MacroGenics (MGNX) This fall 2022 Earnings Call Transcript

MacroGenics (MGNX -1.70%)
This fall 2022 Earnings Call
Mar 15, 2023, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon. We will start the MacroGenics 2022 fourth-quarter company progress and monetary outcomes convention name in only a second. All contributors are in a listen-only mode in the intervening time, and we’ll conduct a question-and-answer session on the conclusion of the decision. At this level, I’ll flip the decision over to Jim Karrels, senior vp, chief monetary officer of MacroGenics.

Jim Karrels — Senior Vice President, Chief Financial Officer

Thank you, operator. Good afternoon, and welcome to MacroGenics’ convention name to debate our fourth-quarter 2022 monetary and operational outcomes. For anybody who has not had the possibility to evaluation these outcomes, we issued a press launch this afternoon outlining in the present day’s bulletins, which is on the market below the Investors tab on our web site at macrogenics.com. You may take heed to this convention name by way of webcast on our web site, the place it is going to be archived for 30 days starting roughly two hours after the decision is accomplished.

I would really like alert listeners that in the present day’s dialogue will embrace statements in regards to the firm’s future expectations, plans and prospects that represent forward-looking statements for functions of the secure harbor provision below the Private Securities Litigation Reform Act of 1995. Actual outcomes could differ materially from these indicated by these forward-looking statements because of numerous necessary elements, together with these mentioned within the Risk Factors part of our annual, quarterly, and present reviews filed with the SEC. In addition, any forward-looking statements symbolize our views solely as of in the present day and shouldn’t be relied upon as representing our views as of any subsequent date. While we could elect to replace these forward-looking statements sooner or later sooner or later, we particularly disclaim any obligation to take action even when our views change, besides to the extent required by relevant legislation.

And now, I’d like to show the decision over to Dr. Scott Koenig, president and chief govt officer of MacroGenics.

Scott Koenig — President and Chief Executive Officer

Thank you, Jim. I’d wish to welcome everybody taking part by way of convention name and webcast in the present day. This afternoon, I’ll present key updates on our medical applications. But earlier than I accomplish that, let me first flip the decision again to Jim, who will evaluation our monetary outcomes.

Jim Karrels — Senior Vice President, Chief Financial Officer

Thank you, Scott. This afternoon, MacroGenics reported monetary outcomes for the yr ended December 31, 2022, which spotlight our monetary place, in addition to our current progress. As described in our launch this afternoon, MacroGenics’ complete income, consisting primarily of income from collaborative agreements, was $151.9 million for the yr ended December 31, 2022, in comparison with complete income of $77.4 million for the yr ended December 31, 2021. Revenue for the yr ended December 31, 2022, included recognition of the $60 million approval milestone from Provention Bio associated to teplizumab’s approval within the fourth quarter, $30 million in milestone funds from Incyte associated to retifanlimab, MARGENZA [Inaudible] of $16.7 million in comparison with $12.3 million for the yr in December 31, 2021, and $14 million in contract manufacturing income.

Our analysis and improvement bills had been $207 million for the yr ended December 31, 2022, in comparison with $214.6 million for the yr ended December 31, 2021. The lower was primarily associated to decreased retifanlimab manufacturing prices for Incyte and decreased prices associated to our discontinued research. These decreases had been partially offset by elevated improvement, manufacturing, and medical trial prices associated to Vobramitamab duocarmazine, or what we now discuss with as vobra duo, elevated bills associated to discovery initiatives and preclinical molecules, and elevated medical bills associated to lorigerlimab and MGD024. Our promoting, normal, and administrative bills had been $58.9 million for the yr ended December 31, 2022, in comparison with $63 million for the yr ended December 31, 2021.

The lower was primarily associated to decreased promoting prices from our MARGENZA, in addition to decreased authorized, consulting, and stock-based compensation bills. Our web loss was $119.8 million for the yr ended December 31, 2022, in comparison with a web lack of $202.1 million for the yr ended December 31, 2021. Subsequent to year-end and as introduced final week, we bought to a completely owned subsidiary of DRI Healthcare Trust our royalty curiosity in future international web gross sales of TZIELD, or teplizumab. We retained all different financial pursuits associated to TZIELD, together with future potential regulatory and industrial milestones from Provention Bio.

As beforehand disclosed, we obtained a $100 million upfront cost from DRI for the sale of our single-digit royalty and international web gross sales of the product. We retained the proper to obtain a 50% share of the royalty on international web gross sales above a sure annual threshold. In addition, we’re eligible to obtain as much as 50 million from DRI upon the prevalence of prespecified occasions tied to the development of TZIELD for the therapy of newly recognized sort 1 diabetes and may obtain an extra 50 million if TZIELD achieved a sure degree of web gross sales. In a couple of minutes, Scott will briefly focus on Provention Bio’s current announcement that it had agreed to be bought by Sanofi.

And so, earlier than together with money obtained subsequent to year-end, our money, money equivalents, and marketable securities steadiness as of December 31, 2022 was 154.3 million in comparison with 243.6 million as of December 31, 2021. Please be aware that this money steadiness additionally didn’t embrace the 45 million receivable from Provention associated to the November FDA approval of TZIELD. Subsequent to year-end, we obtained 15 million of this quantity, whereas the remaining 30 million is due by September 1, 2023. Finally, by way of our money runway, we anticipate that our money, money equivalents, and marketable securities steadiness of 154.3 million as of December 31, 2022, plus projected and anticipated future funds from companions, product revenues, and $100 million proceeds from the DRI royalty sale ought to prolong our money runway by way of 2025.

Our anticipated funding necessities replicate anticipated expenditures associated to the Phase 2 TAMARACK medical trial, the deliberate Phase 2 examine of lorigerlimab and metastatic castration-resistant prostate most cancers that Scott will let you know about momentarily, in addition to our different medical and preclinical research presently ongoing. And now, I’ll flip the decision again to Scott.

Scott Koenig — President and Chief Executive Officer

Thank you, Jim. Over the previous eight months, we demonstrated our means to generate nondilutive capital by way of partnering and royalty monetization efforts, which enabled us to attain $250 million in nondilutive funding, together with $150 million from our companions throughout the second half of 2022 and one other $100 million in funding in early 2023. As Jim talked about, we’re delighted to ship on extending our money runway by way of 2025. Beyond our monetary place, I’m exceptionally happy to have two molecules originating from our portfolio over the regulatory end line.

During the fourth quarter, TZIELD joined MARGENZA as FDA-approved medicines and stand a testomony to MacroGenics’ means to determine and develop product alternatives. Of course, we consider the most effective is but to return and have excessive hopes for our proprietary pipeline of product candidates, which I’ll now stroll you thru. Let me begin by offering an replace on Vobramitamab duocarmazine, or as Jim referred to it, vobra duo, our ADC designed to ship a DNA-alkylating duocarmazine cytotoxic payloads to tumors expressing B7-H3. B7-H3 is a member of the B7 household of molecules concerned in immune regulation.

Vobra duo was designed to benefit from this antigen’s broad expression throughout a number of stable tumor varieties. We initiated the Phase 2 portion of the TAMARACK examine of vobra duo in sufferers with mCRPC in late 2022. This examine is designed to guage vobra duo in 100 sufferers throughout two experimental arms, 2 mgs per kg or 2.7 mgs per kg each 4 weeks, and initially included a management arm through which sufferers obtained a second androgen receptor axis-targeted brokers or ARAT. The therapy panorama for sufferers with mCRPC has developed with declining acceptability relating to using a second ARAT agent in sufferers who progress on earlier therapies and approval of a radiopharmaceutical medicine final yr.

With this backdrop, we now have modified the trial by eradicating the ARAT management arm and the Phase 3 portion of the examine with regulatory approval of the modified protocol obtained so far in a number of international locations. We consider that this modification permits us to enroll TAMARACK in step with our targets, decide an optimum dose expeditiously, and permit us to offer a medical replace in 2024 probably in help of a subsequent Phase 3 examine in mCRPC. Next, let me replace you on lorigerlimab our bispecific tetravalent PD-1 x CTLA-4 DART molecule. At the ASCO Genitourinary Cancers Symposium just a few weeks in the past, we offered preliminary medical outcomes from a dose growth single-arm examine of lorigerlimab in sufferers with superior stable tumors in a poster session.

Before I describe our information, I’ll remind you that checkpoint inhibition has not fared effectively within the therapy of sufferers with late-stage mCRPC. Previously, anti-CTLA-4 remedy, whether or not alone or together with an anti-PD-1 agent, resulted in elevated danger for immune-related toxicity with very modest antitumor exercise. We designed lorigerlimab to have preferential blockade on twin PD-1 CTLA-4 expressing cells, reminiscent of tumor-infatrating lymphocytes, or TILs, that are most plentiful within the tumor microenvironment. Highlights from the information we offered as of December 12, 2022 information cutoff had been that 12 of 42 sufferers, or 28.6%, with mCRPC achieved higher than or equal to 50% PSA, or PSA 50 discount, together with 9, or 21.4%, who achieved higher than or equal to 90% PSA discount or PSA 90.

Nine of the 12 sufferers maintained their PSA 50 response for 3 months or longer, and we had been very excited to report that 9 of the 35 sufferers, or 25.7%, with measurable mCRPC achieved confirmed partial responses. Every one of many 9 sufferers who had confirmed PRs had obtained a previous ARAT, and all however one had beforehand obtained docetaxel. All 9 had reductions of their PSA ranges of higher than 90% as of the information cutoff. The total security profile noticed throughout 127 sufferers from a number of stable tumor growth cohorts was manageable.

Treatment-related AEs occurred in 86.6% of sufferers with the commonest amongst them, higher than 15% being fatigue, rash, pruritus, hypothyroidism, and pyrexia. Rates of higher than nice — or equal to grade 3 PR AEs and immune-related AEs had been 35.4% and seven.9%, respectively. AEs resulted in therapy discontinuation in 25.2% of sufferers, there have been no deadly AEs associated to lorigerlimab. Based on the energy of this information, we plan to provoke a randomized Phase 2 examine of lorigerlimab together with docetaxel versus docetaxel alone in second-line, chemotherapy naive mCRPC sufferers within the second half of 2023.

A complete of 150 sufferers are deliberate to be randomized 2 to 1. The present examine design features a major examine endpoint of radiographic progression-free survival. We will let you know extra about this examine later this yr as we method its begin. And to repeat, as Jim talked about earlier, each this examine and the TAMARACK examine are included in our money runway.

In addition, we proceed to pursue the Phase 1 dose escalation mixture examine of vobra duo with lorigerlimab in sufferers with superior stable tumors, together with renal cell carcinoma, pancreatic most cancers, ovarian most cancers, hepatocellular carcinoma, mCRPC, and melanoma. Next up, MGD024 is our next-generation bispecific CD123 × CD3 DART molecule that comes with a CD3 part designed to attenuate cytokine launch syndrome, whereas sustaining antitumor cytolytic exercise and allowing intermittent dosing by way of an extended half-life. Our Phase 1 dose escalation examine of MGD024 is ongoing in sufferers with CD123 optimistic relapsed or refractory hematologic malignancies, together with acute myeloid leukemia and myelodysplastic syndromes. As we beforehand introduced in October 2022, we and Gilead entered into an unique possibility and collaboration settlement to develop MGD024 and as much as two extra bispecific analysis applications.

The settlement granted Gilead the choice to license MGD024 at predefined determination factors throughout the Phase 1 examine. Next, let me present an replace of our product candidates being developed by our collaboration companions for which we retained sure financial rights. As Jim talked about earlier, we’re very happy to see FDA’s November approval of Provention Bio’s TZIELD to delay the onset of Stage III sort 1 diabetes in grownup and pediatric sufferers aged eight years and older with Stage II sort 1 diabetes. We view this as a vital development for people and their households coping with the dangers and penalties of sort 1 diabetes.

And as we introduced final week, as Jim talked about earlier, we bought our curiosity in a specified portion of royalty funds primarily based on future web gross sales of TZIELD to DRI for precedes of $100 million. We have the chance to obtain as much as an extra $100 million from DRI upon prespecified occasions. In addition, you could recall that as a part of our authentic sale of teplizumab to prevention in 2018, we stay eligible to obtain contingent funds from Provention, together with $110 million, upon the achievement of sure regulatory approval milestones, and $225 million, upon the achievement of sure gross sales milestones. On Monday, Provention Bio introduced that it agreed to be bought by Sanofi.

We have seen the general public statements about this deliberate acquisition pushed by the potential of TZIELD. We are excited for what could — for this will imply for the way forward for TZIELD and, most significantly, for diabetes therapy and sufferers worldwide. As for MacroGenics, we’re within the technique of evaluating the transaction within the context of our settlement with Provention. This is all we are able to say presently.

To conclude, we consider that we now have generated vital nondilutive capital up to now eight months, reprioritized our applications and diminished our company footprint and associated prices, and we’re in a terrific place to execute on our plan of growing and delivering life-changing medicines to most cancers sufferers in 2023 and past. We can be now completely happy to open the decision for questions. Operator?

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first query comes from Jonathan Chang with SVB Securities. You could proceed.

Jonathan Chang — SVB Securities — Analyst

Hi, guys. Thanks for taking my questions. First, on the TAMARACK examine modifications, are you able to present some coloration on what you’d hope to see within the Phase 2 examine that offer you confidence in a subsequent Phase 3 examine and what that Phase 3 examine may seem like? Also by way of getting regulatory approval for the modified protocol, are you able to develop in your ready remarks and provides us a way of the place you might be in that course of and what nonetheless must be performed?

Scott Koenig — President and Chief Executive Officer

Thank you very a lot, Jonathan. So, as I identified earlier, given the altering panorama for the therapy of mCRPC, we felt that to attain our objective of figuring out a dose that diminished a number of the negative effects, we might obtain this faster by simply having the 2 energetic therapy arms versus an extra management arm. And as I’ve identified earlier, our objective was to scale back the dose that, particularly, would cut back specific negative effects. And we modeled this from the information we needed to date from our growth research, significantly palmar-plantar erythrodysesthesia or the hand-foot syndrome, the place various the sufferers who’re getting Grade 2 negative effects, which included of ache of their extremities.

And we discovered that sufferers would drop off due to the uncomfortable nature of this. So, what we’re on the lookout for is a discount within the severity of such a facet impact profile and a discount within the variety of negative effects. We consider, primarily based on the information we now have reviewed from sufferers handled so far, that reaching this and protecting these sufferers on longer could even result in an much more efficient response price from these sufferers. So, that is form of what we’re on the lookout for from the outcomes of this examine.

And with regard to the FDA and going into Phase 3, we really feel that we had been planning in any case, realizing that the panorama was altering that, on the finish of Phase 2, we had been going to debate with the FDA what the suitable management group can be at the moment to get the most effective profit for sufferers going ahead. So, we really feel that we’re — we’ll be in an excellent form by way of the variety of websites that we hope to take part within the present examine after which work with the regulatory businesses to implement that Phase 2 examine shortly.

Jonathan Chang — SVB Securities — Analyst

Understood. If I can simply sneak in yet another. As there was a current unsuccessful Phase 3 examine that attempted so as to add on anti-PD-1 to docetaxel in mCRPC, what are the explanations for confidence within the Phase 2 or drill on that, plus docetaxel examine? Thank you.

Scott Koenig — President and Chief Executive Officer

Yes. We’re fairly conscious of the various failures with — with anti-PD-1s and checkpoints in mCRPC. And that’s the reason we’re very inspired by the current information we offered at ASCO GU, the place each the response charges by way of PSA 50 and 90 reductions, in addition to goal response charges had been far larger than that seen from some other checkpoint examine that we now have that has been reported beforehand so far. As you effectively know, significantly the research that got here out just lately on CheckMate 650, confirmed a really poor response of the NIVO on the order of a 9.3% total response price.

And as we famous right here on this name and on the assembly, we had been seeing responses of 25.7%. And additionally, as you level out, in an identical setting, KEYNOTE-921, which was a examine of pembro and docetaxel versus [Inaudible] just lately failed as effectively. We consider that by designing a molecule that has 4 binding websites, two every for PD-1 and CTLA-4, with a better means to bind to coexpressing cells throughout the tumor micro atmosphere and with a possibility to scale back negative effects by the character of getting an IgG4 engineered into this molecule. So, there isn’t a killing or ADCC of Tregs cells.

We consider that these sufferers will be capable to now be handled for for much longer durations of time, taking benefits of each the consequences of blocking PD-1, in addition to CTLA-4.

Jonathan Chang — SVB Securities — Analyst

Got it. Thanks for taking my questions.

Operator

Thank you. Our subsequent query comes from Yigal Nochomovitz with Citi. You could proceed.

Carly Kenselaar — Citi — Analyst

Hi, group. This is Carly on for Yigal. Thanks a lot for taking our query. Just first to comply with up on one of many prior questions.

Can you discuss a bit extra about what you are seeking to see particularly on the efficacy facet in TAMARACK subsequent yr to help shifting into a possible Phase 3 on this setting?

Scott Koenig — President and Chief Executive Officer

Yeah. Thanks, Carly, for the query. So, we now have an excellent historic information in that line of remedy for sufferers handled with docetaxel as a management arm. As the examine that Jonathan was alluding to, KEYNOTE-921 and an rPFS of 8.3 months, presides Phase 3b, additionally handled with docetaxel, was an 8.3 months rPFS.

And as you could recall, TRIDENT 3 in that management arm of docetaxel can also be 8.3. It’s form of outstanding that they had been similar to the sub month in that examine. And then, should you additionally take a look at the general median total survival, it is roughly 19 months. So, clearly, we wish to see some vital enhance above these numbers.

And clearly, we’ll additionally get a way from the PSA 50, for instance, in PRESIDE 3b, the docetaxel arm of that examine was PSA 50s of 24%. So, we really feel that on condition that, we’re seeing responses which are wanting favorable simply with the PD-1 CTLA-4 alone in a later line of remedy that now including this on to earlier-stage sufferers, along with chemo, has a terrific alternative mechanistically to reinforce the responses of each our PFS, in addition to OS.

Carly Kenselaar — Citi — Analyst

OK. Great. That’s useful. I additionally wish to ask the same query about — for vobra duo, simply the way you’re fascinated with the efficacy bar within the Phase 2 cohort?

Scott Koenig — President and Chief Executive Officer

Well, as , in taking a look at later traces of remedy, typical management arms run about three to 4 months. We’ll should see the place populations now with treating with [Inaudible] cabazitaxel will finish. It was a little bit disappointing. I do not know should you had an opportunity, as an example, wanting on the CheckMate 650 examine, the — as in comparison with the — and the results of the CARD examine in cabazitaxel, that they had a pleasant management arm of cabazitaxel in, clearly, a examine that was simply performed with a response price of about 12%.

So, it is a lot decrease than the historic information from the CARD examine. So, we’ll should see the place we go. So, clearly, the targets of getting a rPFS near eight months can be one thing that we wish to aspire to. But we’ll should see as the information evolves.

Operator

Thank you. Our subsequent query comes from Etzer Darout with BMO Capital Markets. You could proceed.

Etzer Darout — BMO Capital Markets — Analyst

Great. Thanks for taking the query. Another query right here on vobra duo. Just given the commentary round form of radiopharmaceuticals and mCRPC.

Just your ideas round a Phase 3 monotherapy pivotal for vobra duo versus a mixture just like the lorigerlimab mixture that you simply’re exploring now. And then, once more, for lorigerlimab, possibly your ideas across the Phase 2 research that you would probably provoke past the docetaxel combo trial you intend to begin within the second half of 2023. Thanks.

Scott Koenig — President and Chief Executive Officer

Yeah. Very good questions, Etzer. So, what we hope on the vobra duo within the setting of, once more, the altering panorama in a Phase 3, once more, we’ll should see the place we’re going. As I’ve already famous, what a single agent focusing on would search for each extending the rPFS, in addition to the OS, with the rPFS operating, as I stated, on the present research, the VISION examine, as an example, CARD, and so on.

of roughly eight months, after which, clearly, OS in higher than a yr, was about 14 months relying on the examine. As , we’re exploring the potential of vobra duo and lori together in a number of tumor varieties, however will — it features a inhabitants of sufferers with prostate most cancers. We have not recognized the dose but. That can be one we wish to take ahead.

And definitely, we’d look to do growth research as soon as and if we are able to set up a secure and energetic drug. Given the place we’re on the beginning of the TAMARACK examine now and this mix and with the concept we’d have the information from TAMARACK hopefully by the second half of ’24, we could also be in an excellent place to have totally different choices if, the truth is, we now have recognized an acceptable vobra duo and lori combo dose going ahead. So, one might think about extra arms to that examine to be included to ask that query, would a mixture be higher than a single agent in such a setting? So, we’ll should see. Time will inform.

We have extra work to do on that. With regard to extra research for lorigerlimab past the Phase II we simply talked about together with docetaxel, we expect that there are totally different alternatives given the profile of the drug both late to very early phases of prostate most cancers. So, as an example, one may think about the hormone responsive setting shifting additional up the road. We wish to get, clearly, this examine going first within the post-NHT setting, after which we’ll think about different alternatives in different traces of remedy going ahead to lorigerlimab.

Etzer Darout — BMO Capital Markets — Analyst

Great. Thank you. Congrats on the progress.

Scott Koenig — President and Chief Executive Officer

Thank you.

Operator

Thank you. Our subsequent query comes from David Dai with SMBC. You could proceed.

David Dai — SMBC Nikko Securities — Analyst

Great. Thanks for taking my questions. So, only one query on the vobra and lori combo trial. We did see fairly a little bit of Grade 3 therapy associated toxicity of round 35% as you talked about, Scott.

So, how ought to we take into consideration the security profile of the mixed trial? What are some extra type of changes on dosing you are fascinated with to scale back the security whereas sustaining it is efficacy?

Scott Koenig — President and Chief Executive Officer

Yes. So, simply to place this in context in order that persons are taking a look at apples-to-apples comparability, significantly with what you are commenting on the lorigerlimab by way of discontinuations and the AEs, keep in mind that mixtures as an example of ipilimumab and nivolumab would require a discount to 1 mg per kg of ipilimumab to get a tolerable mixture going ahead. And it is restricted to 4 doses of that mixture inside continued use of nivolumab in numerous medical settings. So, I ought to level out that the sufferers being handled with lorigerlimab that had goal responses with the PSA90s I described to you could have now been on the drug for over a yr, and so they’re getting on a Q3 weekly foundation.

So, it was not stunning that, over time, you are going to accumulate extra negative effects in combination in such a inhabitants and discontinuation charges, which are sometimes a lot later than that might have occurred would say ipi/nivo. In reality, should you take a look at the CheckMate 650 examine, should you take a look at the arm that acquired nivolumab 1 and ipi 3, the plan was to deal with these sufferers with 4 doses on a Q6 foundation of ipi. And the imply variety of doses in that arm of the examine was two. So, once more, tolerability was a difficulty there.

Now, with regard to combining going ahead, that is why we’re doing the examine proper now could be to see if new negative effects happen. If you take a look at the precise facet impact profile of the person molecules, there’s little or no overlap by way of the kind of negative effects that we’re seeing by therapy of sufferers individually. But we’ll should see as we go ahead with regard to how we envision optimizing the dosing, effectively, very often as a result of the mechanisms by which these medicine work are fairly totally different. It could also be that decrease doses could also be fairly enough together to attain the response charges that we hope to see which are higher than the person medicine alone.

David Dai — SMBC Nikko Securities — Analyst

That’s very useful. Thank you.

Operator

Thank you. Our subsequent query comes from Jon Miller with Evercore ISI. You could proceed.

Jon Miller — Evercore ISI — Analyst

Hey, guys. Thanks for taking my query, and congrats on all of the current progress. The Provention deal included warrants. I do know you are not speaking a lot in regards to the Sanofi acquisition, however did you train these warrants and personal Provention inventory.

And I additionally seen that change of management seems like a cost of their filings earlier. Do you could have any view on that at this level? And possibly since I do know, Scott, you stated you would not wish to speak about that a lot. Given that TAMARACK is now not managed, I do know you had been going to have to return to the Phase III anyway, however is your timing moving into the Phase 3 portion in any respect delayed by eradicating the management arm in Phase 2? And how ought to we take into consideration shifting into probably pivotal cohorts there?

Scott Koenig — President and Chief Executive Officer

So, let me reply that first, after which I’ll let Jim deal with the TZIELD story. Actually, as we famous early within the name, we have already got 4 international locations, and we count on many of those different international locations to return on. The websites which are already opened in TAMARACK will proceed to enroll sufferers, and any sufferers which are on management arms will probably be simply switched to an energetic arm. So, actually, there isn’t a delay.

In reality, we consider that by going this route and now including on extra websites with this modification, we should always be capable to enroll the examine, in addition to getting readout a lot sooner than we’d have performed with the managed Phase 2. So, proper now, we’re nonetheless — given quite a lot of websites have to return on, we nonetheless must get regulatory approval in a number of the international locations, which we count on to happen imminently. We suppose that we’re nonetheless focusing on within the second half of 2024 to have medical readouts right here.

Jim Karrels — Senior Vice President, Chief Financial Officer

And Jon, thanks for the query about Provention. With regards to the warrants, we disclosed that we exercised these again in 2019, and we bought these shares. I believe we averaged about $12 a share, which, on the time, appeared fairly good. And then, with regard to the opposite query, the Sanofi transaction, clearly, we now have the flexibility to obtain industrial regulatory milestones from Provention, in addition to sure extra consideration for rights that they grant with respect to the product.

And we’re evaluating and we count on to proceed to guage the small print of the pending Sanofi-Provention transactions in that very context.

Jon Miller — Evercore ISI — Analyst

Fair sufficient. But, Scott, I used to be attempting to ask in regards to the Phase 3 portion of TAMARACK round Phase 2. I perceive that you simply’re attempting to assist enrollment alongside for Phase 2. But does having — simply dropping the Phase 3 portion now delay your means to get that going later?

Scott Koenig — President and Chief Executive Officer

I do not suppose so. I imply, we’ll should see as we go ahead and anticipate. Remember, we’ll get actual time information on the Phase 2 examine. So, we now have the flexibility to prep what we’d see by way of the Phase 3.

And the belief is that almost all of websites that we’d have within the Phase 2 would proceed on the Phase 3. So, we — and in any case, we’d have needed to focus on with the FDA what the suitable management was at the moment given the altering panorama. So, in the end, I believe we may have sufficient lead time to not lose the flexibility to implement the Phase 3 in an identical timeframe.

Jon Miller — Evercore ISI — Analyst

All proper. Thanks a lot.

Jim Karrels — Senior Vice President, Chief Financial Officer

Thank you.

Operator

Thank you. Our subsequent query comes from Stephen Willey with Stifel. You could proceed.

Steve Willey — Stifel Financial Corp. — Analyst

Yes, thanks for taking the query. So, possibly only a level of clarification on the proposed Phase 2 or lorigerlimab trial. So, can these sufferers have seen docetaxel within the castration delicate setting or is that this a really chemo-naive affected person inhabitants?

Scott Koenig — President and Chief Executive Officer

We count on that a lot of the sufferers will — this will probably be within the castration-resistant inhabitants. We count on that a lot of the sufferers will probably be there, they might have seen, I consider, some chemo within the castration-sensitive inhabitants however count on to be a a lot smaller portion of that inhabitants.

Steve Willey — Stifel Financial Corp. — Analyst

OK. And I believe you touched upon it earlier than, however I assume what is the rationale for initiating this particular mixture trial versus simply ready for combo information with vobra duo after which probably resourcing that examine as a substitute?

Scott Koenig — President and Chief Executive Officer

Well, I believe, to begin with, we’ll get our expertise of mixing this with the chemotherapy in a distinct chemotherapy. And as I identified earlier, Steve, that we see the prospects of this drug being utilized in very early traces, in addition to late traces of remedy. So, I believe that is our first foray into that. There’s no motive as we’re getting this information as we — if we determine a combo dose that appears good and might be moved ahead that independently we are able to develop one other trial utilizing that combo.

So, it is not mutually unique.

Steve Willey — Stifel Financial Corp. — Analyst

OK. Fair sufficient. And then I assume one of many belongings to which you guys have some stake in, and I do not suppose was talked about earlier, is the ImmunoGen ADC, IMGC936, I believe. So, I believe they stated that they’ve initiated dose growth now in lung and in triple destructive.

I believe they will have some information to share in 2Q. Can you simply remind us what the following steps for this program is perhaps from MacroGenics assuming that it does transfer ahead past dose escalation? Is there a proper opt-in determination that it’s essential make slightly below the phrases of the present settlement?

Scott Koenig — President and Chief Executive Officer

No. It’s — the best way the deal is structured is it is a 50-50, the place we — it is a joint determination on each subsequent steps [Inaudible] the financing of the research we even have an excellent relationship by way of who would conduct the research. And ultimately, both of us might transfer ahead there. And equally, both of us might clearly decide out and never select to fund the examine.

I believe that we nonetheless want some extra time to take a look at the populations that ImmunoGen has disclosed of including extra sufferers. I believe on considered one of their final calls, they stated that they’re planning so as to add extra sufferers with lung most cancers within the examine, and that might prolong that additional however would offer an replace. In the meantime, I believe sufferers are being persevering with to be adopted at this level. So, actually nothing extra to say proper now.

I believe that discovering the suitable dose for therapy is the crucial level right here for persevering with the examine with different tumor sort we each determine to maneuver ahead with.

Operator

Thank you. Our subsequent query comes from Boris Peaker with Cowen. You could proceed.

Boris Peaker — Cowen and Company — Analyst

Great. I’ve two questions. One on lorigerlimab and the opposite one on vobra. So, with lorigerlimab, are you able to focus on the way you selected the dose for the Phase 2 trial and why you do not suppose it’s essential have a number of doses such as you had been doing with vobra? And for vobra, how do you suppose PLUVICTO will affect your final Phase 3 trial design within the TAMARACK examine, after all?

Scott Koenig — President and Chief Executive Officer

Excellent questions, Boris. So, we, as , dosed as much as 10 mg per kg within the dose escalation examine didn’t hit DLT. We did see elevated new-related AEs at 10, so determined to proceed at 6 mg per kg. As , on a Q3 weekly foundation — as , we offered the security information of 127 sufferers at ASCO GU, which included the sufferers with prostate most cancers, in addition to different tumor varieties in that security evaluation.

We consider that 6 mg per kg is an energetic and secure dose. But the fantastic thing about this molecule, should you recall the information from the dose escalation examine, we had a 100% full occupancy of PD-1 optimistic cells at 1 mg per kg and better. We had been seeing goal responses at 3 mg per kg and better. We had been seeing proof of biomarker exercise primarily based on Ki-67 and CD4s and CD8s and [Inaudible] on CD4s at these decrease doses, in addition to the 103 mg per kg.

So, we now have a pleasant large window right here with regard to selecting the dose. So, I might assume that we wished to begin with one dose, get a response there, have the chance to switch it if one thing comes up. But in the end, we’ll possible do a small examine evaluating 6 mg to a decrease dose at some future time as we begin accumulating the information from the continued lori examine. Now, with regard to a Phase 3 examine for vobra duo and the affect of PLUVICTO, we simply should see.

Clearly, there was challenges with regard to getting sufficient drug into the market. We assume Novartis will enhance that over the course of this yr and subsequent yr. But nonetheless, as , that is getting used principally very giant educational facilities and the neighborhood doctor has much less alternative to deal with their sufferers with PLUVICTO. So, we’ll should see the place issues go along with regard to the significance of PLUVICTO remedies within the design of the following examine.

Boris Peaker — Cowen and Company — Analyst

Great. Thanks for taking my questions.

Operator

Thank you. [Operator instructions] Our subsequent query comes from Charles Zhu with Guggenheim. You could proceed.

Unknown speaker

Hi. This is Edward on for Charles Zhu. Thanks for — congratulations on all of the progress. My first query was on the lorigerlimab MGC018 mixture examine.

I’m simply curious should you can provide any coloration on how the dose escalation goes. And then any additional coloration on the longer term information replace and what traders might count on there?

Scott Koenig — President and Chief Executive Officer

Thanks, Edward. As I stated earlier than, we’re nonetheless on the lookout for the proper dose mixture there that gives each the exercise and security. As we had famous earlier than, we had fastened the dose of the lori and began with a really low dose of vobra duo, however don’t have anything extra to say with regard to figuring out the ultimate dose. We’re nonetheless in treating sufferers and seeking to see what the suitable mixture can be.

With regard to the timing of this, once more, we wish to have picked a dose after which transfer into some growth cohorts. And it depends upon how shortly we’ll get to pick that dose and transfer into these growth. There’s an out of doors shot that possibly later this yr extra possible in 2024 we’ll have information to debate.

Unknown speaker

Great, thanks. And possibly simply as a follow-up query. You’ve acquired lori and MGC018 and in addition the mixture. I’m simply curious the way you’re considering of positioning the doublet or the person monotherapy and prostate longer-term?

Scott Koenig — President and Chief Executive Officer

Well, I believe all of it depends upon what the — each the exercise and security profile is as I identified. We wish to enhance the vobra duo. At this level, we see this within the context of treating prostate most cancers to in all probability extra the later line remedy. We take a look at the chance for lori just about throughout the board from early illness to late illness.

But I ought to level out and one shouldn’t neglect the truth that the explanation why we transfer ahead with molecules focusing on B7-H3 and clearly checkpoints as effectively, is that with regard to B7-H3, most stable tumors expressed B7-H3. So, we see this as an entry level into treating most cancers with a terrific alternative for the wants of sufferers with prostate most cancers on condition that even present therapies will not be curing sufferers, primary, significantly in later line, and there’s no checkpoint that has been accepted in prostate most cancers. But, in the end, we take a look at ahead to utilizing each these brokers both alone together and plenty of different stable tumors as effectively. And once more, relying on how a lot capital we now have accessible, partnerships going ahead, and so on., will decide how shortly we’re in a position to develop using each medicine.

Operator

Thank you. Our subsequent query comes from Silvan Turkcan with JMP Securities. You could proceed.

Silvan Turkcan — JMP Securities — Analyst

Thank you for taking my query, and congrats on the progress with the quarter. On vobra duo, it looks like enrollment within the trial Phase 2 and three trial was going sluggish, so that you take away that management arm, what offers you confidence that enrollment will pace up as a result of your energetic arm of technically unproven remedy remains to be competing now with these radiotherapies which are new and that individuals appear to love. Yeah. Have you seen something by way of uptake there with the elimination of the management arm? And then I’ve a follow-up relating to the Provention sale.

Thank you.

Scott Koenig — President and Chief Executive Officer

So, as we famous, these modifications have occurred only in the near past. So, I’ve no view on how shortly the enrollment goes to go along with the elimination of the management arm. The expectation primarily based on CRO suggestions and — in addition to investigators, has been very optimistic. What we had seen is that sufferers didn’t wish to in the end go on to a examine at this level with a managed inhabitants.

That was the most important impediment that we had been going through as we began this examine. And as , there was a big editorial in JCO speaking about ARAT — second ARAT management arms in research that got here out simply as we had been beginning the examine. And so, there may be way more reluctance from the Europeans with regard to utilizing that. So, given all these circumstances, we did not wait.

And we stated, alright, we’ll make these modifications. We did it quickly. The group did a improbable job of implementing these modifications and dealing with the regulatory businesses. And so, I believe we’re in an excellent place primarily based on the suggestions we have heard from investigators world wide.

In reality, I can let you know is that after we had been at ASCO GU, we had been nearly to make these modifications and had facet discussions and investigators who had been on the trial, and so they had been very obsessed with these modifications. So, we’ll have to attend and see.

Silvan Turkcan — JMP Securities — Analyst

Great. Thank you. And might you — with respect to TZIELD, might you assist me perceive a number of the wording. So, it says that the corporate retains the proper to obtain 50% share of royalties on international web gross sales above a sure annual threshold.

Is that also one thing that would come your means or is that additionally now going to the best way of DRI submit the deal — if that deal closes?

Scott Koenig — President and Chief Executive Officer

No, no, no. That was the a part of the settlement we made with DRI. This was a — what I name the kicker along with the $250 million potential milestone funds, which we described in the present day. If gross sales attain a selected complete on a given yr, the whole lot above will probably be shared 50-50 between DRI and MacroGenics on the web gross sales above that degree.

So, this — given what Sanofi simply paid for this drug, I presume they’ve quite a lot of confidence of with the ability to obtain vital gross sales of this drug. And definitely this specific gross sales goal may very well be achieved.

Silvan Turkcan — JMP Securities — Analyst

Great. So, you didn’t fill all the royalties? So, probably —

Scott Koenig — President and Chief Executive Officer

No. Exactly, that is the purpose. We bought vital royalties, however above a sure degree, we’ll take part in a big single-digit royalty there.

Jim Karrels — Senior Vice President, Chief Financial Officer

And so as to add to that, we absolutely retained the $335 million in milestones from the unique Provention transaction.

Scott Koenig — President and Chief Executive Officer

Right. So, simply to place some extent on this complete factor is that, should you take a look at the entire milestones between what Provention Bio may owe us and DRI may owe us, given Sanofi’s cost right here, we consider that these are probably achievable milestones, all of them. And that totals, by itself, with out this kicker, which I simply described to you, is a complete of $435 million.

Silvan Turkcan — JMP Securities — Analyst

Great. Thank you a lot.

Operator

Thank you. This concludes the Q&A session. I’d now like to show the decision again over to Dr. Scott Koenig for any closing remarks.

Scott Koenig — President and Chief Executive Officer

I wish to thank all people for taking part within the name in the present day. And as you heard from our pleasure in regards to the progress we have made on many of those research, we sit up for updating you within the very close to future. Hope everybody has an excellent night.

Operator

[Operator signoff]

Duration: 0 minutes

Call contributors:

Jim Karrels — Senior Vice President, Chief Financial Officer

Scott Koenig — President and Chief Executive Officer

Jonathan Chang — SVB Securities — Analyst

Carly Kenselaar — Citi — Analyst

Etzer Darout — BMO Capital Markets — Analyst

David Dai — SMBC Nikko Securities — Analyst

Jon Miller — Evercore ISI — Analyst

Steve Willey — Stifel Financial Corp. — Analyst

Boris Peaker — Cowen and Company — Analyst

Unknown speaker

Silvan Turkcan — JMP Securities — Analyst

More MGNX evaluation

All earnings name transcripts