MacroGenics (MGNX) Q4 2024 Earnings Call March 21, 2025 03:12 AM ET Company Participants James Karrels - Senior VP, CFO & Corporate SecretaryScott Koenig - President and CEOStephen Eck - Senior VP of Clinical Development & Chief Medical OfficerJonathan Chang - Senior Managing DirectorNick Lorusso - Vice PresidentJonathan Miller - Managing DirectorSilvan Türkcan - Managing DirectorMayank Mamtani - Senior Managing Director Conference Call Participants Peter Lawson - AnalystStephen Willey - Analyst Operator Go ...

MacroGenics (MGNX) reported $19.35 million in revenue for the quarter ended December 2024, representing a year-over-year increase of 80.5%. EPS of -$0.25 for the same period compares to -$0.75 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $45.26 million, representing a surprise of -57.24%. The company delivered an EPS surprise of -8.70%, with the consensus EPS estimate being -$0.23.While investors scrutinize revenue and earnings changes year-over-year and how they compare with ...

Financial Performance - MacroGenics reported a quarterly loss of $0.25 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.23, but an improvement from a loss of $0.75 per share a year ago [1] - The company posted revenues of $19.35 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 57.24%, compared to revenues of $10.72 million a year ago [2] - Over the last four quarters, MacroGenics has surpassed consensus EPS estimates only once [2] Stock Performance - MacroGenics shares have declined approximately 32.9% since the beginning of the year, while the S&P 500 has decreased by 3.5% [3] - The current Zacks Rank for MacroGenics is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.70 on revenues of $21.5 million, and for the current fiscal year, it is -$2.46 on revenues of $91.14 million [7] - The estimate revisions trend for MacroGenics is mixed, and future stock movements will depend on management's commentary during the earnings call [3][4] Industry Context - The Medical - Products industry, to which MacroGenics belongs, is currently ranked in the bottom 49% of over 250 Zacks industries, which may impact the stock's performance [8] - Another company in the same industry, Abbott, is expected to report quarterly earnings of $1.07 per share, reflecting a year-over-year change of +9.2% [9]

MacroGenics, Inc. (NASDAQ:MGNX) Q4 2024 Earnings Conference Call March 20, 2025 4:30 PM ET Company Participants James Karrels - SVP, CFO and Secretary Scott Koenig - President and CEO Stephen Eck - SVP, Clinical Development & Chief Medical Officer Conference Call Participants Peter Lawson - Barclays Jonathan Chang - Leerink Partners Nicholas Lorusso - TD Cowen Jonathan Miller - Evercore ISI Stephen Willey - Stifel Silvan Tuerkcan - Citizens JMP Securities Mayank Mamtani - B. Riley Securities Operator Good a ...

Funding and Collaborations - MacroGenics has received over $1.4 billion in non-dilutive funding since its inception in 2000 through strategic collaborations with global biopharmaceutical companies[23]. - The company has entered into collaborations that provide significant non-dilutive funding and rights to royalties upon achieving development milestones[74]. - Gilead paid MacroGenics a non-refundable upfront payment of $60.0 million under the Gilead Agreement for the development of MGD024, with potential total payments of up to $1.7 billion in fees and milestones[55]. - MacroGenics entered into an agreement with TerSera Therapeutics for the global rights to MARGENZA®, receiving $40.0 million upfront and potential sales milestone payments of up to $35.0 million[43]. - The company has entered into agreements with Incyte and Emergent BioSolutions for contract manufacturing services, receiving upfront payments and annual fixed payments totaling $14.4 million and $9.1 million respectively[60][61]. Clinical Development and Product Candidates - The company is advancing three proprietary product candidates in clinical development: lorigerlimab, MGC026, and MGC028, with lorigerlimab currently in a Phase 2 study expected to commence by mid-2025[24][26]. - The LORIKEET study for lorigerlimab has enrolled 150 patients, with the primary endpoint being radiographic progression-free survival (rPFS)[28]. - MGC026 is in a Phase 1 dose escalation study, with plans to initiate dose expansion in selected indications in 2025[31]. - MGC028 has shown specific, dose-dependent in vivo antitumor activity in preclinical studies across multiple cancer types[34]. - MacroGenics continues to enroll patients in a Phase 1 study of MGD024 for CD123-positive neoplasms, including acute myeloid leukemia[53]. - The company is currently enrolling patients in clinical trials for multiple product candidates, including lorigerlimab and retifanlimab[168]. Safety and Efficacy Concerns - The TAMARACK study for vobramitamab duocarmazine reported an aggregate of 11 treatment-related deaths (6.1%) among 180 patients treated[38]. - The company has decided not to pursue further internal development of vobramitamab duocarmazine due to its safety and efficacy profile[40]. - The company announced the discontinuation of its Phase 2 trial of enoblituzumab due to safety data concerns, with 11 treatment-related deaths reported (6.1% of 180 patients) in the TAMARACK study[182]. Manufacturing and Facilities - MacroGenics operates a 5 × 2,000 liter commercial-scale cGMP antibody manufacturing facility to support clinical programs and provide outsourced services[23]. - Manufacturing is conducted at the company's facility in Rockville, Maryland, with reliance on contract manufacturers for ADC components[86]. - The company has limited experience in large-scale commercial manufacturing, which may lead to production difficulties and supply disruptions[190]. Regulatory and Compliance Issues - The FDA has a 60-day period to determine if a BLA is accepted for filing, with a standard review period of 10 months for non-priority BLAs[108]. - The company is required to submit periodic reports and adverse event reports following FDA approval of a Biologics License Application (BLA)[119]. - The company must comply with the Drug Supply Chain Security Act, which regulates drug distributors[121]. - The company is subject to various federal and state laws related to healthcare fraud and abuse, which may lead to significant penalties for noncompliance[123]. - Regulatory compliance is critical, as failure to meet FDA requirements could result in sanctions and hinder product commercialization[210]. Financial Performance and Projections - As of December 31, 2024, the company's accumulated deficit was approximately $1.2 billion, and it anticipates continuing to incur losses for the foreseeable future[155]. - The company expects its cash, cash equivalents, and marketable securities, combined with anticipated collaboration payments, should enable it to fund operations into the second half of 2026[151]. - The company will require substantial additional funding to complete the development and commercialization of its product candidates, which may not be available on acceptable terms due to current economic conditions[151]. - The company has federal and state net operating loss (NOL) carryforwards of approximately $554.0 million and federal research and development tax credits of approximately $109.0 million available[160]. - The company is subject to Section 382 limitations due to acquisitions made in 2002 and 2008, which may further restrict the utilization of NOL carryforwards and tax credits[160]. Competitive Landscape - The competitive landscape includes numerous companies developing treatments for cancer, utilizing both small molecule drugs and biologic therapeutics[92]. - The company faces significant competition from major pharmaceutical companies with greater resources, which may impact its commercial opportunities[185]. - Competitors are also developing therapeutics targeting multiple specificities using single recombinant molecules, including Amgen and BioNTech, which may impact the company's market position[95]. - The company faces competition in the CDMO service market from full-service contract manufacturers and large pharmaceutical companies, which have greater financial and technical resources[96]. - Mergers and acquisitions in the pharmaceutical and biotechnology industries may further concentrate resources among competitors, increasing competitive pressure[97]. Employee and Organizational Aspects - The company had 341 full-time employees as of December 31, 2024, with 273 engaged in research, development, and manufacturing activities[136]. - The company emphasizes competitive employee wages and links annual compensation changes to overall company performance[138]. - The company maintains an Employee Stock Purchase Plan allowing employees to purchase stock at 85% of fair market value[139]. - 95% of the workforce participated in the employee engagement survey conducted in 2024[142]. - The company invests in employee learning and development, providing resources for leadership and technical skill training[144]. Market and Pricing Challenges - The company anticipates pricing pressures due to managed healthcare trends and evolving payor models, which may affect product sales[198]. - Reimbursement decisions by third-party payors significantly impact market acceptance and pricing of the company's products[199]. - There is uncertainty regarding coverage and reimbursement for newly approved products, as decisions are primarily made by CMS[200]. - The lack of uniform reimbursement policies in the U.S. can lead to significant delays and costs in obtaining coverage for products[201]. - Health reform actions may exert downward pressure on pharmaceutical pricing, potentially affecting revenue and competitiveness[202]. Risks and Uncertainties - The company may experience delays in clinical trials or regulatory approvals, which could increase costs and delay commercialization of its product candidates[149]. - The company may face adverse effects from economic downturns, inflation, and geopolitical events, which could negatively impact its financial performance[158]. - Raising additional capital may cause dilution to stockholders and restrict the company's operations or require relinquishing substantial rights[159]. - The company depends substantially on the successful clinical development of its product candidates, with significant investment in their development[161]. - Clinical drug development is lengthy and expensive, with uncertain outcomes, potentially leading to significant additional costs and delays[163].

Core Insights - MacroGenics, Inc. has achieved multiple clinical development milestones in 2024, including the completion of enrollment in the LORIKEET Phase 2 study for lorigerlimab in combination with docetaxel for mCRPC patients [2][5] - The company has decided to discontinue further internal development of vobra duo based on the results of the TAMARACK Phase 2 study, while expressing optimism about the potential of the B7-H3 target and the progress of MGC026 [2][10] Clinical Development Updates - The LORIKEET Phase 2 trial is a randomized study involving 150 patients, evaluating lorigerlimab in combination with docetaxel, with clinical updates expected in the second half of 2025 [5][6] - A new LINNET Phase 2 study will evaluate lorigerlimab as monotherapy in patients with platinum-resistant ovarian cancer or clear cell gynecologic cancer, targeting enrollment of up to 60 patients [6] - MGC026, a TOP1i-based ADC targeting B7-H3, is currently in a Phase 1 dose escalation study, with dose expansion expected to begin in 2025 [6][7] - MGC028, another TOP1i-based ADC targeting ADAM9, has shown promising preclinical results and is currently in a Phase 1 study [7] Financial Performance - As of December 31, 2024, MacroGenics reported cash, cash equivalents, and marketable securities of $201.7 million, down from $229.8 million in 2023, with a cash runway projected into the second half of 2026 [5][10] - Total revenue for the year ended December 31, 2024, was $150.0 million, a significant increase from $58.7 million in 2023, primarily due to milestone payments from the Incyte License Agreement [10][18] - Research and development expenses rose to $177.2 million in 2024 from $166.6 million in 2023, driven by increased costs related to MGC028 and lorigerlimab [10][12] - The net loss for 2024 was $67.0 million, compared to a net loss of $9.1 million in 2023 [10][18] Strategic Collaborations and Partnerships - MacroGenics continues to collaborate with Gilead Sciences on MGD024, a next-generation CD123 × CD3 DART molecule, currently in a Phase 1 study [11] - The company has received $365.0 million in upfront and milestone payments from Incyte for the licensed monoclonal antibody retifanlimab, with potential for an additional $540.0 million in future milestones [11] - MARGENZA's global rights were sold to TerSera Therapeutics for an initial payment of $40.0 million, with additional milestone payments possible [11][18]

Core Viewpoint - MacroGenics, Inc. will release its financial results for Q4 and the full year of 2024 on March 20, 2025, after market close, and will host a conference call to discuss these results and recent corporate developments [1]. Group 1: Financial Results Announcement - The financial results for the fourth quarter and full year of 2024 will be announced after market close on March 20, 2025 [1]. - A conference call to discuss the financial results and corporate progress will take place on the same day at 4:30 pm ET [1]. Group 2: Conference Call Information - Participants can register in advance to join the conference call via a provided link, receiving a confirmation email with details on how to join [2]. - A listen-only webcast of the conference call will be available in the Investor Relations section of the company's website [2]. - A recorded replay of the webcast will be accessible shortly after the call and archived for 30 days [2]. Group 3: Company Overview - MacroGenics is a biopharmaceutical company focused on developing monoclonal antibody-based therapeutics for cancer treatment [3]. - The company utilizes proprietary next-generation antibody-based technology platforms to generate its pipeline of product candidates [3]. - MacroGenics has established several strategic collaborations with global pharmaceutical and biotechnology companies [3].

Group 1 - MacroGenics, Inc. (NASDAQ: MGNX) is a biotech company that has been previously analyzed for its potential amidst market overreactions to negative news [1] - The author has a PhD in biochemistry and extensive experience in analyzing clinical trials and biotech companies, emphasizing the importance of understanding the science behind investments [1] Group 2 - No stock or derivative positions are held by the author in any mentioned companies, nor are there plans to initiate such positions in the near future [2] - The article reflects the author's personal opinions and is not influenced by any business relationships with the companies discussed [2]

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Macrogenics, Inc. due to a class action complaint alleging breaches of fiduciary duties by the board of directors following significant stock price decline related to safety data misrepresentations of a drug [1][2]. Group 1: Legal Investigation - A class action complaint was filed against Macrogenics on July 26, 2024, with a class period from March 7, 2024, to May 9, 2024 [1]. - The investigation focuses on whether the board of directors of Macrogenics breached their fiduciary duties to the company [1]. Group 2: Stock Performance and Impact - During the class period, Macrogenics made material misrepresentations regarding the safety data from its TAMARACK Phase 2 study of vobramitamab duocarmazine [2]. - Following the revelation that the drug was significantly more dangerous than previously stated, Macrogenics' stock declined by 77.4%, equating to a drop of $11.36 per share [2].

Core Insights - MacroGenics, Inc. is a biopharmaceutical company focused on developing monoclonal antibody-based therapeutics for cancer treatment [3] - The company will participate in two upcoming investor conferences in November 2024, including the Guggenheim Securities Healthcare Innovation Conference and the Stifel 2024 Healthcare Conference [1] Conference Participation - At the Guggenheim Securities Healthcare Innovation Conference in Boston, the Chief Operating Officer, Eric Risser, will engage in a fireside chat on November 12, 2024, at 4:00 PM ET [1] - The President & CEO, Scott Koenig, M.D., Ph.D., will participate in a fireside chat at the Stifel 2024 Healthcare Conference in New York on November 18, 2024, at 1:15 PM ET [1] - Management will also hold one-on-one meetings at both conferences [1] Company Overview - MacroGenics generates its product pipeline from proprietary next-generation antibody-based technology platforms applicable across various therapeutic domains [3] - The company has established strategic collaborations with global pharmaceutical and biotechnology firms, leveraging its technology and protein engineering expertise [3]