Yahoo Finance MacroGenics, Inc. (NASDAQ:MGNX) Q1 2024 Earnings Call Transcript
MacroGenics, Inc. (NASDAQ:MGNX) Q1 2024 Earnings Call Transcript May 10, 2024
MacroGenics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon. We will begin the MacroGenics 2024 First Quarter Corporate Progress and Financial Results Conference Call in just a moment. [Operator Instructions] At this point, I will turn the call over to Jim Karrels, Senior Vice President, Chief Financial Officer of MacroGenics.
Jim Karrels: Thank you, operator. Good afternoon, and welcome to MacroGenics’ conference call to discuss our first quarter 2024 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. This release 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 2 hours after the call is completed. 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. 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: Thank you, Jim. I’d like to welcome everyone participating via conference call and webcast today. I will provide key updates on our clinical programs, including an important interim data update on our TAMARACK Phase 2 study this afternoon. But before I do so, let me first turn the call back to Jim, who will review our financial results.
Jim Karrels: Thank you, Scott. This afternoon, MacroGenics reported financial results for the quarter ended March 31, 2024 which highlight our financial position. As described in our release this afternoon, MacroGenics total revenue was $9.1 million for the quarter ended March 31, 2024, compared to total revenue of $24.5 million for the quarter ended March 31, 2023. This decrease was primarily due to a decrease in revenue from collaborative and other agreements, including a $15 million milestone received from Incyte in the quarter ended March 31, 2023. Our research and development expenses were $46 million for the quarter ended March 31, 2024, compared to $45.9 million for the quarter ended March 31, 2023. Our selling, general and administrative expenses were $14.7 million for the quarter ended March 31, 2024, compared to $13.5 million for the quarter ended March 31, 2023.
The increase was primarily related to increased stock-based compensation expense and consulting fees. Our net loss was $52.2 million for the quarter ended March 31, 2024, and compared to a net loss of $38 million for the quarter ended March 31, 2023. Our cash, cash equivalents and marketable securities balance as of March 31, 2024, was $184.2 million compared to $229.8 million as of December 31, 2023. Finally, in terms of our cash runway, consistent with our prior guidance, we anticipate that our cash, cash equivalents and marketable securities balance of $184.2 million as of March 31, 2024 and in addition to projected and anticipated future payments from partners and product revenues should provide a cash runway into 2026. Our anticipated funding requirements reflect expected expenditures related to the ongoing Phase 2 TAMARACK and LORIKEET studies as well as our other ongoing clinical and preclinical studies.
And now I’ll turn the call back to Scott.
Scott Koenig: Thank you, Jim. We continue to believe our proprietary pipeline of product candidates has great promise, and I will walk you through each of our key programs, including disclosure of new safety and efficacy data from the TAMARACK study of vobramitamab duocarmazine in patients with metastatic castration-resistant prostate cancer. We have lots to cover today, so let’s jump in. Vobramitamab duocarmazine or vobra duo is our ADC designed to deliver a DNA alkylating duacomyocin cytotoxic payload to tumors expressing B7-H3. B7-H3 is a member of the B7 family of molecules involved in immune regulation. Vobra duo designed to take advantage of this antigen’s broad expression across multiple solid tumor types. As you know, we believe B7-H3 has the attributes of an ideal cancer target.
The TAMARACK study is being conducted in mCRPC patients, where previously received an androgen receptor access targeted agents or ART and up to 1 prior taxane containing regimen but no other chemotherapy agents. The study is designed to evaluate vobra duo patients across 2 experimental arms of either 2 mg per kg or 2.7 mg per kg every 4 weeks with radiographic progression-free survival, or rPFS, as the study’s primary endpoint. We recently generated an updated expanded interim data set based on a data cut off date of April 12, 2024, which is the basis for all of the TAMARACK data we are sharing with you today. Feel free to download the slide set that highlights this data from the Events and Presentations page under the Investor Relations section of our website or you can find the direct link to the document provided in today’s earnings press release.
Flip ahead to Slide 4, and you will note we have enrolled a total of 181 patients although a few patients were on the original control arm and are thus not counted in the safety population of 176 patients who receive vobra duo. This is 1 less than the 177 we mentioned in an earlier press release, as 1 patient never fully completed the informed consent form process. As you can see on this slide, we’ve broken out the number of patients with a valuable PSA and baseline target lesions by dosing cohort. Slide 5 provides several baseline characteristics. Both arms are well balanced with the exception of ECOG status as the 2.7 mg per kg arm very slightly favors ECOG 1 over ECOG 0. Keep in mind that this is a fairly subjective measure. I’ll point out that despite randomization, fewer patients in the 2.7 mg per kg cohort and measurable disease than not measurable, whereas there was roughly 50-50 split in the 2 mg per kg cohort.
In terms of having a prior taxane versus not, the split was close to 60-40 across both those cohorts. Also recall that mCRPC patients had to have a prior androgen receptor access targeted agents for study entry. And as you can see, a few had more than one. Next, let’s review biological activity. On Slide 6, we show the PSA50 responses for 153 patients, which represents all subjects who had received at least 1 dose of – over – do at a baseline PSA greater than 2 nanograms per ml and had at least 1 post-baseline PSA measurement. For the 2 mg per kg dosing cohort, 50% of the 82 evaluable patients experienced a greater than 50% reduction in their PSA while 43.9% of patients had a confirmed greater than 50% PSA reduction. In the 2.7 mg per kg dosing cohort, 50.7% of 71 evaluable patients experienced a greater than 50% reduction in their PSA while 36.6% of patients had a confirmed greater than 50% PSA reduction.
Happily, these PSA50 results are generally well aligned with the PSA50 expectations we laid out before the study commenced. Turning to the summary of 2 responses as summarized on Slide 7 and among the 45 patients with baseline target lesion measurements in the 2 mg per kg dosing cohort, 41 or 91.1% achieved disease control as measured by some of confirmed complete and partial responses plus stable disease, while the confirmed objective response rate as measured by some of complete and partial responses or 17.8%. With the inclusion of unconfirmed CRs and PRs, the unconfirmed ORR was 24.4%. Among the 32 patients with baseline target lesion measurements in the 2.7 mg per kg dosing cohort, the disease control rate was 87.5%. The confirmed ORR was 25% and with the inclusion of unconfirmed PRs and CRs, the unconfirmed ORR was 43.8%.
Let’s review the PSA waterfall plot next. Slide 8 shows the PSA waterfall plot for the 2 mg per kg cohort. As you can see, 41 of the 82 patients had a 50% or greater decrease in PSA with 36 or 43.9% of these patients achieving a confirmed PSA50 response. 48 of these patients or 58.5% remained on therapy as of the data cutoff. Also based on the archival biopsy B7-H3 membrane H scores shown on the plot, it does not appear that there are B7-H3 expression thresholds required for reducing PSA. We are still reviewing this interim data. At this point, the implication is that B7-H3 biomarker diagnostic will likely not be required. Slide 9 shows the PSA waterfall plot for the 2.7 mg per kg cohort. Here, 36 of the 71 patients had a 50% or greater decrease in PSA with 26 or 36.6% of these patients achieving a confirmed PSA50 response.
As of the data cutoff, 39 patients or 54.9% of patients remained on therapy. Next, I will review investigator-assessed tumor size waterfall plots. On Slide 10, which shows the 2 mg per kg cohort, of the 45 patients with measurable disease, 1 did not have a post-baseline tumor assessment. As I mentioned earlier, the disease control rate for this group was 91.1%, with all but 3 patients having either a partial response or stable disease. The confirmed ORR was 17.8%, while the unconfirmed ORR was 24.4%. Slide 11 shows tumor response for the 2.7 mg per kg cohort. Here of the 32 patients with measurable disease, 2 did not have a post-baseline tumor assessment. The disease control rate for this group was 87.5%. The confirmed ORR was 25%, while the unconfirmed ORR was 43.8%.
Next, I will review the swimmer plot for the tumor response, which will hopefully convey a sense of durability of vobra duo in the mCRPC setting. Slide 12 shows the interim results for the 2 mg per kg cohort. Here you can see that of the 45 tumor response evaluable patients, 8 or 17.8% had confirmed responses with the inclusion of the 3 unconfirmed responses, the unconfirmed ORR is 24.4%. 23 of the 45 patients or 51.1% were still on therapy as of the data cutoff. In the 2.7 mg per kg dosing cohort, shown on Slide 13, 8 patients or 25% had confirmed objective responses with these 6 unconfirmed responses, the unconfirmed ORR is 43.8%. 20 of the 32 patients or 62.5% remained on therapy as of the data cutoff. Next, I will review interim safety in the TAMARACK study as of the data cutoff.
Slide 14 shows the overall summary of adverse events in this study to date. I’ll point out a few parameters by dosing cohort. Of the 90 patients who receive overdue are at 2 mg per kg 89 or 98.9% experienced study treatment-emergent adverse events of any grade or 54.4% of the patients had a great 3 or greater TEAE and 10 patients or 11.1% and an adverse event leading to study drug discontinuation. Of the 86 patients who received vobra duo duo at 2.7 mg per kg, 86% or 100% experienced a TEAE of any grade, 44 or 51.2% of patients at a Grade 3 or greater TEAE and 13 patients or 15.1% at an AE leading to study drug discontinuation. Also, as noted on Slide 14, as of the data cutoff date, a total of 5 fatal events occurred as follows: 1 Grade 5 fatal event occurred in the 2 mg per kg dosing cohort, an acute myocardial infarction, which was not classified as treatment related, 4 Grade 5 events occurred in the 2.7 mg-per-kg dosing cohort, which included 1 cardiac arrest, not classified as treatment related and two cases of pneumonitis, which are still being investigated and initially assessed as possibly treatment related.
In addition, a patient on 2.7 mg per kg dosing cohort had a grade 3 plural fusion and subsequently died. In terms of specific treatment-emergent adverse events those with incidents greater than or equal to 10% as shown on Slide 15, for the 2 mg-per-kg dosing cohort, the 5 most common TAs of any grade in this dosing cohort included Asthenia, Nausea, Peripheral Oedema, Decreased Appetite and Fatigue. Of note, the incidence of Pleural Effusion in this cohort was Grade 1 of 8.9% and Grade 2 of 0.9%. There were no Grade 3 or greater events. Also, the incidence of palmar-plantar erythrodysesthesia syndrome in this cohort was a Grade 1 of 11.1% and Grade 2 of 4.4%. There were no Grade 3 or greater events. The 5 most common TEAEs of any grade in the 2.7 mg-per-kg dosing cohort included Asthenia, Decreased Appetite, Peripheral Oedema, Nausea and Pleural Effusion.
Of note, the incidence of Pleural Effusion in this cohort was Grade 1 of 14.0%, Grade 2 of 14.0% and Grade 3 of 1.2%. Also, the incidence of palmar-plantar erythrodysesthesia syndrome in this cohort with Grade 1 of 12.8%, Grade 2 of 9.3% and Grade 3 of 1.2%. As visually represented in the butterfly plot on Slide 16, all the TEAEs of greater than or equal to 10% of are overwhelmingly limited to either Grade 1 or 2. Overall, we believe these doses are tolerable with side effects that are manageable. Also, we are very pleased with the biological activity observed in the study as of April 12, 2024 data cutoff with the interim data being well aligned with the parameters of success that we laid out at the onset of the study. We achieved our goal of reducing the incidence and severity of both palmar-plantar erythrodysesthesia and pleural effusion in comparison as of the most recent data cut off to what we saw in the Phase I dose expansion study.
We will continue to evaluate the totality of the data, including future radiographic progression-free survival or rPFS the study’s primary endpoint as we consider dose selection of either 2 mg per kg or 2.7 mg per kg. To that end, we are currently undertaking the necessary initial steps to prepare for the potential initiation of a Phase 3 study in mCRPC in 2025. Looking ahead, we plan to share updated TAMARACK safety, efficacy and durability data, including rPFS in the second half of 2024 based on a future data cutoff. Also, as mentioned on our prior earnings call, we plan to expand the tumor types being evaluated in the TAMARACK trial and expect to enroll additional patients with non-small cell lung cancer – small cell lung cancer, melanoma, squamous cell carcinoma of the head and neck and anal cancer.
We expect to initiate dosing in these additional cohorts in mid-2024. Recall, that we have 2 other clinical molecules that target B7-H3. The first, MGC026 is an investigational ADC incorporating a novel topoisomerase 1 inhibitor based linker-payload SYNtecan E, which we licensed from Synaffix. Our second additional B7-H3 targeted molecule is enoblituzumab, an investigational Fc-optimized monoclonal antibody. I’ll walk you through both of these molecules next. MGC026 incorporates the linker-payload based on exatecan, a clinically validated and potent cantatecan that readily combines with Synaffix’s Hydraspace technology. MGC026 preclinical data was presented recently at the American Association for Cancer Research Annual Meeting. In preclinical studies, MGC026 was shown to have greater potency than B7-H3-directed antibodies conjugated to deruxitecan or DXd, a topoisomerase as payload utilized in other ADCs. In addition, the MGC026 payload has been shown to be less susceptible to multi-drug-resistant mechanisms than DXd and SN-38.
Also, our toxicology study conducted in cynomolgus monkeys show that MGC026 was well tolerated at all dose levels tested. Finally, MGC026 displayed approximate dose proportion of pharmacokinetics in the animal models tested, indicating predictable behavior of conducive to further clinical development. We recently initiated a Phase 1 dose escalation study of MGC026. The variable domain of the molecule targeting B7-H3 for MGC026 is the same sequence contained in Vobra duo. We view MGC026 as a complementary approach to Vobra duo for targeting B7-H3. More specifically, we believe that having distinct mechanisms of action while Vobra duo and MGC026 may address different cancers tumor stages or be used in combination with ultimate agents or potentially with one another to enhance their clinical utility.
We remain confident in the potential of targeting the B7-H3 pathway viewing our TOPO 1 inhibitor strategy as an additional valuable tool in our therapeutic repertoire. Regarding Enoblituzumab, our academic collaborators are enrolling an investigator-sponsored, randomized translationally intense Phase 2 investigator-sponsored study of this molecule in up to 219 patients with prostate cancer. The HEAT study is evaluating the activity of neoadjuvant and Enoblituzumab given prior to radical prostatectomy in men with high-risk localized prostate cancer. Eligible patients will undergo a pretreatment prostate biopsy and conventional imaging, including CT and bone scan as well as PSMA PET and optional prostate MRI as per institutional preferences. Next, I’ll update you on Lorigerlimab, our bispecific tetravalent PD-1 by CTLA-4 dark molecule.
We designed Lorigerlimab to have preferential blockade on dual PD-1 CTLA-4 expressing cells, such as tumor infiltrating lymphocytes, which are most abundant in the tumor micro environment. We are enrolling the LORIKEET study a randomized Phase 2 clinical trial of Lorigerlimab in combination with docetaxel versus docetaxel alone in second-line chemotherapy naive mCRPC patients. A total of 150 patients are planned to be treated in the 2:1 randomized study. The current study design includes the primary study endpoint of rPFS. We anticipate completing enrollment of the study this year and expect to provide a LORIKEET clinical data update in the first half of 2025. In addition, we continue to enroll patients in the Phase 1, 2 dose escalation study of Vobra duo in combination with Lorigerlimab in patients with advanced solid tumors.
We anticipate commencing a dose expansion study of this combination in mCRPC and at least one additional indication in 2024. Next up, MGD024 is our next-generation bispecific CD123 x CD3 DART molecule that incorporates the CD3 component designed to minimize cytokine release syndrome while maintaining antitumor cytolytic activity and permitting intermittent dosing through a longer half-life. Our Phase 1 dose escalation study of MGD024 is ongoing in patients with CD123 positive relapsed or refractory hematologic malignancies, including acute myeloid leukemia and myelodysplastic syndromes. Recall that Gilead has the option to license MGD024 and predefined decision points during the Phase 1 study. In terms of preclinical projects, MGC028 is our second topoisomerase 1 inhibitor based ADC incorporating Synaffix novel linker-payload and an ADAM9 targeting antibody.
ADAM9 is a member of the Adams family a multifunctional type 1 transmembrane protein that play a role in tumor genesis and cancer progression and is overexpressed in multiple cancers, making it an attractive target for cancer treatment. We recently presented MGC028 preclinical data at the AACR Annual Meeting in April. In preclinical studies, MGC028 demonstrated specific antitumor activity in vivo models representing gastric, lung, pancreatic, colorectal, small cell carcinoma, the head and neck and Cholangiocarcinoma. In addition, in a non-human primate study, MGC028 was well tolerated at high dose levels with mild reversible side effects and no ocular toxicity which is offered a concern with Tubulin inhibitor based ADCs. These promising preclinical results support the continued investigation of MGC028 as a therapeutic option for treating ADAM9 solid tumors.
We are currently anticipating submitting an investigational new drug or IND application for MGC028 by the end of this year. Beyond MGC028, we are exploring additional molecules for potential future IND submission. I look forward to telling you more about these additional molecules on future calls. To conclude, – we believe MacroGenics has the technical development and clinical expertise as well as financial resources to support our vision of developing and delivering life-changing medicines to cancer patients. We would now be happy to open the call for questions.
Operator: [Operator Instructions] Our first question comes from the line of Tara Bancroft with TD Cowen.
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