On August 5, 2015 Sangamo BioSciences, Inc. (NASDAQ: SGMO) reported its second quarter 2015 financial results and accomplishments (Press release, Sangamo BioSciences, AUG 5, 2015, View Source [SID:1234507043]).

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For the second quarter ended June 30, 2015, Sangamo reported a consolidated net loss of $12.1 million, or $0.17 per share, compared to a net loss of $7.0 million, or $0.10 per share, for the same period in 2014. As of June 30, 2015, the Company had cash, cash equivalents, marketable securities and interest receivable of $218.6 million.

Revenues for the second quarter of 2015 were $8.4 million, compared to $10.4 million for the same period in 2014. Second quarter 2015 revenues were generated from the Company’s collaboration agreements with Shire International GmbH (Shire), Biogen Inc. (Biogen), enabling technology agreements and research grants. The revenues recognized for the second quarter of 2015 consisted of $7.8 million in collaboration agreements and $0.6 million in research grants, compared to $9.7 million and $0.7 million, respectively, for the same period in 2014.

The decrease in collaboration agreement revenues was primarily due to a decrease in revenues under the Company’s collaboration and license agreement with Shire, partially offset by an increase in revenues from the collaboration and licensing agreement with Biogen. In the second quarter of 2015, Sangamo recognized $3.9 million of revenues related to research services performed under the collaboration agreement with Shire, and $1.7 million of revenues related to research services performed under the collaboration agreement with Biogen. In addition, pursuant to the agreements entered into with Shire in January 2012 and Biogen in January 2014, Sangamo received upfront payments of $13.0 million and $20.0 million, respectively. These payments are being recognized on a straight-line basis over the initial six-year research term for Shire and approximately 40 months for Biogen. The Company recognized $0.5 million of the Shire upfront payment and $1.5 million of the Biogen upfront payment as revenue for the second quarter of 2015.

Research and development expenses were $15.6 million for the second quarter of 2015, compared to $13.5 million for the same period in 2014. The increase in research and development expenses was primarily due to the expansion of the technical operations group in order to manage third-party manufacturing relationships, improve internal process development and enhance the Company’s overall manufacturing capabilities. This expansion resulted in increased personnel expenses, including stock-based compensation, due to increased headcount as well as higher facilities and lab supply expenses to support operations.

General and administrative expenses were $5.0 million for the second quarter of 2015, compared to $4.0 million for the same period in 2014. The increase was primarily due to increases in professional services expenses and personnel-related expenses, including stock-based compensation.

Total operating expenses for the second quarter of 2015 were $20.6 million, compared to $17.4 million for the same period in 2014.

Six Months Results
For the six months ended June 30, 2015, the consolidated net loss was $17.4 million, or $0.25 per share, compared to a consolidated net loss of $14.6 million, or $0.22 per share, for the six months ended June 30, 2014. Revenues were $21.8 million for the first half of 2015, compared to $18.5 million for the same period in 2014. Total operating expenses were $40.3 million for the first half of 2015, compared to $33.2 million for the first half of 2014.

Recent Events

Consolidation of ZFP Therapeutic Strategy for Hemoglobinopathies Program in Beta-Thalassemia and Sickle Cell Disease. In May 2015 Sangamo announced the consolidation of development paths for its zinc finger nuclease (ZFN)-mediated genome editing programs targeting beta-thalassemia and sickle cell disease (SCD), which are being developed under the agreement with Biogen. This decision, made by the Biogen-Sangamo Joint Steering Committee, was based on preclinical data that support the development of a second generation approach (BCL11A Enhancer strategy) to increase levels of fetal globin as a potentially curative strategy for these diseases. We expect to file new Investigational New Drug (IND) applications for these programs in 2016.

Presentation of Data at the 2015 Annual Meeting of the American Society of Gene and Cell Therapy (ASGCT) (Free ASGCT Whitepaper). Sangamo presented eighteen abstracts, including featured presentations in the Presidential Symposium and Clinical Trial Spotlight session, at the 18TH Annual ASGCT (Free ASGCT Whitepaper) Meeting held in May 2015. The presentations included data from Sangamo’s therapeutic and research programs in HIV/AIDS, hemoglobinopathies, lysosomal storage disorders (LSDs) and other monogenic diseases, cancer immunotherapy, and advancements in the Company’s delivery technology.

Updated data were presented from subjects treated in Cohort 3* of Sangamo’s SB-728-1101 clinical trial, who received a T-cell product containing both CCR5-modified CD4 and CD8 T-cells. Two of the three subjects have demonstrated significant control of viral load during a treatment interruption (TI) from antiretroviral therapy (ART), one to levels that are quantifiable but considered to render the subject non-infectious and one who demonstrated a one log drop from peak viral load after a delayed onset of viremia. Both subjects remain off ART and on TI.

Sangamo scientists also presented new preclinical data from the hemoglobinopathies program, partnered with Biogen, demonstrating the effectiveness of knocking out the BCL11A Enhancer in hematopoietic stem and progenitor cells (HSPCs) to increase fetal globin levels specifically in red blood cell precursors.

Additionally, data from the Company’s proprietary ZFP Therapeutic programs in LSDs provided proof of concept for Sangamo’s In Vivo Protein Replacement Platform (IVPRP). The data demonstrated durable expression of functional enzyme sufficient to correct biomarkers of disease in mouse models of MPS I (Hurler syndrome) and MPS II (Hunter syndrome).

Internal Organization. Sangamo promoted Michael Holmes, Ph.D., to Vice President of Research from Vice President of Research-Genome Editing. Dr. Holmes, who has been with the company for fourteen years, is a co-developer of Sangamo’s ZFN genome editing platform and currently directs the Company’s IVPRP programs. In addition, Curt Herberts has been promoted to Vice President of Corporate Development from Senior Director of Corporate Development and Strategy. Mr. Herberts has responsibility for implementation of Sangamo’s corporate development strategy including in-licensing of complementary technologies and negotiating therapeutic collaborations and partnerships.

Financial Guidance for 2015

The Company reiterates its earlier guidance as follows:

Cash and Investments: Sangamo expects that its cash, cash equivalents and marketable securities will be at least $180 million at the end of 2015, inclusive of research funding from Biogen and research funding and certain milestone payments from Shire, but exclusive of funds arising or received from any additional new collaborations or partnerships, equity financings or other new sources.
Revenues: Sangamo expects that revenues will be in the range of $60 million to $70 million in 2015, inclusive of research funding from Biogen and research funding and certain milestone payments from Shire.
Operating Expenses: Sangamo expects that operating expenses will be in the range of $100 million to $110 million for 2015.

On August 5, 2015 OPKO Health, Inc. (NYSE:OPK), a multi-national biopharmaceutical and diagnostics company, reported operating and financial results for its second quarter ended June 30, 2015 (Filing, 8-K, Opko Health, AUG 5, 2015, View Source [SID:1234507042]).

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Business Highlights

• OPKO to Acquire Bio-Reference Laboratories: OPKO and Bio-Reference Laboratories signed a definitive merger agreement on June 3, 2015 under which OPKO will acquire Bio-Reference Laboratories. Bio-Reference Laboratories is the third largest full service clinical laboratory in the United States and is known for its innovative technological solutions and pioneering leadership in the areas of genomics and genetic sequencing. Through GeneDx, Bio-Reference Laboratories’ genetic sequencing laboratory, and GenPath Diagnostics, its Oncology and Women’s Health business units, Bio-Reference Laboratories has accumulated a vast array of genetic and genomics data that OPKO will make available to industry and academic scientists to enhance their drug discovery and clinical trial programs. Under the terms of the agreement, holders of Bio-Reference Laboratories common stock will receive 2.75 shares of OPKO common stock for each share of Bio-Reference Laboratories common stock. Closing of the transaction is subject to approval of Bio-Reference Laboratories’ shareholders, and other customary conditions. OPKO intends to leverage the national marketing, sales, and distribution resources of Bio-Reference Laboratories to enhance sales of OPKO’s 4Kscore test, a blood test that provides a man’s specific personalized risk score for aggressive prostate cancer, and other OPKO diagnostic products under development.

• Acquired EirGen Pharma; A Growing, Profitable Specialty Pharmaceutical Developer and Manufacturer: OPKO acquired EirGen Pharma, Ltd., a growing, profitable, cash flow positive specialty pharmaceutical company focused on the development, manufacturing, and commercial supply of high potency, high barrier to entry pharmaceutical products for sale in the U.S., Canada, Japan, Australia, Europe, and in other countries around the world. The company, situated in a state of the art, high containment research and development and manufacturing facility, is approved by the FDA, EMEA (European Health Authorities) and the PMDA (Japanese Health Authorities). To date, EirGen and its commercial partners have filed 10 product applications with the FDA and 5 each in Europe and Japan. EirGen has a strong research and development portfolio of over 20 niche, high barrier to entry drugs. EirGen will rapidly expand its drug portfolio with access to additional capital from OPKO, together with the generous benefits of Irish government programs encouraging research and development in Ireland. Eirgen also offers significant synergies and benefits to OPKO through is ability to manufacture OPKO’s current and future products which will contribute to a more favorable tax rate in the future.

• Rayaldee NDA Submission Accepted by FDA; Expected PDUFA date of March 29, 2016: OPKO previously announced successful top-line results from both of its pivotal Phase 3 trials with Rayaldee in late 2014. These trials were identical randomized, double-blind, placebo-controlled, multi-site studies intended to establish the safety and efficacy of Rayaldee as a new treatment for secondary hyperparathyroidism (SHPT) in patients with stage 3 or 4 chronic kidney disease (CKD) and vitamin D insufficiency.

• Completed the Enrollment in its ongoing Phase 3 Trial in Growth Hormone Deficient Adults: The trial is designed to evaluate the safety and efficacy of hGH-CTP with a primary endpoint of superiority compared to placebo in decreasing fat mass in adults with GHD. The trial is a randomized, double-blind, placebo-controlled, multi-center, global study in adults with GHD. The study is divided into two treatment periods: a 26-week, double-blind, placebo-controlled part, followed by a 26-week, open-label extension. The study is expected to end toward the second half of 2016; regulatory submission will follow study completion.

• IND for Long Acting Factor VIIa-CTP for Hemophilia Filed and Accepted: In March 2015, the FDA accepted OPKO’s IND application to Initiate a Phase 2a Trial for its Long-Acting Coagulation Factor VIIa-CTP to Treat Hemophilia. Clinical Trials are expected to commence during Q3 2015.

• Clinical Studies for Long Acting Oxyntomodulin for Obesity and Diabetes Expected to Begin During 2015: OPKO expects to commence studies for its long acting Oxyntomodulin for diabetes and obesity in the second half of 2015.

• OPKO’s 4Kscore Recommended in National Comprehensive Cancer Network Guidelines for Prostate Cancer Early Detection: The National Comprehensive Cancer Network (NCCN) included 4Kscore as a recommended test in the 2015 NCCN Guidelines for Prostate Cancer Early Detection. The panel concluded that the 4Kscore, as a blood test with greater specificity over the PSA test, is indicated for use prior to a first prostate biopsy or after a negative biopsy to assist patients and physicians in further defining the probability of high-grade cancer.

•
Rolapitant PDUFA Date is September 5, 2015: OPKO’s partner, TESARO, submitted a NDA to the FDA for approval of oral rolapitant, an investigational neurokinin-1 (NK-1) receptor antagonist in development for the prevention of chemotherapy-induced nausea and vomiting (CINV). The NDA is supported by data from four controlled studies covering a spectrum of patients receiving chemotherapy that commonly causes nausea and vomiting. The top-line results of three of the Phase 3 studies were previously announced by TESARO. Upon approval and following commercialization, OPKO will receive up to $110 Million in additional milestones and tiered, double digit royalties.

"The first half of 2015 was transformational for OPKO," said Phillip Frost, M.D., Chairman and CEO. "We believe that the closing of the Pfizer transaction, the acquisition of EirGen and our pending transaction with Bio-Reference will result in OPKO having significant revenue opportunities and an expanded commercial presence to broadly sell and market our products and services. The submission and acceptance of our NDA filing for Rayaldee were also important parts of bringing to market a new therapeutic option for patients with stage 3 or 4 chronic kidney disease and vitamin D insufficiency. We expect the initiation of our important clinical development programs for Factor VIIa-CTP and oxyntomodulin, products with great commercial potential, during the second half of the year," continued Dr. Frost. "The 4Kscore Test’s addition to the NCCN guideline represents a major step towards its becoming the standard of care for early detection of aggressive prostate cancer as well as obtaining reimbursement from the healthcare providers."

Financial Highlights

• Cash, cash equivalents and marketable securities were $221.2 million as of June 30, 2015.

¡ Reflects receipt of Pfizer upfront payments of $295.0 million, partially offset by a $94.7 million cash payment for the acquisition of EirGen (net of cash on hand of EirGen) and a one-time $25.9 million payment to the Office of the Chief Scientist in Israel related to the Pfizer transaction.

• Consolidated revenues increased to $42.4 and $72.5 million during the three and six months ended June 30, 2015 from $23.5 and $45.8 million in the comparable periods of 2014. Revenue for the three and six months ended June 30, 2015 included $17.7 and $30.2 million of revenue resulting from OPKO’s collaboration agreement with Pfizer. OPKO is recording revenue in connection with the Pfizer transaction on a straight-line basis over the expected development period.

• Net loss for the three and six months ended June 30, 2015 was $42.8 million and $159.9 million and included increased operating expenses including increased research and development expense of $13.3 million and $17.8 million, respectively, in comparison to the 2014 periods. Further, the three and six month periods included significant non-recurring and or non-cash charges, such as:

¡ $25.9 million of non-recurring operating expense related to the repayment of a grant to the Office of the Chief Scientist in Israel related to the Pfizer transaction; and

¡ $16.6 million and $66.3 million in non-cash charges related to the change in value of embedded derivatives during the three and six months of 2015, which are part of our January 2013 convertible senior notes due in 2033 (the "2033 Senior Notes"). This non-cash charge is principally a result of the increased market price of our common stock since December 31, 2014.

On August 5, 2015 PDL BioPharma, Inc. (PDL) (NASDAQ: PDLI) reported financial results for the second quarter and six months ended June 30, 2015 (Press release, PDL BioPharma, AUG 5, 2015, View Source [SID:1234507040]).

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Total revenues were $138.1 million for the three months ended June 30, 2015, compared to $162.8 million for the same period of 2014, and $287.8 million for the six months ended June 30, 2015, compared to $299.6 million for the six months ended June 30, 2014. During the three and six months ended June 30, 2015 and 2014, our Queen et al. royalty revenues consisted of royalties and maintenance fees earned on sales of products under license agreements associated with our Queen et al. patents. During the three and six months ended June 30, 2015 and 2014, royalty rights – change in fair value consisted of revenues associated with the change in fair value of our royalty right assets, primarily Depomed, Inc., The Regents of the University of Michigan , and Viscogliosi Brothers, LLC. Revenues for the quarter ended June 30, 2015 included $116.9 million in royalty and license payments from PDL’s licensees to the Queen et al. patents, $12.2 million in net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets, which included approximately $1.2 million in net cash royalty rights payments, and $9.0 million in interest revenue from notes receivable debt financings to late-stage healthcare companies. Revenues for the six months ended June 30, 2015 included $244.7 million in royalty and license payments from PDL’s licensees to the Queen et al. patents, $23.6 million in net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets, which included approximately $2.1 million in net cash royalty rights payments, and $19.5 million in interest revenue from notes receivable debt financings to late-state healthcare companies.

Total revenues decreased by 15% and 4%, respectively, for the three and six months ended June 30, 2015, when compared to the same periods in 2014. The decrease is primarily driven by the decrease in the Depomed royalty rights cash proceeds related to the Salix Pharmaceuticals, Ltd (recently acquired by Valeant Pharmaceuticals International, Inc.) excess supply of Glumetza at the wholesaler inventory levels, decreased interest revenues due to the early payoff of the AxoGen and Durata notes receivables, and decreased Actemra royalties as a result of the conclusion of the Actemra license agreement, partially offset by increased royalties from sales of Perjeta, Xolair, Kadcyla, Herceptin, and Tysabri.

Operating expenses in the second quarter of 2015 were $7.4 million, compared with $6.9 million in the second quarter of 2014. The increase in operating expenses for the three months ended June 30, 2015, as compared to the same period in 2014, was a result of an increase in general and administrative expenses of $1.0 million for professional service expenses mostly related to the asset management of Wellstat Diagnostics, partially offset by a decrease of $0.3 million for share-based compensation and a decrease of $0.2 million for legal services.

Operating expenses for the six months ended June 30, 2015 were $15.1 million, compared with $11.5 million in the first six months of 2014. The increase in operating expenses for the six months ended June 30, 2015, as compared to the same period in 2014, was a result of an increase in general and administrative expenses of $2.8 million for professional service expenses primarily related to the asset management of Wellstat Diagnostics and an increase of $0.9 million in share-based compensation.

Net income in the second quarter of 2015 was $78.3 million, or $0.47 per diluted share as compared with net income in the second quarter of 2014 of $92.1 million, or $0.52 per diluted share. Net income in the six months ended June 30, 2015 was $162.8 million, or $0.97 per diluted share as compared with net income in the first six months of 2014 of $164.9 million, or $0.94 per diluted share. The decrease in net income for the six months ended June 30, 2015, compared to the same period in 2014, is primarily driven by the decrease in the Depomed royalty rights cash proceeds.

Net cash provided by operating activities in the first six months of 2015 was $155.9 million, compared with $146.2 million in the same period in 2014. At June 30, 2015, PDL had cash, cash equivalents and short-term investments of $294.1 million, compared with $293.7 million at December 31, 2014. The change and slight increase in the cash balance at June 30, 2015 was primarily attributable to net cash provided by the proceeds from the March 2015 Term Loan of $100.0 million, proceeds from royalty rights of $2.1 million, and cash provided by operating activities of $155.9 million, offset in part by retirement of the Series 2012 Notes and May 2015 Notes for $177.4 million, payment of dividends of $49.1 million, repayment of a portion of the March 2015 Term Loan for $25.0 million, additional note receivable purchases of $5.2 million, and the payment of $0.6 million for debt issuance costs related to the March 2015 Term Loan.

Recent Developments

ARIAD Revenue Interest Assignment
On July 28, 2015, the Company entered into a revenue interest assignment agreement (the "Agreement") in which it agreed to provide ARIAD Pharmaceuticals, Inc. ("ARIAD") with up to $200 million in cash in exchange for royalties on the net revenues of Iclusig (ponatinib). Funding of the first $100 million will be made in two tranches of $50 million each, with the initial amount having already been funded on the closing date of the Agreement and an additional $50 million to be funded on the 12-month anniversary of the closing date. In addition, ARIAD has an option to draw up to an additional $100 million at any time between the six and twelve month anniversaries of the closing date.

PDL will initially receive 2.5% of the worldwide net revenues of Iclusig until the 12-month anniversary of the closing date, at which time the royalty increases to 5.0% of the worldwide net revenues of Iclusig and remains until December 31, 2018. Beginning January 1, 2019 and thereafter, the royalty rate will increase to 6.5%, subject to an additional increase to 7.5% if PDL’s funding exceeds $150 million. If PDL does not receive payments equal to or greater than the total amount funded on or before the fifth anniversary of each of the respective fundings, ARIAD will pay PDL make-whole payments calculated as the difference between the amounts funded by PDL and the amounts paid to PDL to such date.

PDL has a put option based upon certain events and ARIAD has a call option to repurchase the revenue interest at any time. Both the put and call prices have been pre-determined.

On August 5, 2015 Nektar Therapeutics (Nasdaq: NKTR) reported its financial results for the second quarter ended June 30, 2015 (Press release, Nektar Therapeutics, AUG 5, 2015, View Source [SID:1234507039]).

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Cash and investments in marketable securities at June 30, 2015 were $279.7 million as compared to $325.8 million at March 31, 2015.

"We are pleased that the MOVANTIK launch in the U.S. is off to an encouraging start with very rapid uptake," said Howard W. Robin, President and Chief Executive Officer of Nektar. "AstraZeneca plans to launch MOVANTIK in both Europe and Canada in the second half of this year. The SUMMIT-07 efficacy study of NKTR-181 in patients with chronic low back pain is well underway and proceeding ahead of schedule. We recently signed an important clinical collaboration with MD Anderson Cancer Center for our immuno-oncology therapy, NKTR-214, which is scheduled to enter a Phase 1 / 2 clinical study before year-end. Finally, Baxalta’s ADYNOVATE, or BAX 855, continues on track to be approved and launched in the U.S. by the end of 2015."

Year-to-date revenue for 2015 was $131.5 million as compared to $48.3 million in the first half of 2014. The increase in revenue in the first half of 2015 as compared to the same period in 2014 is due to the recognition of $90.0 million of the $100.0 million milestone payment from AstraZeneca following the first commercial sale of MOVANTIK in the U.S. Revenue in the second quarter of 2015 was $22.7 million as compared to $28.5 million in the second quarter of 2014. Revenue included non-cash royalty revenue, related to our 2012 royalty monetization, of $4.7 million and $8.7 million in the second quarter and first half of 2015, respectively, and $4.8 million and $10.6 million in the second quarter and first half of 2014, respectively. This non-cash royalty revenue is offset by non-cash interest expense.

Total operating costs and expenses in the first half of 2015 were $131.9 million as compared to $107.6 million in the first half of 2014. Total operating costs and expenses in the second quarter of 2015 were $66.1 million as compared to $51.4 million in the second quarter of 2014. Total operating costs and expenses increased primarily as a result of increased research and development (R&D) expense.

Research and development expense in the second quarter of 2015 was $45.4 million as compared to $36.7 million in the second quarter of 2014. For the first half of 2015, R&D expense was $92.4 million as compared to $75.0 million in the first half of 2014. R&D expense was higher in the second quarter and first half of 2015 as compared to the same periods in 2014 primarily due to the initiation of the Phase 3 efficacy study of NKTR-181 in patients with chronic low back pain. Additionally, R&D expense in the first half of 2015 included costs related to the commercial scale-up of production of devices for Amikacin Inhale, the ongoing Phase 3 study of NKTR-102 in breast cancer, the ongoing Phase 1 study of NKTR-171, and IND enabling activities for NKTR-214, which will enter the clinic in 2015.

General and administrative expense was $10.2 million in the second quarter of 2015 as compared to $9.6 million in the second quarter of 2014. G&A expense in the first half of 2015 was $20.5 million as compared to $19.5 million in the first half of 2014.

Net loss in the second quarter of 2015 was $52.7 million or $0.40 loss per share as compared to $32.6 million or $0.26 loss per share in the second quarter of 2014. Net loss in the first half of 2015 was $18.8 million or $0.14 loss per share as compared to $78.8 million or $0.63 loss per share in the first half of 2014.

The company also announced the following upcoming presentations and events:

IASLC 16th World Congress on Lung Cancer, Denver, CO:

Abstract/Poster Title: "Etirinotecan Pegol (NKTR-102) in the Treatment of Patients with Metastatic Non Small Cell Lung Cancer (NSCLC) after Failure of 2nd Line Treatment: A Phase II study", Aggarwal C., et al.
Date: September 9, 2015, 9:30 a.m. – 4:30 p.m. Mountain Time
CRI-CIMT-EATI-AACR Inaugural International Cancer Immunotherapy Conference (CIMT) (Free CIMT Whitepaper), Translating Science into Survival 2015, New York, NY:

Abstract/Poster Title: "Antitumor activity of the CD122-biased immunostimulatory cytokine combined with immune checkpoint blockade requires innate and adaptive immunity", Langowski, J., et al.
Date: September 18, 2015, 4:30-6:30 p.m. Eastern Time
Nektar Investor and Analyst R&D Day, St. Regis Hotel, New York, NY:

Date: October 8, 2015, 12:00-3:30 p.m. Eastern Time

On August 5, 2015 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, today provided a corporate progress update and reported financial results for the second quarter ended June 30, 2015 (Press release, MacroGenics, AUG 5, 2015, View Source [SID:1234507038]).

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"In focusing on our mission to harness the power of the immune system to fight cancer and autoimmune diseases, we continue to make advancements across multiple fronts," said Scott Koenig, M.D., Ph.D., President and CEO of MacroGenics. "Our fourth bi-specific DART molecule, MGD011, is in clinical testing with our collaboration partner, Janssen Biotech, Inc., and we expect that our fifth DART molecule, MGD009, will be in the clinic by year-end. In addition, we recently initiated SOPHIA, our Phase 3 study of margetuximab in patients with metastatic breast cancer. Beyond these programs, we continue to advance our other DART molecules as well as MGA271, an Fc-optimized antibody product candidate. Finally, with the additional capital recently raised, we are in an excellent position to accelerate the development of checkpoint inhibitor molecules as well as to expand our manufacturing capacity for anticipated clinical and commercial needs."

Pipeline Update

Margetuximab is an Fc-optimized monoclonal antibody that targets HER2. Recent highlights include:

SOPHIA Phase 3 Metastatic Breast Cancer Study: The Company recently enrolled the first patient in SOPHIA, a Phase 3 pivotal study. This randomized, open-label, two-arm, interventional Phase 3 study will evaluate margetuximab plus chemotherapy against trastuzumab plus chemotherapy in third-line metastatic breast cancer patients with HER2 expression at the 3+ level by IHC or 2+ level by IHC with gene amplification. The purpose of the study is to determine whether patients treated with margetuximab plus chemotherapy have longer progression-free and overall survival than patients treated with trastuzumab plus chemotherapy. MacroGenics plans to enroll 530 patients in this study and projects that it will take approximately three years to complete.

ASCO Presentation of Phase 1 Data: During the second quarter, MacroGenics presented margetuximab Phase 1 clinical data at the 2015 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in a poster discussion. Margetuximab was well tolerated by patients in this dose-escalation study and showed promising activity in patients who have limited treatment options. The updated Phase 1 study results show the potential for margetuximab in the treatment of HER2-expressing tumors.

Gastroesophageal Cancer Opportunity: The Company remains on track to initiate a Phase 1/2 combination study in gastroesophageal cancer starting in the fourth quarter of 2015.

MGA271 is an Fc-optimized monoclonal antibody that targets B7-H3, a member of the B7 family of molecules involved in immune regulation. Recent highlights include:

Recruiting Additional Monotherapy Expansion Cohorts: The Company is recruiting patients in multiple MGA271 monotherapy expansion cohorts in a Phase 1 study across various tumor types, including triple-negative breast cancer, head and neck cancer, renal cell cancer, melanoma (in patients who have progressed despite prior checkpoint inhibitor treatment), non-small cell lung cancer and bladder cancer.

Combination Studies: MacroGenics is currently enrolling a study of MGA271 in combination with ipilimumab in patients with B7-H3 positive melanoma, lung, and head and neck cancers. In the third quarter of 2015, the Company also expects to initiate a study of MGA271 in combination with pembrolizumab in patients with melanoma, non-small cell lung carcinoma and squamous cell carcinoma of the head and neck.

Presentation of Phase 1 MGA271 Data: In the fourth quarter of 2015, MacroGenics plans to present clinical data from the ongoing clinical trial.

MGD006 is a humanized DART molecule that recognizes both CD123 and CD3. CD123, the Interleukin-3 receptor alpha chain, is expressed on leukemia and leukemic stem cells. The primary mechanism of action of MGD006 is its ability to redirect T cells, via their CD3 component, to kill CD123-expressing cells. MacroGenics continues to enroll patients in the dose escalation portion of a Phase 1 study of MGD006 for the treatment of acute myeloid leukemia.

MGD007 is a humanized DART molecule that recognizes both the glycoprotein A33 antigen, or gpA33, and CD3. gpA33 is a gastrointestinal antigen with high expression in colorectal cancer. The primary mechanism of action of MGD007 is its ability to redirect T cells, via their CD3 component, to kill gpA33-expressing cells. MacroGenics continues to enroll patients in the dose escalation portion of a Phase 1 study of MGD007 for the treatment of colorectal cancer.

MGD010 is a humanized DART molecule that simultaneously targets CD32B and CD79B, two B-cell surface proteins. MGD010 is being developed for the treatment of autoimmune disorders and is designed to inhibit B-cell activation by exploiting the inhibitory function of CD32B, a checkpoint molecule expressed by B cells. MacroGenics continues to enroll patients in a Phase 1a study in normal healthy volunteers.

MGD011 is a humanized DART molecule that targets both CD19 and CD3 and is being developed for the treatment of B-cell hematological malignancies. MGD011 is designed to redirect T cells, via their CD3 component, to eliminate cells expressing CD19, a marker expressed in B-cell hematological malignancies. MGD011 has been engineered to address half-life challenges posed by other programs targeting CD19 and CD3, allowing for convenient intermittent dosing regimens in the clinical setting.

Pursuant to a collaboration agreement executed with Janssen Biotech, Inc. in December 2014, Janssen is developing MGD011. The first patient in an open-label Phase 1 study received the first dose of MGD011 in late July, triggering a $10 million milestone payment to MacroGenics. Janssen’s Phase 1 study will evaluate the safety, tolerability and preliminary clinical activity of MGD011 when administered to patients with relapsed or refractory B-cell malignancies, including diffuse-large B cell lymphoma, follicular lymphoma, mantle-cell lymphoma, chronic lymphocytic leukemia and acute lymphoblastic leukemia. MacroGenics retains options to co-promote the product in the United States and Canada and to invest in later-stage development in exchange for a profit-share.

MacroGenics continues to advance several additional antibody and DART-based pre-clinical molecules, including MGD009, for which MacroGenics retains worldwide development and commercialization rights.

Corporate Update

Equity Offering: In July, the Company completed an equity offering, raising $141 million in net proceeds, which includes exercise of the underwriters’ option to acquire additional shares in full. MacroGenics intends to use the proceeds of this offering to expand its manufacturing capacity, accelerate development of undisclosed immune checkpoint-based product candidates, advance other research and development programs, in-license or acquire other products or technologies, or for general corporate purposes.

Manufacturing Expansion: The Company recently signed a lease for additional space with a focus on expanding its commercial manufacturing capabilities. MacroGenics expects to complete the design of the new manufacturing space this year.

R&D Day: The Company plans to host an R&D Day in New York on Tuesday, October 13, 2015.

Second Quarter 2015 Financial Results

Cash Position: Cash and cash equivalents as of June 30, 2015 were $235.0 million, compared to $157.6 million as of December 31, 2014. Subsequent to June 30, 2015, MacroGenics completed an equity offering of 4,053,750 shares (including full exercise of the underwriters’ option to acquire additional shares) with net proceeds of $141 million to the Company.
Revenue: Total revenues, consisting primarily of revenue from collaborative research, were $6.7 million for the three-month period ended June 30, 2015 compared to $9.2 million for the three-month period ended June 30, 2014. Collaborative research revenue includes the recognition of deferred revenue from payments received in previous periods as well as payments received during the quarter.

R&D Expenses: Research and development expenses were $22.7 million for the three-month period ended June 30, 2015, compared to $17.3 million for the three-month period ended June 30, 2014. This increase was primarily due to recently commenced clinical trial activities and preparations for additional studies, offset in part by a decrease in expenses related to a product candidate transferred to a partner following IND submission.

G&A Expenses: General and administrative expenses were $5.3 million for the three-month period ended June 30, 2015, compared to $4.1 million for the three-month period ended June 30, 2014. This increase was primarily due to higher stock-based compensation expense and labor costs as well as information technology-related expenses.

Net Loss: Net loss was $21.4 million for the three-month period ended June 30, 2015, compared to net loss of $12.3 million for the three-month period ended June 30, 2014.

Shares Outstanding: Shares outstanding as of June 30, 2015 were 30,123,407, excluding the 4,053,750 shares issued in connection with the July equity offering.