Thank you, and welcome back to day two of the Citizens JMP Life Sciences Conference. My name is Silvan Tuerkcan , and I cover precision medicine here at Citizens, and now it's my pleasure to host MacroGenics, in particular, Eric Risser, President and CEO. Thanks so much for joining us today.
Thanks Silvan and my pleasure to be here.
Great. Yeah, we just talked, so it's been six or nine months that you've taken over. Can you just tell us a little bit about how you're redirecting MacroGenics's R&D engine and the strategy?
Yeah. You know, I've stepped into the seat about seven months ago, so last August. Many facets of the business are the same in terms of our commitment to really differentiate medicines for patients, you know, very much grounded in innovative science. I think what has changed is a heightened sense of urgency to really drive the programs to important inflection points, and a very clear focus in terms of how do we allocate capital in the areas that are gonna create the
Mm-hmm
The most attractive return for investors. The team has been working very hard over the last seven months advancing the pipeline. We did have an earnings update early in the week, where we did also provide a little bit of a roadmap for the year ahead. We really see 2026 as a reemergence of MacroGenics, resetting expectations and really concentrating on some of our key pipeline efforts, which really span three core modalities. Our ADC portfolio, which is growing, now includes three different assets that have both best-in-class or first-in-class potential. A T cell engagement portfolio, where we have already Gilead working on with us on three molecules, one of which is in the clinic, and then we have our bispecific immune checkpoint molecule.
Three different platforms that we've leveraged and now advancing four clinical programs, three of which we have, you know, full rights on.
Mm-hmm. Great. Maybe if you can remind us from your earnings update that your cash balance and your runway that you currently have.
Yeah. We feel very good about the cash balance. When I stepped into the role, that was one of our six strategic imperatives is continue to extend the cash runway. We brought in $75 million in Q4 through a collaboration revenue from both Gilead and Sanofi. We ended the year now with $190 million of cash, which again extends cash runway through end of 2027.
Great. Thank you. Yeah, maybe talking about the update, and I saw that the stock reacted very positively yesterday for what I think is you putting some dates out and a roadmap on when we get some first-in-human data on some of these follow-on assets where we haven't seen anything yet, right? In particular, I think the ADCs. I think people are interested in them. Obviously B7H3, you're still very excited about the target, right? This is the follow-on ADC here, and you have a lot of experience from vobramitamab duocarmazine. Can you just discuss some of the differences between MGC026 and vobramitamab duocarmazine, and what gives you confidence in a TOP1 payload here that you're using?
Yeah. The most fundamental difference between those molecules is the payload as well as the linker. In the case of MGC026, we are leveraging a platform that we licensed in from Synaffix, now part of Lonza, and it's really a system that includes a proprietary linker that binds to the native glycan. It's a site-specific-
Site. Right.
Conjugation approach, which means you have very uniform species of DAR for, you know, our ADC versus vobradu with more of a random cysteine conjugation.
Mm-hmm.
You get a little bit of a more of a distribution. The payload we're working on is exatecan, which is a TOP1, and, you know, not all TOP1s are the same, so some actually have higher potency. Exatecan, for instance, is 2- 5-fold more potent than deruxtecan.
Mm-hmm
Which is the operative payload with the Daiichi molecule. You know, to date, we're very encouraged by the performance of this platform. It's actually the same platform we've embedded in MGC026, MGC028, and MGC030, so all three molecules have that site-specific conjugation approach, as well as the exatecan payload. There is emerging competition in-
Mm-hmm
The B7H3 landscape, including within, you know, the area of TOP1-based ADCs. Four kind of probably most prominent players right now are Daiichi Sankyo, which has a partnership with Merck, Hansoh, which has a partnership with GSK, MedLink, which has a partnership with Roche, and Duality Bio, which has a partnership with BioNTech, and each of them have slightly different configurations. For instance, the Daiichi and Hansoh molecules are more derived on a deruxtecan-based payload, so a little bit lower potency, and you can see that in the dosing that they're employing, which is, you know, double digit
Mm-hmm
Mg per kg. They also have seen evidence, at least in the case of Daiichi Sankyo, of pretty pronounced ILD, which triggered a clinical hold on one of their phase III studies. By virtue of our binding to the native glycan, we knock out Fc gamma receptor binding, and we do believe that that could actually mediate some of that ILD by having nonspecific uptake of alveolar macrophages. Actually, Daiichi has published some of that in the context of their Enhertu HER2 molecule, where they characterize some of the ILD and believe it may have been mediated by that, you know, Fc gamma receptor binding. That could be an important point of differentiation.
What we did note in our earnings release is actually, to date, no ILD has been seen, regardless of, you know, greater severity level, and that's across both the MGC026 and MGC028 experience.
Oh, that's great. That's a great update. Maybe, you know, obviously, as to my understanding, a lot of these compounds that you just mentioned focus on slightly different indications, and so in my mind, I'm trying to, you know, organize myself and think about where this target is fitting and also obviously with the constructs. But is there any overarching idea that you have from your perspective, and how are you thinking about potency versus, you know, like linker stability and things like that? What do you think is the Goldilocks zone and are you focusing on a particular subset here already?
Yeah. I think the crux of your question is competitive positioning and-
Yeah
Differentiation, and the ADC really is a whole system. It relates to starting with the target and the expression pattern of the target, the antibody, which we think we have a very good binder, very efficient internalizer. We have published some comparative data showing better internalization relative to the Daiichi molecule. That linker and the stability of the linker and having that very uniform DAR four species is important, potentially expands the therapeutic window. The fact that we knock out the Fc gamma receptor binding potentially positions us to have a better safety profile. And then the payload, again, we know exatecan, and not only is it more potent but also has better bystander killing effects and is less susceptible to multidrug resistance and other escape mechanisms. So that system, we think, you know, could potentially afford us differentiation.
That being said, you know, I think B7-H3 is one of the most exciting targets to emerge over the last couple years, the fact that it has such a broad expression pattern and you're already seeing early glimpses of clinical validation across a number of different solid tumors. Unlike, for instance, a target like folate receptor or PSMA, which are much more lineage-specific targets with one or two indications, with B7-H3, you've already seen very early validation in small cell lung cancer.
Yeah.
There's a number of groups, including the four that I mentioned, that are mobilizing phase III studies. You're seeing early evidence in esophageal cancer, sarcoma, and then again, even based on some of the early clinical data that's been published, anecdotes of activity across cervical, ovarian, head and neck, I think liver, nasopharyngeal, given that a lot of the competitors are based out of China.
Mm-hmm.
That's a very prevalent disease in China. It's still the early innings in terms of where this field is going, and I think the fact that we have a very promising molecule with a great design, that system that I mentioned we think is very much optimized and could play across a number of these different indications, including ones where there you know have not yet been tapped by other competitors that have already you know initiated a late-stage development.
Yeah. Yeah, no, as you mentioned, across all these indications, I think they're all higher unmet need indications which makes, you know, this a particularly interesting target. Maybe so you said data, you may have that at midyear, if I'm not mistaken. Can you just tell us a little bit about what type of data we can expect? Like, what type of patients, dose ranges, what kind of efficacy bar should we look for? What kind of, you know-
Yep
indications?
What we've declared publicly is, you know, the MGC026 program completed the dose escalation late last year, and we initiated expansion cohorts in multiple tumor types, so that study is still ongoing, continuing to enroll patients. We'll have data that really frames out that early dose escalation, the selection of a target dose, and then obviously both a view on the safety profile, which we highlighted the ILD, but much more comprehensive survey of, you know, the totality of the safety experience. Obviously, durability of response is something that people want to see, so we'll have some early evidence of patients with responses and be able to see the length of those responses. Then obviously response rates, and we did guide that there have been, you know, RECIST responses seen in this study.
You'll get a little bit more sense of just the breadth of those responses and which tumor types we've seen early evidence of activity in.
Okay. A real wholesome update then that we'll have sooner than at least I expected. I think we also expect Duality Bio data or BioNTech's data relatively soon. Do you think there's some read across from what we may see or?
I think just given the breadth of other agents in this field, and many of them have multiple studies across different.
Mm-hmm
Indications, there will be a constant drumbeat of data maturing on those programs, including some of their late-stage development efforts. I know Duality recently highlighted they're moving into a phase III study.
Mm-hmm
With their program, as is Daiichi, and those are fairly large, you know, studies, 700-1,400 kind of patient experience, and I'm sure there will be more. I think this is still the early innings of just the appreciation of how broad this class of targets can be developed, and I think what you're also seeing is, given the relatively positive safety profile of these TOPO1s as a class, many of these agents are trying to move into earlier lines of therapy. You're also seeing people aggressively pursuing combinations with B7-H3 ADCs, with not just, you know, a conventional standard of care, but you're also seeing combos with T-cell engagers, and there's been a few studies with DLL3 T-cell engagers from both Merck and Amgen.
You're also seeing, you know, combinations with next gen immune checkpoints.
Mm-hmm
Including PD-1, VEGF molecules that both BioNTech and GSK are pursuing. Again, a lot of opportunity here across different indications, different regimens, both combo and monotherapy. Again, the field is still opening up with a lot of room for us to maneuver.
Mm-hmm. I'm hearing here a little bit, at least maybe qualitatively, you know, Vobramitamab duocarmazine, you just couldn't find a therapeutic window. Like, does it seem different this time with this MGC026?
Oh, for-
Like, it seems a lot more open.
Oh, for sure. I mean, Vobramitamab duocarmazine did have that challenge in terms of the more narrow therapeutic window. It was a ultra-potent
Mm-hmm
Payload.
Yeah, we saw lots of responses, right?
Potency is not the only attribute you're trying to solve for, especially when you're dealing with later line patients that might be more compromised and have other comorbidities.
Mm-hmm.
You need to also have a tolerable regimen where you can also maintain longer duration of treatment.
Great. Maybe your next ADC, ADAM9, MGC028, you also put a date on that, so second half of the year. Also very exciting asset. Can you just talk a little bit about the target? I think it's much less crowded and what gives you confidence?
Yeah. This is a first-in-class ADC. We were actually one of the very early pioneers actually for both B7-H3 and
Mm-hmm
ADAM9. We had a first gen molecule that was being co-developed with ImmunoGen.
Mm-hmm.
Some lessons learned from that development experience, primarily again, around the actual payload that we selected, which for the first gen molecule was a potent maytansinoid, had some ocular toxicities that are clearly platform related, and we've again re-engineered the molecule leveraging the Synaffix platform, the site-specific linker binding to that native glycan and a very potent exatecan payload. This molecule started phase I development early last year, so about a year behind 026, but you can see we've kind of closed the gap there, and we'll also have data shared later part of this year. There is some emerging competition on this target. Again, it's a fairly efficient marketplace, especially with all the competition in China.
We have seen that both Duality Bio has recently declared that they're initiating a phase I program of their own, and Bone has also declared that they are of interest in this target. I think a lot of people are just recognizing the appeal of the target, the fact that it also has a broad expression pattern across a number of solid tumors, including a number of GI cancers, lung, triple-negative breast cancer, prostate. It's a fairly long list of areas that have also had historically some challenges with ADCs.
Mm-hmm
Again, a lot of open space there, and we're ahead of the pack and, you know, moving aggressively to kind of progress the ongoing clinical-stage program.
Nice. Is it the same architecture as the Synaffix platform, like site-specific conjugation?
It's the exact same architecture with the same linker, the same DAR, the same exatecan payload. Then they also, because exatecan, although it's very potent, tends to be a little bit more hydrophobic, so they also have a proprietary polar spacer that enables you to generate better solubility with the molecule. That system, which again is very robust and we've now leveraged it with, you know, all three of the molecules that we're developing.
Does that payload make sense with the indications you're thinking about going after with ADAM9?
It makes great sense, especially with the GI cancers, which we know historically are not sensitive to cell cycle dependent payloads like auristatin or maytansinoid. Definitely makes sense. Lung is another that could pair well.
Mm-hmm.
So we're excited. We've obviously had early preclinical data that we've published, showing very robust activity in a number of PDX models. What we've also highlighted in the call, and this is again, more of a platform observation, is encouraging safety on both 026 and 028. No evidence of ILD on both 026 and 028 and RECIST responses that have been seen across those two programs.
Nice. All right. Yeah. Congratulations. Moving on to Lorigerlimab, your bispecific. Can you maybe before we go into the details here of the recent clinical update. Can you just give us an overview of the molecule for those not familiar with it and kind of put it into context of you know what it could bring to the table?
This is a dual checkpoint molecule that blocks both PD-1 and CTLA-4. It's a two-by-two configuration, so you have bivalent engagement of PD-1, bivalent engagement of CTLA-4, which is different than, for instance, the AstraZeneca molecule, which is probably the most prominent.
Yeah
Development effort where they have, I think, five phase III studies ongoing. That's a one-by-one configuration.
Mm-hmm.
We've actually done some benchmarking work showing that ours has superior, you know, engagement in terms of, hitting these dual positive TILs, so we can really localize the effect and potentially get a better therapeutic window. This molecule, we've now dosed probably over 300 patients, and that spans both early monotherapy experience, and then we had obviously the experience with our combo with docetaxel.
Mm-hmm
And prednisone. A lot of data. The 6 mg per kg dose is the predominant dose that we've used, although we did dose up to 10 mg per kg.
Mm-hmm
In the phase I study. The LORIKEET study, which was the prostate, and this was relatively early in my tenure, we looked at that data and made a decision at that point that we were not gonna continue the program in prostate cancer. We thought there were, you know, better opportunities within the portfolio, and we wanted to shunt the precious capital that we have into things that are gonna unlock the most value for shareholders.
Mm-hmm.
We do have a study called the LINNET study, which actually spans two separate populations, a serous platinum-resistant ovarian cancer population and a clear cell GYN cancer population. It was set up as basically 20 patients in each arm with the opportunity to extend the PROC arm through Simon's two-stage design.
Mm-hmm.
That study, we did highlight, you know, recently that it was put on a partial clinical hold.
Mm-hmm.
Although that was actually preceded by MacroGenics having looked at the data, and in concert with our data monitoring committee, decided to pause further enrollment because of some emerging toxicities that we saw. In particular, it was four patients that had grade four events. Two of these were grade four thrombocytopenia. One was a grade four myocarditis. These are again, immune events that you would associate with immune checkpoints, but the number and severity of those was somewhat unexpected.
Mm-hmm.
We also had a grade 4 neutropenia, which was a fairly complicated case that had concurrent septic shock, and that patient eventually died, so it became a grade 5 event. Those four patients with those AEs also led us to pause the study, and the FDA put us on a partial clinical hold, meaning we will not enroll new patients, but patients already on the study will continue to receive treatment. We're working closely with the FDA and hope to obviously remove that hold and progress the enrollment in that study as soon as possible.
Great. Maybe two questions. What about the safety signals that arose, like what's your first speculation of why that's happening? You know, as you said, in prostate cancer, significantly more patients dosed at a higher dose.
It-
Almost double.
Actually, it was the same dose.
Okay.
6 mgs per kg was the consistent dose.
Okay.
Although in the prostate cancer, you're having concurrent administration of systemic chemo.
Yeah.
That's a fairly big load of kind of potential toxicity across the two agents. 6 mg per kg was in the prostate study as well as in the LINNET study.
Okay. Why did we not see that emerging in the prostate?
You know, I really don't wanna speculate in terms of that, and that's an active process where we're actually analyzing the data, trying to map back. Is there something unique?
Mm-hmm
In the LINNET population that may have triggered that? Obviously, the LINNET study by design, these are all platinum refractory patients, so all of them had prior platinum therapy, which tends to be a fairly aggressive regimen and fairly toxic, especially with regard to potentially depleting the bone marrow.
Mm-hmm.
We're going through that analysis. We're working closely with the FDA. We're trying to figure out what a risk mitigation plan could be, and then we'll have an update on this program in mid part of this year. That will likely be a holistic assessment. We've obviously made some comments around safety experience.
Mm-hmm
We wanna pair that with also some commentary around efficacy, so you get a kind of a wholesome understanding of risk-benefit for the program. Then we'll also provide some guidance in terms of go forward, you know, planning.
Great. Yeah. Obviously you can't tell at this moment, but you're confident you can address that through like maybe dose modification or regimen modification or maybe more monitoring around-
There's a lot of options that we could look at, including, you know, our safety monitoring approach, you know, looking at eligibility, making sure how we screen patients. Dosing could be part of that. That's something we're now again aligning with the FDA on what that plan would be, and then we'll have that update by mid this year in terms of next steps.
Great. Maybe in terms of efficacy, right? You said it's a Simon's two-stage design, and you, as far as I understand, you know, you filled your first stage by the summer. Could you make a call or inference at least on where this was heading in terms of risk reward, and if it makes sense to go to stage two?
Again, as part of that holistic assessment, we'll make some judgment in terms of go forward planning. You're right, what we did disclose is we enrolled about 41 patients. Based on that design where we had 20 patients in PROC, 20 patients in clear cell, you can surmise that, you know, we were largely at that kind of decision point, which is at least a positive here that despite the partial hold, the integrity of the experiment that we're running is not gonna be, you know, subverted. The fact that we still have patients on study, we'll be tracking them, obviously assessing efficacy, durability of response, and this in some ways was a natural juncture to kind of assess the data before we decide how we wanna move forward.
Stage two, potentially you could do some sort of protocol modification, and then kick that second part off or something like that and do analysis on that?
There's a lot of options available.
Okay.
Yeah, we'll provide those updates in mid-2026.
Okay, great. You mentioned as a third leg the Gilead partnership. Can you walk us through that? I think one of the assets is the CD123, CD3 DART. Then there's two more undisclosed ones. Kinda what are the value inflection points here that are upcoming?
Yeah. We're very excited about our relationship with Gilead. We've actually had, as a company, a history of repeat partnering, where, you know, companies work with us. They really appreciate the quality of the science, the commitment to execution, and many of these partners come back and try to extend or expand those relationships. That's been the case with Gilead. That initial partnership started in late 2022, and that was around our CD123, CD3 asset, which is an evolution of some of the first gen molecules that we generated. The CD3, we've kind of detuned the binding kinetics of the CD3 arm to potentially expand the therapeutic window, and it also relies on intermittent dosing, unlike some of the earlier generation molecules. About a year after that first partnership, they came back. They wanted to expand-
Mm-hmm
The relationship with a second program, which is in preclinical stages of development. This past November, we were really excited by the interest to expand even further with a third molecule, which is an actual product candidate that's being developed. All three of these are moving ahead. We have very close interaction with Gilead in terms of planning and thinking about, you know, potential next steps with these programs. The T-cell engager platform, which again, we were an early innovator, and we've kind of learned and tried to build on our experience base. I mentioned the MGD024 asset, which is the CD123, CD3, that really represents a second generation-
Mm-hmm
Approach with potentially a broader therapeutic window. We've also now continued to build on those learnings to now create a third generation, molecule, which was this most recent, candidate that, Gilead licensed. The underlying theme there is, you know, how do we further improve on what the experience has been with traditional CD3s? The two predominant areas that we're trying to improve is safety, which we know cytokine release is always endemic in CD3 based approaches, but are there ways to potentially, limit that even further? The other opportunity is can you prolong the duration of response, which has been a limitation even with some of these other, CD3 engagers that you hear about, that others are developing. The T-cell sometimes drives to exhaustion early, and that can limit durability of response.
We have some novel approaches there where we think we could potentially extend the durability of the T cell response.
Great. Maybe one last quick question on Incyte. They got approval for anal cancer. Does it unlock a milestone payment to you?
ZYNYZ, which is the PD-1 asset, we're really thrilled that that molecule has really grown, and you can see Japan approval was just realized in December, and then a week ago they got the approval in Europe for frontline anal cancers. That's really a potentially practice-changing opportunity. It was highlighted a few years ago back at ESMO in the presidential symposium, and a lot of excitement around the promise of this molecule in that population. We're excited to see, and they do report their kind of quarterly revenue that, you know, revenue is growing. Uptake in the markets globally has been growing. We do have additional milestones. We haven't disclosed the specific trigger points for these.
Mm-hmm
In aggregate, it's about $540 million of residual milestones. We do have a royalty that we did monetize with Sagard Health last year, but it is a capped royalty structure.
Mm-hmm.
We brought in about $70 million from Sagard. They're entitled to earn a 2x return, and then all the residual royalties revert back to us. What we have also publicly disclosed is that's a meaningful royalty of 15%-24%.
Yeah.
A lot of embedded value in the Incyte asset, a lot of embedded value in the TZIELD asset, which is another approved program that Sanofi is marketing, about $330 million of untapped milestones, and then Gilead, the relationship we just discussed across the three molecules. In that partnership, there's $1.6 billion of biobucks. Again.
Yeah
Not all of these are gonna be easily realizable and may be, you know, much, further out, but the hope is some of these could be, you know, near-term value drivers for the business.
Great. Well, thank you, Eric. Thanks for the overview.
I appreciate it.
It was great to host you.
Yeah. My pleasure. Thank you.