On February 28, 2017 MacroGenics, Inc. (NASDAQ: MGNX), a clinical-stage biopharmaceutical company focused on discovering and developing innovative monoclonal antibody-based therapeutics for the treatment of cancer, as well as autoimmune disorders and infectious diseases, reported a corporate progress update and reported financial results for the year ended December 31, 2016 (Filing, 8-K, MacroGenics, FEB 28, 2017, View Source [SID1234517914]).

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"MacroGenics continues to advance its broad pipeline of clinical compounds, including those in our HER2, B7-H3 and PD-1 franchises as well as the many bispecific product candidates based on our DART platform," said Scott Koenig, M.D., Ph.D., President and CEO of MacroGenics. "Across our portfolio of proprietary antibody and DART-based oncology programs, we now have initial evidence of on-target engagement, manageable safety and anti-tumor activity. In addition, I am very encouraged by the biological activity observed in subjects treated with MacroGenics’ autoimmune DART molecule, MGD010. We will continue to advance our robust pipeline in 2017, including defining future development strategies for multiple programs based on data expected later this year."
Pipeline Updates
Margetuximab. Recent highlights related to the Company’s Fc-optimized monoclonal antibody that targets the human epidermal growth factor receptor 2, or HER2, include:
•
Phase 3 Metastatic Breast Cancer Study. The pivotal SOPHIA study is evaluating the efficacy of margetuximab plus chemotherapy compared to trastuzumab plus chemotherapy in approximately 530 relapsed/refractory HER2-positive metastatic breast cancer patients. MacroGenics continues to expect to complete enrollment of this study by late 2018. In addition, in consultation with the U.S. Food and Drug Administration (FDA) and the Committee for Medicinal Products for Human Use of the European Medicines Agency, the patient population eligible for participation in SOPHIA has been further expanded to include ado-trastuzumab emtansine-naïve patients.
•
Phase 2 Gastric Cancer Study. The Company continues to enroll advanced HER2-positive gastric and gastroesophageal junction cancer patients in its combination study of margetuximab with an anti-PD-1 antibody. Preliminary data from the dose escalation portion of the study, including patients with objective response following progression on previous lines of treatment with trastuzumab and chemotherapy, was presented at the Company’s R&D Day in December 2016. MacroGenics expects to complete enrollment of this study in 2017.
B7-H3 Franchise. MacroGenics is developing a portfolio of therapeutics that target B7-H3, a member of the B7 family of molecules involved in immune regulation. The Company is advancing multiple programs that target B7-H3 through complementary mechanisms of action that take advantage of this antigen’s broad expression across multiple solid tumor types. These molecules include:
•
Enoblituzumab: The Company continues to recruit patients in multiple ongoing studies of enoblituzumab, an Fc-optimized monoclonal antibody that targets B7-H3. These studies include one monotherapy study expanded to include additional bladder and prostate cancer cohorts and two combination studies with either an anti-CTLA-4 mAb (ipilimumab) or anti-PD-1 mAb (pembrolizumab). In addition, two monotherapy Phase 1 studies were recently initiated: a study for children with various solid tumors, including neuroblastoma, and an investigator-sponsored study in men with localized intermediate and high-risk prostate cancer in the neoadjuvant setting.

•
MGD009: This DART molecule targeting B7-H3 and CD3 is being evaluated in a Phase 1 study across multiple solid tumor types. Adverse events have been manageable to date and initial signs of antitumor activity have been observed, as previously disclosed at the Company’s R&D Day in December 2016. The Company expects to establish the dose and schedule for MGD009 administration as well as initiate dose expansion cohorts in 2017.
•
MGC018: The Company is conducting Investigational New Drug (IND)-enabling activities to support an IND application for this anti-B7-H3 antibody drug conjugate (ADC) in 2018. The Company will feature a poster presentation on MGC018 at the upcoming American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April.
PD-1-Directed Immuno-Oncology Franchise. MacroGenics is advancing several PD-1-directed programs, which will enable both a broad set of combination opportunities across the Company’s portfolio and provide further differentiation from existing PD-1-based treatment options. The first of these are:
•
MGA012. The Company’s Phase 1 clinical study of its proprietary anti-PD-1 monoclonal antibody was initiated in November 2016. With anti-PD-1 therapy becoming a mainstay of cancer treatment across multiple tumor types, MacroGenics believes MGA012 will be the basis for combination therapy with several of the molecules in its pipeline.
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MGD013. MacroGenics is developing the DART molecule, MGD013, to provide co-blockade of two immune checkpoint molecules expressed on T cells, PD-1 and LAG-3, for the potential treatment of a range of malignancies. The Company has completed IND-enabling studies and plans to submit an IND for MGD013 in the first half of 2017.
Additional DART Clinical Programs. Additional DART molecules in Phase 1 clinical development include flotetuzumab (CD123 x CD3, also known as MGD006 and S80880); MGD007 (gpA33 x CD3); MGD010 (CD32B x CD79B); duvortuxizumab (CD19 x CD3, also known as MGD011), which is being developed by Janssen; and PF-06671008 (P-cadherin x CD3), which is being developed by Pfizer. At its R&D Day in December 2016, MacroGenics provided an in-depth update on its portfolio of proprietary, clinical DART programs. The Company highlighted the promising features of these DART molecules, including on-target engagement, manageable safety as well as preliminary evidence of biological activity. Updates on three of these programs for which MacroGenics leads development include:
•
Flotetuzumab. MacroGenics continues to recruit patients with acute myeloid leukemia (AML) or myelodysplastic syndrome (MDS) in the U.S. and Europe in the Phase 1 study of flotetuzumab. The Company expects to establish the dose and schedule as well as initiate dose expansion cohorts for this study in 2017. In late 2016, the FDA granted orphan drug designation to flotetuzumab for the treatment of AML.
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MGD007. MacroGenics continues to recruit patients with colorectal cancer in the Phase 1 study of MGD007. The Company expects to establish the dose and schedule for this study in 2017.
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MGD010. During the fourth quarter of 2016, MacroGenics completed the Phase 1 study of MGD010 in healthy subjects. This DART molecule is being developed for the potential treatment of autoimmune disorders. The Company plans to report updated clinical pharmacodynamic activity results from this study in 2017.
Corporate Update
•
New Board Members: In January 2017, MacroGenics announced the expansion of its Board of Directors from six to eight members and the appointments of Karen J. Ferrante, M.D., and Scott Jackson to fill the newly

created vacancies. Dr. Ferrante, a hematologist-oncologist, most recently served as Chief Medical Officer and Head of Research and Development at Tokai Pharmaceuticals. Mr. Jackson served as Chief Executive Officer and as a member of the Board of Directors of Celator Pharmaceuticals, Inc. until its acquisition in July 2016.
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Commenced Build-out of GMP Manufacturing Suite: In January 2017, the Company began the expansion of its manufacturing capacity by commencing the construction of a GMP suite in its headquarters building in Rockville, MD to support larger-scale clinical and commercial manufacturing.
2016 Financial Results and Cash Runway Guidance

•
Cash Position: Cash, cash equivalents and marketable securities as of December 31, 2016, were $285.0 million, compared to $339.0 million as of December 31, 2015.
•
Revenue: Total revenue, consisting primarily of revenue from collaborative agreements, was $91.9 million for the year ended December 31, 2016, compared to $100.9 million for the year ended December 31, 2015. Revenue from collaborative agreements includes the recognition of deferred revenue from payments received in previous periods as well as payments received during the year.
•
R&D Expenses: Research and development expenses were $122.1 million for the year ended December 31, 2016, compared to $98.3 million for the year ended December 31, 2015. This increase was due primarily to increased activity in the Company’s preclinical immune checkpoint programs, including MGD013 and MGA012, MGD014 (funded by NIAID/NIH) and the initiation of two Phase 1 clinical trials combining enoblituzumab with other compounds. These increases were partially offset by decreased manufacturing costs for margetuximab.
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G&A Expenses: General and administrative expenses were $29.8 million for the year ended December 31, 2016, compared to $22.8 million for the year ended December 31, 2015. This increase was primarily due to increased staff, recruiting costs and stock-based (non-cash) compensation expense and patent expense.
•
Net Loss: Net loss was $58.5 million for the year ended December 31, 2016, compared to net loss of $20.1 million for the year ended December 31, 2015.
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Shares Outstanding: Shares outstanding as of December 31, 2016 were 34,870,607.
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Cash Runway Guidance: MacroGenics expects that its current cash, cash equivalents and marketable securities, combined with anticipated funding under its current strategic collaborations, should fund the Company’s operations through late 2018.

Conference Call Information

MacroGenics will host a conference call today at 4:30 pm (EDT) to discuss the 2016 financial results and provide a corporate update. To participate in the conference call, please dial (877) 303-6253 (domestic) or (973) 409-9610 (international) five minutes prior to the start of the call and provide the Conference ID: 58247768.
The recorded, listen-only webcast of the conference call can be accessed under "Events & Presentations" in the Investor Relations section of the Company’s website at View Source A replay of the webcast will be available shortly after the conclusion of the call and archived on the Company’s website for 30 days following the call.

MACROGENICS, INC.
SELECTED CONSOLIDATED BALANCE SHEET DATA
(Amounts in thousands)

As of December 31,

2016

2015
Cash, cash equivalents and marketable securities
$
284,982

$
339,049

Total assets
311,263

359,269

Deferred revenue
14,306

18,497

Total stockholders’ equity
268,751

313,337

MACROGENICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Amounts in thousands, except share and per share data)

Year Ended December 31,

2016

2015

2014
Revenues:

Revenue from collaborative agreements
$
86,582

$
99,368

$
47,264

Revenue from government agreements
5,298

1,486

533

Total revenues
91,880

100,854

47,797

Costs and expenses:

Research and development
122,091

98,271

70,186

General and administrative
29,831

22,765

15,926

Total costs and expenses
151,922

121,036

86,112

Loss from operations
(60,042
)

(20,182
)

(38,315
)

Other income
1,514

42

2

Net loss
(58,528
)

(20,140
)

(38,313
)

Other comprehensive loss:

Unrealized loss on investments
(77
)

(5
)

—

Comprehensive loss
$
(58,605
)

$
(20,145
)

$
(38,313
)

Basic and diluted net loss per common share
$
(1.69
)

$
(0.63
)

$
(1.40
)
Basic and diluted weighted average number of common shares
34,685,274

31,801,645

27,384,990

On February 28, 2017 Portola Pharmaceuticals, Inc. (NASDAQ:PTLA) reported a corporate update and reported its financial results for the fourth quarter and year ended December 31, 2016 (Press release, Portola Pharmaceuticals, FEB 28, 2017, View Source;p=RssLanding&cat=news&id=2250316 [SID1234517893]).

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"We are working towards gaining approval of both betrixaban, our investigational oral Factor Xa inhibitor, and andexanet alfa, our investigational antidote for oral Factor Xa inhibitors, in the United States and Europe over the next year," said Bill Lis, chief executive officer of Portola. "Each has the potential to become the first product approved for their respective indications and both are highly anticipated by the medical community. We are confident in the robust clinical data for both products, and are focused on addressing the regulatory risks that remain."

Recent Achievements, Upcoming Events and Milestones

Betrixaban – an oral Factor Xa inhibitor anticoagulant in development for extended prophylaxis of venous thromboembolism (VTE) in acute medically ill patients with risk factors for VTE; designated Fast Track status by the U.S. Food and Drug Administration (FDA)

The FDA accepted the New Drug Application (NDA), granted priority review, and established a Prescription Drug User Fee Act (PDUFA) action date of June 24, 2017
FDA informed Portola at the mid-cycle review that it does not plan to schedule an Advisory Committee meeting to discuss the NDA
The European Medicines Agency (EMA) validated the Marketing Authorization Application (MAA) under a standard 210-day review period; the Committee for Medicinal Products for Human Use (CHMP) opinion is expected by the end of the year
AndexXa (andexanet alfa) – a Factor Xa inhibitor antidote in development for patients treated with a Factor Xa inhibitor when reversal of anticoagulation is needed due to life-threatening or uncontrolled bleeding; designated a Breakthrough Therapy and an Orphan Drug by the FDA

Expanded the existing agreement with Daiichi Sankyo; Portola received a $15 million upfront payment and is eligible to receive up to an additional $10 million upon meeting certain milestones; upon AndexXa’s approval, Daiichi will be eligible to receive a capped royalty
Resubmission of the Biologics License Application (BLA) is anticipated in the second quarter of 2017
Continued to enroll patients in the ongoing Phase 3b/4 ANNEXA-4 Study in patients with acute major bleeding; the Data and Safety Monitoring Board (DSMB) successfully completed its third review
Cerdulatinib – an oral, dual Syk/JAK inhibitor in development to treat resistant or relapsed hematologic cancer patients

Continued to enroll patients in a Phase 2a study evaluating the safety and efficacy of cerdulatinib in patients with relapsed/refractory B-cell malignancies who have failed multiple therapies
Entered into an exclusive worldwide licensing agreement with Dermavant Sciences for the development and commercialization of cerdulatinib in topical applications beyond oncology; Portola retains full rights to all non-topical formulations of cerdulatinib, including oral formulations
Corporate

Entered into a $50 million loan agreement with Bristol-Myers Squibb Company and Pfizer Inc. for continued development and clinical studies of andexanet alfa
Entered into a $150 million royalty agreement in the first quarter of 2017 with HealthCare Royalty Partners in exchange for a tiered, mid-single-digit royalty based on worldwide andexanet alfa sales
Fourth Quarter and Year-End Financial Results
Collaboration and license revenue earned under Portola’s collaboration and license agreements with Bristol-Myers Squibb Company and Pfizer, Bayer Pharma and Janssen Pharmaceuticals, Daiichi Sankyo and Dermavant Sciences was $13.7 million for the fourth quarter of 2016 compared with $4.4 million for the fourth quarter of 2015. Collaboration and license revenue for the year ended December 31, 2016, was $35.5 million compared with $12.1 million for the year ended December 31, 2015.

Total operating expenses for the fourth quarter of 2016 were $68.9 million compared with $70.7 million for the same period in 2015. Total operating expenses for the fourth quarter of 2016 included $7.9 million in stock-based compensation expense compared with $6.8 million for the same period in 2015. Total operating expenses for the year ended December 31, 2016, were $305.1 million compared with $239.2 million for 2015. Total operating expenses for the full year ended December 31, 2016, included $30.4 million in stock-based compensation expense compared with $22.9 million for 2015.

Research and development expenses for the fourth quarter of 2016 were $56.0 million compared with $59.8 million for the same period in 2015. Research and development expenses were $246.9 million for the year ended December 31, 2016, compared with $200.4 million for 2015. The increase in R&D expenses was primarily due to increased program costs to advance andexanet alfa of $64.7 million, including a $27.3 million one-time charge to write off certain prepaid manufacturing costs and increased program costs to support cerdulatinib and early research programs of $3.8 million, partially offset by decreased program costs related to betrixaban of $22.0 million following the completion of the APEX clinical trial enrollment.

Selling, general and administrative expenses for the fourth quarter of 2016 were $12.9 million compared with $10.9 million for the same period in 2015. Selling, general and administrative expenses for the year ended December 31, 2016, were $58.2 million compared with $38.9 million for 2015. The increase in SG&A expenses was primarily due to increased headcount-related costs, commercial launch preparation activities and business development-related costs, and costs associated with professional and accounting fees of $2.0 million.

For the fourth quarter of 2016, Portola reported a net loss of $53.8 million, or $0.95 net loss per share, compared with a net loss of $66.1 million, or $1.23 net loss per share, for the same period in 2015. Shares used to compute net loss per share attributable to common stockholders were 56.5 million for the fourth quarter of 2016 compared with 53.6 million for the same period in 2015. Net loss for the year ended December 31, 2016, was $269.0 million, or $4.76 net loss per share, compared with a net loss of $226.5 million, or $4.36 net loss per share, for the same period in 2015. Shares used to compute net loss per share attributable to common stockholders were 56.5 million for 2016 compared with 52.0 million for 2015.

Cash, cash equivalents and investments at December 31, 2016, totaled $318.8 million compared with cash, cash equivalents and investments of $460.2 million as of December 31, 2015.

2017 Annual Financial Guidance
For the fiscal year 2017, Portola expects total GAAP operating expenses to be between $323 million and $344 million. For the fiscal year 2017, Portola expects total pro-forma operating expenses to be between $290 million and $310 million, excluding stock-based compensation. These expenses will be primarily for manufacturing of both andexanet and betrixaban, support of ongoing clinical trials and preparation for the potential commercial launches of betrixaban and AndexXa.

Non-GAAP Financial Projection
This press release and the reconciliation table included herein include a non-GAAP projection of 2017 operating expenses, excluding stock-based compensation. A reconciliation to projected GAAP 2017 operating expenses is provided in the accompanying table entitled "Reconciliation of GAAP to Non-GAAP Projected Operating Expenses." Portola management believes this non-GAAP information is useful for investors because it provides information about the Company’s ability to independently fund and advance its operations with existing capital resources. Share-based compensation is not an expense that requires cash settlement, and therefore, the Company excludes these charges for purposes of evaluating our ability to fund future operations.

On February 28, 2017 Cancer Research UK, Cancer Research Technology (CRT), the charity’s commercial arm, and HitGen Ltd, a privately held biotech company focused on early drug discovery, reported that they have entered into a licence agreement to develop a novel class of drugs against lung cancer (Press release, Cancer Research Technology, 28 28, 2017, View Source [SID1234523167]).

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The work will be carried out by scientists at Cancer Research UK’s Drug Discovery Unit at The University of Manchester, after the new family of compounds was identified using HitGen’s leading technology platform. This involved screening vast DNA encoded libraries, containing many hundreds of millions of small molecules with drug-like properties synthesized on chemically diverse scaffolds. A number of new small molecule leads for this important therapeutic target in lung cancer nominated by Cancer Research UK were revealed.

This is the first licence taken through the ongoing collaboration between CRT, Cancer Research UK’s Manchester Institute Drug Discovery Group and HitGen, who are eligible for milestone payments as the project progresses.

Dr Jin Li, CEO of HitGen, said: "We’re delighted to announce this significant project milestone. We look forward to seeing the progress made by the Cancer Research UK Manchester Institute."

Dr Donald Ogilvie, head of drug discovery at the Cancer Research UK Manchester Institute at The University of Manchester, said: "We’re very pleased to work with HitGen to find promising leads against these more difficult targets that may otherwise not be developed."

"As part of the Cancer Research UK Lung Cancer Centre of Excellence, we’re determined to get new lung cancer treatments to patients quicker. Identifying this promising candidate drug offers the potential to help boost survival from this devastating disease."