MacroGenics at Barclays Conference: Strategic Insights on Pipeline and Partnerships

On Wednesday, 12 March 2025, MacroGenics Inc. (NASDAQ: MGNX) participated in the Barclays 27th Annual Global Healthcare Conference. The discussion, led by biotech analyst Peter Lawson and MacroGenics’ President and CEO Scott Koenig, highlighted the company’s strategic focus on its pipeline, potential partnerships, and the challenges posed by the current macroeconomic environment. While the company is optimistic about its internal manufacturing capabilities and pipeline progress, concerns were raised regarding potential NIH funding cuts and supply chain issues.

Key Takeaways

• MacroGenics is advancing its B7H3-targeted therapies, VOBER DUO and O2CIT, with promising clinical data.
• The company is exploring partnerships for a Phase III study of VOBER DUO.
• Concerns over potential NIH funding cuts and FDA slowdowns could impact future research and development.
• MacroGenics emphasizes internal manufacturing to mitigate supply chain risks.
• Loragrelumab trial results are anticipated in the second half of the year.

Operational Updates

Supply Chain:

• MacroGenics maintains internal manufacturing capabilities to address supply chain challenges.
• Control over production is ensured by a commercial manufacturing facility operational since 2005.
• Potential shortages, particularly for components sourced outside the U.S., remain a concern.

FDA & NIH Concerns:

• Proposed budget cuts and personnel changes at the FDA could slow down regulatory processes.
• Potential long-term impacts of NIH funding cuts on basic research and innovation are significant worries for MacroGenics.

Pipeline Progress:

• VOBER DUO shows encouraging progression-free survival (PFS) data in castration-resistant prostate cancer patients, with PFS of 8-8.5 months.
• The Phase I study for O2CIT is advancing well, with dose selection and indication choices expected by the second half of the year.
• Loragrelumab’s top-line PFS data from the LORIKETE study is expected in the latter half of the year, with plans to announce another tumor indication.

Partnership Strategy:

• MacroGenics is open to partnering VOBER DUO for a Phase III study and considers broader partnerships for other B7H3-targeted molecules.

Future Outlook

VOBER DUO:

• Final median PFS and safety data are anticipated soon.
• The company is exploring partnerships for Phase III development.

O2CIT:

• A dose selection is expected by the second half of the year, with Phase II indications to be identified.

Loragrelumab:

• Anticipated top-line PFS data from the LORIKETE study in the second half of the year.
• Announcement of another tumor indication is forthcoming.

Strategic Focus:

• Continued emphasis on internal manufacturing and product development control.
• Proactive risk mitigation strategies for supply chain issues.
• Monitoring and adapting to potential impacts of FDA and NIH changes.

Q&A Highlights

B7H3-Targeted Molecules:

• Discussion on the advantages of MacroGenics’ B7H3-targeted molecules compared to competitors like Daiichi Sankyo.
• O2CIT is being studied irrespective of B7H3 expression levels.

Prostate Cancer Treatment:

• Development of combination therapies with different mechanisms to improve prostate cancer treatment outcomes.

Loragrelumab Trial:

• Enrollment was completed in December, with results expected in the second half of the year.
• Interim data looks are ongoing.

General:

• High interest from investigators in the O2CIT Phase I trial, with requests for additional slots.

For a detailed account, readers are encouraged to refer to the full transcript below.

Full transcript - Barclays 27th Annual Global Healthcare Conference:

Peter Lawson, Biotech Analyst, Barclays: Okay. So just gone live. My name is Peter Lawson. I’m one of the biotech analysts at Barclays that covers MidCap, predominantly MidCap oncology focused companies and have the pleasure of covering MacroGenics for a number of years up on stage with me as Scott Koenig, the President and CEO of MacroGenics. First questions I’ve been asking companies have just been more kind of macro just with various movements that have happened with the new administration.

So just something that always concerns me, I guess, from COVID was just like if there are any supply chain issues that we should be thinking about as we think about tariffs kicking in or cranking up.

Scott Koenig, President and CEO, MacroGenics: Yes. I would put it in the perspective of going back to COVID and even before, one of the strategies that MacroGenics has set out is really to do as much as we can internally. And so going back to 02/2005, we initiated our own manufacturing facility and now have a commercial manufacturing facility. So in that context, to be able to control the production of not only our own molecules, but which include all the molecules in clinical development, we also make two commercial products and molecules for other organizations that are in clinical research. So we have to always be ahead of the game in terms of supply chain issues and be there, but you never know when a particular component is going to be challenging to get, especially if they’re not sourced within The U.

S. I can tell you like for instance, during the summer for one of the control products that were being used in the clinical trial, there was some shortage that we ultimately resolved it was resolved within a few weeks, but that is always a concern and you’ve heard about shortages of antibiotics, for instance, that occur. So at this point, I think we’re in very good shape in terms of anticipating our needs over the next couple of years, but we’ll have to see how the environment evolves.

Peter Lawson, Biotech Analyst, Barclays: Got you. Thank you. And just as we think about the FDA with proposed and I guess current cuts, Have you seen any slowdown in communication patterns or do you anticipate any slowdown in?

Scott Koenig, President and CEO, MacroGenics: Well, I think it’s too early to tell. Obviously, there’s a lot of disruption as we all are encountering in government and particularly within the HHS and FDA. Patrizio Cabazzoni leaving and senior members of the FDA leaving often presents challenges in the operation. And I a little bit anxious to see how this gets all played out. I guess this week we’ve heard that employees that are supported by the fees from companies of PDUFA are not at risk.

But I could tell you there is a lot of anxiety given that we are located in Rockville and very close to the FDA. We

Peter Lawson, Biotech Analyst, Barclays: Okay. Thank Okay. Thank you. And then I guess the other component is just like if there’s any worry about restrictions over like biologicals manufacturing and whether it’s here overseas and partnerships and any cross border licensing agreement worries?

Scott Koenig, President and CEO, MacroGenics: Well, again, I think that as we’ve built, MacroGenics is a fully integrated discovery to commercialization, but including the manufacturing, we are trying to control our needs for our own programs as our primary objective. And so we do have obviously contracts for some CRO work on a more limited basis. Currently right now, for instance, the ADC molecules, we have vendors that we’ve had good relationships with in The U. S. To do the conjugation.

And but at any time that could be impactful, I think more to others than us. But again, we have to be aware of those challenges going forward.

Peter Lawson, Biotech Analyst, Barclays: Got you. Thank you. And then final question just around NIH cuts. Mean, clearly that I assume that’s a terrible thing long term and just your view on the near to mid term kind of how that could impact innovation?

Scott Koenig, President and CEO, MacroGenics: I am very concerned about that. Having grown up within the academic and government infrastructure, training in universities, being at the NIH for over six years and then going to industry. It takes a long time for the organizations to build themselves into a mess and given so many challenges in our healthcare system, any disruption of the infrastructure there, I think will have very long term impacts. In particular, as we’ve heard of funding cuts, as of a couple of years ago, individuals weren’t getting their first R01 grants till they were 42 years of age. And now if your pay line is being cut even worse, There is no incentive for people to build out academic careers there, which will have horrible impact on the basic research infrastructure.

I think a lot of the if this continues, I think a lot of the burden for both basic as well as translational work will fall on the biotech and pharmaceutical industry going forward. Got you.

Peter Lawson, Biotech Analyst, Barclays: No, that’s kind of frightening change. So as we get back to your platform and B7 H3 ADC kind of, what do you want to see to move that forward? So it’s been really encouraging data, there’s been safety signals and you’ve kind of tried to mitigate some of those, but just what are the particular metrics you want to hit, whether it’s RPFS or other components?

Scott Koenig, President and CEO, MacroGenics: Yes. Let me put it in a little broader context. As you know, MacroGenics has been the leader in developing B7H3 targeted molecules in the history of the company. We were the first to put a therapeutic in testing. We’ve had historically four different molecules targeting B7H3, three are currently in clinical testing.

I think right now you’re alluding to the vobra duo molecule, which is an ADC molecule with a linker toxin called durocamycin that the mechanism is based as a DNA alkylating agent. As we recently reported at ESMO, we provided six month landmark endpoint in September of a Tamarac study, which was looking at two lower doses of the molecule in castration resistant prostate patients. These are ones who have been both naive to chemotherapy as well as experiencing chemotherapy. And we were in a sense trying to compare it to our historical dosing in the Phase one study at three mgs per kg Q3 testing versus in the Tamarac study of either 2Q4 or 2.7Q4. The landmark data was very encouraging.

So we had established that at the six month landmark endpoint of these two lower doses already a better PFS profile,

Peter Lawson, Biotech Analyst, Barclays: We were

Scott Koenig, President and CEO, MacroGenics: already at eight to eight point five months for those two doses. And we had seen dramatic improvement in some of the safety parameters going forward. In July of last year, we stopped dosing the patients who had not progressed or off study and said we would continue to follow those patients for another six months. And that was actually the study design and the endpoint. As we’ve described this early part of this year, we would provide an update both on the final median PFS as well as the safety profile as final evaluation.

But in a broader context, we’re looking at that response in the whole development plan for any drug for prostate cancer. How good is the efficacy? Is the safety manageable to move forward? What is the competitive landscape? What else do we have in our clinical pipeline in the prostate setting.

And then ultimately, given our broad pipeline and so many active drugs ask the question for doing a Phase three study, do we want to devote it to this molecule or to other molecules? And I think the general conclusion, which we have expressed previously is that for us to go forward with all the other success, if we’re successful in all those other parameters, we would want to have a partner to take forward given the cost of doing a large Phase three study. So we will provide updates very shortly about the opportunity on VOBER DUO and probably at a later time later this year present a more wholesome full data set for the entire program. So people get an appreciation of what was done in the Tamarac study.

Peter Lawson, Biotech Analyst, Barclays: Got you. So the idea of a partner for kind of a large Phase III study, would that also sort of capture both Vopraduo and also the kind of the next generation, the TOPO1 labeled?

Scott Koenig, President and CEO, MacroGenics: So as you know, Peter, we have been very successful in the whole history of the company of doing partnerships. So we’re very open to different strategies on partnering molecules. I would say that it would be more likely just to focus on a vobra duo opportunity with a partner, but we never discount that if somebody wanted to have a broader relationship, given that as I already alluded to that we have multiple B7H3 targeted molecules that we might possibly include that. So never excluded, but I would say the inclination would be to focus on just the Vopraduo as an opportunity. Got you.

Peter Lawson, Biotech Analyst, Barclays: Do you think Vopraduo versus O2, so it’s do you think there’s a difference in the different indications that could go on?

Scott Koenig, President and CEO, MacroGenics: Oh, absolutely. Again, if you recall, the strategy which we set out a number of years ago was that experiences as everyone is well aware is that different tumors will respond to different chemotherapies and mechanisms of action. We had a excellent variable domain antibody for targeting B7H3. And so we started out with the durokomycin as the first toxin, but as more data came in on the potential of TOPO1 inhibitors to treat lots of different tumors and our relationship with Synafix identifying what we think is a superior topo one inhibitor platform. We said it would be, I think, a smart idea for us to develop two parallel molecules.

So in the context for instance, we’re talking about prostate cancer, it may be VOBER DUO may be better than a TOPO1 inhibitor. We just don’t have enough data right now on O26 to address that at this point.

Peter Lawson, Biotech Analyst, Barclays: Got you. Okay, perfect. Thank you.

Scott Koenig, President and CEO, MacroGenics: And then

Peter Lawson, Biotech Analyst, Barclays: the efficacy from or the difference in efficacy you get from a Topo one payload, is that depth of response? Is it durability?

Scott Koenig, President and CEO, MacroGenics: I think it could be all depending on the tumors. As you know, a lot of competitive molecules out there right now targeting B7H3 has shown very good efficacy for instance in small cell lung cancer. Depending on which study you look at probably about half the patients have had objective responses. But in the end, it’s what line of therapy you’re going to give it, are you giving this as a single agent or in combination? What is standard of care of this?

And I think as I have highlighted for the ultimate treatment for prostate cancer, this is not the drugs on the market are not curative, they’re palliative. And so ultimately doing combination therapy with orthogonal mechanisms, I think will be the best way to go to hopefully get to a cure for prostate cancer.

Peter Lawson, Biotech Analyst, Barclays: Which of I was going to open it for you. So with O2CIT and Voura, when you look at that versus DAEH’s molecule,

Scott Koenig, President and CEO, MacroGenics: which are more similar and Well, I would declare without the data that we have a superior molecule. But all joking aside, there is some rationale to that opinion. First of all, on the antibody side, we think we have a better variable domain than Daiichi molecule. We have actually made what we believe to be a copy of their molecule and we know that we have excellent tumor to normal tissue binding ratios and an excellent incorporation of linker toxins into cells and seems to be superior to the variable domain that they have are using in their lead molecule. I secondly would argue that based on the SINIFYX preclinical data and even some clinical data that’s out there with a linker toxin for the topo one exotecan, it has a profile that could be quite superior to the direct satican basis for the Daiichi Merck molecule.

In particular, data has been shown that it’s more potent, meaning Synafix platform. It has lower ability to induce multi drug resistance. And by the nature of the fact that the linker toxin is hooked on to a engineered glycan within the Fc domain. If you go back to the data that Daichi has presented with regard to interstitial lung disease, they account for both in HER2 as well as the B7 H3 interstitial lung disease to be secondary to the binding of the Fc domain of their linker toxin to alveolar macrophages and other granular sites, which are in the lung. Because the Synafix platform knocks out Fc receptor binding by virtue of the binding to the glycan site, one would expect that the likelihood of interstitial lung disease should be reduced.

Now this is theoretical, but that’d be another reason. So great antibody looks like great, a linker toxin. And I would also point out that the same linker toxin isn’t has been licensed for other targets. And for instance, INNOVENT is now doing a Phase three study with a claudan eighteen-two based on very good Phase two data. So we think we have a nice combination here of a superior variable domain and a superior TOPO1 linker toxin that should bode well for the future development.

Peter Lawson, Biotech Analyst, Barclays: Perfect. Thank you. And Daichi is not pursuing prostate cancer. Is there suspicion why or why not?

Scott Koenig, President and CEO, MacroGenics: Well, I would again, speculation. I don’t live in the bowels of Merck or Daiichi, but if you go back to the original Phase one data, which had about fifty patients in late stage prostate cancer, their RPFS value was 5.3. So not very encouraging. Already as we have pointed out for VOBERDUO, we were at eight, eight point five and we’re hoping with the final data will be even higher. So it may be that they do not feel that their molecule or TOPO1 is sufficient to address prostate cancer and the prospects for other tumor types may be better for them.

Got you.

Peter Lawson, Biotech Analyst, Barclays: Thank you. And

Scott Koenig, President and CEO, MacroGenics: the

Peter Lawson, Biotech Analyst, Barclays: I guess as we think about O2CIT, can that be accelerated quickly, just because based on your prior experience, does that help you with kind of dose escalation or prioritization of various indications?

Scott Koenig, President and CEO, MacroGenics: I think we have tremendous experience and insights on this target and the whole development process here. I would say that the Phase one study is going exceptionally well. A lot of investigators who participate in the study are clamoring for additional slots in our trial. I would say that we’re in a dose range that is maybe actually the dose we ultimately select or within one dose away. So I think by the second half of the year, we should be in a good position to select a dose and have once we get the pharmacokinetic feedback from our data set back and obviously a little more experience with additional patients.

So with regard to particular indications, my expectation is that we will select a few to move forward into expansion into Phase II development.

Peter Lawson, Biotech Analyst, Barclays: Got you. Thank you. And then are you currently enrolled in Okemos or do you

Scott Koenig, President and CEO, MacroGenics: I would say there’s a very wide range of tumors. There are a few exclusionary tumor types that we have not that are not participating, but it’s a very wide set of tumor types.

Peter Lawson, Biotech Analyst, Barclays: And they’re not tested for B7H?

Scott Koenig, President and CEO, MacroGenics: No. This is irrespective of B7H3 expression.

Peter Lawson, Biotech Analyst, Barclays: Do you get a sense if there is kind of a threshold level or if there’s a

Scott Koenig, President and CEO, MacroGenics: Well, our experience in both on the 26 molecule on VOBER DUAN and our previous molecules, so far has not identified a direct association of density of expression with responsiveness. Clearly, there are certainly tumors that have higher H scores and higher percentages of cells, but we just don’t have enough data to say whether there is a particular cutoff value for responsiveness.

Peter Lawson, Biotech Analyst, Barclays: Got you. Thank you. And when we see the data, kind of how much data should we expect to see? What is it?

Scott Koenig, President and CEO, MacroGenics: It’s a typical Phase one study and I can’t give you the ultimate final numbers on these. I mean, these are usual cohorts of three patients going up. And I would say it could be anywhere from 20 to 50 or 60 patients from that initial Phase one. We have designed the study that you could do little mini cohort expansions. So I don’t know what the ultimate final data set is

Peter Lawson, Biotech Analyst, Barclays: going to show. Maybe on just on loragellumab, just kind of what when we could see the initial top line kind of PFS

Scott Koenig, President and CEO, MacroGenics: number? So we’re very excited about loragelumab, which is the tetravalent PD-one by CTLA-four bispecific. The LORIKETE study, which is a 150 patient study, two:one randomization in patients who with castration resistant prostate cancer that are naive to chemotherapy. One hundred patients are getting standard of care dosing of docetaxel plus loragirlimab versus fifty patients getting docetaxel alone. We finished enrollment of that study in December and given the historical time for progression for the control group, which could be anywhere on the average of median of about five, six or seven or eight months in that range.

I think we’ll be in a good position in the second half of this year to know where the study is going. This is an open study, so there are interim looks on the data, but it’s an event driven readout here of PFS. So I can’t give you precision about this, but I think given where the enrollment was completed, my projection would be second half of this year, we’d be in a good position to say, hey, is the study moving in the right direction? Where are we going with next steps with lorazirumab going forward for prostate cancer? I should also note that we will announce very shortly another tumor indication that we are going to proceed with loragilumab.

So we are encouraged by what we have seen historically in the dose escalation of loragilumab, our expansion studies, the LORIK HEET study to date to move forward with another tumor indication.

Peter Lawson, Biotech Analyst, Barclays: Perfect. Thank you so much. It was a pleasure, Chen.

Scott Koenig, President and CEO, MacroGenics: Always a pleasure. Thank you, Tim.

Peter Lawson, Biotech Analyst, Barclays: Thanks a lot.

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