with Mahogany A was 10.3 months, given that it was also a smaller number of patients.

Scott Koenig: So it was quite comparable. Ultimately, we're going to have to take a look at what their benefit with regard to PFS is and, potentially, overall survival. Again, that would be something that we would look to exceed, whatever it turns out to be, for 811.

Operator: As a reminder, ladies and gentlemen, if you have a question, please press star 1 on your telephone. And I'm showing no further questions. So with that, I'll turn the call back over to management for any closing remarks.

Scott Koenig: Thanks, everyone, for participating in the call today. We look forward to updating you on our programs in the near term and hope that you have a great Thanksgiving holiday.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

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