MacroGenics(MGNX) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements 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 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 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 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 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] - Proprietary product candidates in clinical development include lorigerlimab (PD-1 x CTLA-4), MGC026 (B7-H3 ADC), and MGC028 (ADAM9 ADC)[20] - 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] - 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][40][41] 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 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 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] Liquidity and Capital Resources 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][103] - 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] Quantitative and Qualitative Disclosures about Market Risk 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] Controls and Procedures 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] - 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] PART II. OTHER INFORMATION Legal Proceedings 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] Risk Factors 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] Other Information 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] Exhibits 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]