STIFEL 2026 HEALTHCARE CONFERENCE - MACROGENICS INC

Explicit Guidance:

• No specific financial guidance (revenue, EPS, margins, capex) provided for FY2024, FY2025, or FY2026.
• Cash runway update provided as of Q2 2024: $327 million pro forma cash balance ($173 million actual cash on hand), derived from non-dilutive capital raising and milestone payments.
• Q3 earnings release scheduled to be issued "in a couple of days" post-transcript.

Business-Segment Outlook:

• ADC Portfolio (Three Clinical Stage Assets):
  • MGC-026 (B7H3): Dose expansion in head and neck cancer expected to be fully enrolled (40 patients) by end of 2024; data update anticipated in "middle part of 2027." Frontline combination with pembrolizumab planned; target indication selection for this combo remains under assessment pending competitive landscape data.
  • MGC-028 (ADAM-9): Phase I update expected later in the current year (2024). Focus on GI-associated cancers, lung, prostate, renal, and TNBC. Competitive landscape is less crowded than B7H3, but monitoring Duality Bio and B1.
  • Undisclosed Novel Target ADC: IND submission and clearance achieved in Q2 2024 (accelerated from Q3); first patient dosed. Focus indications: pancreatic, colorectal, esophageal, and bladder cancer.
• T-Cell Engagers:
  • Gilead Partnership: Three assets under license (CD123-CD3 construct + two new candidates). One asset pending Gilead option decision based on Phase I data; two other assets de-risked and moving into IND-enabling work.
  • Wholly Owned Assets: Lorigerlimab (anti-PD-1) expanding into clear cell gynecologic malignancies (most promising cohort) after lowering dose from 6mg to 3mg to improve tolerability. Additional 20-patient data for 3mg cohort expected later in 2024; clinical update on dose selection and indication strategy expected in 2025.
• Pipeline Inflection Points: Management anticipates "multiple inflection points" in 2027 to showcase pipeline potential across ADC and T-cell engager programs.
• R&D Strategy: Active exploration of next-generation ADCs including dual-payload strategies and non-Topo1 mechanisms to address resistance. Next-gen T-cell engagers moving beyond conventional CD3 approaches.

Market and Competitive Outlook:

• B7H3 Space: Acknowledged as highly competitive; company strategically avoided direct head-to-head competition in small-cell lung cancer and prostate cancer (dominated by late-stage Phase III programs from Daiichi Sankyo and Duality Bio) to focus on white-space indications (head and neck, melanoma, sarcoma, endometrial).
• ADC Differentiation: MGC-026 positioned to demonstrate superiority over Topo1-based ADCs regarding safety profile (specifically avoiding Interstitial Lung Disease and ocular toxicities associated with competitors' payloads).
• Competitive Landscape: ADAM-9 field is less crowded (approx. 15 molecules in B7H3 space vs. limited competition for ADAM-9), allowing the company to lead the race for this target.
• Pricing/Commercial: Zynlonta (partnership with Insight) shows "really nice uptake" in first-line anal cancer with broad global commercialization in US, Europe, and Asia; potential royalty reversion to company once capped milestones are realized.

Macro / Industry Outlook:

• No specific commentary on broader macroeconomic factors, interest rates, FX, or regulation.
• Industry trend noted: Shift away from early-line populations in US trials toward heavily pretreated populations, contrasting with earlier lines in China.

Strategic Initiatives:

• Capital Efficiency: Company strategy prioritizes non-dilutive capital via partnering and milestones; $290 million in non-dilutive capital raised in the last 12 months.
• M&A/Partnerships: Expectation to remain "active" on corporate development/partnering through 2027. Strategy shifts from purely non-dilutive capital to securing participation rights and long-term upside sharing in partnerships.
• Asset Disposition: Previously divested embedded CDMO operation to refocus enterprise.
• Platform Evolution: Leveraging Synfixex linker/payload platform across ADC portfolio; expanding T-cell engager portfolio to include wholly owned assets alongside Gilead partnership.

Risks and Headwinds to Outlook:

• Competitive Density: B7H3 and B7H4 targets face significant competition from late-stage programs (e.g., Daiichi Sankyo, Duality Bio, CSPC, Kalon).
• Clinical Failure Risk: Potential for TOPo1-based resistance in future ADCs; safety concerns (ILD, ocular toxicity) associated with competing payloads in the B7H3 class.
• Regulatory/Strategic Delays: Timeline for MGC-026 data hinges on enrollment rates; final indication selection for MGC-026 combination therapy is pending assessment of competitor data (e.g., PDO).
• Partner Dependency: One Gilead asset's progression is contingent on the partner's option decision based on Phase I data.

Management Tone on the Future:

• Confidence Level: High confidence in the 2027 timeline for inflection points; describes the current year as "transformative" and "busy."
• Urgency: Explicit mention of moving projects forward with "a lot of conviction and a lot of urgency."
• Strategic Focus: Shift from "lineage-specific" targets to "backbone therapy" potential with broad utility; deliberate avoidance of high-cost, high-competition domains to preserve capital.

Miscellaneous:

• Milestone Values: Gilead partnership carries $1.6 billion in potential milestones; Insight partnership carries >$500 million in embedded milestones plus royalty rights.
• Data Caveats: Early MGC-026 data skewed toward HPV-positive head and neck patients; further data needed to confirm activity across HPV-negative subsets. Early MGC-028 ocular toxicity observed in prior generation (Immunogen collaboration) but resolved in current Cinefix platform iteration.