Q3 2022 MacroGenics Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Yeah.
Yeah. Good afternoon, we will begin the Microjet X 2022 third quarter corporate progress and financial results Conference call in just a moment all participants are in a listen only mode at the moment and we will conduct a question and answer session at the conclusion of the call.
At this point I will turn the call over to Jim Carroll, Senior Vice President and Chief Financial Officer of Macrogenics.
Yeah.
Thank you operator, good afternoon, and welcome to Macrogenics conference call to this.
Our third quarter 2022 financial and operational results.
For 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.
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 1095.
Actual results may differ materially from those indicated by these forward looking statements.
As a result of various important factors, including those discussed in the risk factors section of our annual quarterly and current reports.
Filed with the SEC.
In addition, any forward looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.
While we may elect to update these forward looking statements at some point in the future. We specifically disclaim any obligation to do so even if our views change except to the extent required by applicable law and now I would like to turn the call over to Dr. Scott Koenig, President and CEO of Macrogenics.
Thank you Jim I'd like to welcome everyone participating via conference call and webcast today.
This afternoon, I will provide key updates on our clinical programs as well as our recently announced collaboration with Gilead, but before I do so let me first turn the call back to Jim who will review our financial results.
Thank you Scott This afternoon Macrogenics reported financial results for the quarter ended September 32022, 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 $41 7 million.
For the quarter ended September 32022, compared to total revenue of $15 7 million for the quarter ended September 32021 revenue for the quarter ended September 32022 included $30 million in milestone payments from insight related to run a family man, which they licensed from US in 2017 revenue for the quarter ended September .
32022 also included margins are net sales of $4 4 million compared.
Compared to $3 6 million for the quarter ended September 32021, or.
Our research and development expenses were $48 2 million for the quarter ended September 32022.
Compared to $49 40.
<unk> $49 8 million for the quarter ended September 32021 the.
The decrease was primarily related to decreased manufacturing costs for insight and decreased decreased cost related to discontinued studies.
These decreases were partially offset by increased development manufacturing and clinical trial costs related to <unk> increased expenses related to discovery projects in preclinical molecules and increased clinical expenses related to larger la Mab and <unk> four.
Our selling general and administrative expenses were $15 4 million for the quarter ended September 32022, compared to $17 2 million for the quarter ended September 32021.
The decrease was primarily related to decreased Mark Jenkins selling costs as well as decreased consulting expenses are.
Our net loss was $24 8 million for the quarter ended September 32000 to 2022 compared to a net loss of $52 9 million for the quarter ended September 32021 or.
September 30th 2022, the $60 million subsequently received from Gilead projected and anticipated payments from partners product revenues as well as anticipated savings from our previously announced corporate restructuring plan should extend our cash runway into mid mid 2024.
This updated cash runway guidance reflects anticipated expenditures related to the plan phase two portion of the M. G. C. O 18, Tamarack study as well as Macrogenics other ongoing studies.
In addition, we note that the potential approval of the <unk> DLA later, this month, which would obligate prevention bio to provide us with a $60 million milestone within 90 days of that approval would help us achieve a two year cash runway and now I'll turn the call back to Scott.
Thank you Jim and.
In the past few months, we demonstrated our ability to generate nondilutive capital of the of partnering efforts, which enables us to collect $30 million in milestone payments from inside and the subsequent receipt of the 60 million dollar upfront payment from Gilead.
Very excited to advance mgd twenty-four in collaboration with Gilead.
Also we continued to operationalize the Tamarack study of <unk>, which has a new name <unk> duo Karmazin in prostate cancer and believe we should be able to dose at first patient in this study by year end.
Finally, with enrollment completed in the mono therapy dose expansion study of Lord <unk>, we look forward to sharing clinical data and first quarter of 2023.
With that backdrop, let me walk you through updates on our portfolio of investigational clinical molecules, starting with poker <unk>, <unk> or <unk> or ADC designed to deliver a DNA alkylating <unk> southern toxic payload to tumors expressing.
783.
783, as a member of the <unk> family of molecules involved in in a mean regulation vulgar.
<unk> do a karmazin was designed to take advantage of the sandwiches broad expression across multiple solid tumor types.
We continue to make progress as we operationalize the Tamarack study.
We've begun initiating clinical sites and expect to start the tamarack study by year end with anticipation of interim data from the phase two portion of this study in 2024.
Next let me.
Update you on Laura gentleman that we continue to dose patients in the phase one dose escalation combination study above <unk> do a karmazin with Laura Journal Mab in patients with advanced solid tumors, including renal cell carcinoma pancreatic cancer ovarian cancer.
Cellular carcinoma M CRP C N melanoma.
May recall that based on data from our preclinical studies antitumor activity with <unk> do a karmazin may be enhanced by combination therapy with an anti P. D. One agent without significant incremental toxicities.
During the second quarter, we completed enrollment of the phase one two doses expansion study with Lord gentleman that as mono therapy and cohorts of patients with microsatellite stable caller rectal cancer MCR P C melanoma and checkpoint naive non small cell lung cancer.
Many patients are still on study.
And while we will wait to provide a clinical update on this study in the first quarter of 2023, I'll mentioned that we're very encouraged by what we've seen so far.
We look forward to sharing data with you in early 2023.
Next up Mgd out 24 is our next generation by specific C. D 123 by three Dart molecule that incorporates a CD three components designed to minimize <unk> syndrome.
While maintaining antitumor side of lytic activity and permitting intermittent dosing to a longer half lives.
Our phase one dose escalation studies M. G 24 is ongoing in patients with C. D. One twenty-three positive relapse refractory hematologic malignancies, including acute myeloid leukemia, and Marla dysplastic syndromes.
Of course, we're thrilled to have Gilead is a collaboration partner to advance Mtgo 24.
Last month, we entered annex boosted option and collaboration agreement with Gilead to develop Mgd 24, and up to two additional by specific research programs in oncology.
Agreement Grand-scale, you had the option to an exclusive license to M. G. D. O 24, as part of the agreement Gilead paid us an upfront payment of $60 million and Macrogenics will be eligible to receive up to $1.7 billion in target nomination option fees and development regulatory and commercial miles.
<unk>.
Macrogenics will also be eligible to receive tiered double digit royalties and worldwide net sales <unk> 24, and a flat royalty on worldwide net sales of products, resulting from the two additional research programs.
Macrogenics will be responsible for the ongoing phase one study a M. G 24, and Gilead may elect to exercises option to license the program at predefined decision points.
The phase one study will include a dose escalation segment and an expansion segment. There's an intended to evaluate <unk> 24, as mono therapy and in combination with other therapies across multiple indications.
Next I will provide an update on our product candidates being developed by our collaboration partners, who which we retain certain economic rights.
As I mentioned earlier, we and prevention wait the F D as decision on <unk> and Nancy C. D. Three monoclonal antibody that Pervenche prevention acquired from us under an asset purchase agreement in 2018.
<unk> is developing to please a man for both the treatment and prevention of type one diabetes.
The extended the Doofer target action dates for the prevention of type one diabetes indication is November 17th 2022.
<unk> is eligible to receive royalties on that sales at the Pleasant Mabus approved in addition to milestone payments that total of $170 million inclusive of the $60 million U S approval milestone.
<unk> is an investigation of anti Ped, one mad that we exclusively licensed inside Corporation.
Macrogenics is eligible to receive royalties on that sales of <unk>. If approved in addition to milestone payments.
In July 2022, Macrogenics received $30 million in milestone payments from inside as part of its collaboration agreement.
But <unk> is currently being studied as monotherapy or in combination with other agents across multiple studies.
Finally, as a reminder, we previously announced in August a restructuring plan, which included the prioritization of our pipeline a product candidates at.
15% workforce reduction and plant closure of two facilities with a goal of delivering value, creating data with our existing and anticipated financial resources.
All of these cost saving measures are proceeding according to plan.
With our continued progress through 2022, we remain committed to developing and delivering life changing medicines to cancer patients.
We would be now happy to open the call for questions operator.
Thank you at this time, we will conduct a question and answer session.
Reminder, to ask a question you'll need to press Star one line on your telephone and wait for your name to be an M. Please stand by while we compiled a Q and a roster.
The first question.
From John Miller.
At at our core John go ahead with your question.
Hi, This is Jessica plan for John two questions for me. My first question is what exactly is included in the cash finally guidance that gets you can make 2024. Besides just 6 million dollar attack panic. Some carry at at the P. I mentioned project again, a feature payments from partner and product Avenue.
<unk> can you give us an idea of what payment.
<unk>.
And what potential milestones can further extend the cash family to at least the end of 23. Four for example of that 60 million dollar math, a payment plan prevention file a salary bacon or the data that you expect unfair at <unk> in 1023 cannot lead to something and.
My second question is appear also mentioned that Gilead may elect to exercise his option to license.
And at coin club pre defined decision points can you give us a little bit more color on what the decision point account.
That phase one data would be one of these points and please go ahead have a clock on their choice.
Thank you.
[noise].
Alright standby for our second question.
Our next question comes from Jonathan Chang.
S B B Securities. Jonathan go ahead with your question.
Hi, guys. Thanks for taking my questions first question Congratulant resent Guiliani partnership.
Curious to hear your thoughts on business development broadly regarding other pipeline assets post the steel.
I'm, having some trouble hearing you guys.
Yes, I can hear you.
Scott Jim.
At.
Absolutely will do that.
Our next question.
Comes from David Gay with S. N B C. David go ahead with your question.
Yeah, Hi, Thanks for taking my questions I always wanted to stomach congratulations on the recent progress one question on the.
At the M. G. <unk> could you talk a little more about the biological rationale combining M. G C O a T and <unk>.
I understand that you will also be presenting adapted data.
Could you maybe you can help us understand is you'll be testing Campbell inhibitor trial.
I'm also having a issue hearing got a gym your comments.
Alright, I am currently on it.
Yes.
So to all of our participants on the call for some reason, we're having issues with you hearing the answer when you've been brought to ask your question. We are not having that same issue and so we're gonna work for just a second to see if we can resolve this.
David are you able to hear me.
Yes, I can hear you operator, but I cannot hear Jim or Scott at this time.
They are not hearing you I'm not you're not muted.
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Yes, we are.
Since you a note.
Yeah.
Can you hear me now hear me now.
Thank you.
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David were you able to hear them.
Yeah, Hi, Jim Yeah. It was able to hear you now.
Can you hear me okay.
Yes, I can hear you David Bacon here you buy for some reason we are unable to you're unable to hear them when they respond.
Right.
Let's try this David can you hear me now.
Yes, I can hear you now Jim.
Sorry, one second please.
Okay. We'll try this again, operator and David can you hear me now.
Yes, yes.
Great.
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We are working on a solution right now I will send you a message.
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Okay.
Hello, operator.
Operator, yes, we're going to call again, our bank line I called I called through the a separate connection.
Connection here can you hear me.
Obviously.
From another computer.
Hello.
Yes, I can hear you <unk>.
And are any of the other party salon, our UK and are you able to hear them.
Yeah, Scott I can hear you right now alright, so we're going to work through this this line here weekly establishes so are we.
<unk> is obviously a decision was not from our end.
Justin in response.
In response to your question.
The rationale behind combining the M D C O 18 and <unk>.
Laura Gerald <unk> Mab is that we had identified a mechanistically.
That combining an ADC with a blockade of PD one gig.
<unk>.
A R orthogonal mechanisms that gives enhanced immune.
Immune responses enhance killing against targets and given the.
Success, we've seen so far with the Dart Bispecific Lora Gerald <unk> Mab, where you now have the additional block here of one to 565359 I'm not here to take your message. So please leave a message at the time. Thank you operator, you need to turn that off and the talent. Please record your.
Are you still hear me David I'm sorry.
Yes, I can hear you, yes, we hear you.
So there's the digital rationale of now using instead of just a read of fathom Abu but using instead the bi specific is based on the encouraging the monotherapy data we had already seen so the idea was to optimize both checkpoint blockade as well as the ADC activity. So that's the rash.
Now.
Okay.
<unk>.
I think it's so much.
Mick will go about let me go back to Jonathan's question Jonathan.
With regard to the BD activity as Youre, well aware we have been.
Very active for many many years in a continuous BDA BD engagement on both our clinical and preclinical portfolio and I'm pleased to say.
In addition to the success of the recent partnership with Gilead, we have ongoing discussions on another number of fronts. Both law on clinical assets and preclinical asset so I have nothing more to.
Describe.
At this point, but you.
You could anticipate.
As time goes on.
Over the course of the year, we should have any additional activity being discussed.
And Jonathan you are live on the stage, if you would like to ask a follow up question.
Hi, This is Jessica and I, just got back in the line and.
All of that.
I used to my second question.
We are fine decision points, and which at Gilead may elect to exercise their.
The option to license the program could you give us some color on that as a as a Jessica I'm just tried to answer that question, but let me just reiterate.
Because of the nature of the agreement there was nothing we're not allowed specifically to define the points where a gilead can.
Enter into the option period.
Two of them to.
Take a license during this option periods, having said that they can do it at any time, so clearly they will be continuing to monitor.
The clinical results I'm on the dose escalation and then as we described today.
There is plans to do additional combination studies.
Going forward so at any time during this.
Examination of the molecule they can opt in.
Our next question is coming.
From Charles you with it.
You can hang partners. Charles go ahead with your question.
Hello, Good evening and thanks for taking my questions. I was wondering if you have reached the maximum time permitted for recording your message.
On slide with the message press, one to listen to your message press two to erase and Rerecord press three.
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Okay already I'll try again and could provide if you're satisfied with domestic press line to listen to your message press two to erase and Rerecord press three.
Could you provide some color into the progress of the M. D. C O <unk> dose escalation study in combination with the Lora Joel and that's I think the study has been ongoing since earlier this year with the newer Q4 weekly dosing and I was wondering if your early 2023, lower driller map update could potentially provide some more.
Of sites into that combination as well thank you.
Yeah, Charles again without specifying.
The timing of things, obviously, we had taken a I would say a reasonably aggressive view of this where we set the dose of the.
Lord Journal Mab component that at six mix per kg and that continues the plan was to dose escalate.
In a reasonable fashion with the M D C O 18th starting at Onemain.
Her kid.
As you recall from our dose escalation.
We.
Began to see clinical responses.
Even at low doses of M. G C O a team.
So with regard to the timing of when we might be able to see some clinical result, they can occur at any any time. We believe we are given that our plan is to.
Dose escalate.
As you know.
Fairly rapidly with obviously.
Paying attention to the safety profile of that of that combination and doing it appropriately and at any particular time, we may elect to do expansion a particular cohort so.
It's just too early at this time to say of when that it will occur but could occur.
In <unk> and 'twenty three.
Even in the early part of 'twenty three.
Got it great and maybe one follow up if you don't mind on the Lora Gorilla math program update us specifically in 2023, so looking forward to that one for sure and I was wondering if you could also help us contextualize.
The Lora drill a map update relative to some of the other a PD one CTO explore by specific data that we've seen emerging not only recently, but also you know some others that we may see very soon at the upcoming Citi Conference as well. Thank you.
So as we noted today, we have been encouraged by the data we've completed in the fall for expansion cohorts.
Our enrollment plans.
We will discuss one or more of these.
These expansion cohorts, which.
In Munich in several of these cases are quite considerable.
Now given that as we've already noted that we're doing combination studies. We're also looking at our plans of potentially to move forward.
And.
Monotherapy studies, and one of them or potentially more indications and all of these will be discussed early in 2023, So I.
I should also note that we.
We have made many of the.
Competitor PD, one CCL, a four type molecules.
And they've done a comparison that I can see.
Right.
That our molecule compares quite favorably to all those that we tested.
Great. Thanks for answering the questions.
Sure.
Our next question is.
Is coming from Lucas Shumway with BMO capital markets. Lucas go ahead with your question.
Two questions on the evolving Hefei kitchen landscape what are your views on the opportunity for Andrew can zero in on what clinical benchmarks are you looking forward for comparison.
And for a second question on.
Are you virtually to figuring on development for Ontario, Telematics on do you think we could expect Quaker business development change similar to what we saw with zero to four again.
So with regards to M D C O O N E.
As we've stated quite clearly this year was pre.
Prioritize to operationalize the.
Our planned phase two slash three studies in patients with castration resistant prostate cancer, who had progressed on.
And a chemotherapy.
As well as a one <unk>.
Antigen receptor.
<unk> targeting agents.
As we noted today, we plan to have the first patient in.
By the end of the year that would be I'm looking at the major part of the enrollment occurring in 'twenty three and as population.
And so that's the laser focus right now and then of course as we just discussed we're doing a combination study of M. D C. L a team.
With that Laura Journal imagine based on the.
The results of all of that data that could lead into additional indications and other opportunities in prostate cancer.
With regard to the question.
Concerning to Tebo telematics.
As we've noted is that we've been prioritizing.
Our programmatic spend.
We have obviously very exciting.
Exciting data that we've reported on to date both in <unk>.
Solid tumors as well as <unk>.
And.
The L D C L a.
Post car T therapy.
We are in discussions again.
Looking for additional capital.
Regarding the future studies, we spent a lot of time.
Identifying the opportunities that we think would be.
The most promising in the solid tumor.
Setting as well as in <unk>.
Hematological malignancies and are those discussions discussions are ongoing now, but I have nothing more to report with regard to.
Particular partnerships or a magnitude of those partnerships.
Okay. Thank you.
Okay.
Okay.
At this time as a reminder, if you would like to ask a question. Please press star one one on your telephone and wasting your name to be announced.
Our next question comes from Silvan Perkin.
<unk> go ahead with your question.
Yeah. Good afternoon, I apologize about my voice here.
I have two quick questions regarding anticipated.
The prevention bio progress they announced this morning that our labeling discussions.
How confident are you in the approval.
And coming soon in November and then when do you think royalty side I'm talking about the commercial opportunity here. When do you think royalties to you will be meaningful.
Concerning your mccann's ourselves.
And shoots of after that will be great. Thank you.
So thanks, Silvan, sorry, you're feeling ill good luck with.
You'll recovery with regard to the prevention.
Announcement today, we obviously had been very encouraged all along with their public communications, we know nothing more than that was stated today.
Publicly but my sense is is that we are exactly two weeks up from the Paducah date, and they would not be putting out these.
<unk>.
Reports of of the labeling and post marketing commitments if they werent encouraged by this so we like everyone else is waiting for hopefully the approval of the drug within the next two weeks.
With regard to our royalties.
You said.
The Marge royalties I mean, the only royalties that we have.
It would anticipate.
Oh would be that from our partners XI in China.
We obviously have.
Sales ongoing with the ever.
Ever Sona.
With regard to our XI partnerships they have expectations.
Sometime next year of getting approval for that so.
And nothing more to really say in terms of the.
The magnitude of such.
Such royalties on the product.
Thank you so much and I have a follow up question on minus Mistras employees earlier questions personal suites, so expect to M. D C O aging.
Data next year and I believe it was first half if I'm not mistaken.
And here I have a question around P dosing since you have.
Change to dosing recently will be upgraded that will get to be in.
Prostate cancer and will it be with the new dosing regimen, Doug N B two new tosses of two milligram per occasion to four seven milligrams per kg. Thank you very much.
And so we have or.
Not.
Treated.
Any new patients as of yet with those two dosing schedules that will start on when we start the tamarack study.
Obviously these.
Doses were extracted from our analysis of the patients that were originally started at remixed per kick on a Q3 weekly basis and how those doses were altered during the course of those patients therapy, our plans for future disclosure with regard to the program will.
Occur when we decide on additional cohorts that we would take forward into phase II development and not until then.
Thank you very much.
Okay.
Operator, if I can address one of the questions that was the first asked with regard to cash runway.
I believe Jessica asked the questions adjusted we have not and I apologize for this communication mass map of the year.
We have not disclosed the specific milestones other than in aggregate that we are potentially eligible to receive from our various partnerships.
What we do when we.
When we think about cash runway as we probability adjust those that we think are reasonably within our reach.
With regard to the $60 million from prevention for example.
We do have a portion of that in our budget not the full amount.
And that's similar with other things that we have.
A second mine too.
Okay.
Okay.
At this time, we have no further questions. So I'd like to turn it back over to the company for closing remarks.
First of all we apologize for the technical Snafu today was beyond our control.
We obviously look forward to having further discussions on our progress.
At future Conference calls and earnings calls look forward to speaking to you at that time.
Okay.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Okay.
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