Good afternoon. We will start the MacroGenics 2022 Third Quarter Corporate Progress and Financial Results Conference Call shortly. I will now hand the call to Jim Karrels, Senior Vice President and Chief Financial Officer of MacroGenics.

Thank you, operator. Good afternoon, and welcome to MacroGenics Conference Call to discuss our third quarter 2022 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 2 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 would like to turn the call over to Dr. Scott Koenig, President and CEO of MacroGenics.

Thank you, Jim. I'd like to welcome everyone participating via conference call and webcast today. This afternoon, I will provide key updates on our clinical programs as well as our recently announced collaboration with Gilead. But before I do so, let me first turn the call back to Jim, who will review our financial results.

Thank you, Scott. This afternoon, MacroGenics reported financial results for the quarter ended September 30, 2022, 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 agreements, was $41.7 million for the quarter ended September 30, 2022, compared to total revenue of $15.7 million for the quarter ended September 30, 2021. Revenue for the quarter ended September 30, 2022, included $30 million in milestone payments from Incyte related to retifanlimab, which they licensed from us in 2017. Revenue for the quarter ended September 30, 2022, also included MARGENZA net sales of $4.4 million compared to $3.6 million for the quarter ended September 30, 2021. Our research and development expenses were $48.2 million for the quarter ended September 30, 2022, compared to $49.8 million for the quarter ended September 30, 2021. The decrease was primarily related to decreased retifanlimab manufacturing costs for Incyte and decreased costs related to discontinued studies. These decreases were partially offset by increased development, manufacturing, and clinical trial costs related to MGC018, increased expenses related to discovery projects and preclinical molecules, and increased clinical expenses related to lorigerlimab and MGD024. Our selling, general and administrative expenses were $15.4 million for the quarter ended September 30, 2022, compared to $17.2 million for the quarter ended September 30, 2021. The decrease was primarily related to decreased MARGENZA selling costs as well as decreased consulting expenses. Our net loss was $24.8 million for the quarter ended September 30, 2022, compared to a net loss of $52.9 million for the quarter ended September 30, 2021. Our cash, cash equivalents, and marketable securities balance as of September 30, 2022, was $123.6 million compared to $243.6 million as of December 31, 2021. The September 30, 2022 balance did not include $60 million subsequently received from Gilead in October 2022. Finally, in terms of our cash runway, we anticipate that our cash, cash equivalents, and marketable securities balance as of September 30, 2022, the $60 million subsequently received from Gilead, projected and anticipated payments from partners, product revenues, as well as anticipated savings from our previously announced corporate restructuring plan, should extend our cash runway into mid-2024. This updated cash runway guidance reflects anticipated expenditures related to the planned Phase II portion of the MGC018 TAMARACK study as well as MacroGenics other ongoing studies. In addition, we note that the potential approval of the teplizumab BLA later this month, which would obligate Provention Bio to provide us with a $60 million milestone within 90 days of that approval, would help us achieve a 2-year cash runway. And now I'll turn the call back to Scott.

Thank you, Jim. In the past few months, we demonstrated our ability to generate nondilutive capital via partnering efforts, which enabled us to collect $30 million in milestone payments from Incyte and the subsequent receipt of the $60 million upfront payment from Gilead. We are very excited to advance MGD024 in collaboration with Gilead. Also, we continue to operationalize the TAMARACK study of MGC018, which has a new name, vobramitamabduocarmazine, in prostate cancer and believe we should be able to dose our first patient in the study by year-end. Finally, with enrollment completed in the monotherapy dose expansion study of lorigerlimab, we look forward to sharing clinical data in the first quarter of 2023. With that backdrop, let me walk you through updates on our portfolio of investigational clinical molecules, starting with vobramitamabduocarmazine or MGC018, an ADC designed to deliver a DNA-alkylating duocarmycin cytotoxic payload to tumors expressing B7-H3. B7-H3 is a member of the B7 family of molecules involved in immune regulation. Vobramitamab, duocarmycin, was designed to take advantage of this antigen's broad expression across multiple solid tumor types. We continue to make progress as we operationalize the TAMARACK study. We've begun initiating clinical sites and expect to start the TAMARACK study by year-end with anticipation of interim data from the Phase II portion of the study in 2024. Next, let me update you on lorigerlimab. We continue to dose patients in the Phase I dose escalation combination study of vobramitamabduocarmazine with lorigerlimab in patients with advanced solid tumors, including renal cell carcinoma, pancreatic cancer, ovarian cancer, hepatocellular carcinoma, mCRPC, and melanoma. You may recall that based on data from our preclinical studies, antitumor activity with vobramitamabduocarmazine may be enhanced by combination therapy with an anti-PD-1 agent without significant incremental toxicities. During the second quarter, we completed enrollment of the Phase I/II dose expansion study with lorigerlimab as monotherapy in cohorts of patients with microsatellite stable colorectal cancer, mCRPC, melanoma, and checkpoint-naive non-small cell lung cancer. Many patients are still on study. And while we will wait to provide a clinical update on this study in the first quarter of 2023, I'll mention that we're very encouraged by what we've seen so far. We look forward to sharing data with you in early 2023. Next up, MGD024 is our next-generation bispecific CD123 x CD3 DART molecule that incorporates the CD3 component designed to minimize cytokine-release syndrome while maintaining anti-tumor cytolytic activity and permitting intermittent dosing through a longer half-life. Our Phase I dose escalation study of MGD024 is ongoing in patients with CD123-positive relapsed or refractory hematologic malignancies, including acute myeloid leukemia and myelodysplastic syndromes. Of course, we're thrilled to have Gilead as a collaboration partner to advance MGD024. Last month, we entered an exclusive option and collaboration agreement with Gilead to develop MGD024 and up to 2 additional bispecific research programs in oncology. The agreement grants Gilead the option to have the exclusive license to MGD024. As part of the agreement, Gilead paid us an upfront payment of $60 million, and MacroGenics will be eligible to receive up to $1.7 billion in target nomination, option fees, and development regulatory and commercial milestones. MacroGenics will also be eligible to receive tiered double-digit royalties on worldwide net sales of MGD024, and a flat royalty on worldwide net sales of products resulting from the 2 additional research programs. MacroGenics will be responsible for the ongoing Phase I study of MGD024, and Gilead may elect to exercise its option to license the program at predefined decision points. The Phase I study will include a dose escalation segment and an expansion segment that has been intended to evaluate MGD024 as monotherapy and in combination with other therapies across multiple indications. Next, I will provide an update on our product candidates being developed by our collaboration partners for which we retain certain economic rights. As Jim mentioned earlier, we and Provention await the FDA's decision on teplizumab, an anti-CD3 monoclonal antibody that Provention acquired from us under an asset purchase agreement in 2018. Provention is developing teplizumab for both the treatment and prevention of Type 1 diabetes. The extended PDUFA target action date for the prevention of Type 1 diabetes indication is November 17, 2022. MacroGenics is eligible to receive royalties on net sales of teplizumab, if approved, in addition to milestone payments that totaled $170 million, inclusive of the $60 million U.S. approval milestone. Retifanlimab is an investigational anti-PD-1 mAb that we exclusively licensed to Incyte Corporation. MacroGenics is eligible to receive royalties on net sales of retifanlimab, if approved, in addition to milestone payments. In July 2022, MacroGenics received $30 million in milestone payments from Incyte as part of its collaboration agreement. Retifanlimab is currently being studied as monotherapy or in combination with other agents across multiple studies. Finally, as a reminder, we previously announced in August our restructuring plan, which included the prioritization of our pipeline of product candidates, a 15% workforce reduction, and plant closures of 2 facilities with the goal of delivering value-creating data with our existing and anticipated financial resources. All of these cost-saving measures are proceeding according to plan. With our continued progress through 2022, we remain committed to developing and delivering life-changing medicines to cancer patients. We would now be happy to open the call for questions.

The first question comes from John Miller at Evercore.

This is Jessica Hui on for John. I have 2 questions from me. My first question is, what exactly is included in the cash runway guidance that gets you to mid-2024 besides the $60 million upfront payment from Gilead? The press release mentioned projected and anticipated future payments from partners and product revenues, and those are part of the anticipated cash runway. Can you give us an idea of what payments these include and what potential milestones can further extend the cash runway to at least the end of 2024? For example, is the $60 million milestone payment from Provention Bio already baked in? Or could the data update that you're expecting for their PD-1/CTLA-4 in 1Q '23 lead to something? And then my second question is the press release also mentioned that Gilead may elect to exercise this option to license the program at clinical predefined decision points. Can you give us a little bit more color on what these decision points entail? Is it fair to say that the Phase I data would be one of these points? Does Gilead have a timeline for their choice?

Our next question comes from Jonathan Chang of SVB Securities.

First question, congrats on the recent Gilead partnership. I'm curious to hear your thoughts on business development broadly regarding other pipeline assets post this deal.

Our next question comes from David Dai with SMBC.

I also want to say my congratulations on the recent progress. One question on the MGC018. Could you talk a little more about the biological rationale for combining MGC018 and lorigerlimab? I understand that you will also be presenting dedicated data at SITC. Could you maybe help us understand if you will be testing this combination in the trial?

Yes. For all the participants on the call, we are currently experiencing difficulties with your ability to hear the answers when your questions are being addressed. We are not encountering the same issue on our end. Please bear with us for a moment as we work to resolve this.

Just in response to your question, the rationale behind combining MGC018 and lorigerlimab is that we identified mechanistically that combining an ADC with a blockade of PD-1 presents orthogonal mechanisms that lead to enhanced immune responses and enhanced targeting against targets. Given the success we've seen so far with the bispecific lorigerlimab, we now have the additional blockade.

Operator, you need to turn off.

Yes. The additional rationale is now utilizing, instead of just retifanlimab, the bispecific is based on the encouraging monotherapy data we have already observed. So the ideas were to optimize both checkpoint blockade as well as the ADC activity. So that's the rationale.

Maybe we can go back...

Yes. Let me go back to Jonathan's question. Jonathan, regarding the business development activity, as you are well aware, we have been very active for many years in continuous business development engagement on both our clinical and preclinical portfolio. I am pleased to say, in addition to the success of the recent partnership with Gilead, we have ongoing discussions on various fronts, both on clinical assets and preclinical assets. I have nothing more to describe at this point, but you could anticipate that as time goes on over the course of the year, we should have additional activity being discussed.

And Jonathan, you are live on the stage, if you would like to ask a follow-up question.

This is Jessica. I just got back in the line. I guess, to my second question, the predefined decision points in which Gilead may elect to exercise their option to license the program. Could you give us some more color on that?

So Jessica, Jim tried to answer that question, but let me just reiterate, because of the nature of the agreement, we are not permitted to specifically define the points where Gilead can enter into the option period to take a license during this option period. Having said that, they can do it at any time. They will be continuing to monitor the clinical results on the dose escalation. And then as we described today, there are plans to do additional combination studies going forward. So at any time during this examination of the molecule, they can opt in.

Our next question is coming from Charles Zhu with Guggenheim Partners.

I was wondering if there are any updates on the option period for Gilead to take a license.

Operator, it sounds like you haven't dropped that line.

Could you provide some color on the progress of the MGC018 dose escalation study in combination with lorigerlimab? I think the study has been ongoing since earlier this year with the newer Q4 weekly dosing. And I was wondering if your early 2023 lorigerlimab update could potentially provide some more insight into that combination as well?

Yes, Charles. Again, without specifying the timing of things, I would say we set the dose of the lorigerlimab component at 6 mg per kg, and that continues. The plan was to dose escalate reasonably with the MGC018 starting at 1 mg per kg. As you recall from our dose escalation, we began to see clinical responses even at low doses of MGC018. So with regard to the timing of when we might be able to see some clinical results, they can occur at any time we believe, given that our plan is to dose escalate fairly rapidly, obviously, paying attention to the safety profile of that combination and doing that appropriately. At any particular time, we may elect to do an expansion of a particular cohort. So it's just too early to say when that will occur, but it could happen in '23, even in the early part of '23.

And maybe one follow-up, if you don't mind, on the lorigerlimab program update, specifically in 2023. So looking forward to that one for sure. I was wondering if you could also help us contextualize the lorigerlimab update relative to some of the other PD-1/CTLA-4 bispecific data that we've seen emerging, both recently and some others that we may see very soon at the upcoming SITC conference?

Yes. As we noted today, we have been encouraged by the data we've completed in the 4 expansion cohorts, our enrollment plans. We will discuss one or more of these expansion cohorts, which, in several cases, are quite considerable. Given that, as we've already noted, we are conducting combination studies. We are also looking at plans potentially to move forward in monotherapy studies in one or potentially more indications, and all of these will be discussed early in 2023. I should also note that we have made comparisons with many of the competitor PD-1/CTLA-4 type molecules, and I can state that our molecule compares quite favorably to all those that we've tested.

Our next question is coming from Lucas Shumway with BMO Capital Markets.

The question is on the evolving prostate cancer study. What are your views on the opportunity for MGC018, and what clinical benchmarks are you looking for comparison? For a second question, what's your latest thinking on development for tebotelimab? Do you think we could expect business development actions similar to what we saw with MGD024?

With regard to MGC018, we have prioritized in the current year to operationalize the planned Phase II/III study in patients with castration-resistant prostate cancer who have progressed on chemotherapy, as well as one androgen-receptor targeting agent. As we noted today, we plan to have the first patient in by the end of the year, looking at the major part of the enrollment occurring in '23 in this population. That is the major focus right now. Additionally, as we just discussed, we are conducting the combination study of MGC018 with lorigerlimab. Based on the results of that data, that could lead into additional indications and other opportunities in prostate cancer. Regarding tebotelimab, we have been prioritizing our programmatic spend. We have exciting data that we have reported on to date, both in solid tumors as well as in DLBCL post CAR-T therapy. We are in discussions looking for additional capital regarding future studies, and we've spent a lot of time identifying opportunities that we believe are most promising in the solid tumor setting as well as in hematological malignancies. Those discussions are ongoing now, but I have nothing more to report regarding specific partnerships or the magnitude of those partnerships.

Our next question comes from Silvan Tuerkcan.

I have 2 quick questions regarding teplizumab and the Provention Bio progress. They announced this morning that they're in labeling discussions there. How confident are you in the approval coming soon in November? When do you think royalties to you will be meaningful considering your MARGENZA sales? If you could answer that, it would be great.

With regard to the Provention announcement today, we have been very encouraged all along with their public communications. We know nothing more than what was stated publicly today. However, we sense that we are exactly 2 weeks from the PDUFA date, and they would not be putting out these reports of the labeling and post-marketing commitments if they weren't encouraged by this. So we, like everyone else, are waiting for, hopefully, the approval of the drug within the next 2 weeks. Regarding royalties, you mentioned MARG royalties. The only royalties we would anticipate are from our partner, Zai, in China. We have ongoing sales with EVERSANA concerning our Zai partnerships, and they have expectations of receiving approval sometime next year. Nothing more to really say regarding the magnitude of such royalties on the product.

I have a follow-up question. I might have missed this in earlier questions. So we still expect MGC018 data next year, and I believe it was in the first half, if I'm not mistaken. I have a question around the dosing since you have changed the dosing recently. Will the update that we'll receive be in prostate cancer, and will it be with the new dosing regimen of 2 milligrams per kg and 2.5 milligrams per kg?

Yes. We have not treated any new patients as of yet with those 2 dosing schedules; that will start when we begin the TAMARACK study. Obviously, these doses were derived from our analysis of the patients originally started at 3 mg per kg on a Q3 weekly basis, and how those doses were altered during the course of those patients' therapy. Our plans for future disclosure regarding the program will happen when we determine which additional cohorts we will advance into Phase II development.

Operator, if I could address one of the questions that was first asked regarding cash runway, I believe Jessica asked the question. Jessica, we have not disclosed the specific milestones other than in aggregate that we could potentially receive from our various partnerships. When we think about cash runway, we probability adjust those that we believe are reasonably within our reach. Regarding the $60 million from Provention, for example, we do have a portion of that in our budget, not the full amount; that's similar with other items as well.

At this time, we have no further questions. So I'd like to turn it back over to the company for closing remarks.

First of all, we apologize for the technical issues today; it was beyond our control. We look forward to having further discussions on our progress at future conference calls and earnings calls. We look forward to speaking with you at that time.

Thank you for your participation in the program. You may now disconnect.