On August 9, 2023 MacroGenics, Inc. (NASDAQ: MGNX), a biopharmaceutical company focused on developing and commercializing innovative antibody-based therapeutics for the treatment of cancer, reported an update on its recent corporate progress and announced financial results for the quarter ended June 30, 2023 (Press release, MacroGenics, AUG 9, 2023, View Source [SID1234634082]).

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"MacroGenics maintains its historical focus on developing innovative antibody-based therapeutics, and we are very excited about our continued progress in advancing our two Phase 2 programs in prostate cancer, which engage different yet potentially complementary mechanisms of action," said Scott Koenig, M.D., Ph.D., President and CEO of MacroGenics. "Additionally, we’ve expanded our efforts to broaden our antibody-drug conjugate (ADC) portfolio through technology-enabling partnerships, internal discovery efforts on first-in-class targets, as well as our continued antibody engineering expertise. As we’ve indicated earlier, we intend to submit an investigational new drug (IND) application to the FDA by year-end for the first of potentially multiple new ADC molecules which incorporate a topoisomerase inhibitor payload."

Updates on Proprietary Investigational Programs

Recent progress and anticipated events related to MacroGenics’ investigational product candidates are highlighted below.

Vobramitamab duocarmazine (vobra duo) is an ADC that targets B7-H3, an antigen with broad expression across multiple solid tumors and a member of the B7 family of molecules involved in immune regulation.
MacroGenics began enrolling the TAMARACK Phase 2 study of vobra duo in patients with mCRPC under an amended protocol during the second quarter. This study is designed to evaluate vobra duo at two different doses, 2.0 mg/kg or 2.7 mg/kg every four weeks, across a total of 100 patients. MacroGenics anticipates enrolling a majority of the study patients in 2023 and expects to provide a clinical update in 2024.
MacroGenics continues to enroll a Phase 1/2 dose escalation study of vobra duo in combination with lorigerlimab in patients with various advanced solid tumors. The Company anticipates commencing the dose expansion portion of the study by year-end 2023.
Lorigerlimab is a bispecific, tetravalent PD-1 × CTLA-4 DART molecule. Based on the encouraging lorigerlimab monotherapy clinical data in mCRPC previously presented at ASCO (Free ASCO Whitepaper) Genitourinary Cancers Symposium in February 2023, MacroGenics plans to commence enrollment of a randomized Phase 2 study of lorigerlimab in combination with docetaxel vs. docetaxel alone in second-line, chemotherapy-naïve mCRPC patients in the coming weeks. A total of 150 patients are planned to be treated in the 2:1 randomized study. The current trial design includes a primary study endpoint of radiographic progression-free survival (rPFS).
MGD024 is a next-generation, humanized CD123 × CD3 DART molecule designed to minimize cytokine-release syndrome, while maintaining anti-tumor cytolytic activity, and permitting intermittent dosing through a longer half-life. MacroGenics continues to enroll patients in a Phase 1 dose-escalation study of MGD024 in patients with CD123-positive neoplasms, including acute myeloid leukemia and myelodysplastic syndromes.
Enoblituzumab is an Fc-optimized monoclonal antibody that targets B7-H3. Based on the recently published results from a Phase 2 investigator-sponsored study of enoblituzumab in men with prostate cancer, MacroGenics and collaborators at multiple academic institutions plan to initiate an investigator-sponsored randomized, translationally intense, neo-adjuvant prostate cancer study in a high-risk population by early 2024.
Other Corporate Updates

$50 million TZIELD milestone. On July 28, 2023, Sanofi S.A. (Sanofi) reported that the PROTECT placebo-controlled study investigating TZIELD in patients with newly diagnosed stage 3 Type 1 diabetes met its primary endpoint, having demonstrated preservation of beta cell function. This positive study outcome triggers payment of a $50 million milestone to MacroGenics by Sanofi, pursuant to a March 2023 agreement originally between MacroGenics and DRI Healthcare Acquisitions LP (DRI), the royalty interest and milestone payment obligations of which were sold by DRI to a subsidiary of Sanofi in April 2023.

Under the MacroGenics agreement with DRI, since assumed by a Sanofi subsidiary, MacroGenics retains the right to receive a 50% share of the royalty on global net sales of TZIELD above a certain annual threshold. Under this agreement, the Company may also receive an additional $50 million milestone from Sanofi if TZIELD achieves a certain level of net sales. In addition, MacroGenics continues to be eligible to receive additional economics under the asset purchase agreement with Provention Bio, Inc.
Second Quarter 2023 Financial Results

Cash Position: Cash, cash equivalents and marketable securities as of June 30, 2023, were $240.3 million, compared to $154.3 million as of December 31, 2022. The Company’s cash balance as of June 30, 2023 did not include the $50 million milestone from Sanofi subsequently earned.
Revenue: Total revenue was $13.1 million for the quarter ended June 30, 2023, compared to total revenue of $26.0 million for the quarter ended June 30, 2022.
R&D Expenses: Research and development expenses were $43.2 million for the quarter ended June 30, 2023, compared to $51.7 million for the quarter ended June 30, 2022. The decrease was primarily related to decreased costs related to discontinued studies, partially offset by increased expenses related to preclinical ADC molecules and increased clinical expenses related to lorigerlimab and vobra duo.
SG&A Expenses: Selling, general and administrative expenses were $13.7 million for each of the quarters ended June 30, 2023 and June 30, 2022.
Other Income: Under GAAP guidelines and pursuant to Financial Accounting Standards Board’s Accounting Standards Codification (ASC) 470, in March 2023, MacroGenics recorded the $100 million proceeds received from the sale of the Company’s single-digit royalty interest on global net sales of TZIELD to DRI as a "Liability related to future royalties." This liability was to be amortized over the term of the arrangement using the effective interest rate method. In separate transactions, Sanofi subsequently acquired both Provention Bio, Inc. and the TZIELD royalty interest and milestone obligations from DRI on April 27, 2023, obviating the need for MacroGenics’ involvement in the transfer of royalty payments to DRI. This resulted in a change to the arrangement, which was evaluated as a modification under the provisions of ASC 470. Accordingly, the Company recognized approximately $100 million as a component of other income on its financial statements for the quarter ended June 30, 2023.
Net Income (Loss): Net income was $57.5 million for the quarter ended June 30, 2023, compared to net loss of $41.3 million for the quarter ended June 30, 2022.
Shares Outstanding: Shares of common stock outstanding as of June 30, 2023 were 61,938,493.
Cash Runway Guidance: MacroGenics anticipates that its cash, cash equivalents and marketable securities balance of $240.3 million as of June 30, 2023, plus the $50 million milestone subsequently earned, in addition to projected and anticipated future payments from partners and product revenues should extend its cash runway into 2026. The Company’s expected funding requirements reflect anticipated expenditures related to the Phase 2 TAMARACK clinical trial, the Phase 2 study of lorigerlimab in mCRPC as well as MacroGenics’ other ongoing clinical and preclinical studies.
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