Good afternoon. We will start the MacroGenics 2020 third-quarter corporate progress and financial results conference call shortly. I will now hand the call over to Jim Karrels, senior vice president and chief financial officer of MacroGenics. Please go ahead, sir.

Thank you. Good afternoon, and welcome to MacroGenics' conference call to discuss our third-quarter 2020 financial and operational results. For anyone who has not had the chance to review these results, we issued a press release this afternoon outlining today's announcements, which is available under the Investors tab on our website at macrogenics.com. You may also listen to this conference call via webcast on our website where it will be archived for 30 days beginning approximately two hours after the call is completed. I would like to alert listeners that today's discussion will include statements about the company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our annual, quarterly and current reports filed with the SEC. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change except to the extent required by applicable law. And now I'd like to turn the call over to Dr. Scott Koenig, president and chief executive officer of MacroGenics.

Thank you, Jim. I'd like to welcome everyone participating via conference call and webcast today. This afternoon, I will provide key highlights from our clinical programs. But before I do so, let me first turn the call back to Jim who will review our financial results for the quarter.

Thank you, Scott. This afternoon, MacroGenics reported financial results for the quarter ended September 30, 2020, which highlight our financial position, as well as our recent progress. As described in our release this afternoon, MacroGenics total revenue, consisting primarily of revenue from collaborative arrangements, was $18.2 million for the quarter ended September 30, 2020, compared to $18.7 million for the quarter ended September 30, 2019. Revenue recognized during the quarter ended September 30, 2020, included a $15 million milestone from Incyte. Our research and development expenses were $44.7 million for the quarter ended September 30, 2020, compared to $44.9 million for the quarter ended September 30, 2019. General and administrative expenses were $9.7 million for the quarter ended September 30, 2020, compared to $11.8 million for the quarter ended September 30, 2019. This decrease is primarily due to a reduction in external expenses, including consulting costs. MacroGenics net loss was $36 million for the quarter ended September 30, 2020, compared to a net loss of $44.6 million for the quarter ended September 30, 2019. Our cash, cash equivalents and marketable securities as of September 30, 2020, were $280.7 million, compared to $215.8 million as of December 31, 2019. During the quarter ended September 30, 2020, we received $75.7 million in gross proceeds from the sale of approximately 2.55 million shares of our common stock pursuant to an at-the-market or ATM offering at an average sale price per share of $29.67. With the sale of these shares, we fully exhausted the dollar amount of shares that were available for sale under the ATM. As you may have seen, we filed a new one this afternoon in the amount of $100 million as a matter of financial housekeeping. We believe that it is prudent to have this financing vehicle in place for potential future use. Let me also point out that the $15 million milestone from Incyte was received after September 30, 2020, and was therefore reflected on our balance sheet as a receivable. Finally, there is no adjustment necessary to our previously disclosed cash guidance. And to remind listeners, we anticipate that our cash, cash equivalents and marketable securities as of September 30, 2020, combined with anticipated and potential collaboration payments, should enable us to fund our operations into 2023 assuming the company's programs and collaborations advance as currently contemplated. And now I'll turn the call back to Scott.

Thank you, Jim. We continue to be excited about the momentum we have built to date in 2020, as well as the events we are anticipating during the remainder of the year and into 2021. We are particularly excited about the multiple registrational or potentially registration-enabling studies currently under way that involve MacroGenics' own molecules or those we have partners. First, we await the near-term PDUFA date decision by the U.S. FDA regarding margetuximab in late-line HER2-positive metastatic breast cancer. Next, we announced earlier this year our ongoing registrational trial of flotetuzumab in the treatment of primary induction failure refractory AML. Third, Provention Bio recently completed the rolling submission of their BLA for teplizumab for the delay or prevention of clinical type 1 diabetes in at-risk individuals. You'll recall that we had earlier developed and sold teplizumab to them in 2018. If approved, we would receive a $60 million milestone, as well as royalties on sales. Finally, Incyte has multiple ongoing potentially registration-enabling studies for retifanlimab, which we licensed to them in 2017. We are advancing our other internal and partnered programs with the goal of evaluating additional patients across multiple indications in order to potentially define the next set of registrational studies. I'd like to use this time to walk you through the updates on our portfolio of eight clinical molecules. I will start with flotetuzumab, an investigational bispecific CD123 x CD3 DART molecule and our most recent product candidate to enter a registration study. During the third quarter, two manuscripts were published in Blood and Blood Advances, both publications of the American Society of Hematology. The first reported on clinical results as of November 2019, while the most recent one reported on the role of flotetuzumab in the immunotherapy of TP53-positive acute myeloid leukemia. In addition, we are very excited that six flotetuzumab and AML abstracts, including two orals and four posters, were accepted for presentation at the upcoming ASH annual meeting. My understanding is that these abstracts will be released by ASH tomorrow morning. We look forward to presenting additional data on this molecule next month. I'll quickly remind listeners that MacroGenics continues to enroll a single-arm registrational clinical study to evaluate flotetuzumab in up to 200 AML patients with primary induction failure or early relapsed AML with complete remission and CR with partial hematological recovery as the primary end point. I'll next discuss MGC018, our investigational antibody drug conjugate designed to deliver a DNA-alkylating duocarmycin cytotoxic payload to cells that express B7-H3. Post-ASCO, we selected three milligrams per kilogram as the recommended dose for expansion. We recently commenced the enrollment of patients with metastatic castration-resistant prostate cancer, triple-negative breast cancer and non-small cell lung cancer in the dose expansion portion of the Phase 1 clinical study. The rationale for selecting metastatic castration-resistant prostate cancer patients is based on promising activity in dose escalation, which we previously presented at ASCO. Moreover, through our own IHC analysis of over 1,500 tumor tissue samples to date, we know that many solid tumors express B7-H3 with several tumor types at exuberant levels. We selected triple-negative breast cancer as the second dose expansion cohort based on its B7-H3 expression coupled with unmet medical need. Finally, we selected non-small cell lung cancer not only due to its high degree of B7-H3 expression but also because of the results previously reported at SITC 2018 regarding the activity of enoblituzumab, our B7-H3 monoclonal antibody, in combination with an anti-PD-1 in the non-small cell lung cancer setting. We are focused on execution of the MGC018 study and expect to provide an update on it next year. Next, I would like to turn to tebotelimab, our investigational bispecific PD-1 x LAG-3 DART molecule previously known as MGD013. Recall that we previously reported that LAG-3 expression on immune effector cells was enhanced by margetuximab, our investigational Fc-engineered monoclonal antibody targeting HER2. Given the early efficacy signal and acceptable safety profile observed in an initial small expansion cohort of patients, we are evaluating the combination of tebotelimab and margetuximab in three subgroups of patients with HER2-positive tumors: one with gastric or gastroesophageal junction cancer, another with breast cancer, as well as a basket of other HER2-positive cancer types, with 30 patients initially targeted for each group. We believe that combining Fc-engineering and checkpoint blockade has the potential to engage both innate and adaptive immune responses against a broad range of tumors with varied tumor microenvironments. We plan to present the poster on the ongoing Phase 1 dose expansion study of tebotelimab in combination with margetuximab in a cohort of patients with advanced HER2-positive tumors at the upcoming Society for Immunotherapy of Cancer annual meeting. I believe that abstracts will be officially released by SITC next week. In addition, we will have a poster presentation at ASH next month regarding tebotelimab in DLBCL. Also, based on early association of biomarkers with clinical responsiveness to tebotelimab that we first reported at ASCO, we are completing an assessment of biomarkers that can be used to screen and select patients who would have a greater likelihood to respond to treatment, including patients with DLBCL and solid tumors. We look forward to providing these updates. Speaking of tebotelimab, I'd like to tell you about a study combining this molecule with another of our Fc-engineered antibodies. In the first quarter of 2021, we are planning to initiate a combination study of enoblituzumab, which targets B7-H3 in a chemo-free regimen in frontline squamous cell carcinoma of the head and neck, with either tebotelimab for patients who are PD-L1 negative or with retifanlimab in patients who are PD-L1 positive. Blockade of the PD-L1/PD-1 inhibitory access with retifanlimab is ideally suited for tumors with an underlying inflammatory response, as indicated by the positive PD-L1 score at baseline. In contrast, PD-L1-negative tumors or those tumors lacking a T-cell infiltrate may benefit from an Fc-engineered antibody like enoblituzumab. Enoblituzumab has been shown to induce an inflammatory T-cell response in tumors in a neoadjuvant clinical study of patients with newly diagnosed prostate cancer. It has also been shown to enhance expression of checkpoint molecules, including both PD-L1 and LAG-3. Therefore, patients may benefit from the concomitant treatment with tebotelimab through the combinatorial blockade of the PD-1 and LAG-3 axes. Moving on to margetuximab. The PDUFA target action date for our BLA in metastatic HER2-positive breast cancer is December 18, 2020. In early October, we had our late cycle meeting with the U.S. FDA. Based on the current accrual rate of the overall survival events in the Phase 3 SOPHIA study, MacroGenics now anticipates accrual of the 385th OS event, which triggers the final OS analysis to take place in the second half of 2021. The FDA has stated that they intend to meet their PDUFA date obligation based on the SOPHIA study's primary PFS end point. With the PDUFA date right around the corner, we are planning for the commercialization of margetuximab if it is approved. As we have previously discussed, we do not currently intend to develop an internal sales force. Instead, we are evaluating a number of arrangements with third parties, including providers of sales, marketing, distribution, and logistics services, as well as potential biopharmaceutical commercial partners who may assist us with the potential launch of margetuximab. Beyond breast cancer, the Phase 2/3 MAHOGANY study is evaluating margetuximab and checkpoint blockade as a frontline treatment for advanced gastric and gastroesophageal junction cancer. Module A, the single-arm part of the MAHOGANY study of margetuximab and retifanlimab, an investigational anti-PD-1 antibody, is enrolling. We expect to submit data on a subset of the initially targeted 40 patients for presentation at a scientific conference in the first half of 2021. MacroGenics' partner in Greater China, Zai Lab, recently announced dosing of the first patient in that region for Module B, the randomized component of MAHOGANY that will evaluate margetuximab plus chemotherapy versus margetuximab plus chemotherapy plus either retifanlimab or tebotelimab versus standard of care, which is trastuzumab plus chemotherapy. Let me next discuss MGD019, our investigational bispecific checkpoint DART molecule that targets PD-1 and CTLA-4. At the ESMO Virtual Congress in September, data from our Phase 1 dose escalation study of MGD019 was reported via oral presentation. MGD019 was well tolerated in patients who received less than 10 mg per kilogram. Notably, dose-dependent upregulation of the inducible costimulator or ICOS molecule was evident in treated patients, including those who responded to MGD019 therapy, as well as T-cell expansion. Based on activity that was reported, we are expanding the study initially in patients with microsatellite stable colorectal cancer and checkpoint-naive non-small cell lung cancer at the recommended Phase 2 dose of six milligrams per kilogram. Let me next turn to retifanlimab, previously known as MGA012 and INCMGA0012, the investigational anti-PD-1 antibody that we licensed to Incyte. MacroGenics and Incyte have each established multiple development programs for this molecule, evaluating it either as monotherapy or in combination with other agents. Incyte is conducting clinical trials that are potentially registration-enabling for patients with metastatic non-small cell lung cancer, squamous cell carcinoma of the anal canal, MSI-high endometrial cancer and Merkel cell carcinoma, while MacroGenics is conducting the potentially registration-enabling study in HER2-positive gastric cancer, as I mentioned previously. At the ESMO Virtual Congress in September, data from Incyte's Merkel cell carcinoma and anal cancer monotherapy studies were presented. Initial safety and activity data appear to be comparable to that of approved anti-PD-1 monoclonal antibodies. During the third quarter, Incyte initiated the Phase 3 PODIUM-304 clinical trial, which is evaluating the efficacy and safety of retifanlimab with platinum-based chemotherapy in patients with metastatic squamous and non-squamous non-small cell lung cancer. This triggered a $15 million milestone payment to MacroGenics. We expect Incyte to initiate PODIUM-303 in patients with anal cancer in the coming months. In October, we entered into a commercial supply agreement with Incyte as contemplated by our collaboration and license agreement, pursuant to which we are entitled to manufacture a portion of the global commercial supply needs for retifanlimab. We plan to manufacture commercial retifanlimab at our 5x2000-liter-scale GMP facility in Rockville, Maryland. I will remind listeners that under our collaboration agreement with Incyte, we are eligible to receive up to a total of $390 million in potential remaining development and regulatory milestones and up to $330 million in potential commercial milestones. If retifanlimab is approved and commercialized, MacroGenics would be eligible to receive royalties tiered from 15% to 24% on future worldwide net sales of the molecule. Finally, we expect our second antibody drug conjugate, IMGC936, an ADC targeting ADAM9 that is being advanced under a co-development agreement with ImmunoGen to enter clinical testing in the near term. Under our 50-50 collaboration, ImmunoGen is leading clinical development, and they are currently screening patients for the Phase 1 dose escalation study in patients with select advanced solid tumors. As we hope you can see, we continue to build momentum and advance our pipeline of innovative product candidates. We would now be happy to open the call for questions. Operator? Operator, before you release the talk here for questions, I'd like to add that the seven abstracts accepted for ASH were prematurely released today. As such, we released a press release earlier today noting the title and times of the presentation at ASH. With that, operator, let's open the call for questions.

Thank you. Our first question comes from the line of Yigal Nochomovitz with Citigroup. Your line is open.

Thank you very much for taking the questions. Congratulations on the progress. It was interesting to compare the flotetuzumab ASH abstract that was just released with the 2019 ASH slides. The incremental response rate appears to be quite good, at seven out of ten. I was curious if there was anything specific or different about those patients that contributed to the 70% incremental response rate, compared to the initial nine out of twenty-eight response rate observed in the 2019 data.

Thanks, Yigal, for the question. So the presentation at last ASH was approximately 30 patients. What happened is that we treated a very large group of patients subsequent to the ASH meeting. The only patients that were presented in the 38 that were in the abstract were those that were limited to a fewer lines of therapy, as we have outlined with the FCA, in our plans for our registration study. We have eliminated some of the patients or a significant number of those patients that we presented last year. So more than half the patients that you're going to see at the upcoming ASH meeting are newly treated patients that have been enrolled in the study under the little more restrictive criteria. But you are absolutely right, we are seeing improved response rates even compared to the data from last year.

Okay. Great. And then I was just wondering on MGD019. You've announced plans for the expansion cohorts in MSS CRC and non-small cell lung cancer. But you did have a complete response, as I understand it, in a metastatic castrate-resistant prostate cancer patient. Any particular reason you've chosen not to do an expansion cohort in mCRPC?

Excellent question. Obviously, we're very excited about the activity of this molecule. We had to make some decisions in terms of priority. Given the need for treating patients with microsatellite stable colorectal cancer and seeing both patients that have objective responses, as well as tumors that shrunk, we thought it would be worthwhile to expand that study to see how profound that signal was in colorectal cancer. Therefore, if I look at the non-small cell lung cancer, clearly, there has been a lot of work on ipi/nivo combinations. We therefore want to establish how MGD019 was performing compared to the large database that's already available for ipi/nivo. But we have not lost sight of the value of using MGD019 in castration-resistant prostate cancer. As you recall, there has been activity that's been tested for ipi/nivo combinations in that indication. While Bristol did not succeed in that trial, there was some activity in that combination. Given that we also have explored the use of enoblituzumab, our other B7-H3 molecule targeting prostate cancer with a collaboration with the group at Johns Hopkins in an IST and what we saw is patients with single-agent activity in this, we are considering moving forward with MGD019 possibly even in combination with enoblituzumab. But right now, that's on the drawing board, and nothing has been definitely decided yet.

Thank you. Our next question comes from the line of Evan Seigerman with Credit Suisse. Your line is open.

Thank you, operator. Hi, Scott. I appreciate you taking my question. Congratulations on the progress made this year. I know you started discussing plans for commercializing margetuximab, mentioning the possibility of using a contract sales organization or partnering. Are you waiting to see the MAHOGANY Module A data before making that decision? I'm trying to understand when we might see commercial sales of margetuximab and any thoughts on how you plan to position the asset in the breast cancer market. Thank you.

Yes. Evan, thanks so much for your comments and your question. As you point out and as we stated today, we are exploring different avenues for commercialization, both looking at potential contracting relations so that we have drug available if the FDA approves it by the PDUFA date in the early part of next year. We are also in discussions with certain companies who might also serve to commercialize this drug for us in the U.S. We expect that again, if it's approved by the end of the year, we should be in a position to be making an announcement about our plans for commercialization sometime around December or early next year. With regard to the decision around Module A, that is totally independent. Clearly, the opportunity to expand into a gastric setting front line would be great, but the data still has to mature. We're still enrolling in that part of the study. With regard to positioning this asset for other breast cancer indications, there is an IST that has been initiated in patients with newly diagnosed breast cancer, testing it compared to standard of care in a neoadjuvant setting. As we pointed out, the activity we're seeing in late-line HER2-positive tumors in combination with tivo, which include breast cancer patients, we're continuing to expand that cohort. Hopefully, that may, if successful, provide an avenue to further develop margetuximab in a chemo-free regimen. So we're very excited about the prospects obviously and wait to hear from the FDA by the PDUFA date.

And just one follow-up on MGC018. So I know we had some really interesting data at ASCO, and you plan to provide a data update in the first half of 2021. I guess any thoughts as to what tumor types you want to pursue this in? Or is this more of a tumor-agnostic setting for a potential pivotal trial assuming that the Phase 1 data update is positive next year?

We are currently screening patients for expansion in those with metastatic castration-resistant prostate cancer for MGC018, aiming to enroll up to 40 patients to validate and extend our findings. Additionally, we are enrolling two smaller cohorts, one for triple-negative breast cancer and another for non-small cell lung cancer, with patient screening beginning soon. These three indications are our initial focus, but we are not limited to just them. We have demonstrated that B7-H3 is significantly overexpressed in various common solid tumors. If our data from these indications proves successful, we will consider additional indications, both as a standalone therapy and in combination with other treatments. There are opportunities to expand into combination therapy based on the positive feedback we have received regarding alternative strategies for tumor control.

Excellent. Thanks so much, Scott, for the color on both of those questions.

Thanks.

Thank you. Our next question comes from the line of Tom Shrader with BTIG. Your line is open.

Hi. This is Kaveri for Tom. Thanks for taking our questions. For the Module B of MAHOGANY study, you're evaluating combinations with both PD-1 and PD-1/LAG-3. Can you tell us how do they fit into the treatment landscape?

We are excited about this. Enrollment has just begun through our partner Zai Lab, and we plan to start enrolling in that part of the study next year. The goal is to build on the Fc Optimization technology, which activates both innate and specific immunity. The question arises for patients who are PD-L1-positive; they may only need treatment with an anti-PD-1 to achieve enhanced therapeutic benefits. However, for those who are PD-L1-negative, we have observed that Fc Optimization can enhance other checkpoint molecules like LAG-3. Using a molecule like tebotelimab, which is a PD-1/LAG-3 bispecific, in combination could lead to improved responses. This was the rationale behind designing that molecule. I would likely favor the combination with tebotelimab, but we will need to wait for the data as it becomes available.

That's useful. And do you expect to screen patients for LAG-3 levels based on the emerging data?

That's a great question. Regarding Module B, we do not have plans to screen those patients. However, we can retroactively analyze that in the context of the gastric study. We are preparing for a presentation at SITC on the combination of margetuximab and tivo in the late HER2-positive populations, along with data we've already shared about the relationship between LAG-3 expression and responsiveness in our monotherapy cohorts. By the end of this year or early next year, we aim to provide more details on our plans for biomarker screening. Currently, we believe that LAG-3 expression, whether measured through IHC or transcript levels, may be a valuable biomarker, but we might consider adding others to our screening process to identify populations that we hope would respond to tebotelimab.

That makes sense. And does the cohort combining PD-1, CTLA-4 make sense before starting a large cohort?

Can you clarify the specific indications you're referring to? Please provide more details on what you're looking for, and I'll be glad to assist you.

Thank you. Our next question comes from the line of Jonathan Miller with Evercore.

Hey, thanks for taking my question. Congratulations on all the progress. I noticed there was a significant increase to the ATM facility, but there wasn't any updated guidance provided. Was the amount of cash you secured included in your previous guidance, or are you spending it? If you are spending it, what new initiatives are you adding that weren't previously planned? Additionally, I wanted to inquire about the PD-1/LAG-3 plus margetuximab combination expansion in gastric that you're incorporating into the Phase 1 study mentioned in the 013 section of your talk. Will this Phase 1 expansion cohort potentially be available before the MAHOGANY Part B data? If so, how does that influence your approach for HER2 and the bispecific combinations in the controlled trial? Lastly, I wanted to congratulate you on using the term exuberant to describe B7-H3 expression levels across multiple tumor types.

Thank you very much, Jon, for those comments, including the use of the word exuberant. I will address the second question, and then either Jim or I can provide insights on the ATM. Regarding the PD-1/LAG-3 in combination with margetuximab for late-line patients, these individuals have likely progressed on HER2 and other therapies. We are currently awaiting that expansion cohort, which we plan to enroll up to 30 patients. As you saw in our earlier presentation, several patients responded positively to this treatment. Since we are pursuing a Module B in a frontline setting, we view these as two distinct pathways. With Module B, we are adding chemotherapy, while in the late-line setting we are examining this approach without chemotherapy. Therefore, we have two entirely different strategies for the use of tebotelimab. Regarding the ATM, it presents opportunities to extend our timeline into 2023. However, the proceeds from this have not been allocated to any specific program. Jim, would you like to add anything?

Yes, real quickly, Jonathan. The ATM obviously extended our runway a bit further into 2023. At this point, we're not providing the granularity with regard to exactly how far along it takes us. Recall that we do stand to potentially receive up to, I guess, what remains, $390 million of milestones from Incyte as well, as Scott mentioned, the $60 million from Provention Bio related to the BLA should it be approved from the teplizumab program. All that together, the runway does take us out a little bit further. But at this point, we're not really going to be precise about how far into '23 it takes us.

Thank you for the clarification. I have a follow-up question regarding the non-small cell cohort for 019. Since you aim to directly compare or at least conduct a cross-trial comparison with the ipi/nivo combinations, I assume your main focus is on first-line treatment. Could you elaborate on the types of patients you expect to include? Is there a chance that you may also enroll later-line therapy patients who are still checkpoint-naive in this expansion cohort? How would you approach making that comparison in such cases?

Yes. That's a good question, Jon. Obviously, we haven't started enrolling that. Clearly, we are planning to initiate most of the recruitment of this outside the U.S., where ipi/nivo combinations have not been approved in the frontline setting. So again, it's possible that we may include post-first-line patients that have been naive to anti-PD-1 or ipi. But the majority, we hope, will be frontline patients.

Thank you. We will now go back to Kaveri. Your line is open.

Hi. This is Kaveri again for Tom. Just rephrasing my last question here, are there any hints in the literature or that you have uncovered as to the potential different places to use PD-1/LAG-3 versus PD-1/CTLA-4?

Thank you for your question. It seems we are beginning to clarify that there may be different T-cell populations involved. The activation or inhibition of T cells through CTLA-4 occurs in different areas compared to LAG-3. As we've explained, each molecule is designed for various purposes. Specifically, the PD-1/CTLA-4 combination was created to significantly lower the toxicity that was noted at higher doses of ipilimumab. By utilizing a bispecific DART molecule, we appear to be focusing on the co-expressing cells of PD-1/CTLA-4 within the tumor microenvironment, along with some that express only PD-1. This presents a valuable opportunity for application in various tumor types. Regarding PD-1/LAG-3, it's still too early to pinpoint specific indications, but based on our initial data, we seem to be witnessing responses particularly in tumors such as triple-negative breast cancer, some ovarian cancers, and lung cancers. We will also provide updates on DLBCL. It’s clear that certain T-cell populations and tumor types may be better suited for one approach over the other.

That's helpful. Thank you, and congrats on the progress.

Thank you.

Thank you. Our next question comes from the line of Stephen Willey with Stifel. Your line is open.

Yes. Thanks for taking the question. So just going back to flotetuzumab for a moment. And I think, Scott, you and I maybe talked about this before, but I guess just curious as to what proportion of the responding patients might be progressing to transplant. And I guess given that this is now a registrational trial, how does that potentially complicate the interpretation of duration of response just for the purposes of potential accelerated approval?

So Steve, it's still too early to determine the exact percentage of patients who will proceed to transplant, as most of these patients are usually not eligible for such procedures. We need to consider whether they have a matched donor available, their overall health conditions apart from the AML, their age, and other factors. However, we are optimistic that over 50% of these patients may eventually qualify for and undergo transplant. Currently, that appears to be the percentage we are close to achieving.

Okay. And has there been any regulatory dialogue about just how that gets incorporated into the agency's consideration of duration of response, which they've traditionally held to be kind of a fairly important metric for the purposes of accelerated approval?

Yes. We had that discussion with them on how to monitor those patients and include them in terms of survival and duration of response. There will be an analysis that's devoted to those patients who go on to transplant. It is actually part of our secondary end points of the study.

Understood. Got it. And then just a question on the MARGOT trial. And I know this is investigator sponsored, so I don't know to what extent you can provide some context around the trial design. But was just kind of curious as to what's the end game here, right? I mean it's obviously overpowered in terms of it being kind of a proof-of-concept trial, but it's probably not sufficiently large enough for any kind of regulatory consideration. So I guess if you could just maybe walk us through like the rationale for having such a large kind of open label with an active comparator, single site, that many patients, that would be helpful.

Are we talking about the neoadjuvant study you're talking about?

Yes, correct.

Yes. It's not a single site. There are expected to be around 19 sites involved. This is a consortium, so the study will likely take place at some of the major breast cancer centers in the country. Our focus is on the F allele population, and we aim to utilize the beneficial effects of the engineered Fc region to achieve a better response. While this study wasn't designed to be sized for regulatory approval, we hope to observe trends that indicate a benefit. That’s the intent at this stage.

Thank you. Our next question comes from the line of Etzer Darout with Guggenheim Securities. Your line is open.

Great. Congrats on the progress, and thanks for taking my question. So first question for me. Maybe if you can speak to the response one would expect in relapsed/refractory AML patients with TP53 mutations just to help maybe put the 60% response we're seeing with that population from flotetuzumab into some sort of context. And then I have a second question.

Yes. As you know, this is one of the most challenging mutated subsets in AML where the expectation of responsiveness is less than 10%. So the fact that we were seeing such a high response rate in the subset makes us very excited about the initial data. Obviously, we will expand this with additional patients and monitor this. But the data speaks for itself.

Great. Thanks for that. And then secondly, for MGD013, I'm not sure if you really can comment on this. But we know in this complete response in DLBCL, that was a CD9 experienced patient. But I wondering if you could elaborate at all on the other three patients that had partial responses and whether or not those were also sort of CAR-T experienced. Obviously, this is sort of from the abstracts released today.

Yes. Etzer, I recommend waiting for the upcoming SITC meeting, which is just around the corner. We will likely have additional information to share at ASH in about a month. Details regarding those patients will be presented there. By then, we should also be able to add some more evaluable patients to that cohort. In the abstract, we could only include patients who had already been scanned by the cutoff date, but a few more patients will be part of that analysis. We are eager about the activity we are observing. Additionally, we will examine various biomarkers linked to responsiveness.

Thank you. Our next question comes from the line of Jonathan Chang with SVB Leerink. Your line is open.

Hi, team. This is John Barrett on for Jonathan. A couple of questions on flotetuzumab. Regarding the registrational trial now running for that molecule, what would be the overall benchmark to define a positive trial for flotetuzumab? And based on all the translational research you've presented, are there any predefined patient subgroups for this molecule, which you could seek approval if you do not meet the activity threshold in the overall population?

Thank you for your question, John. We are not providing specific benchmarks at this time. Historically, patients who do not respond to high-dose chemotherapy on their first salvage attempt show a low double-digit response rate at best. After subsequent failures, the success rate diminishes significantly to low single digits or none at all. We conducted a thorough analysis of literature spanning 30 years to estimate the mean and median response rates in this patient population based on various treatment regimens, which we shared with the FDA to support the design of a registrational study. While we cannot disclose specific details due to competitive reasons, you can infer the range we anticipate, given our historical success with this molecule in these populations. As for the biomarkers you mentioned, we have considered working with predefined populations based on them, but we are still in the exploratory phase. We aim to expand this data and will conduct a retrospective analysis of current patients participating in the ongoing studies. You will receive more information at the upcoming ASH meeting. Besides the TP53 population, there are other biomarkers we can combine with gamma-interferon associated genes to identify responsive groups, which will become the focus of future studies and designs.

Got it. And one more just regarding execution for that trial. Do you have any expectations on how long this trial could enroll or take to come to the end of the trial?

Yes. So again, we've been guiding that our aspiration is to enroll this by the end of next year. Given the whole COVID-19 situation, we were hoping that there wouldn't be a flare in Europe. As you've heard, a number of countries again are shutting down their hospitals. Right now, we're still on target in terms of our enrollment rates, but I can't predict what's going to happen over the next few months. The hope is that we'll have this enrolled by the end of next year.

Got it. Thank you.

Thank you. Our next question comes from the line of Boris Peaker with Cowen. Your line is open.

Hey, this is Cynthia asking on behalf of Boris. Thank you for taking our question. Regarding the ADAM9 ADC, could you share what you and ImmunoGen are considering for patient selection? Are you planning to screen for ADAM9 expression levels? Additionally, based on the available data, are there specific tumor types that seem promising for the Phase 1 dose escalation? Thank you.

So thanks very much for the question. Of course, we're very excited with our partner ImmunoGen on the initiation of this trial. I expect they will also provide some update on their conference call regarding that study. We had defined several different tumor types for enrollment in the dose escalation part of this study but did not define this based on ADAM9 levels of expression. Clearly, this is something we can analyze retrospectively. With regard to expansions, that will obviously be dictated on both the responsiveness and safety we see in the dose escalation phase.

Thank you. Our next question comes from the line of Peter Lawson from Barclays. Your line is open.

Hey. Thanks for taking the question. Congrats on the progress. Just firstly, just on the next update for the prostate data for MGC018, is that in the first half or is that for the other indications, triple-negative breast cancer or lung that we see?

Thanks, Peter. As I've mentioned on previous calls, our goal was to enroll this as quickly as possible. As I noted earlier, we're screening these patients now. We like to get as many of the 40 patients in the first half by the first half of next year. Our plan is to try to provide an update no later by midyear next year.

Perfect. Thank you. And then do you get a better sense of how it's working so well in prostate? Is that something to do with the tumor microenvironment? Or what are your thoughts there?

Peter, as I mentioned earlier, we don't believe there's anything specific to prostate cancer based on the data from our Phase 1 study. It seems that it was somewhat coincidental that one of the first patients who responded was at the two mg per kg level. Consequently, the investigators decided to include more prostate patients at the two or three mg per kg dose since they had no other treatments available and saw it as an opportunity. I should also mention that among the two patients with non-small cell lung cancer, one at 0.5 mg and the other at two mg per kg, both experienced tumor reductions, with the patient at two mg per kg showing a 24% reduction in a significant lung mass. At this point, we don't see the microenvironment as the determining factor, though we are examining various immune markers which could play a role. It's important to remember that we noted immune activation as a consequence of using this specific epitope with the ADC. In the initial design of the Phase 1 study, we planned to combine retifanlimab with MGC018. However, due to the impressive responses observed in the prostate patients, we've put that combination study on hold, but we do intend to pursue some combinations with retifanlimab or one of our other checkpoint molecules in the future.

Thanks for the update around that. ADAM9, the ADC, when can we see the initial data for that?

Well, again, with the studies just starting, and it will all be dictated by obviously the ability to recruit patients, which I don't think will be difficult. There will be several sites opened that will be enrolling patients. Clearly, we'll have to obviously monitor the safety as well. It's just too early to give you any advice about the timing.

Great. It seems that partnering for margetuximab is currently on hold due to the upcoming commercialization.

That's not what I was saying, and maybe what I said was misinterpreted. We are in discussions both looking at various vendors that can help us get the drug available to patients to use it. Obviously, there are a lot of steps on bringing a drug to market. We are also working with groups that can fully commercialize that, including typical biopharmaceutical companies. As I noted earlier in this call, if we have an approval by the PDUFA date, we should be in a position around that time or soon thereafter to discuss the commercialization of that molecule. So nothing is really on hold. We're actually actively discussing prospects with various partners.

Great. Okay. Thank you so much. Thanks for taking my questions.

Thank you. Our next question comes from Yigal Nochomovitz with Citigroup. Your line is open.

Thank you for the follow-up. I have two questions about margetuximab and one about flotetuzumab. You mentioned the PDUFA date of December 18, but didn’t mention an Advisory Committee meeting. Does this mean the FDA is no longer planning on holding one for margetuximab? Also, it seems like the timeline for the 385th overall survival event has changed from the end of this year to the second half of next year. Can you clarify if this shift indicates anything regarding the overall survival benefit? Regarding flotetuzumab, could you explain the comment in the abstract about outpatient dosing, especially considering the decline in CRS events during the first cycle? How can outpatient dosing be achieved when the first cycle involves a 28-day continuous infusion? Thank you.

Thank you, Yigal, for the follow-up. We announced earlier this year that the FDA informed us that an outcome was not necessary, and there has been no change in that status. The interaction with the FDA has been very positive. They make the final decision, but we are on track to meet their PDUFA requirements. Regarding the 385th event, you've highlighted an important point: the overall deaths are slowing down. We've observed a numerical reduction in deaths among patients treated with margetuximab compared to trastuzumab, and we are hopeful that this trend will continue, as it suggests that these patients may be living longer. Concerning flotetuzumab and its outpatient dosing, it’s important to note that the initial eight days of treatment for patients has been well tolerated. There is a lead-in dosing during the first week, where we typically see the greatest occurrence of any cytokine release that may need to be addressed. However, we have significantly reduced the associated risks linked to CRS. Consequently, these patients may use a pump and a pack that they can take home, which they would then replace with a new infusion every few days. This approach is similar to what is used with blinatumomab.

Okay. Got it. Thank you so much.

Thank you. I'm showing no further questions in the queue. I would now like to turn the call back over to Dr. Scott Koenig for closing remarks.

Thank you, operator, and thanks, everybody, for participating in our call today. We look forward to speak to you about updates at a future call. Have a nice evening.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.