Summary of MacroGenics FY Conference Call - September 08, 2025 Company Overview - **Company**: MacroGenics (NasdaqGS: MGNX) - **Focus**: Development of next-generation antibodies for cancer treatment with a promising pipeline of four clinical-stage programs across three modalities, including ADC technology and multi-specific platforms [3][4] Pipeline and Product Development - **Clinical Programs**: - Three molecules leveraging the Cinefix platform, with two currently in the clinic and one expected to enter next year [3] - DART and Trident platforms for T cell engagers and bispecifics [4] - **Approved Products**: - Margemza for HER2-positive breast cancer - TZeal for type 1 diabetes - Zyniz for anal cancer and Merkel cell carcinoma [5] - **Cash Position**: - Cash and marketable securities of approximately $177 million, with a cash runway extending through 2027 [5][6] - Recent capital increase from a $70 million royalty monetization deal [6] Key Pipeline Assets - **Lorigirlimab**: - A bispecific molecule targeting PD-1 and CTLA-4, currently in studies for castrate-resistant prostate cancer and gynecologic cancers [7][13] - Phase 1 data shows a confirmed overall response rate (ORR) of 26% in heavily pretreated patients, significantly higher than traditional PD-1 agents [14][33] - **ADC Portfolio**: - Utilizes Cinefix platform for site-specific conjugation and potent payloads [20][21] - Exoticon as a payload shows higher potency compared to other agents, with ongoing phase 1 studies [22][24] Strategic Priorities for 2025 and 2026 - **Development Focus**: - Continue advancing Lorigirlimab studies and ADC portfolio [31] - IND submission for O30 expected next year [29] - **Corporate Strategy**: - Active exploration of partnerships and maintaining operational efficiency to enhance financial position [32] Market Context and Competitive Landscape - **Prostate Cancer Treatment**: - The field has evolved with various modalities, and Lorigirlimab's 26% response rate is notable compared to single-digit rates of traditional PD-1 agents [33] - **ADC Market**: - Competitive dynamics exist, but MacroGenics aims to establish a strong position with its differentiated technology and broad access to the Cinefix platform [23][24] Additional Insights - **Safety Profile**: - Lorigirlimab shows a favorable safety profile with fewer severe adverse events compared to traditional therapies [17] - **Research and Development**: - MacroGenics has a productive research organization with new INDs expected every 12 to 18 months [31] This summary encapsulates the key points from the MacroGenics FY Conference Call, highlighting the company's strategic direction, pipeline developments, and market positioning.

Core Viewpoint - MacroGenics, Inc. is set to present at the H.C. Wainwright 27th Annual Global Investment Conference on September 8, 2025, highlighting its focus on innovative antibody-based therapeutics for cancer treatment [1]. Company Overview - MacroGenics is a biopharmaceutical company dedicated to developing monoclonal antibody-based therapeutics specifically for cancer treatment [3]. - The company utilizes proprietary next-generation antibody-based technology platforms to generate its pipeline of product candidates, which have broad therapeutic applications [3]. - MacroGenics combines its technology platforms with protein engineering expertise to create promising product candidates and has established several strategic collaborations with global pharmaceutical and biotechnology companies [3].

Group 1 - MacroGenics reported a quarterly loss of $0.57 per share, which was better than the Zacks Consensus Estimate of a loss of $0.59, and an improvement from a loss of $0.89 per share a year ago, resulting in an earnings surprise of +3.39% [1] - The company posted revenues of $22.24 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 4.73%, and showing significant growth from year-ago revenues of $10.8 million [2] - MacroGenics shares have declined approximately 48.9% since the beginning of the year, contrasting with a 10% gain in the S&P 500 [3] Group 2 - The earnings outlook for MacroGenics is mixed, with the current consensus EPS estimate for the coming quarter at -$0.40 on revenues of $26.77 million, and -$2.04 on revenues of $92.12 million for the current fiscal year [7] - The Zacks Industry Rank indicates that the Medical - Products sector is currently in the bottom 39% of over 250 Zacks industries, suggesting potential challenges for stocks in this category [8] - Ayr Wellness Inc., another company in the same industry, is expected to report a quarterly loss of $0.29 per share, reflecting a year-over-year change of +14.7%, with revenues projected at $111.05 million, down 5.3% from the previous year [9]

PART I. FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Q2 2025 revenues increased to $22.2 million, net loss narrowed to $36.3 million, with $176.5 million in cash and marketable securities, including $70 million from a royalty sale [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total current assets were $204.9 million, total liabilities $198.8 million (including a new $70.3 million royalty liability), and stockholders' equity decreased to $46.6 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and cash equivalents | $130,686 | $182,840 | | Total current assets | $204,945 | $217,490 | | **Total Assets** | **$245,416** | **$261,655** | | **Current Liabilities** | | | | Total current liabilities | $39,000 | $55,530 | | Liability related to future royalties | $70,260 | $— | | **Total Liabilities** | **$198,798** | **$145,598** | | **Total Stockholders' Equity** | **$46,618** | **$116,057** | [Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q2 2025 total revenues doubled to $22.2 million, driven by contract manufacturing, while net loss narrowed to $36.3 million due to reduced R&D and SG&A expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $22,241 | $10,797 | $35,434 | $19,901 | | Research and development | $40,791 | $51,732 | $80,489 | $97,760 | | Selling, general and administrative | $9,302 | $14,423 | $20,020 | $29,133 | | Loss from operations | ($36,758) | ($58,181) | ($79,381) | ($111,931) | | Net loss | ($36,251) | ($55,664) | ($77,287) | ($107,854) | | Basic and diluted net loss per common share | ($0.57) | ($0.89) | ($1.23) | ($1.73) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 saw $93.9 million net cash used in operations, $27.7 million in investing, and $69.5 million provided by financing, resulting in a $52.2 million net decrease in cash Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($93,875) | ($90,128) | | Net cash (used in) provided by investing activities | ($27,736) | $72,231 | | Net cash provided by financing activities | $69,457 | $873 | | **Net change in cash and cash equivalents** | **($52,154)** | **($17,024)** | | Cash and cash equivalents at end of period | $130,686 | $83,932 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the company's biopharmaceutical focus, a new $70 million royalty monetization, collaboration revenue, and management's belief in sufficient funding for the next twelve months - The company is a **clinical-stage biopharmaceutical company** focused on developing **antibody-based therapeutics for cancer**, including **antibody-drug conjugates (ADCs)** and **multi-specific antibodies (DART® and TRIDENT® molecules)**[20](index=20&type=chunk) - Proprietary product candidates in clinical development include **lorigerlimab** (PD-1 x CTLA-4), **MGC026** (B7-H3 ADC), and **MGC028** (ADAM9 ADC)[20](index=20&type=chunk) - Based on its cash flow forecast, the company believes its current resources are sufficient to fund its operating plans for a minimum of **twelve months** from the filing date of this report[24](index=24&type=chunk) - In June 2025, the company sold its right to receive royalties on global net sales of ZYNYZ to Sagard Healthcare Partners for a cash payment of **$70.0 million** The proceeds were recorded as a liability[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) R&D Expense by Program (Six Months Ended June 30, in thousands) | Program | 2025 | 2024 | | :--- | :--- | :--- | | Lorigerlimab | $19,425 | $20,625 | | Vobramitamab duocarmazine | $12,653 | $21,706 | | MGC026 | $8,914 | $7,852 | | MGC028 | $8,676 | $15,882 | | MGC030 | $8,172 | $4,911 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue grew 78% in H1 2025 due to manufacturing and collaborations, R&D expenses decreased 18%, and a $69.7 million royalty deal extends the cash runway through H1 2027 [Results of Operations](index=24&type=section&id=Results%20of%20Operations) H1 2025 total revenue increased by **$15.5 million** to **$35.4 million**, driven by contract manufacturing and collaborations, while R&D and SG&A expenses decreased due to program discontinuation and reduced commercialization activities Revenue Comparison (Six Months Ended June 30, in millions) | Revenue Source | 2025 | 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Collaborative and other agreements | $13.9 | $3.8 | $10.1 | 266% | | Product sales, net | $— | $10.1 | ($10.1) | (100)% | | Contract manufacturing | $21.5 | $5.2 | $16.3 | 313% | | **Total revenue** | **$35.4** | **$19.9** | **$15.5** | **78%** | Research & Development Expense Comparison (Six Months Ended June 30, in millions) | Program | 2025 | 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Vobramitamab duocarmazine | $12.7 | $21.7 | ($9.0) | (41)% | | MGC028 | $8.7 | $15.9 | ($7.2) | (45)% | | Margetuximab | $0.7 | $6.0 | ($5.3) | (88)% | | **Total R&D Expense** | **$80.5** | **$97.8** | **($17.3)** | **(18)%** | - Selling, general and administrative expenses **decreased** for the six months ended June 30, 2025, primarily due to **lower stock-based compensation** and **reduced professional fees** following the cessation of commercialization activities for MARGENZA[99](index=99&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Primary funding sources include equity and collaborations; H1 2025 financing provided **$69.4 million** from a royalty sale, extending the cash runway through the **first half of 2027** - Net cash provided by financing activities for the first six months of 2025 was **$69.4 million**, which includes **$69.7 million** in net proceeds from the sale of future ZYNYZ royalties to Sagard Healthcare Partners[100](index=100&type=chunk)[103](index=103&type=chunk) - Management anticipates that cash, cash equivalents, and marketable securities as of June 30, 2025, combined with projected payments from partners and cost-saving initiatives, will support the company's cash runway through the **first half of 2027**[106](index=106&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Market risk exposure remains materially unchanged since December 31, 2024 - As of June 30, 2025, the company's exposure to market risk has not changed materially from what was disclosed in its Annual Report for the fiscal year ended December 31, 2024[108](index=108&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[109](index=109&type=chunk) - No changes in internal control over financial reporting occurred during the second quarter of 2025 that materially affected, or are reasonably likely to materially affect, these controls[110](index=110&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal proceedings are not expected to have a material adverse effect on the company's business, financial condition, or results of operations - The company does not currently expect any ongoing legal proceedings to have a **material adverse effect** on its business, financial condition, or results of operations[111](index=111&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the Annual Report on Form 10-K for FY2024 and Q1 2025 Form 10-Q - No **material changes** have occurred in the risk factors described in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and the Q1 2025 Form 10-Q[112](index=112&type=chunk) [Other Information](index=28&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted, modified, or terminated a **Rule 10b5-1 trading plan** during the three months ended June 30, 2025[113](index=113&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) Exhibits include CEO/CFO certifications and the Purchase and Sale Agreement with Sagard Healthcare Partners for royalty monetization - Key exhibits filed include the **Purchase and Sale Agreement** with Sagard Healthcare Partners, dated June 9, 2025, and certifications from the Principal Executive Officer and Principal Financial Officer[114](index=114&type=chunk)

Core Insights - MacroGenics, Inc. is focused on developing innovative antibody-based therapeutics for cancer treatment and has reported financial results for Q2 2025, highlighting corporate progress and strategic priorities for the upcoming years [1][2][11]. Corporate Updates - Eric Risser has been appointed as the new President and CEO, succeeding Scott Koenig, who served for 24 years. Risser has previously generated over $550 million in non-dilutive capital for the company [4]. - The company aims to enhance its focus and capital efficiency while advancing its pipeline, with updates expected on strategic priorities [2][7]. Financial Performance - As of June 30, 2025, MacroGenics reported cash, cash equivalents, and marketable securities of $176.5 million, down from $201.7 million at the end of 2024, providing a cash runway through the first half of 2027 [7][15]. - Total revenue for Q2 2025 was $22.2 million, a significant increase from $10.8 million in Q2 2024, driven by higher contract manufacturing revenue [11][14]. - Research and development expenses decreased to $40.8 million in Q2 2025 from $51.7 million in Q2 2024, while selling, general, and administrative expenses also fell to $9.3 million from $14.4 million [11][14]. Pipeline and Programs - The company is advancing several key programs, including lorigerlimab, MGC026, MGC028, and MGC030, with ongoing clinical trials and plans for IND submissions [5][8][12]. - Lorigerlimab is currently being evaluated in two Phase 2 studies for metastatic castration-resistant prostate cancer and gynecologic cancers [9]. - MacroGenics is developing three antibody-drug conjugates (ADCs) in collaboration with Synaffix, focusing on innovative payloads [6]. Partnered Programs - The company has entered into a royalty purchase agreement with Sagard Healthcare Partners for ZYNYZ®, receiving $70 million upfront [7]. - MacroGenics retains economic interests in ZYNYZ and is eligible for up to $540 million in additional milestones [12]. - The company also has ongoing collaborations with Gilead Sciences for MGD024, with potential milestone payments totaling $1.7 billion [12].

Core Viewpoint - MacroGenics, Inc. has appointed Eric Risser as President and CEO, succeeding Scott Koenig, who served for 24 years, effective August 13, 2025 [1][2] Group 1: Leadership Transition - Eric Risser has been with MacroGenics since 2009 and has held various roles, most recently as Chief Operating Officer, where he oversaw key functions and corporate development efforts that generated over $1.6 billion in non-dilutive capital [1][3] - Scott Koenig, the outgoing CEO, is recognized for his leadership in developing three FDA-approved products and will continue to serve as a Director and advisor [2] Group 2: Strategic Vision - Eric Risser aims to create a more focused and capital-efficient biotechnology company that delivers high-value therapies for cancer patients [3] - The company plans to invest resources strategically to generate significant value for both patients and shareholders [3] Group 3: Company Overview - MacroGenics is a biopharmaceutical company focused on developing innovative monoclonal antibody-based therapeutics for cancer treatment [4] - The company utilizes proprietary next-generation antibody-based technology platforms to generate its pipeline and has established strategic collaborations with global pharmaceutical and biotechnology firms [4]

Pipeline and Programs - MacroGenics' cash runway is extended through the first half of 2027[9, 10] - Lorigerlimab shows a confirmed Objective Response Rate (ORR) of 25.7% and a PSA50 response rate of 28.6% in mCRPC patients[23] - MGC026, a B7-H3 directed program, is in Phase 1 dose escalation, with dose expansion anticipated in selected indications in 2025[43] - MGC028, an ADAM9 ADC, shows potent anti-tumor activity in preclinical models, with a Phase 1 dose escalation study ongoing[50] - MGD024, a CD123 × CD3 DART molecule, is in Phase 1 dose escalation in hematological malignancies, with a Gilead collaboration commenced in October 2022[60] Financials and Partnerships - MacroGenics received $365 million in upfront and milestone payments[12] - MacroGenics is eligible to receive up to $210 million in potential regulatory milestones and up to $330 million in potential commercial milestones[12] - MacroGenics could receive 15-24% tiered royalty (after 20x cap reached)[12] - As of March 31, 2025, MacroGenics had $154.1 million in cash, cash equivalents, and marketable securities[9, 11, 72] - A $70 million upfront payment was received in June 2025[9, 12]

Core Insights - MacroGenics, Inc. (NASDAQ: MGNX) has faced various challenges that impact its investment thesis, as highlighted in recent analyses [1] Company Analysis - The company has been under scrutiny for its performance and the factors that may hinder its growth potential [1] - The author emphasizes the importance of understanding the scientific basis behind the biotech industry, which is crucial for making informed investment decisions [1] Industry Context - The biotech sector is characterized by high risks and complexities, particularly in clinical trials, which necessitates thorough due diligence by investors [1]

Financial Data and Key Metrics Changes - The company reported a cash runway extending through the first half of 2027, with $154 million in cash and cash equivalents as of March 31, 2025, and an additional $70 million from a transaction with Saggart Health Care Partners [5][36][38] - Over the last three years, the company has raised over $550 million from various partnerships and milestones, demonstrating a strong ability to finance operations through non-dilutive capital sources [38] Business Line Data and Key Metrics Changes - The company has three assets on the market: Margemza for HER2 positive breast cancer, TZEAL for type one diabetes, and Zynas, an anti-PD-1 antibody recently approved for frontline anal cancer [4][36] - The Lorigirlimab program is being developed for prostate cancer and ovarian cancer, with early clinical results showing a confirmed overall response rate (ORR) of 26% in castrate-resistant prostate cancer [12][15] Market Data and Key Metrics Changes - The ADC portfolio includes three molecules leveraging the Sinefix drug linker technology, targeting B7H3, with clinical validation established across multiple indications [21][22] - The company sees a competitive landscape for ADCs, expecting multiple players to establish a presence due to the broad range of indications for B7H3 [22] Company Strategy and Development Direction - The company is focused on developing innovative medicines through its proprietary platforms, including DART and Trident, and aims to translate early research insights into robust product candidates [3][4] - The company plans to advance additional molecules, including MGC030, with an IND submission expected in 2026, and aims to maintain a prolific research output with new INDs every 12 to 18 months [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate regulatory complexities and maintain a strong cash position, highlighting the importance of non-dilutive financing [5][38] - The company anticipates multiple inflection points and data updates over the next year, particularly for the Lorigirlimab program and ongoing ADC studies [34] Other Important Information - The company has a partnership with Gilead for a T cell engager molecule, which is currently in dose escalation, with Gilead holding an exclusive opt-in right [33] - The company is exploring accelerated approval paths for its ovarian cancer studies, particularly in aggressive forms of the disease [20] Q&A Session Summary Question: What is the status of the Lorigirlimab program? - The Lorigirlimab program has shown promising early results, with a confirmed ORR of 26% in prostate cancer, and the study is expected to provide updates later this year [12][15] Question: How does the company view the competitive landscape for ADCs? - The company believes there will be multiple players in the ADC market due to the expansive nature of indications for B7H3, and it is confident in its differentiating features [22] Question: What are the future plans for the pipeline? - The company plans to continue advancing its pipeline, with several IND submissions expected in the coming years, and aims to maintain a strong research output [34][36]

Core Viewpoint - MacroGenics has entered into a royalty purchase agreement with Sagard, receiving a $70 million upfront payment for a capped royalty interest on future global net sales of its PD-1 inhibitor, ZYNYZ [1][2]. Group 1: Royalty Purchase Agreement - The agreement allows MacroGenics to receive an upfront payment of $70 million for its royalty rights on global net sales of ZYNYZ [2]. - After Sagard receives a total of $140 million in royalty payments (2.0x), MacroGenics will regain the right to collect all future royalties on global net sales [2]. Group 2: Financial Position - As of March 31, 2025, MacroGenics had $154.1 million in cash, cash equivalents, and marketable securities, which, along with the $70 million upfront payment and anticipated future payments, is expected to support its cash runway through the first half of 2027 [3]. Group 3: Product Information - ZYNYZ (retifanlimab-dlwr) is a humanized monoclonal antibody targeting PD-1, indicated for the first-line treatment of adult patients with inoperable locally recurrent or metastatic squamous cell carcinoma of the anal canal (SCAC) [4]. - ZYNYZ is also indicated for the treatment of adult patients with metastatic or recurrent locally advanced Merkel cell carcinoma (MCC) in the U.S., approved under accelerated approval based on tumor response rate [5]. Group 4: Company Overview - MacroGenics is a biopharmaceutical company focused on discovering, developing, manufacturing, and commercializing innovative monoclonal antibody-based therapeutics for cancer treatment [6]. - The company generates its pipeline from proprietary next-generation antibody-based technology platforms and has entered into several strategic collaborations with global pharmaceutical and biotechnology companies [6]. Group 5: About Sagard - Sagard is a multi-strategy alternative asset management firm with over $25 billion under management, investing in various sectors including venture capital and private equity [7].