Good afternoon. We will begin the MacroGenics 2019 Fourth Quarter Corporate Progress and Financial Results Conference Call in just a moment. All participants are in a listen-only mode at the moment, and we will conduct a question-and-answer session at the conclusion of the call. At this point, I will turn the call over to Anna Krassowska, Vice President, Investor Relations and Corporate Communications of MacroGenics.

Thank you. Good afternoon and welcome to MacroGenics’ conference call to discuss our fourth quarter 2019 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 Web site at macrogenics.com. You may also listen to this conference call via webcast on our Web site 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, Anna. I’d like to welcome everyone participating via conference call and webcast today. Thank you for joining us. This afternoon, I will provide an update on our clinical programs and the advancements expected during the year. But before I do so, let me first turn the call over to Jim Karrels, Senior Vice President and Chief Financial Officer who will review our financial results for the year.

Thank you, Scott. This afternoon, MacroGenics reported financial results for the year ended December 31, 2019, which highlight our financial position as well as our recent progress. As described in our release, MacroGenics had research and development expenses of $195.3 million for the year ended December 31, 2019 compared to $190.8 million for the year ended December 31, 2018. This decrease was primarily due to the continued enrollment across our multiple ongoing clinical trials. We had general and administrative expenses of $46.1 million for the year ended December 31, 2019 compared to $40.5 million for the year ended December 31, 2018. This increase was primarily due to an increase in consulting costs related to market research and other commercial preparation activities. Consistent with our prior communications, we have no intention to build out a sales force at this time as our strategy remains to partner the commercialization of margetuximab. Nonetheless, there is a modest preparatory investment in pre-commercial efforts that we believe may be necessary. We’ve recorded total revenue consisting primarily of revenue from collaborative agreements of $64.2 million for the year ended December 31, 2019 compared to $60.1 million for the year ended December 31, 2018. This increase was primarily due to the timing of revenue recognition under our collaborative agreements. Included in our 2019 total revenue was $24.3 million recognized under various supply agreements with our collaboration partners, including Incyte Corporation and Zai Lab with regard to our development and manufacturing activities that support supply of partnered product candidate drug material. I will also point out that of the $25.4 million in other income we recognized for the year ended December 31, 2019, approximately $20 million related to both the revaluation of warrants we received as consideration on the license and purchase agreements with Provention Bio and the gain on sale of the underlying 1.95 million shares of Provention Bio mostly during the fourth quarter. We had a net loss of $151.8 million for the year ended December 31, 2019 compared to net loss of $171.5 million for the year ended December 31, 2018. And finally, our cash, cash equivalents and marketable securities as of December 31, 2019 were $215.8 million compared to $232.9 million as of December 31, 2018. We anticipate that our cash, cash equivalents and marketable securities as of December 31, 2019 combined with anticipated and potential collaboration payments will enable us to fund our operations into 2021, assuming our programs and collaborations advance as currently contemplated. Through the prioritization of programs and ongoing realignment of resources, we are focused on extending our cash runway into 2022. And now, I’ll turn the call back to Scott.

Thank you, Jim. As we outlined in January, as the product candidate in our pipeline advanced to later stage trials, we are prioritizing those programs that we believe have the highest scientific and commercial merit as well as potential to achieve regulatory approval. As I will describe later in more detail, we took several actions to prioritize and focus. We discontinued development of two clinical stage molecules; MGD007 and MGD009. Going forward, we expect to pursue only focused dose expansion cohort in one or two tumor types for each molecule currently in Phase 1 dose escalation. We prioritized modularly of the Phase 2/3 MAHOGANY study and we modified the design of the planned Phase 2/3 registration directed study of enoblituzumab. Let's begin with margetuximab, our investigational Fc-engineered, anti-HER2 antibody. In December 2019, we submitted a Biologics License Application or BLA to the FDA for the treatment of patients with metastatic HER2-positive breast cancer in combination with chemotherapy. The safety and efficacy results provided in the BLA are primarily from the pivotal Phase 3 SOPHIA study, which is evaluating margetuximab plus chemotherapy compared to trastuzumab plus chemotherapy in patients with HER2-positive metastatic breast cancer who have received prior anti-HER2 therapies. Updated results from the study were presented at the San Antonio Breast Cancer Symposium in December 2019. Recently, the BLA was accepted for review by the FDA. Accordingly, we expect a Standard Review process with an anticipated Prescription Drug User Fee Act or PDUFA date by the end of 2020. We also expect that the FDA will require an Oncologic Drugs Advisory Committee or ODAC meeting in the second half of 2020. Separately, in February 2020, our regional partner in Greater China, Zai Lab, announced that they initiated a bridging study to support the potential registration in Greater China of margetuximab…

[Operator Instructions]. The first question comes from Debjit Chattopadhyay of H.C. Wainwright. Your line is open.

Good afternoon. This is Earl DeSouza in for Debjit. Can you hear me?

Yes. Hi, Earl.

Hi. So a couple of questions from our end. First is on MGD013. When should we expect that data? Is that more an AACR or ASCO event? And additionally, what threshold of activities do you think is both compelling and convincing from single-arm studies? The second question we have is regarding the BLA acceptance and you guys mentioned something about the commercial launch and wanted to know how do you see this adoption of marge in the post DS-8201 world? And if we could squeeze one more, it’s regarding flotetuzumab. Any further updates on the regulatory dialogue and is the plan still a single-arm expansion cohort in primary refractory patients as a registration study? Thank you so much.

Thanks so much, Earl. So MGD013 PD-1 x LAG-3, we submitted abstract to ASCO. Obviously we’ll have to wait to hear the response. But given the content we have placed in the abstract which included the dose escalation of the molecule as well as expansion into multiple cohorts composed of nine different tumor types where we’ve treated over 150 patients, we expect obviously an opportunity in forum to present that data. With regard to the specific threshold that we would expect to be acceptable, it varies greatly from tumor to tumor. What we’ve incorporated in this study to patients that have received previous checkpoints, ones that were naïve to checkpoint treatment in some cases we’ve also had some limited studies in combination therapy. So it varies from tumor to tumor type. And so you’ll have to wait until the meeting to assess that data set. With regard to the second question, the BLA acceptance and commercial launch and how we think this will be adopted in the post 8201 world. As we have shown previously and discussed the merit of margetuximab, we’re actually very excited for the opportunity for patients to have access to a molecule like margetuximab. Obviously if it gets approved by the FDA, first of all, this is the only head to head study that has ever been tested against trastuzumab and having shown successfully in a statistically significant manner, a PFS benefit of this molecule and trending in the OS benefit of margetuximab over trastuzumab, we think it gives both the patients and the treating physician a great opportunity to give the patients a better treatment selection. In particular, given that this was tested in four different – in combination with four different chemotherapies, depending on the historical treatment regimens these patients have received, it gives…

Thank you so much, Scott.

Thank you. Our next question comes from Varun Kumar of Cantor Fitzgerald. Your line is open.

Hi. Good evening, everyone. Thanks for taking the questions. First on flotetuzumab. Any regulatory discussion ongoing around safety profile and specifically around the lead-in dosing strategy, Scott, if you can provide some color?

So there’s been multiple conversations over the years regarding the dosing strategy and clearly as you have seen the evolution of this molecule, we have evolved the strategy so that we’ve optimized the lead-in dosing in the first week of treatment to achieve the targeted dose of 500 nanograms per kilogram in subsequent treatment during the three weeks of the first cycle of therapy. We’ve also implemented in the subsequent cycles of therapy continued dosing of the drug. We have found that if you do not interrupt dosing, the likelihood of having any further cytokine release associated with the drug is dramatically reduced. And we have seen that this is a very favorable profile for the drug. So, so far we – nothing further to discuss with regard to the safety profile. We are continuing to provide additional data which includes the safety analysis of patients that have been treated historically and are ongoing treatments, but we expect obviously to have that as part of our updated discussion with the FDA shortly.

Thank you, Scott. And I wanted to follow up on 013, the PD-1 x LAG-3 program. Given two targets PD-1 and LAG-3, I just wanted to understand if there will be supporting data at the conference when you present the initial data which can potentially highlight contribution coming from PD-1 or LAG-3?

So in that regard, we don’t have obviously a separate LAG-3 antibody. This is a composite molecule. We’re evaluating these both in checkpoint or anti-PD-1 or anti-PD-L1 experienced patients as well as naïve patients. What we will try to do and I don’t know by the time ASCO occurs whether we have a full comprehensive data set. We are analyzing specimens for varying levels of LAG-3 expression in patients treated and we’ll try to obviously come to some conclusions with the value of either threshold levels of LAG-3 expression or ultimate percentage of LAG-3 expression in the tumors and its association with ultimate responsiveness. I think that’s probably the best we’ll be able to provide in this timeframe.

Thank you very much, Scott. And maybe last one, if I may, on the financial guidance. You talked about the cash runway could go into 2022. Going forward, should we expect any advance program to be impacted by reprioritizing different programs to extend the cash runway?

Well, again, obviously we can’t anticipate everything in the future but I think as we’ve laid out just before the JPMorgan meeting, a prioritization in the programs taking into account timing for the enrollment rates for the various programs. As I think we’ve highlighted, they focus on the Module A in the gastric study and a delay in the Phase 2/3 study for enoblituzumab has afforded us additional cash to continue with our programs, as Jim has pointed out, through 2021. And as we’re hoping as we analyze the spend over the course of the next few months that this may allow us to get into 2022. So at this point we don’t see any further need to modify the plans for the studies going forward.

Thank you very much, Scott, and congrats on the progress.

Thank you.

Thank you. Our next question comes from Jonathan Miller of Evercore. Your line is open.

Hi, guys. Thanks so much for taking my question and congrats on the recent progress. I would like to focus first on the MAHOGANY trial, you said initial data second half this year. Is your expectation that that potentially registration with ORR – and I’m assuming Module A is as good as you hope it is. Would we get that potentially registration with ORR in second half this year or some other lesser update? Then I’d like to ask about the PD-1 x CTLA-4 bispecific which I think is an interesting one that seems to be down your list of priorities. What are your next steps there? And is it possible we’ll see that dose escalation data maybe at ASCO this year alongside the PD-1 x LAG-3 bispecific? Last thing I guess I’ll ask for is any other plans in the flotetuzumab PD-1 combo, you mentioned you’re doing that study ex-U.S., but you had said on the Q3 call that that could potentially expand and become a larger program. What are your next steps with flote combos as we look forward to FDA meeting for the monotherapy?

Thanks for those questions, John. So with regard to MAHOGANY, we just began late last year to enroll in that study. What we are selecting is as you know in that Module A is the HER2 IHC 3+ x PD-1 positive 1% or greater. Obviously, there’s some degree of screening failures. We are expanding the number of sites going forward. As noted in our various briefing books, our initial goal that we had laid out was to enroll up to 40 patients to be able to make an assessment whether we’re hitting the target of overall response. And what we have put out previously is, is that we like to obviously hit what TOGA is in terms of overall response rate or greater. And just to refresh your memory, it was about 47% in the TOGA regimen and obviously have a better safety profile. We think that with less than 40 patients, we’ll be able to make the assessment whether the response rate is adequate enough to try to accelerate the continued enrollment through 2021. If we hit those milestones, we feel that we can get that fully enrolled by the end of 2021. But clearly we’re off to a good start this year. It obviously takes time to continue to evaluate the patient and observe them. So clearly the hope is, is that in the first half of this year we will enroll enough patients to be able to make that decision in the second half of this year. With regard to the PD-1 x CTLA-4 priorities and dose escalation and are we going to present it at ASCO, what I mentioned just before JPMorgan meeting we had done a dose escalation of the molecule. Our targeted top dose was 10 nanograms per kilogram. We achieved that quite successfully.…

Great. Thank you very much.

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

Hi. Thanks for taking the question. Just one for me here on MGC018, your B7-H3 ADC. I was wondering if you could further elaborate on the types of data that we might see here from the initial dose escalation, obviously from safety and then maybe the potential chance for efficacy data? With regard to safety, could you also perhaps help us understand the toxicities you might expect from the payload that you’re using there and sort of help us on your expectations around that? Thank you.

Thanks, Chris. So with regard to where we are on this molecule, as I had outlined previously in January we went through or we are in the middle of dose escalation. We are in nanograms per kilogram dosing range which was the expected range where we will being to see biological activity, which I have indicated we have observed in different tumor types. Second is with the safety that we’ve seen to date, again, with the limited number of patients, it appears to be quite acceptable and tolerable. The intended toxicities or the possible expected toxicities that one sees with this particular payload, the duocarmycin, which is incorporated in another molecule that Synthon is developing for HER2 therapy, they’re major toxicities that was observed was often reported for other ADCs which was eye toxicity, Keratitis and such. I have to say we haven’t seen much in terms of problems with eye to date. And so again our experience is on a limited number of patients. We will plan to provide update midyear to the second half of this year on this study. And because this is an ADC molecule, single agent activity should be expected and we would intend to advance this forward likely in one major tumor type or possibly two.

Okay. And then regarding the tumor types that are you’re looking at, could you just sort of look at tumors that expect B7-H3 highly, I know many do? Are there any there that MacroGenics is looking at to prioritize development pending data? Thank you.

Rather than opening up and revealing at this point, we have our priority list but I think it’s still too early to be definitive about this. We will update this later this year.

Thank you.

Thank you. Our next question comes from Yigal Nochomovitz of Citi. Your line is open.

[Technical Difficulty] Thanks very much for taking our questions. On the decision to amend the enoblituzumab trial to include lead-in cohort for combination risk MGD013 and MGA012, I wonder if you could elaborate more as to the reasons that you believe MGD013 may potentially be a better combo with enoblituzumab? And is it known what the expression of LAG-3 is among patients with head and neck cancer?

Yes. Thank you very much for that question. That’s why we’re doing this lead-in module testing. We have seen as we’ve indicated activity across a number of tumor types including head and neck cancer. We have analyzed our own set of specimens and there is also reported published work on LAG-3 expression in head and neck cancers and it turns out to have expression in a sizable portion of the population. So rather than diving in with the 012 given the advancement of the 013 program, we thought rather than doing a Phase 2/3 study and kicking ourselves afterwards for not testing 013, we thought it would be much more effective as testing one versus the other. And the other point is, is that 012 as you know is partnered with Incyte where except for China rights, we own 013. So again, being able to combine two of our own molecules together if the efficacy and safety looks more favorable than 012 would make the most sense to us.

Thanks. That’s very helpful. And then sticking to MGD013, without revealing the types of tumors that you have on your priority list, I wonder if you could just give maybe a bit more color on what your thought process was for which of the tumor types you will be advancing, what was the threshold that you had broadly and is there potential for monotherapy only or would you advance some of these tumor types as a potential combination as well?

Thanks for the question. And so again, we had gone through the literature to look at levels of expression of LAG-3 across all solid tumor types as well as lymphomas and obviously the reported literature had varying grades of expression. We did our own pathology work in-house to evaluate a very large number of tumors sets. And in a large part, many of them were similar to what has been previously reported. What is also interesting just as aside in addition to up-regulation of LAG-3 expression on immune cells, which include T-cells and NK cells, there are certain tumor types that also up-regulate LAG-3 expression. And so again without giving you any guidance right now, we’ll have to wait until data presented at ASCO, we plan to focus on specific tumors where we’ve seen responsiveness and correlate that with the biomarkers that we are working on in terms of IHC expression patterns. With regard to how we will proceed with this, we look at this both as monotherapy in certain tumor types but we have also explored in a more limited fashion the combination of 013 with other molecules in our portfolio and clearly the opportunity here is to combine it with other modes of therapy which include both immune therapeutics, chemotherapy and targeted agents as well.

Thanks very much for taking the questions.

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

Hi, guys. Thank you. Congrats on the progress last year and thank you for taking my questions. I know you touched on this a little bit before but can you just help me better understand how you view the commercial opportunity for marge in breast cancer? And when are you planning on kind of giving us more details as to how you’re thinking about partnering that out? And then a follow up on the marge question. Can you provide us with any color as to why FDA is requiring the panel ahead of your PDUFA date?

So with regard to the commercial opportunity, we haven’t given any guidance with respect to the specific targeted value and market of this molecule. Obviously with a changing landscape now with 8201 just launched, the likelihood of the cabinet [ph] one being launched sometime middle of this year. We obviously have to assess what the opportunity is here. We have done our own marketing analysis. I have to say it’s quite favorable from our perspective as a company now that would be selling its – or obviously finding a partner to sell the first molecule. So I can’t give you any more guidance on that. And I think as the market evolves this year for the other competing late line drugs, we’ll get a better sense of things. With regard to details on partnering, we had established contacts and interactions with a number of companies that had showed interest in margetuximab. I would say that given the acceleration of the launching of the competitive molecule and right now given the timeliness of the regulatory review of that, I think most of them would want to see the outcomes of both those things before establishing a firm commitment to partner with us. So as I have said previously, we still engage partners from time to time on this but we see this as a second half of the year post ODAC review when we would get more engaged with partnering activity. As Jim has pointed out earlier, we’ve done our homework with regarding the marketing of this drug going forward. So whatever partner we end up with, we will be able to provide them with a very significant package with regard to the opportunity. As regard to the FDA panel, it’s the FDA’s choice to ask whatever question they want. If I were to speculate on this is clearly we’re still in a – we’ve achieved a PFS benefit. We still have a – haven’t received the final OS evaluation for the drug which will occur at 385 events. As you know, we had a preplanned exploratory analysis of the F allele population. If I were to speculate I think that would be something that the FDA might want to query with regard to the value of following that population or even limiting the drug to use in that F allele population. But I have no insights specifically on what they would query of the ODAC.

And then just a follow up. I know you had touched on this before, but when you talk about the Module A, the Phase 2/3 MAHOGANY study, what type of response rates do you want to be seeing to support potential approval?

Without being specific to the precision of a single digit, clearly we would like to achieve a response that is good or better than that of TOGA which was a 47% response rate. If you can achieve that or greater without giving a chemotherapy regimen given the safety profile of this drug, I think that would be quite favorable. But of course that’s again a conversation we would have with the FDA.

All right. Thanks so much for taking the questions. I really appreciate it. And congrats on the progress.

Thank you.

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

Yes. Hi. Good morning Thanks for taking the questions. Just a couple of questions on the Zai Lab trial. Is the incidence of the CD16A-F allele carrier status the same in Chinese patients as it is in the U.S.? And I’m guessing this is a study that’s looking at efficacy as a function of intend to treat, but can you also just speak to whether or not they’re also trying to carve off from a secondary endpoint perspective activity within the F allele population specifically?

Thanks for the question, Steve. Worldwide there is minor variation in terms of CD16A-F allele [ph] variation but we’re talking about a 5% or so difference from one ethnic group to another. So while we have seen in our study which included as you know patients in Korea in our study, there was – 86% had the F allele. So in reported literature it goes from essentially around 80% to the 85%. So maybe some minor local variation, but I don’t expect it to deviate any greatly. The plan really from the study as I understand it is a bridging study to SOPHIA. So they are looking at the opportunity to treat in combination with chemotherapy and looking at response rates overall in intend to treat. But I think they also plan retrospectively to look at the F allele subsets as well. Having that seen there, submissions specifically I can’t give you any more definitive plans with regard to the secondary endpoints.

Okay. And then just a quick question regarding MAHOGANY. I guess if the Module A data looks to be favorable and you go ahead and proceed with additional enrollment, have you guys done any work to look at extending marge dosing out to Q4W just in an effort I guess to harmonize with MGA012 dosing schedule?

So we have not looked at Q4 as I recall on marge at this point, but clearly with regard to different dosing regimens we are – we have explored different dosing regimens for MGA012. And so I do believe it could fit Q3 weekly dosing if necessary. But right now I know we have no data on Q4 weekly for marge.

Okay. Thanks for taking the questions.

Thank you. Our next question comes from Etzer Darout of Guggenheim Securities. Your question, please.

Hi. Thanks for taking my question. Just one quick one on the combination study in gastric cancer, just wondered if maybe you can talk a little bit to sort of the PD-1 x LAG-3 niraparib study in China and where there’s an opportunity to expand this combination to patients outside of China?

Thanks for the question, Etzer. They just started that study. Given that the rights to niraparib are in Zai Lab and I believe GSK is outside of China, clearly there is opportunity but we don’t have the ability to pursue that ourselves. And clearly there are other combinations that are being anticipated, other chemotherapies and other targeted therapies. But if that data is promising, obviously we would yield the benefit through the Incyte relationship from the economics there on the PD-1. And clearly if there’s positive data there, other inhibitors could be used in combination with it as well.

Great, thanks for that and congrats on all the update on your progress.

Thank you.

This concludes the question-and-answer session. I’ll now turn the call back to Dr. Koenig for closing remarks.

I just like to thank everyone again for joining us this afternoon and to let you know that we look forward to continuing to advance our programs in the coming year and providing updates on our progress. Have a nice day.

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.