UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-36112 MACROGENICS, INC. (Exact name of registrant) Delaware 06-1591613 (State of organization) (I.R.S. Employer Identification Number ...

MacroGenics, Inc. (NASDAQ:MGNX) Q3 2023 Earnings Conference Call November 6, 2023 4:30 PM ET Company Participants Scott Koenig - President and Chief Executive Officer Jim Karrels - Senior Vice President and Chief Financial Officer Conference Call Participants Charles Zhu - Guggenheim Securities Kaveri Pohlman - BTIG Etzer Darout - BMO Capital Markets Jon Miller - Evercore Peter Lawson - Barclays Silvan Tuerkcan - JMP Securities Faisal Khurshid - Leerink Partners Stephen Willey - Stifel Operator Good afterno ...

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) [Filing Details](index=1&type=section&id=Filing%20Details) Details SEC filing information for MacroGenics, Inc.'s Form 10-Q, identifying it as a **non-accelerated** and **smaller reporting company** - The report is a Quarterly Report on Form 10-Q for the period ended **September 30, 2023**[2](index=2&type=chunk) - MacroGenics, Inc. is incorporated in Delaware and classified as a **non-accelerated filer** and a **smaller reporting company**[2](index=2&type=chunk)[3](index=3&type=chunk) - As of **November 3, 2023**, **62,029,447 shares** of common stock were outstanding[3](index=3&type=chunk) [Table of Contents](index=2&type=section&id=TABLE%20OF%20CONTENTS) [Forward-Looking Statements](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) [Nature and Risks of Forward-Looking Statements](index=3&type=section&id=Nature%20and%20Risks%20of%20Forward-Looking%20Statements) Forward-looking statements are based on current expectations, with actual results potentially differing due to clinical, regulatory, financing, and macroeconomic factors - Forward-looking statements are based on current expectations and assumptions, are inherently uncertain, and actual results may **differ materially**[8](index=8&type=chunk) - Key uncertainties include product candidate development, clinical trial outcomes, regulatory approvals, financing needs, and ability to raise additional capital[10](index=10&type=chunk) - The company does not undertake any obligation to update or revise forward-looking statements, except as required by law[9](index=9&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) Presents unaudited consolidated financial statements, including balance sheets, income, equity, cash flow, and detailed notes for specified periods [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :------- | | Total current assets | $291,319 | $222,180 | $69,139 | **31.1%** | | Total assets | $339,972 | $280,468 | $59,504 | **21.2%** | | Total current liabilities | $51,291 | $48,611 | $2,680 | **5.5%** | | Total liabilities | $145,992 | $138,455 | $7,537 | **5.4%** | | Total stockholders' equity | $193,980 | $142,013 | $51,967 | **36.6%** | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) | Metric | 3 Months Ended Sep 30, 2023 (in thousands) | 3 Months Ended Sep 30, 2022 (in thousands) | Change (in thousands) | % Change | 9 Months Ended Sep 30, 2023 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | Change (in thousands) | % Change | | :------------------------------------ | :----------------------------------------- | :----------------------------------------- | :-------------------- | :------- | :----------------------------------------- | :----------------------------------------- | :-------------------- | :------- | | Total revenues | $10,397 | $41,734 | $(31,337) | (**75.1%**) | $48,029 | $78,842 | $(30,813) | (**39.1%**) | | Total costs and expenses | $45,899 | $66,689 | $(20,790) | (**31.2%**) | $166,919 | $212,242 | $(45,323) | (**21.4%**) | | Loss from operations | $(35,502) | $(24,955) | $(10,547) | (**42.3%**) | $(118,890) | $(133,401) | $14,511 | **10.9%** | | Gain on royalty monetization arrangement | $50,000 | $0 | $50,000 | N/A | $150,930 | $0 | $150,930 | N/A | | Net income (loss) | $17,554 | $(24,813) | $42,367 | N/A | $37,014 | $(132,560) | $169,574 | N/A | | Basic EPS | $0.28 | $(0.40) | $0.68 | N/A | $0.60 | $(2.16) | $2.76 | N/A | | Diluted EPS | $0.28 | $(0.40) | $0.68 | N/A | $0.60 | $(2.16) | $2.76 | N/A | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric | Dec 31, 2022 (in thousands) | Sep 30, 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :------- | | Total Stockholders' Equity | $142,013 | $193,980 | $51,967 | **36.6%** | | Accumulated Deficit | $(1,093,694) | $(1,056,680) | $37,014 | (**3.4%**) | | Additional Paid-In Capital | $1,235,095 | $1,250,074 | $14,979 | **1.2%** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Metric | 9 Months Ended Sep 30, 2023 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | Change (in thousands) | % Change | | :------------------------------------ | :----------------------------------------- | :----------------------------------------- | :-------------------- | :------- | | Net cash used in operating activities | $(50,168) | $(116,279) | $66,111 | **56.9%** | | Net cash provided by (used in) investing activities | $(118,906) | $76,503 | $(195,409) | (**255.4%**) | | Net cash provided by financing activities | $150,088 | $300 | $149,788 | **49929.3%** | | Net change in cash and cash equivalents | $(18,986) | $(39,476) | $20,490 | **51.9%** | | Cash and cash equivalents at end of period | $89,898 | $83,993 | $5,905 | **7.0%** | [Notes to Consolidated Financial Statements (unaudited)](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(unaudited)) Provides detailed disclosures and explanations for figures in consolidated financial statements, covering operations, accounting policies, and financial calculations [1. Nature of Operations](index=9&type=section&id=1.%20Nature%20of%20Operations) MacroGenics, a biopharmaceutical company with three FDA-approved cancer therapeutics, expects current resources to fund operations for at least twelve months - MacroGenics is a biopharmaceutical company focused on developing, manufacturing, and commercializing innovative antibody-based therapeutics for cancer[24](index=24&type=chunk) - Three products originating from the company's pipeline have received U.S. FDA approval: MARGENZA (margetuximab-cmkb), TZIELD (teplizumab-mzwv), and ZYNYZ™ (retifanlimab-dlwr)[24](index=24&type=chunk) - The company believes its current resources are sufficient to fund its operating plans for a minimum of twelve months from the **10-Q** filing date, relying on revenue from collaborations, product sales, royalties, and available capital sources[27](index=27&type=chunk) [2. Summary of Significant Accounting Policies](index=10&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Details accounting policies for future royalty liability and interest expense, noting no material impact from new accounting pronouncements on financial statements - Net proceeds from sales of future royalty payments are accounted for as a liability, amortized using the effective interest method over the arrangement term, based on current estimates of future royalties[32](index=32&type=chunk) - The effective interest rate and related non-cash interest expense are adjusted prospectively if estimates of future royalty payments or their timing materially change[32](index=32&type=chunk) - No new accounting pronouncements issued or effective since the **2022** Annual Report on Form **10-K** had, or are expected to have, a material impact on the company's consolidated financial position, results of operations, or cash flows[34](index=34&type=chunk) [3. Fair Value of Financial Instruments](index=10&type=section&id=3.%20Fair%20Value%20of%20Financial%20Instruments) Financial instruments are measured at fair value using a three-level hierarchy, with no transfers between levels occurring during the reported periods - Fair value measurements are classified into Level **1** (unadjusted quoted prices in active markets), Level **2** (observable inputs other than Level **1**), and Level **3** (unobservable inputs)[35](index=35&type=chunk)[37](index=37&type=chunk) | Asset Type | Total (in thousands) | Level 1 (in thousands) | Level 2 (in thousands) | | :-------------------------- | :------------------- | :--------------------- | :--------------------- | | Money market funds | $51,137 | $51,137 | $— | | U.S. Treasury securities | $26,038 | $26,038 | $— | | Government-sponsored enterprises | $83,695 | $— | $83,695 | | Corporate debt securities | $56,801 | $— | $56,801 | | **Total** | **$217,671** | **$77,175** | **$140,496** | | Asset Type | Total (in thousands) | Level 1 (in thousands) | Level 2 (in thousands) | | :-------------------------- | :------------------- | :--------------------- | :--------------------- | | Money market funds | $41,564 | $41,564 | $— | | Government-sponsored enterprises | $32,811 | $— | $32,811 | | Corporate debt securities | $17,626 | $— | $17,626 | | **Total** | **$92,001** | **$41,564** | **$50,437** | [4. Marketable Securities](index=12&type=section&id=4.%20Marketable%20Securities) Summarizes marketable debt securities, all available-for-sale with maturities under one year, noting insignificant unrealized losses primarily due to interest rate changes | Security Type | Amortized Cost (in thousands) | Gross Unrealized Gains (in thousands) | Gross Unrealized Losses (in thousands) | Fair Value (in thousands) | | :-------------------------- | :---------------------------- | :------------------------------------ | :------------------------------------- | :------------------------ | | U.S. Treasury securities | $26,050 | $— | $(12) | $26,038 | | Government-sponsored enterprises | $83,671 | $40 | $(16) | $83,695 | | Corporate debt securities | $56,847 | $— | $(46) | $56,801 | | **Total** | **$166,568** | **$40** | **$(74)** | **$166,534** | | Security Type | Amortized Cost (in thousands) | Gross Unrealized Gains (in thousands) | Gross Unrealized Losses (in thousands) | Fair Value (in thousands) | | :-------------------------- | :---------------------------- | :------------------------------------ | :------------------------------------- | :------------------------ | | Government-sponsored enterprises | $32,812 | $5 | $(7) | $32,810 | | Corporate debt securities | $12,655 | $1 | $(4) | $12,652 | | **Total** | **$45,467** | **$6** | **$(11)** | **$45,462** | - All marketable debt securities had contractual maturities of less than one year. Unrealized losses were not significant and primarily due to changes in interest rates, not increased credit risks[38](index=38&type=chunk) [5. Inventory, Net](index=12&type=section&id=5.%20Inventory,%20Net) Inventory, exclusively for MARGENZA manufacturing, is capitalized after FDA approval and reported net of a **$4.9 million** reserve for unsaleable inventory - All of the company's inventory relates to the manufacturing of MARGENZA[39](index=39&type=chunk) | Category | September 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--------------- | :-------------------------------- | :--------------------------------- | | Work in process | $— | $409 | | Finished goods | $1,066 | $1,042 | | **Total inventory, net** | **$1,066** | **$1,451** | - The inventory balance is net of a **$4.9 million** reserve for unsaleable inventory[39](index=39&type=chunk) [6. Royalty Monetization Arrangement](index=12&type=section&id=6.%20Royalty%20Monetization%20Arrangement) MacroGenics sold TZIELD royalty interest for **$100.0 million**, later recognizing a **$100.9 million** gain from a Tripartite Agreement and a **$50.0 million** milestone - In **March 2023**, the company sold its single-digit royalty interest on global net sales of TZIELD to DRI Healthcare Acquisitions LP for **$100.0 million**[40](index=40&type=chunk)[41](index=41&type=chunk) - A Tripartite Agreement in **April 2023** eliminated the company's obligation to deliver royalty payments to DRI, resulting in a **$100.9 million** gain on royalty monetization[43](index=43&type=chunk) - An additional **$50.0 million** milestone was achieved in **July 2023**, and the Royalty Purchase Agreement was terminated in **September 2023**, with the remaining **$50.0 million** Sales Milestone Payment incorporated into the Provention APA[44](index=44&type=chunk) [7. Stockholders' Equity](index=13&type=section&id=7.%20Stockholders'%20Equity) Terminated previous ATM offering, initiated a new one for up to **$100.0 million**, selling **95,000 shares** for **$0.6 million** net proceeds in **9M 2023** - The company terminated its previous ATM Offering and entered into a new sales agreement in **March 2023** to sell up to **$100.0 million** of common stock through an ATM Offering[47](index=47&type=chunk) - During the nine months ended **September 30, 2023**, **95,000 shares** of common stock were sold at a weighted average price of **$6.60**, resulting in approximately **$0.6 million** in net proceeds[47](index=47&type=chunk) [8. Revenue](index=14&type=section&id=8.%20Revenue) Details revenue recognition from collaborative agreements, manufacturing services, and government contracts, outlining terms and revenue for major agreements [Collaborative and Other Agreements](index=14&type=section&id=Collaborative%20and%20Other%20Agreements) Engages in collaborations for product development, generating revenue from upfront payments, milestones, and royalties, including agreements with Incyte, Gilead, Zai Lab, and Provention - Incyte License Agreement: FDA approved ZYNYZ (retifanlimab-dlwr) in **March 2023**, leading to a **$15.0 million** milestone payment recognized in **9M 2023**. The company is eligible for up to **$320.0 million** in development/regulatory milestones and **$330.0 million** in commercial milestones, plus tiered royalties of **15%** to **24%**[48](index=48&type=chunk)[49](index=49&type=chunk)[52](index=52&type=chunk) - Gilead Agreement: Received a **$60.0 million** upfront payment in **October 2022**. Gilead nominated the first of two research programs in **September 2023**, with a **$15.7 million** nomination fee received in **October 2023**. The company is eligible for up to **$1.7 billion** in target nomination, option fees, and milestones[55](index=55&type=chunk)[62](index=62&type=chunk) - Provention APA: Received all four **$15.0 million** milestone payments (total **$60.0 million**) for TZIELD's first approval prior to **June 30, 2023**. Recognized **$5.5 million** related to other consideration and **$0.3 million** in royalty revenue in **9M 2023**. The remaining **$50.0 million** Sales Milestone Payment from the Royalty Purchase Agreement was incorporated into the Provention APA in **September 2023**[76](index=76&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) [Manufacturing Services Agreement (Incyte)](index=20&type=section&id=Manufacturing%20Services%20Agreement%20(Incyte)) Has a Manufacturing and Clinical Supply Agreement with Incyte for bulk drug substance, with revenue recognized over time on a straight-line basis - The company has an agreement with Incyte to provide manufacturing services for bulk drug substance, including a **$10.0 million** upfront payment and annual fixed payments totaling **$19.5 million** (after amendment)[86](index=86&type=chunk)[87](index=87&type=chunk) | Period | Revenue Recognized (in millions) | | :-------------------------- | :----------------------------- | | 3 Months Ended Sep 30, 2023 | $4.5 | | 3 Months Ended Sep 30, 2022 | $1.1 | | 9 Months Ended Sep 30, 2023 | $9.6 | | 9 Months Ended Sep 30, 2022 | $5.1 | - As of **September 30, 2023**, **$7.0 million** in revenue was deferred under this agreement[88](index=88&type=chunk) [Government Agreement (NIAID Contract)](index=21&type=section&id=Government%20Agreement%20(NIAID%20Contract)) Holds a NIAID contract to develop DART molecules for HIV, with a total funded value of **$25.1 million** and a performance period ending **September 2024** - The NIAID Contract has a total funded value of **$25.1 million** as of **September 30, 2023**, with a performance period ending in **September 2024**[90](index=90&type=chunk) | Period | Revenue Recognized (in millions) | | :-------------------------- | :----------------------------- | | 3 Months Ended Sep 30, 2023 | $0.3 | | 3 Months Ended Sep 30, 2022 | $0.5 | | 9 Months Ended Sep 30, 2023 | $1.1 | | 9 Months Ended Sep 30, 2022 | $1.5 | - This contract is outside the scope of ASC **606**, as NIAID does not receive goods or services from the company under this contract[89](index=89&type=chunk) [9. Stock-Based Compensation](index=21&type=section&id=9.%20Stock-Based%20Compensation) Details stock-based compensation plans, including ESPP and Employee Stock Incentive Plans, providing expense figures and activity summaries for options and RSUs | Category | 3 Months Ended Sep 30, 2023 (in thousands) | 3 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2023 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | | :-------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Research and development | $2,335 | $2,571 | $6,996 | $7,621 | | Selling, general and administrative | $2,455 | $2,552 | $7,018 | $8,076 | | **Total stock-based compensation expense** | **$4,790** | **$5,123** | **$14,014** | **$15,697** | - The **2023** Equity Incentive Plan was approved in **May 2023**, allowing for the issuance of up to **4,850,000 shares**[95](index=95&type=chunk) | Metric | Shares | Weighted-Average Exercise Price | | :-------------------------- | :----------- | :------------------------------ | | Outstanding, Dec 31, 2022 | **10,098,929** | **$18.58** | | Granted | **3,267,727** | **$4.91** | | Exercised | (**26,146**) | **$3.34** | | Forfeited | (**293,161**) | **$9.78** | | Expired | (**367,054**) | **$19.77** | | **Outstanding, Sep 30, 2023** | **12,680,295** | **$15.26** | - Total unrecognized compensation expense related to unvested stock options was approximately **$22.6 million** as of **September 30, 2023**, expected to be recognized over approximately **1.3 years**[98](index=98&type=chunk) [10. In-licensing arrangement](index=23&type=section&id=10.%20In-licensing%20arrangement) Entered a license agreement with Synaffix B.V. for ADC development, amended to seven targets, with potential milestone payments up to **$2.8 billion** and low-single digit royalties - The company entered into a non-exclusive license agreement with Synaffix B.V. in **January 2022** to develop, manufacture, and commercialize up to three antibody-drug conjugate targets, which was amended in **March 2023** to add four additional targets, totaling seven[100](index=100&type=chunk) - Assuming successful development and commercialization of all seven targets, the company could be obligated to pay up to **$2.8 billion** for development, regulatory, and sales milestones, plus tiered royalties in the low-single digit percentages on net sales[100](index=100&type=chunk) - The company incurred **$1.7 million** and **$1.0 million** in expense under this agreement during the nine months ended **September 30, 2023**, and **2022**, respectively, recorded as research and development expense[101](index=101&type=chunk) [11. Net Income (Loss) Per Share](index=24&type=section&id=11.%20Net%20Income%20(Loss)%20Per%20Share) Details basic and diluted net income (loss) per share calculation, noting dilutive effects from stock options and RSUs in **2023** and anti-dilutive effects in prior net loss periods | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) | $17,554 | $(24,813) | $37,014 | $(132,560) | | Weighted average shares outstanding, basic | **61,980,680** | **61,459,831** | **61,890,824** | **61,390,143** | | Effect of dilutive securities | **263,922** | — | **199,519** | — | | Weighted average shares outstanding, diluted | **62,244,602** | **61,459,831** | **62,090,343** | **61,390,143** | | Net income (loss) per share, basic | **$0.28** | $(0.40) | **$0.60** | $(2.16) | | Net income (loss) per share, diluted | **$0.28** | $(0.40) | **$0.60** | $(2.16) | - For the three and nine months ended **September 30, 2023**, stock options and RSUs were dilutive. For the same periods in **2022**, they were anti-dilutive due to net losses[102](index=102&type=chunk)[103](index=103&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Provides management's perspective on financial condition and results, covering business overview, macroeconomic impacts, collaborations, accounting estimates, and liquidity [Overview](index=25&type=section&id=Overview) MacroGenics, a biopharmaceutical company with three FDA-approved cancer therapeutics, has an accumulated deficit of **$1.1 billion** and expects current resources to fund operations into **2026** - MacroGenics is a biopharmaceutical company focused on developing, manufacturing, and commercializing innovative antibody-based therapeutics for the treatment of cancer[106](index=106&type=chunk) - The company had an accumulated deficit of **$1.1 billion** through **September 30, 2023**, which is expected to increase due to ongoing research and development expenses[107](index=107&type=chunk) - Cash, cash equivalents, and marketable securities as of **September 30, 2023**, combined with anticipated collaboration payments, product revenue, contract manufacturing revenue, and royalties, are expected to fund operations into **2026**[106](index=106&type=chunk) [Macroeconomic Conditions](index=25&type=section&id=Macroeconomic%20Conditions) Global macroeconomic volatility from financial issues, inflation, and geopolitical upheaval could adversely affect the company's business, operations, or financial condition - The global economy, credit markets, and financial markets are experiencing significant volatility due to adverse events involving financial institutions, inflation, rising interest rates, and geopolitical upheaval[108](index=108&type=chunk) - These macroeconomic conditions could create supply chain disruptions, inventory disruptions, and fluctuations in economic growth, potentially adversely affecting the company's business, results of operations, or financial condition[108](index=108&type=chunk) [Collaborations](index=25&type=section&id=Collaborations) Balances internal product development with strategic collaborations providing non-dilutive funding, milestones, and royalties, including agreements with Incyte, Gilead, Zai Lab, and Provention - Incyte: Received **$150.0 million** upfront and **$115.0 million** in milestones through **September 30, 2023**, including **$15.0 million** for ZYNYZ FDA approval. Eligible for additional **$320.0 million** in development/regulatory milestones and **$330.0 million** in commercial milestones, plus tiered royalties (**15-24%**)[111](index=111&type=chunk) - Gilead: Received a **$60.0 million** upfront payment. Eligible for up to **$1.7 billion** in target nomination, option fees, and milestones. Gilead nominated the first of two research programs in **September 2023**, with a **$15.7 million** nomination fee received in **October 2023**[111](index=111&type=chunk) - Provention: Received **$60.0 million** in milestone payments for TZIELD FDA approval (split into four **$15 million** payments, all received by **June 30, 2023**). Sold single-digit royalty interest in TZIELD for **$100.0 million** in **March 2023**, retaining other economic interests and a **$50.0 million** milestone received in **September 2023**[112](index=112&type=chunk) [Critical Accounting Estimates](index=27&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates include future royalty liability and interest expense, amortized using the effective interest method based on periodically reassessed royalty payment estimates - The liability related to future royalties is presented net of unamortized issuance costs and amortized using the effective interest rate method over the life of the arrangement[115](index=115&type=chunk) - The effective interest rate and related non-cash interest expense are adjusted prospectively if estimates of future royalty payments or their estimated timing materially differ from previous estimates[115](index=115&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Compares revenues, costs, and expenses for the three and nine months ended **September 30, 2023**, versus **2022**, highlighting key drivers of financial performance changes [Revenue](index=28&type=section&id=Revenue) Total revenue significantly decreased for both **3M** and **9M** ended **September 30, 2023**, mainly due to lower collaborative agreements, partially offset by manufacturing and product sales | Period | 2023 (in millions) | 2022 (in millions) | Change (in millions) | % Change | | :-------------------------- | :----------------- | :----------------- | :------------------- | :------- | | 3 Months Ended Sep 30 | $10.4 | $41.7 | $(31.3) | (**76%**) | | 9 Months Ended Sep 30 | $48.0 | $78.8 | $(30.8) | (**39%**) | - The decrease in revenue for the three months was primarily due to a **$30.0 million** decrease in Incyte License Agreement milestone payments, a **$3.8 million** decrease from the I-Mab License Agreement, and a **$1.8 million** decrease from the **2021** Zai Lab Agreement, partially offset by a **$3.3 million** increase in Incyte Manufacturing revenue[118](index=118&type=chunk) - The decrease in revenue for the nine months was primarily due to decreases from the **2021** Zai Lab Agreement (**$16.8M**), Incyte License Agreement (**$15.0M**), **2018** Zai Lab Agreement (**$4.9M**), I-Mab License Agreement (**$4.5M**), and I-Mab Clinical Supply Agreement (**$1.4M**). These were partially offset by increases from the Provention APA (**$5.5M**), Incyte Manufacturing (**$4.5M**), Gilead Agreement (**$1.1M**), and Incyte Clinical Supply Agreement (**$1.1M**)[119](index=119&type=chunk) [Cost of Product Sales](index=28&type=section&id=Cost%20of%20Product%20Sales) Cost of product sales includes product royalties and fill finish costs, with gross margin favorably impacted by selling drug product previously expensed as R&D - Cost of product sales primarily consists of product royalties and fill finish costs[120](index=120&type=chunk) - Gross margin has been favorably impacted by the sale of drug product that was previously charged to research and development expense prior to FDA approval of MARGENZA[122](index=122&type=chunk) [Cost of Manufacturing Services](index=30&type=section&id=Cost%20of%20Manufacturing%20Services) Costs of manufacturing services for Incyte bulk drug substance are expected to fluctuate based on the agreed-upon manufacturing schedule - Cost of manufacturing services consists of costs to produce Incyte bulk drug substance under the Incyte Manufacturing and Clinical Supply Agreement[123](index=123&type=chunk) - These costs are expected to vary from period to period based on the agreed-upon manufacturing schedule[123](index=123&type=chunk) [Research and Development Expense](index=30&type=section&id=Research%20and%20Development%20Expense) Total R&D expense decreased by **$18.1 million** (**38%**) for **3M** and **$42.2 million** (**26%**) for **9M** ended **September 30, 2023**, primarily due to reduced program costs | Period | 2023 (in millions) | 2022 (in millions) | Change (in millions) | % Change | | :-------------------------- | :----------------- | :----------------- | :------------------- | :------- | | 3 Months Ended Sep 30 | $30.1 | $48.2 | $(18.1) | (**38%**) | | 9 Months Ended Sep 30 | $119.2 | $161.4 | $(42.2) | (**26%**) | - The decrease in R&D expense for the three months was primarily due to decreased development and clinical trial costs related to margetuximab, enoblituzumab, vobramitamab duocarmazine, flotetuzumab, tebotelimab, and other programs[125](index=125&type=chunk) - The decrease for the nine months was primarily due to decreased costs for enoblituzumab, margetuximab, vobra duo manufacturing, flotetuzumab, next-generation T-cell engagers, tebotelimab, and other programs, partially offset by increased costs for preclinical ADC product candidates and lorigerlimab[126](index=126&type=chunk) [Selling, General and Administrative Expense](index=31&type=section&id=Selling,%20General%20and%20Administrative%20Expense) Selling, general and administrative expenses decreased by **$3.0 million** for **3M** and **$5.6 million** for **9M** ended **September 30, 2023**, mainly due to reduced MARGENZA selling expenses - Selling, general and administrative expenses decreased by **$3.0 million** for the three months ended **September 30, 2023**, compared to the prior year[127](index=127&type=chunk) - Selling, general and administrative expenses decreased by **$5.6 million** for the nine months ended **September 30, 2023**, compared to the prior year[127](index=127&type=chunk) - The primary reason for the decrease was reduced MARGENZA-related selling expenses[127](index=127&type=chunk) [Gain on Royalty Monetization Arrangement](index=31&type=section&id=Gain%20on%20Royalty%20Monetization%20Arrangement) Recognized a **$100.9 million** gain in **April 2023** from the Tripartite Agreement and an additional **$50.0 million** gain in **July 2023** from a milestone achievement - A **$100.9 million** gain on royalty monetization arrangement was recognized in **April 2023** due to the Tripartite Agreement, which modified the liability related to future royalties[128](index=128&type=chunk) - An additional **$50.0 million** gain was recognized in **July 2023** upon Sanofi reporting achievement of a primary endpoint milestone event[128](index=128&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and cash equivalents decreased by **$19.0 million** in **9M 2023**, with operating and investing activities using cash, while financing provided **$150.1 million** | Activity | 9 Months Ended Sep 30, 2023 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | | Operating activities | $(50.2) | $(116.3) | | Investing activities | $(118.9) | $76.5 | | Financing activities | $150.1 | $0.3 | | **Net change in cash and cash equivalents** | **$(19.0)** | **$(39.5)** | - Net cash used in operating activities decreased to **$50.2 million** for the nine months ended **September 30, 2023**, benefiting from **$15.0 million** in milestones from Incyte[131](index=131&type=chunk) - Net cash provided by financing activities significantly increased to **$150.1 million** for the nine months ended **September 30, 2023**, primarily due to **$149.7 million** in net cash proceeds from the Royalty Purchase Agreement with DRI[133](index=133&type=chunk) - The company anticipates that its cash, cash equivalents, and marketable securities as of **September 30, 2023**, combined with anticipated collaboration payments, product revenue, contract manufacturing revenue, and royalties, should enable it to fund operations into **2026**[135](index=135&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a **smaller reporting company**, MacroGenics is not required to provide market risk disclosures in this Form **10-Q** - The company is not required to provide quantitative and qualitative disclosures about market risk in this Form **10-Q** because it is considered a **smaller reporting company** under SEC rules[137](index=137&type=chunk) [ITEM 4. Controls and Procedures](index=33&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective as of **September 30, 2023**, with no material changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of **September 30, 2023**[138](index=138&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended **September 30, 2023**[139](index=139&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) Involved in various legal and regulatory proceedings, the company does not anticipate a material adverse effect on its business or financial condition - The company is involved in various legal or regulatory proceedings, claims, or class actions related to alleged patent infringements, other intellectual property rights, and other matters incidental to its business[140](index=140&type=chunk) - The company does not currently expect such legal proceedings to have a material adverse effect on its business, financial condition, or results of operations[140](index=140&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) Business is subject to various risks that could adversely affect financial condition and stock price, with no material changes to **2022** Form **10-K** risk factors - The company's business is subject to risks and events that could adversely affect its financial condition, results of operations, and trading price of its securities[141](index=141&type=chunk) - There have been no material changes in the risk factors described in "Item **1A**. Risk Factors" of the Annual Report on Form **10-K** for the year ended **December 31, 2022**[141](index=141&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form **10-Q**, including an amendment to the Asset Purchase Agreement, Rule **13a-14(a)** and Section **1350** certifications, and XBRL data - Exhibits include Amendment No. **2** to the Asset Purchase Agreement, Rule **13a-14(a)** Certifications, Section **1350** Certifications, and XBRL Instance, Schema, Calculation, Definition, Labels, and Presentation Linkbase Documents[142](index=142&type=chunk) [Signatures](index=35&type=section&id=SIGNATURES) Contains required signatures from the registrant's authorized officers, certifying the filing of the report - The report is signed by Scott Koenig, M.D., Ph.D., President and Chief Executive Officer, and James Karrels, Senior Vice President and Chief Financial Officer, on **November 6, 2023**[144](index=144&type=chunk)[145](index=145&type=chunk)

MACRO GENICS® Corporate Update August 9, 2023 Cautionary Note on Forward-Looking Statements Legal Notices Trademarks Investigational Agents August 9, 2023 • Pursuing first-in-class targets 3 Multiple Platforms for Developing Innovative Biologics • Targeting improved efficacy and/or safety profile vs. traditional mAbs • Broad experience with CD3-directed bispecifics August 9, 2023 First-in-Human (Phase 1) Vobramitamab Duocarmazine (B7-H3) | --- | --- | --- | --- | --- | |--------------------------------|---- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36112 MACROGENICS, INC. (Exact name of registrant as specified in its charter) Delaware 06-1591613 (State or other jurisdiction of incorpor ...

18 CONFIDENTIAL | --- | --- | |-------------------------------------|-------| | | | | Stratification Factors: | | | • Disease Location | | | (bone only vs. visceral) • Region | | PARCE SENICS MGD024 is investigational and has not yet been approved for marketing by any regulatory authority MACRO GENICS MGD024 MGD024: Favorable Cytokine Profile, Encouraging Combination Activity (in vivo) Improved Tolerability vs. Wild Type (WT) in Cynos 21 Preclinical data presented at ASH 2021 Interleukin-6 MGD024 Enhances A ...

MacroGenics, Inc. (NASDAQ:MGNX) Q1 2023 Results Conference Call May 9, 2023 4:30 PM ET Company Participants Jim Karrels - Vice President, Chief Financial Officer Scott Koenig - President and CEO Conference Call Participants Jonathan Chang - SVB Securities Yigal Nochomovitz - Citi Kaveri Pohlman - BTIG Stephen Willey - Stifel Shay Simin - Barclays Operator Good afternoon. We will begin the MacroGenics 2023 First Quarter Corporate Progress and Financial Results Conference Call in just a moment. All participan ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36112 MACROGENICS, INC. (Exact name of registrant as specified in its charter) Delaware 06-1591613 (State or other jurisdiction of incorpo ...

Developing Breakthrough Biologics, Life-changing Medicines® 2 DART, TRIDENT, MacroGenics, the MacroGenics logo and MARGENZA are trademarks or registered trademarks of MacroGenics, Inc. All third-party trademarks used herein are registered trademarks of their respective owners. Integrated approach for exploiting direct and immune-based killing mechanisms Proof-of-Concept (Phase 2) Major Market Rights | --- | --- | --- | --- | --- | |--------------------------------|----------------------------------|-------- ...

MacroGenics, Inc. (NASDAQ:MGNX) Q4 2022 Earnings Conference Call March 15, 2023 4:30 PM ET Company Participants Jim Karrels - Senior Vice President and Chief Financial Officer Scott Koenig - President and Chief Executive Officer Conference Call Participants Jonathan Chang - SVB Securities Etzer Darout - BMO Capital Markets David Dai - SMBC Jon Miller - Evercore ISI Stephen Willey - Stifel Boris Peaker - Cowen Silvan Tuerkcan - JMP Securities Operator Good afternoon. We will begin the MacroGenics 2022 Fourth ...