Scott Koenig - President and Chief Executive Officer James Karrels - Senior Vice President, Chief Financial Officer and Secretary

Michael Schmidt - Leerink Partners Christopher Marai - Oppenheimer [Call Starts Abruptly] Second quarter 2015 financial and operational results. For anyone who has not had a chance to review our results, we issued a press release this afternoon, outlining today’s announcement which is available under the Investors tab on our website at www.macrogenics.com. You can also listen to this conference call via webcast on our website. It will be archived there for 30 days beginning approximately two hours after the call is completed. I would like to remind listeners that we will make forward-looking statements on today’s call and therefore, I would like to also remind you 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. Now, I would like to turn the call over to Dr. Scott Koenig, MacroGenics’ President and Chief Executive Officer.

Thank you, Jim. As always, I welcome everyone participating via conference call and webcast today. Thank you for joining us. I’d like to touch on three themes during this call that we consider essential to MacroGenics in our efforts to direct the immune system to treat cancer and other diseases. Those themes are MacroGenics’ diversified pipeline of novel clinical development candidates including margetuximab, a next-generation anti-HER2 antibody that has just commenced Phase 3 testing. MGA271, a first-in-class anti- B7-H3 antibody and several novel bi-specific DART molecules that have been strategically positioned to address unmet medical needs in patients with hematological malignancies and solid tumors as well as autoimmune disease. Second, our research including the antibody engineering expertise and target discovery efforts that are at the heart of our company. Our research and engineering efforts are constantly replenishing and strengthening our pipeline with additional development candidates in new data and third, advances in our operational infrastructure, which underpins our growing portfolio of programs. Following that, we’d be glad to have a discussion during the Q&A period, but first, I’ll ask Jim to conduct a review of our key financials.

Thank you, Scott. This afternoon we reported financial results in line with our expectations briefly as we described in our release MacroGenics had research and development expenses of $22.7 million for the three months period ended June 30, 2015 compared to $17.3 million for the three months period ended June 30, 2014. This increase was primarily due to the clinical study preparations for the margetuximab Phase 3 SOPHIA study, the commencement of a DART Phase 1 Study and increased activity related to IND preparations for MGD009. Some of these expenses were offset by decrease in MGD011 spending after this program is transferred to Janssen following our submission of the IND in March. We had general and administrative expenses of $5.3 million for the three-month period ended June 30, 2015, compared to $4.1 million for the three-month period ended June 30, 2014, primarily due to higher stock-based compensation expense and labor costs, as well as information technology-related expenses. We recorded total revenues consisting primarily of revenue from collaborative research of $6.7 million for the three month period ended June 30, 2015 compared to $9.2 million for the three month period ended June 30, 2014. Collaborative research revenue includes the recognition of deferred revenue from payments received in previous periods as well as payments received during the year. For the quarter ended June 30, 2015, we had a net loss of $21.4 million compared to a net loss of $12.3 million for the three month period ended June 30, 2014. As of June 30, 2015, our cash and cash equivalents were $235 million, compared to $157.6 million as of December 31, 2014. Subsequent to the close of the quarter we completed an equity offering of 4,053,750 shares including full exercise of the underwriters' overallotment option generating net proceeds to MacroGenics of $141 million. In addition, as we announced last week, our collaboration partner, Janssen Biotech Inc. chose the first patient in the Phase 1 study of MGD011 which triggered the achievement of a $10 million milestone. Based on the company’s current cash balance, we believe that we continue to be in a good position to advance our growing pipeline of product candidates along with our recently announced efforts to accelerate the development of checkpoint inhibitor-based molecules and the planned expansion of our manufacturing capacity for anticipated clinical and commercial needs. With that, I will hand the call back to Scott.

Thanks, Jim. Again I’ll review our pipeline, our platform and then touch on operational infrastructure before we open up the call to your questions. Our pipeline as I have often emphasized, is deep in terms of its number of product candidates as well as the very indications we are pursuing. We are part of the fact that each of these candidates was generated using MacroGenics’ proprietary platform which includes our Fc-optimization, Dual Affinity Re-Targeting or DART and cancer stem like cell technology. Starting off, I am very pleased to announce that we recently enrolled the first patient in the pivotal Phase 3 SOPHIA Study of margetuximab in patients with metastatic breast cancer. As a brief review SOPHIA is a pivotal study on margetuximab plus chemotherapy in patients with third-line metastatic breast cancer. A total of 530 patients with higher levels of HER-2 expressions will be enrolled in this study. For these purposes, we mean expression of HER-2 at the 3+ level by immunohistochemistry or 2+ level by IHC with gene amplification. Eligible patients who have progressed on earlier lines of HER-2 directed therapy. This is important to note when considering the potential position for margetuximab in the treatment landscape as there is currently no consensus regarding the standard of care for treatment of HER-2 positive patients who have progressed despite standard first and second-line treatments. As many of you know, data from our Phase 1 study margetuximab represented at the ASCO Annual Meeting earlier in the quarter. To summarize, monotherapy anti-tumor activity was observed across several tumor types including patients with gastric, colorectal and head and neck cancer, as well as patients with breast cancer who had received extensive prior therapy and progressed on prior HER-2 directed therapy. Tumor reductions were observed in 13 of 19 evaluable patients with breast…

Apparently, we cannot hear the operator. We are trying to…

We cannot hear anything on this side.

He says, he is speaking on another line. We can hear him.

Hello there, sir.

Yes, we haven’t heard anything.

Yes sir, I think we had a technical difficulty in my computer. I apologize for the delay there. [Operator Instructions] Our first question comes from Michael Schmidt of Leerink. Your line is open.

Hey, good afternoon and thanks for taking my questions. Scott, I just had one MGA271. I guess, could you provide some more color the breadth and depth of data that you’ve planned to present later this year?

Yes, Michael, thanks very much for the question. As we’ve indicated in the fourth quarter, we’ve planned to present the original monotherapy cohort, as you recall, we had a dose escalation up to 15 mgs per kg of MGA271. We then did three expansion cohorts of approximately 15 patients each which included patients with melanoma prostate cancer and then a mixed basket of other tumors of which no more than five patients about any given tumor type were represented. We will present all that data, plus, as you recall, we started five additional monotherapy cohorts which I’ve outlined including the triple negative breast, head and neck, renal cell cancer, the melanoma group that had progressed on other checkpoints and then the higher expressers in the lung cancer and bladder cancer group. We are still recruiting that monotherapy cohort, I would say, we have just under half of that cohort enrolled. And so patients will still be continue on treatment. So we will present a subset of that data as well. And it will be too early to present any of the data on the combination studies because those are just been initiated.

Great, thanks. And then, I had one on MGD010, the autoimmune DART. How is that being positioned? Is that being positioned as for broad indication or more towards niche autoimmune diseases?

The opportunity here is quite a unique one via the mechanism of action of this molecule. By colligating the two receptors on the B-cells and down regulating B-cell activation, which includes the production of auto-antibodies, we think that this can be used potentially quite broadly in both large and this indication. As you recall, Michael, we also had some pre-clinical data in reconstituted immunodeficient mouse models where we showed that we could also impair a T-cell mediate effect preventing a graft-versus-host disease in animals that received MGD010 at the time of reconstitution of those animals. And so there maybe also an ancillary effect on sensitizing T-cells which may also help us to broadly – this molecule to many different autoimmune indications.

Great, terrific. And one more if I may. I recall Pfizer had a pester at ASCO on a DART molecule that they is working on with you and my question is, are there any updates from any of the other partnered programs and what are your expectations for potential milestone or license payments going forward?

At this point, though we have ongoing collaborations with a number of different partners, but we are right now at not at liberty to bring new up-to-date on where they are in the development process. These are primarily research relationships and it is incumbent on them to announce their plans for further development. I think the Pfizer opportunity is a great one. They’ve obviously now publicized the fact that they are moving into development with a CD3 and PCAT here in DART like molecule. But at this time, we are not at liberty to discuss any of the other collaborations.

Okay. Great. Thanks so much and congrats on the progress.

Thank you so much.

Thank you. Our next question comes from Christopher Marai of Oppenheimer. Your line is open.

Hi, good afternoon. Thanks for taking the question. Just really curious about MGD006, that’s a CD123 CD3 by specific. I guess, that’s enrolling right now in a Phase 1 patients with AML. I was wondering if you could comment on how enrollment in that trial is going if you are encountering any issues, or difficulties. If I recall correctly, this is a continuous infusion molecule. And then, finally any feedback I guess from the physicians with respect to that, any tweaks that you might want to make to that trial? Thanks.

Thanks, Chris, I appreciate the comment. As you’ve characterized quite correctly, this is the only DART molecule in which we do not have an FC component to it and so that this molecule has a very short half life and we are administering this as of constant infusion over four days, which time the patients then stop treatment and then we restart the following week four days on three days off, four days on, three days off. As you call when we started this trial, we had one single site at – and currently right now, we have approximately five sites in the US that are recruiting patients. So, while we recognize this is that obviously we had to expand the number of sites to recruit a population that is obviously a difficult one because these patients are acute and often when you are in a screening process, when they are ready to go, they may have a complication even before they enter in the trial. And so, while we started this trial last year, it’s been slower than – obviously I liked it, but, at this point, we continue to do the dose escalation. What I can say is, is that, we are - obviously this is a molecule that we have a partnership with a survey on and we are in plans with them to even expand this program even further to hopefully next year include sites in Europe. And also broadly indications beyond the AML and to other targets which over express CD123. So we expect in 2016 to be able to update you on the clinical progress of this program.

Okay, great. And then just on the – I guess, the short half life, I know, you know there maybe some advantage to that in some sense and in some indications, could you maybe elaborate on that? I guess, the question is, where does this fall relative to some potential competition in this space that’s got the longer short acting half life and how do you look to sort of have an advantage there? Thanks.

So we are well poised to answer that in the sense that, given that the broad number of different indications in which this molecule can be used, there maybe certain settings where you want that – have the shorter half life. In other cases, you want to have a longer half life. We have right here at the belt and that’s the bearing version of this molecule as an alternative in cases where we want to have an extended half life. But, as this was the first DART molecule we moved to the clinic, we felt that it was most prudent to have the short acting half life where we had the total control both on the safety and an efficacy standpoint. So we had the great latitudes, now that we not only have the experience with the short half life having this year we will have four different other molecules with a long half life to be able to then make a decision whether it is necessary to introduce a longer half life in CD123 molecule. So, we have that latitude.

Okay, great. Thanks for the color. Congratulations on the quarter.

Thanks so much.

Thank you. [Operator Instructions] Our next question comes from Stephen Willey of Stifel. Your line is open.

Hi, this is [Indiscernible] calling in for Stephen Willey. Congratulations on the progress made thus far and a wonderful quarter. I just have a couple of questions with respect to the mechanism of action for the MGA271, B7-H3 molecule. I was wondering if you could just give us some sort of indication as to what you think the mechanism of action is and what the rationale is for the combination with other checkpoint inhibitors please.

Well, thank you very much for that question. We are very excited about the prospects of MGA271. It targets a very interesting molecule B7-H3 as you know quite well, there was a very large literature that shows that over expression on almost every solid tumor is associated with a worst clinical outcome when patients tumors bear high levels of this antigen. Mechanistically, we’ve taken advantage of the fact that tumors have high levels of expression but normal tissues have very low levels of expression and so that’s why we were able to design a molecule that incorporated our enhanced FC-receptor engagement. As a consequence, we had shown quite nicely in published data that we can get dramatic increase killing of not only tumor cells that express this antigen, but also cancer stem cells and we have very good evidence that we can control the growth of blood vessels which are associated in the growth of tumors. So mechanistically, we know that the direct killing of that can have a dramatic effect on tumor growth. But in addition, because this molecule has been shown quite nicely to inhibit T-cell activation and the activation of other immune cells, here is the additional possibility that by downgrading reducing of the density of the expression on tumor cells, we may allow some of the adapted immune T-cells to engage in an active immune response. At this point, in the context of a clinical studies, we don’t know right now which mechanism bears the greatest impact on the growth of tumors. There are also other ancillary mechanisms which maybe employed here, the fact is, is that there is a strong literature that shows that B7-H3 maybe involved in tumor cell migration, which may lead to greater metastases and in fact that may also impart a biological function on tumor cells as well. So, we hope as we continue to advance forward with these clinical studies and we begin to acquire tissues from the patients themselves, we’ll be getting a better insight in terms of the impact on the mechanism. Ultimately, the generation of antigen-specific T-cell responses which has been showed to be very important may in fact obviously be favored by combining this and one of these many mechanisms by which MGA271 maybe acting with the reenergizing the T-cells that are found in a tumor compartment.

Brilliant. That was – thank you so much for answering that. Can I just ask one more question, which is pertaining to D700 or D007, could you just let us know, because you are exploring this particular molecule in a number of indications and do all these indications have evidence of over expression of GPA33? And if so, how would you standardize for that?

So let me clarify this and correct it. Currently, the only indication we are pursuing at this time are patients with advanced colorectal cancer.

Okay.

Over 95% of these patients, of cancer cells both primary metastatic cells expressed GPA33. There also is a minority of other GI tumors which also express GPA33 including gastric cancer and pancreatic cancer. So, right now, we are just focusing on the colorectal population. Obviously, this is a somewhat a heterogeneous population, but at this point, we are not distinguishing between different colorectal cancer types.

Brilliant. Thank you very much and again fantastic quarter.

Thank you so much.

Thank you. Again we apologize for the technical difficulty in queuing participants’ questions. [Operator Instructions] At this time, there is no other questions in queue. I’d like to turn it back to Dr. Koenig for any closing remarks.

Thank you operator and thank you all for joining us. I hope to see many of you at our R&D Conference in October. Have a great day.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes your program. You may now disconnect.