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What changed in MACROGENICS INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MACROGENICS INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+427 added−495 removedSource: 10-K (2025-03-20) vs 10-K (2024-03-07)

Top changes in MACROGENICS INC's 2024 10-K

427 paragraphs added · 495 removed · 334 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

90 edited+32 added−76 removed144 unchanged
Biggest changeLorigerlimab (previously known as MGD019) is an investigational, bispecific tetravalent DART molecule designed to enable simultaneous and/or independent blockade of PD-1 and CTLA-4, with potentially enhanced CTLA-4 blockade on T cells co-expressing these immune checkpoint molecules. Data from a Phase 1/2 dose escalation study of lorigerlimab in patients with advanced solid tumors was reported at the 2020 ESMO Annual Meeting.
Biggest changeOur Wholly Owned Pipeline in Active Development The table below depicts the status of our diverse portfolio of investigational oncology product candidates for which we retain commercialization or other important rights in the U.S. or more broadly: 1 Lorigerlimab Lorigerlimab (previously known as MGD019) is an investigational, bispecific tetravalent DART molecule designed to enable simultaneous and/or independent blockade of PD-1 and CTLA-4, with potentially enhanced CTLA-4 blockade on T cells co-expressing these immune checkpoint molecules.
Cancer cells that arise in other tissues or organs are referred to as solid tumors. Cancer can arise in virtually any part of the body, with the most common types arising in the prostate gland, breast, lung, colon and skin. Cancer is the second leading cause of death in the United States, exceeded only by heart disease.
Cancer cells that arise in other tissues or organs are referred to as solid 6 tumors. Cancer can arise in virtually any part of the body, with the most common types arising in the prostate gland, breast, lung, colon and skin. Cancer is the second leading cause of death in the United States, exceeded only by heart disease.
If and when deficiencies outlined in a complete response letter have been addressed to the FDA's satisfaction in a resubmission of the BLA, the FDA will issue an 15 approval letter. The FDA has committed to reviewing 90 percent of resubmissions within two or six months from receipt depending on the type of information included.
If and when deficiencies outlined in a complete response letter have been addressed to the FDA's satisfaction in a resubmission of the BLA, the FDA will issue an approval letter. The FDA has committed to reviewing 90 percent of resubmissions within two or six months from receipt depending on the type of information included.
Moreover, we may have to participate in interference proceedings declared by the USPTO to determine priority of invention. In the ordinary course of business we participate in post-grant challenge proceedings, such as oppositions, that challenge the patentability of third party patents. Such proceedings could result in substantial cost, even if the eventual outcome is favorable to us.
Moreover, we may have to participate in interference proceedings declared by the USPTO to determine priority of invention. In the ordinary course of 8 business we participate in post-grant challenge proceedings, such as oppositions, that challenge the patentability of third party patents. Such proceedings could result in substantial cost, even if the eventual outcome is favorable to us.
Assuming exercise of the CD123 Option, we will also be eligible to receive tiered, low double-digit royalties on worldwide net sales of MGD024 (or other CD123 products developed under the agreement) and assuming exercise of the Research Program Option, a flat royalty on worldwide net sales of any products resulting from the two research programs.
Assuming exercise of the CD123 Option, we will also be eligible to receive tiered, low double-digit royalties on worldwide net sales of MGD024 (or other CD123 products developed under the agreement) and assuming 5 exercise of the Research Program Option, a flat royalty on worldwide net sales of any products resulting from the two research programs.
There have been persistent proposals to repeal or modify the ACA and it is uncertain how any of those proposals, if in the future approved, would affect these provisions. Trade Secrets We also rely on trade secret protection for our confidential and proprietary information.
There have been persistent proposals to repeal or modify the ACA and it is uncertain how any of those proposals, if in the future approved, would affect these provisions. 9 Trade Secrets We also rely on trade secret protection for our confidential and proprietary information.
In many cases our agreements with consultants, outside scientific collaborators, sponsored researchers 11 and other advisors require them to assign or grant us licenses to inventions they invent as a result the work or services they render under such agreements or grant us an option to negotiate a license to use such inventions.
In many cases our agreements with consultants, outside scientific collaborators, sponsored researchers and other advisors require them to assign or grant us licenses to inventions they invent as a result the work or services they render under such agreements or grant us an option to negotiate a license to use such inventions.
In addition, we provide focused development for managers and emerging leaders who are designated as “key talent” based on performance and leadership potential. 19 Community We believe in giving back and supporting the local communities where we work as well as initiatives consistent with our areas of focus.
In addition, we provide focused development for managers and emerging leaders who are designated as “key talent” based on performance and leadership potential. Community We believe in giving back and supporting the local communities where we work as well as initiatives consistent with our areas of focus.
We endeavor to establish collaborations that preserve our right to participate in future commercialization, for example by securing co-promotion or profit-sharing rights under certain circumstances. 9 We pursue a balanced approach between product candidates that we develop ourselves and those that we develop with our collaborators.
We endeavor to establish collaborations that preserve our right to participate in future commercialization, for example by securing co-promotion or profit-sharing rights under certain circumstances. We pursue a balanced approach between product candidates that we develop ourselves and those that we develop with our collaborators.
In Europe, for example, a CTA must be submitted to the competent national health authority and to independent ethics committees in each country in which a company intends to conduct clinical trials. Once the CTA is approved in accordance with a country’s requirements, clinical trial development may proceed in that country.
In Europe, for example, a CTA must be submitted to the competent national health authority and to independent ethics committees in each country in which a company intends to conduct clinical trials. Once the CTA is approved in accordance with a country’s requirements, clinical trial 15 development may proceed in that country.
In addition, the protocol must be reviewed and approved by an institutional review board (IRB) and all study subjects must provide informed consent prior to participating in the study. 14 Typically, each institution participating in the clinical trial will require review of the protocol before any clinical trial commences at that institution.
In addition, the protocol must be reviewed and approved by an institutional review board (IRB) and all study subjects must provide informed consent prior to participating in the study. Typically, each institution participating in the clinical trial will require review of the protocol before any clinical trial commences at that institution.
Additionally, the FDA will typically inspect the facility or the facilities at which the drug is manufactured. The FDA will not approve the product unless compliance with current Good Manufacturing Practices (cGMPs) is satisfactory. The FDA also reviews the proposed labeling submitted with the BLA and typically requires changes in the labeling text.
Additionally, the FDA will typically inspect the facility or the facilities at which the drug is 13 manufactured. The FDA will not approve the product unless compliance with current Good Manufacturing Practices (cGMPs) is satisfactory. The FDA also reviews the proposed labeling submitted with the BLA and typically requires changes in the labeling text.
In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the IND application is cleared and the clinical trial can begin. As a result, submission of an IND application may not result in the FDA allowing clinical trials to commence. Clinical Development .
In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the IND application is cleared and the clinical trial can begin. As a result, submission of an IND application may not result in the FDA allowing clinical trials to commence. 12 Clinical Development .
Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could 13 result in our competitors establishing a strong market position before we are able to enter the market.
Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.
Under the Provention APA, Sanofi has a remaining obligation to pay us contingent milestone payments totaling $105 million upon the achievement of certain regulatory approval milestones, in addition to contingent milestone payments totaling $225 million upon the achievement of certain sales milestones.
Under the Provention APA, Sanofi has a remaining obligation to pay us contingent milestone payments totaling $105.0 million upon the achievement of certain regulatory approval milestones, in addition to contingent milestone payments totaling $225.0 million upon the achievement of certain sales milestones.
Noncompliance with post-marketing requirements can result in one or more of the following consequences: • Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • Warning letters; • Holds on post-approval clinical trials; • Refusal of the FDA to approve pending BLAs or supplements to approved BLAs, or suspension or revocation of product license approvals; 16 • Product seizure or detention, or refusal to permit the import or export of products; or • Injunctions or the imposition of civil or criminal penalties.
Noncompliance with post-marketing requirements can result in one or more of the following consequences: 14 • Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • Warning letters; • Holds on post-approval clinical trials; • Refusal of the FDA to approve pending BLAs or supplements to approved BLAs, or suspension or revocation of product license approvals; • Product seizure or detention, or refusal to permit the import or export of products; or • Injunctions or the imposition of civil or criminal penalties.
Under the centralised procedure in the EU, a MAA is submitted to the European Medicines Agency (EMA) where it will be evaluated by the Committee for Medicinal Products for Human Use (CHMP). The maximum timeframe for a CHMP evaluation of an MAA that has been validated is 210 days, excluding time taken by an applicant to respond to questions.
Under the centralized procedure in the EU, a MAA is submitted to the European Medicines Agency (EMA) where it will be evaluated by the Committee for Medicinal Products for Human Use (CHMP). The maximum timeframe for a CHMP evaluation of an MAA that has been validated is 210 days, excluding time taken by an applicant to respond to questions.
In November 2020, we partnered with Eversana, a pioneer of next-generation commercial services to the global life sciences industry, to commercialize margetuximab in the U.S. by leveraging their integrated commercial services. Under the terms of the agreement, we maintain ownership of margetuximab, including all manufacturing, regulatory and development responsibilities for the product.
In November 2020, we partnered with Eversana, a pioneer of next-generation commercial services to the global life sciences industry, to commercialize margetuximab in the U.S. by leveraging their integrated commercial services. Under the terms of the Eversana agreement, we maintained ownership of margetuximab, including all manufacturing, regulatory and development responsibilities for the product.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are more effective, have fewer or less severe effects, are more convenient or are less expensive than any products that we may develop, or the standards of care for cancer patients change while our clinical trials are ongoing.
Our commercial opportunity for our product candidates could be reduced or eliminated if our competitors develop and commercialize products that are more effective, have fewer or less severe effects, are more convenient or are less expensive than any products that we may develop, or the standards of care for cancer patients change while our clinical trials are ongoing.
We link annual changes in compensation to overall Company performance, as well as each individual’s contribution to the results achieved. The emphasis on overall Company performance is intended to align the employee’s financial interests with the interests of stockholders. MacroGenics is committed to providing our employees with a benefits program that is both comprehensive and competitive.
We link annual changes in compensation to overall Company performance, as well as each individual’s contribution to the results achieved. The emphasis on overall Company performance is intended to align the employee’s financial interests with the interests of stockholders. We are committed to providing our employees with a benefits program that is both comprehensive and competitive.
We cannot market or promote a new product in a country until a marketing application has been approved by the appropriate regulatory authority for that jurisdiction. Subject to receiving marketing authorization in a jurisdiction, we believe we will be able to commercialize in that market through arrangements with third-party commercial partners.
For our product candidates, we cannot market or promote a new product in a country until a marketing application has been approved by the appropriate regulatory authority for that jurisdiction. Subject to receiving marketing authorization in a jurisdiction, we believe we will be able to commercialize in that market through arrangements with third-party commercial partners.
As part of the Gilead Agreement, Gilead paid us a non-refundable upfront payment of $60.0 million, and we will be eligible to receive up to $1.7 billion in target nomination fees and option fees, as well as development, regulatory and commercial milestones, assuming Gilead exercises the CD123 Option and Research Program Option, successfully develops and commercializes MGD024 or other CD123 products developed under the agreement, and assuming products result from the two additional research programs.
As part of the Gilead Agreement, Gilead paid us a non-refundable upfront payment of $60.0 million, and we are eligible to receive up to $1.7 billion in target nomination fees and option fees, as well as development, regulatory and commercial milestones, assuming Gilead exercises the CD123 Option and Research Program Option, successfully develops and commercializes MGD024 or other CD123 products developed under the agreement, and assuming products result from the two additional research programs.
Public and private healthcare payers control costs and influence drug pricing through a variety of mechanisms, including through negotiating discounts with the manufacturers and through the use of tiered formularies and other mechanisms that provide preferential access to certain drugs over others within a therapeutic class.
Public and private healthcare payors control costs and influence drug pricing through a variety of mechanisms, including through negotiating discounts with the manufacturers and through the use of tiered formularies and other mechanisms that provide preferential access to certain drugs over others within a therapeutic class.
If we are unable to enter into third-party commercial arrangements for other product candidates that may be approved in the future, with respect to the United States we believe that we could potentially build the capabilities to commercialize our 12 approved product or products.
If we are unable to enter into third-party commercial arrangements for our product candidates that may be approved in the future, with respect to the United States we believe that we could potentially build the capabilities to commercialize our approved product or products.
All such filings are available through our website free of charge. In addition, the SEC makes available at its website (www.sec.gov), free of charge, reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 20
All such filings are available through our website free of charge. In addition, the SEC makes available at its website (www.sec.gov), free of charge, reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 18
A favorable opinion on the application by the CHMP will typically result in the granting of the marketing authorisation by the European Commission within 67 days of receipt of the opinion. Generally, the entire review process takes approximately 13-14 months.
A favorable opinion on the application by the CHMP will typically result in the granting of the marketing authorization by the European Commission within 67 days of receipt of the opinion. Generally, the entire review process takes approximately 13-14 months.
BioPharmaceutical Coverage, Pricing, Reimbursement, and Health Care Reform In the United States and other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of adequate reimbursement from third-party payors, including government health administrative authorities, managed care providers, private health insurers, and other organizations.
Biopharmaceutical Coverage, Pricing, Reimbursement, and Health Care Reform In the United States and other countries, sales of any product candidates for which we receive regulatory approval for commercial sale will depend in part on the availability of adequate reimbursement from third-party payors, including government health administrative authorities, managed care providers, private health insurers, and other organizations.
Our Platforms and Technology Expertise We apply our understanding of disease biology, immune-mediated mechanisms and next-generation antibody technologies to design specifically targeted antibody-based product candidates based on our DART, Fc Optimization and licensed ADC platforms.
Our Platforms and Technology Expertise We apply our understanding of disease biology, immune-mediated mechanisms and next-generation antibody technologies to design specifically targeted antibody-based product candidates based on our DART and licensed ADC platforms.
Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such product containing the sponsor's own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.
Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full biologics license application (BLA) for such product containing the sponsor's own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.
Payers also set other criteria to govern the uses of a drug that will be deemed medically appropriate and therefore reimbursed or otherwise covered.
Payors also set other criteria to govern the uses of a drug that will be deemed medically appropriate and therefore reimbursed or otherwise covered.
We will also be reimbursed for materials used to manufacture product as well as other costs incurred to provide manufacturing 7 services. In July 2022, we and Incyte executed an amendment to the agreement which extended the term for one year and provided for an additional annual fixed payment of $5.1 million. Provention Bio, Inc.
We will also be reimbursed for materials used to manufacture product as well as other costs incurred to provide manufacturing services. In July 2022, we and Incyte executed an amendment to the agreement which extended the term for one year and provided for an additional annual fixed payment of $5.1 million.
There is therefore a possibility that our practices might be challenged under such anti-kickback laws. False claims laws prohibit anyone from knowingly and willingly presenting, or causing to be presented, any claims for payment for reimbursed drugs or services to third party payers (including Medicare and Medicaid) that are false or fraudulent.
There is therefore a possibility that such laws may apply and our practices might be challenged under such anti-kickback laws. False claims laws prohibit anyone from knowingly and willingly presenting, or causing to be presented, any claims for payment for reimbursed drugs or services to third-party payors (including Medicare and Medicaid) that are false or fraudulent.
HIV DART Molecules We are conducting clinical studies of MGD014 and MGD020 under a contract awarded to us in September 2015 by the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH).
HIV DART Molecules We conducted clinical studies of MGD014 and MGD020 under a contract awarded to us in September 2015 by the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH).
Other Healthcare Laws and Compliance Requirements We are subject to various federal and state laws pertaining to health care “fraud and abuse,” including anti-kickback and false claims laws, as well as laws related to health care transparency and data protection.
Other Healthcare Laws and Compliance Requirements We may be subject to various federal and state laws pertaining to health care “fraud and abuse,” including anti-kickback and false claims laws, as well as laws related to health care transparency and data protection.
In all cases, the clinical trials must be conducted in accordance with GCP, and other applicable regulatory requirements. A separate CTA must be submitted for each clinical trial to be conducted. In the EU, for example, to obtain regulatory approval of an investigational medicinal product, we must submit a marketing authorisation application (MAA).
In all cases, the clinical trials must be conducted in accordance with GCP, and other applicable regulatory requirements. A separate CTA must be submitted for each clinical trial to be conducted. In the EU, for example, to obtain regulatory approval of an investigational medicinal product, a company must submit a marketing authorization application (MAA).
(Gilead) entered into an exclusive option and collaboration agreement (Gilead Agreement) to develop and commercialize MGD024 and create up to two separate bispecific cancer target research programs using our DART platform and undertake their early development.
In October 2022, we and Gilead entered into an exclusive option and collaboration agreement (Gilead Agreement) to develop and commercialize MGD024 and create up to two separate bispecific cancer target research programs using our DART platform and undertake their early development.
“ MacroGenics ® , the MacroGenics logo, DART ® , TRIDENT ® , MARGENZA ® and the phrases Breakthrough Biologics, Life-Changing Medicines® and Developing Breakthrough Biologics, Life-Changing Medicines ® are our trademark s. The other trademarks, trade names and service marks appearing in this report are the property of their respective owners.
“MacroGenics ® , the MacroGenics logo, DART ® , TRIDENT ® and the phrases Breakthrough Biologics, Life-Changing Medicines ® and Developing Breakthrough Biologics, Life-Changing Medicines ® are our trademarks. The other trademarks, trade names and service marks appearing in this report are the property of their respective owners.
However, assuming no adjustments or extensions, the primary composition of matter patent for each of our clinical pipeline product candidates is expected to expire in the following timeframes: 10 Product or Product Candidate Expiration Date margetuximab 2029 enoblituzumab 2031 retifanlimab 2036 tebotelimab 2036 lorigerlimab 2036 vobramitamab duocarmazine 2037 MGD024 2039 MGD026 2044* * pending Patent Term Extension and Reference Product Exclusivity The Hatch-Waxman Act permits a patent term extension for FDA-approved drugs, including biological products, of up to five years beyond the expiration of the patent.
However, assuming no adjustments or extensions, the primary composition of matter patent for each of our clinical pipeline product candidates is expected to expire in the following timeframes: Product or Product Candidate Expiration Date retifanlimab 2036 lorigerlimab 2036 vobramitamab duocarmazine 2037 MGD024 2039 MGC026 2044* MGC028 2045* * pending Patent Term Extension and Reference Product Exclusivity The Hatch-Waxman Act permits a patent term extension for FDA-approved drugs, including biological products, of up to five years beyond the expiration of the patent.
Once the submission is accepted for filing, the FDA begins a substantive review, and the review period under the PDUFA begins. The standard for reviewing a BLA is whether the product is safe, pure and potent, which has been interpreted to include that the product is safe and effective and has a favorable benefit-risk profile.
Once the submission is accepted for filing, the FDA begins a substantive review, and the review period under the Prescription Drug User Fee Act begins. The standard for reviewing a BLA is whether the product is safe, pure and potent, which has been interpreted to include that the product is safe and effective and has a favorable benefit-risk profile.
Eversana received a co-exclusive right to conduct approved commercialization activities. Eversana utilizes its internal capabilities to support marketing, channel management services, medical affairs and other commercial and patient access related services; we book MARGENZA sales. We and Eversana equally share in funding Eversana’s commercialization expenses.
Eversana received a co-exclusive right 10 to conduct approved commercialization activities. Eversana utilized its internal capabilities to support marketing, channel management services, medical affairs and other commercial and patient access related services; we booked MARGENZA sales. We and Eversana equally shared in funding Eversana’s commercialization expenses.
Under this framework, exclusivity protects innovator products by prohibiting others, for a period of 12 years, from being granted FDA approval based in part on reliance on or reference to the innovator's data in their application to the FDA. The law does not change the duration of patents granted on biological products.
Under this framework, exclusivity protects innovator products by prohibiting others, for a period of 12 years, from being granted FDA approval based in part on reliance on or reference to the innovator's data in their application to the FDA.
Vobramitamab Duocarmazine Vobra duo (previously known as MGC018) is an investigational ADC with a cleavable peptide linker designed to deliver a DNA-alkylating duocarmycin payload to dividing and non-dividing cells on solid tumors that express B7-H3. The 2 underlying ADC technology was licensed from Byondis B.V. (Byondis).
Additional Wholly Owned Programs Vobramitamab Duocarmazine Vobra duo is an investigational ADC with a cleavable peptide linker designed to deliver a DNA-alkylating duocarmycin payload to dividing and non-dividing cells on solid tumors that express B7-H3. The underlying ADC technology was licensed from Byondis B.V. (Byondis).
This cleavable linker-payload is based on exatecan, a clinically validated and potent camptothecin, and is site-specifically conjugated using the GlycoConnect™ technology developed by our collaboration partner, Synaffix (a Lonza company). We recently initiated a Phase 1 dose escalation study of MGC026 in patients with advanced solid tumors.
This cleavable linker-payload is based on exatecan, a clinically validated and potent camptothecin, and is site-specifically conjugated using the GlycoConnect® technology developed by our collaboration partner, Synaffix (a Lonza company). A Phase 1 dose escalation study of MGC026 in patients with advanced solid tumors is ongoing. We expect to initiate dose expansion in selected indications in 2025.
Under the terms of the agreements, we receive payments in accordance with the manufacturing schedule and are reimbursed for materials used to manufacture product, as well as other costs incurred to provide manufacturing services.
Under the terms of the agreements, we receive payments in accordance with the manufacturing schedule and are reimbursed for materials used to manufacture product, as well as other costs incurred to provide manufacturing services. TerSera In November 2024, we sold global rights to MARGENZA to TerSera.
Human Capital Management 18 As of December 31, 2023, we had 339 full-time employees, 289 of whom were primarily engaged in research, development and manufacturing activities, and 67 of whom had an M.D. and/or Ph.D. Our employees are critically important to the achievement of our company’s mission and goals.
Human Capital Management As of December 31, 2024, we had 341 full-time employees, 273 of whom were primarily engaged in research, development and manufacturing activities, and 71 of whom had an M.D. and/or Ph.D. Our employees are critically important to the achievement of our company’s mission and goals.
We intend to seek, and are seeking, patent term extensions to our issued patents in any jurisdiction where these are available. For example, we have submitted a request to obtain patent term extension of U.S. Patent No. 8,802,093, the primary composition of matter patent for margetuximab. Additionally, we have submitted a request to obtain patent term extension of U.S.
We intend to seek, and are seeking, patent term extensions to our issued patents in any jurisdiction where these are available. For example, we have submitted a request to obtain patent term extension of U.S. Patent No. 10,577,422, the primary composition of matter of retifanlimab.
Patent No. 10,577,422, the primary composition of matter of retifanlimab. However, there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.
However, there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.
With the inclusion of a third targeting arm, TRIDENT molecules enable a broader range of mechanisms of action than bispecific targeting, allowing, for instance, the engagement of multiple antigens on a single or on different cells or enabling enhanced target selectivity by modulating the avidity of one of two antigens. Product candidates using this technology are currently in preclinical development.
With the inclusion of a third targeting arm, TRIDENT molecules enable a broader range of mechanisms of action than bispecific targeting, allowing, for instance, the engagement of multiple antigens on a single or on different cells or enabling enhanced target selectivity by modulating the avidity of one of two antigens.
Manufacturing We currently manufacture drug substance for most of our clinical trials at our manufacturing facility located in Rockville, Maryland. We also rely on our licensees and contract manufacturers, including Byondis, Synaffix and Millipore Sigma, for producing components of our ADC candidates. We have supplemented our drug substance manufacturing capacity through an arrangement with AGC Biologics, Inc.
Manufacturing We currently manufacture drug substance for most of our clinical trials at our manufacturing facility located in Rockville, Maryland. We also rely on our licensees and contract manufacturers, including Byondis, Synaffix and Millipore Sigma, for producing components of our ADC candidates.
The content of the MAA is similar to that of a New Drug Application or BLA filed 17 in the United States, with the exception of, among other things, EU-specific document requirements. Under the EU regulatory system, a company may submit marketing authorisation applications either under a centralised or decentralised procedure.
The content of the MAA is similar to that of a BLA filed in the United States, with the exception of, among other things, EU-specific document requirements. Under the EU regulatory system, a company may submit marketing authorization applications either under a centralized or decentralized procedure.
The Code requires reporting any actual or suspected misconduct, illegal activities or fraud. To that end, we maintain a Speak Up Culture where all employees are encouraged to raise issues, report concerns, and ask questions. We also maintain an anonymous hotline that is available to all of our employees, contractors and vendors to report any matter of concern.
To that end, we maintain a Speak Up Culture where all employees are encouraged to raise issues, report concerns, and ask questions. We also maintain an anonymous hotline that is available to all of our employees, contractors and vendors to report any matter of concern.
Incyte is also pursuing development of retifanlimab in combination with multiple product candidates from its pipeline. TZIELD In 2018, we entered into an asset purchase agreement (Provention APA) with Provention Bio, Inc., subsequently acquired by Sanofi S.A. (Sanofi), pursuant to which they acquired our interest in teplizumab, a mAb we had been developing for the treatment of type 1 diabetes.
TZIELD In 2018, we entered into an asset purchase agreement (Provention APA) with Provention Bio, Inc., subsequently acquired by Sanofi S.A. (Sanofi), pursuant to which they acquired our interest in teplizumab, a mAb we had been developing for the treatment of type 1 diabetes.
ZYNYZ In 2017, we licensed retifanlimab (previously known as MGA012), a mAb targeting PD-1, to Incyte Corporation (Incyte) under a global collaboration and license agreement (Incyte Agreement); we retain the right to develop the molecule in combination with product candidates from our pipeline.
In November 2024, we received $7.0 million in fulfillment of an approval milestone from Zai Lab. ZYNYZ In 2017, we licensed retifanlimab (previously known as MGA012), a mAb targeting PD-1, to Incyte Corporation (Incyte) under a global collaboration and license agreement (Incyte Agreement); we retain the right to develop the molecule in combination with product candidates from our pipeline.
In addition, other companies are developing new treatments for cancer that utilize multi-specific approaches, including Abbvie Inc., Affimed N.V., Eli Lilly and Company, Genmab A/S, Merus B.V., Regeneron, Roche, AstraZeneca, Xencor, Inc. and Zymeworks, Inc.
In addition, other companies are developing new treatments for cancer that utilize multi-specific approaches, including Abbvie, Affimed N.V., AstraZeneca, BioNTech, Eli Lilly and Company, F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., particularly through its affiliate, Genentech, Inc., Genmab A/S, Johnson & Johnson Services, Inc., Merus B.V., Regeneron Pharmaceuticals, Inc., Xencor and Zymeworks, Inc.
In exchange for co-funding these expenses, Eversana is eligible to earn future revenue share payments which shall be capped at 125% of Eversana’s cumulative service fees. The term of the agreement is five years following the date of FDA approval, subject to predefined termination provisions.
In exchange for co-funding these expenses, Eversana was eligible to earn future revenue share payments which were capped at 125% of Eversana’s cumulative service fees. The term of the agreement was five years following the date of FDA approval, subject to predefined termination provisions. Pursuant to the sale of MARGENZA to TerSera, we paid Eversana an amendment fee.
Under the terms of this agreement, we received an upfront payment and payments in accordance with the manufacturing schedule and are reimbursed for materials used to manufacture product as well as other costs incurred to provide manufacturing services.
In connection with the sale, we entered into an agreement with TerSera to provide manufacturing services to produce MARGENZA. Under the terms of the agreement, we receive payments in accordance with the manufacturing schedule and are reimbursed for materials used to manufacture product, as well as other costs incurred to provide manufacturing services.
Commercialization Of the three products that originated from our pipeline and for which U.S. approval for commercialization has been received, MARGENZA is the only product for which we retain the majority of commercial rights.
Commercialization Of the three products that originated from our pipeline and for which U.S. approval for commercialization has been received, MARGENZA was the only product for which we retained the majority of commercial rights, until we sold global rights to MARGENZA to TerSera in November 2024.
Pipeline Patent Protection As of December 31, 2023, we held 97 patents in the United States with 40 patent applications pending and 760 patents in other countries of the world with 457 patent applications pending.
Pipeline Patent Protection As of December 31, 2024, we held 73 patents in the United States with 35 patent applications pending and 891 patents in other countries of the world with 410 patent applications pending.
Many of our pipeline programs, if successful, will likely face significant competition both by therapeutics that are already being marketed as well as those that will be approved for marketing before our programs. In particular, we are developing PD-1-directed product candidates, including a mAb that we have outlicensed and two DART molecules.
In particular, we are developing a PD-1 and CTLA-4 directed DART molecule, which if successful, will likely face significant competition both by therapeutics that are already being marketed as well as those that will be approved for marketing before our program.
Our Culture; Diversity Equity and Inclusion Our Living Values are the backbone of our culture: Patients First, Do It Right, Innovate, Pitch In, Take Action and Be Inclusive. In 2022 and continuing into 2023, we kicked off a number of initiatives to reinforce the importance of a diverse workforce and culture of belonging to our Company’s success.
Our Culture Our Living Values are the backbone of our culture: Patients First, Do It Right, Innovate, Pitch In, Take Action and Be Inclusive. Consistent with our Living Value of “ Be Inclusive ” we have a number of initiatives to reinforce the importance of an inclusive workforce and culture of belonging to our Company’s success.
In August 2023, the China National Medical Products Administration approved the New Drug Application (NDA) for margetuximab for patients with pretreated metastatic HER2-positive breast cancer. In November 2023, Zai Lab provided notice of termination of this agreement, effective as of May 2024.
As part of our November 2018 license and collaboration agreement, Zai Lab received the rights to develop margetuximab in mainland China, Hong Kong, Macau and Taiwan. In August 2023, the China National Medical Products Administration approved the New Drug Application (NDA) for margetuximab for patients with pretreated metastatic HER2-positive breast cancer. Zai Lab terminated this agreement, effective May 2024.
These include two products approved by the FDA: ZYNYZ® (retifanlimab-dlwr), an anti-PD-1 mAb that we out-licensed; and TZIELD® (teplizumab-mzwv), an anti-CD3 mAb that we sold to a partner.
These include three products approved by the FDA: MARGENZA ® (margetuximab-cmkb), an anti-HER2 monoclonal antibody (mAb) that we recently sold to a partner, ZYNYZ ® (retifanlimab-dlwr), an anti-PD-1 mAb that we out-licensed; and TZIELD ® (teplizumab-mzwv), an anti-CD3 mAb that we sold to a partner. We are also collaborating with Gilead Sciences, Inc.
This is designed to provide a structure with enhanced manufacturability, long-term structural stability and the ability to tailor the half-lives of the DART molecules to their clinical needs.
This is designed to provide a structure with enhanced manufacturability, long-term structural stability and the ability to tailor the half-lives of the DART molecules to their clinical needs. This engineered antibody-like protein has a compact and stable structure and enables the targeting of two different antigens with a single recombinant molecule.
In preclinical studies, MGC028 exhibited specific, dose-dependent in vivo antitumor activity toward ADAM9-positive CDX and PDX models, including in gastric, lung, pancreatic, colorectal, and head and neck cancers. MGC028 was well tolerated in a repeat-dose non-human primate toxicology study, up to 55 mg/kg, the highest dose level tested.
In preclinical studies, MGC028 exhibited specific, dose-dependent in vivo antitumor activity toward ADAM9-positive cell-derived and patient-derived xenograft models, including in gastric, lung, pancreatic, colorectal, and head and neck cancers as well as in cholangiocarcinoma. In addition, MGC028 was well tolerated in a repeat-dose non-human primate toxicology study at high dose levels.
The key competitive factors affecting the success of all our therapeutic product candidates, if approved, are likely to be their efficacy, safety, dosing convenience, price, the effectiveness of companion diagnostics in guiding the use of related therapeutics, the level of generic or biosimilar competition and the availability of reimbursement from government and other third-party payors.
These competitors also compete with us in recruiting and retaining top qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. 11 The key competitive factors affecting the success of all our therapeutic product candidates, if approved, are likely to be their efficacy, safety, dosing convenience, price, the effectiveness of companion diagnostics in guiding the use of related therapeutics, the level of generic or biosimilar competition and the availability of reimbursement from government and other third-party payors.
In 2022, 84% of our workforce participated in our engagement survey, and we anticipate conducting another survey in 2024. Learning and Development We continue to invest in our employees to achieve their goals and to lead our company through learning and development. We conduct regular performance reviews.
In 2024, 95% of our workforce participated in our engagement survey. Learning and Development We continue to invest in our employees to achieve their goals and to lead our company through learning and development. We conduct regular performance reviews. We encourage all employees to take advantage of our leadership, 17 management and technical skill trainings and resources.
Emergent BioSolutions In August 2023 and December 2023, we entered into agreements with Emergent BioSolutions (Emergent) to provide manufacturing services to produce certain Emergent bulk drug substances.
In December 2024, we and Incyte entered into a letter agreement whereby Incyte reserved additional manufacturing services with a fixed cost of $9.1 million. Emergent BioSolutions In August 2023 and December 2023, we entered into agreements with Emergent BioSolutions (Emergent) to provide manufacturing services to produce certain Emergent bulk drug substances.
We believe our multi-specific platforms may provide a significant advantage over current biological interventions in cancer, autoimmune disorders and infectious disease by enabling a range of modalities.
The DART platform has been specifically engineered to accommodate virtually any variable region sequence with predictable expression, folding and antigen recognition. We believe our multi-specific platforms may provide a significant advantage over current biological interventions in cancer, autoimmune disorders and infectious disease by enabling a range of modalities.
Marketed Products MARGENZA We and our commercial partner, Eversana Life Science Services, LLC (Eversana), are currently marketing MARGENZA (margetuximab-cmkb), in combination with chemotherapy, for the treatment of adult patients with metastatic HER2-positive breast cancer who have received two or more prior anti-HER2 regimens, at least one of which was for 5 metastatic disease.
MARGENZA was approved by the FDA in December 2020 in combination with chemotherapy for the treatment of adult patients with metastatic HER2-positive breast cancer who have received two or more prior anti-HER2 regimens, at least one of which was for metastatic disease.
MGD024 MGD024 is an investigational, next-generation, bispecific CD123 × CD3 DART molecule designed to engage CD3 expressed on immune effector cells, such as T cells, to kill CD123-expressing cancer cells for the potential treatment of certain hematologic malignancies, including AML. MGD024 was designed to minimize cytokine-release syndrome, while maintaining anti-tumor cytolytic activity, and permitting intermittent dosing through a longer half-life.
Product Candidates in Development under Collaborations MGD024 MGD024 is an investigational, next-generation, bispecific CD123 × CD3 DART molecule designed to engage CD3 expressed on immune effector cells, such as T cells, to kill CD123-expressing cancer cells for the potential treatment of certain hematologic malignancies, including AML.
The clinical significance of in vitro data is unknown. Licensed ADC Platforms We have licensed ADC platforms from collaboration partners to leverage their past investment in proprietary linker-toxin technology and know-how.
Product candidates using this technology are currently in preclinical development. 7 Licensed ADC Platforms We have licensed ADC platforms from collaboration partners to leverage their past investment in proprietary linker-toxin technology and know-how.
A Phase 1 study of MGD014 in persons with HIV maintained on antiretroviral therapy has been completed and a Phase 1 study of MGD020 alone and combined with MGD014 was initiated in 2022. The completion of this contract is anticipated by the end of 2024.
Both the Phase 1 study of MGD014 in persons with HIV maintained on antiretroviral therapy and the Phase 1 study of MGD020 alone and combined with MGD014 have been completed and we are in the process of closing out the contract.
In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act (PDMA) which regulates the distribution of drugs and drug samples at the federal level and sets minimum standards for the registration and regulation of drug distributors by the states.
In addition, the distribution of prescription pharmaceutical products is subject to the Drug Supply Chain Security Act which sets minimum standards for the registration and regulation of drug distributors by the states. Approval of Biosimilars. The ACA authorized the FDA to approve biosimilars via a separate, abbreviated pathway.
These treatments consist both of small molecule drug products, as well as biologic therapeutics that work by using next-generation antibody technology platforms to address specific cancer targets. For example, MARGENZA is directed against HER2 and many companies have cancer therapeutics directed against HER2 that are either currently approved and on the market or may be in development, such as F.
These treatments consist both of small molecule drug products, as well as biologic therapeutics that work by using next-generation antibody technology platforms to address specific cancer targets.
Margetuximab is an Fc-engineered mAb that targets the HER2 oncoprotein. HER2 is a protein found on the surface of some cancer cells that promotes growth and is associated with aggressive disease and poor prognosis. As part of our November 2018 license and collaboration agreement, Zai Lab received the rights to develop margetuximab in mainland China, Hong Kong, Macau and Taiwan.
Margetuximab is a mAb developed using our Fc Optimization platform and targets the HER2 oncoprotein, a protein found on the surface of some cancer cells that promotes growth and is associated with aggressive disease and poor prognosis.
(AGC, formerly CMC Biologics, Inc.), a contract manufacturing organization, and commercially produced initial margetuximab commercial supply and inventory at AGC. We have an FDA-approved commercial manufacturing site at 9704 Medical Center Drive in Rockville, Maryland for the manufacture of MARGENZA and ZYNYZ drug substance.
We have an FDA-approved commercial manufacturing site at 9704 Medical Center Drive in Rockville, Maryland for the manufacture of MARGENZA and ZYNYZ drug substance. We commercially produce MARGENZA and ZYNYZ for TerSera and Incyte, respectively, and intend to commercially produce any of our product candidates when, and if approved, by the FDA.
In addition, these and other companies are developing product candidates directed against other immuno-oncology targets that we are pursuing through our bispecific approaches. Further, several companies are also developing therapeutics that work by targeting multiple specificities using a single recombinant molecule.
These companies have significantly greater resources than we do. Further, several companies are also developing therapeutics that work by targeting multiple specificities using a single recombinant molecule.
We added the Living Value , Be Inclusive , and completed company-wide training on Diversity, Equity and Inclusion (DEI). To further champion our DEI efforts, we formed an employee-led DEI Team with sponsorship from our senior leadership team.
To further champion our inclusion efforts, we formed an employee-led team with sponsorship from our senior leadership team. The team focused on raising awareness and promoting a sense of commitment in 2024, and held a number of focus groups and company-wide events.
Overview We are a biopharmaceutical company focused on discovering, developing, manufacturing and commercializing innovative antibody-based therapeutics for the treatment of cancer. We have a pipeline of product candidates designed to target either various tumor-associated antigens or immune checkpoint molecules. These candidates are being evaluated in clinical trials sponsored by us or our collaborators or are in preclinical development.
Overview We are a clinical-stage biopharmaceutical company focused on discovering, developing, manufacturing and commercializing innovative antibody-based therapeutics for the treatment of cancer. We generate our pipeline of product candidates from our proprietary suite of antibody technology platforms.
The team focused on raising awareness of DEI and promoting a sense of belonging in 2023, and held a number of focus groups and company-wide events. All employees are required to observe high standards of business and personal ethics and must adhere to our Code of Business Conduct and Ethics, for which they receive training annually.
All employees are required to observe high standards of business and personal ethics and must adhere to our Code of Business Conduct and Ethics, for which they receive training annually. The Code requires reporting any actual or suspected misconduct, illegal activities or fraud.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe continuation, modification, or commencement of existing or new clinical trials could be substantially delayed or prevented by several factors, including: • further discussions with the FDA or other regulatory agencies regarding the scope or design of our clinical trials; • the limited number of, and competition for, suitable sites to conduct our clinical trials, many of which may already be engaged in other clinical trial programs, including some that may be for the same indication as our product candidates; • any delay or failure in patient recruitment or enrollment in our or our collaborators’ trials for any reason; • any delay or failure to obtain regulatory approval or agreement to commence a clinical trial in any of the countries where enrollment is planned; • inability to obtain sufficient funds required for a clinical trial; • clinical holds on, or other regulatory objections to, a new or ongoing clinical trial; • delay or failure to manufacture sufficient supplies of the product candidate for our clinical trials; • delay or failure to reach agreement on acceptable clinical trial terms or clinical trial protocols with prospective sites or CROs the terms of which can be subject to extensive negotiation and may vary significantly among different sites or CROs; • delay or failure to obtain IRB approval to conduct a clinical trial at a prospective site; • significant competition of product candidates that are expected to be more effective or have a more favorable safety profile; • approval of potential therapies by competitors; The progress or completion of our, or our collaborators', clinical trials have been and could also be substantially delayed or prevented by many factors, including: • unforeseen safety issues, including severe or unexpected drug-related adverse effects experienced by patients, including actual and possible deaths; • delays in expected site initiation, patient recruitment and enrollment, for any reason; • failure of patients to complete the clinical trial; • lack of efficacy during clinical trials; • termination of our clinical trials by one or more clinical trial sites; • inability or unwillingness of patients or clinical investigators to follow our clinical trial protocols; • economic and political instability in countries where our trial sites are located, including terrorist attacks, civil unrest and actual or threatened armed conflict; • inability to monitor patients adequately during or after treatment by us, our collaboration partners and/or our CROs; and • the need to repeat or terminate clinical trials as a result of inconclusive or negative results or unforeseen complications in testing.
Biggest changeThe continuation, modification, or commencement of existing or new clinical trials could be substantially delayed or prevented by several factors, including: • further discussions with the FDA or other regulatory agencies regarding the scope or design of our clinical trials; • the limited number of, and competition for, suitable sites to conduct our clinical trials, many of which may already be engaged in other clinical trial programs, including some that may be for the same indication as our product candidates; • any delay or failure in patient recruitment or enrollment in our or our collaborators’ trials for any reason; • any delay or failure to obtain regulatory approval or agreement to commence a clinical trial in any of the countries where enrollment is planned; • inability to obtain sufficient funds required for a clinical trial; • clinical holds on, or other regulatory objections to, a new or ongoing clinical trial; • delay or failure to manufacture sufficient supplies of the product candidate for our clinical trials; 25 • delay or failure to reach agreement on acceptable clinical trial terms or clinical trial protocols with prospective sites or CROs the terms of which can be subject to extensive negotiation and may vary significantly among different sites or CROs; • delay or failure to obtain IRB approval to conduct a clinical trial at a prospective site; • significant competition of product candidates that are expected to be more effective or have a more favorable safety profile; and • approval of potential therapies by competitors.
Any failure to follow cGMP or other regulatory requirements or delay, interruption or other issues that arise in the manufacture, fill-finish, packaging, or storage of our product or product candidates as a result of a failure of our facilities or the facilities or operations of third parties to comply with regulatory requirements or pass any regulatory authority inspection could significantly impair our ability to develop and commercialize our product or product candidates, including leading to significant delays in the availability of drug product for sale and our clinical trials or the termination or hold on a clinical trial, or the delay or prevention of a filing or approval of marketing applications for our product candidates.
Any failure to follow cGMP or other regulatory requirements or delay, interruption or other issues that arise in the manufacture, fill-finish, packaging, or storage of our product or product candidates as a result of a failure of our facilities or the facilities or operations of third parties to comply with regulatory requirements or pass any regulatory authority inspection could significantly impair our ability to develop and commercialize our product candidates, including leading to significant delays in the availability of drug product for sale and our clinical trials or the termination or hold on a clinical trial, or the delay or prevention of a filing or approval of marketing applications for our product candidates.
Further, we have limited experience in large-scale commercial manufacturing, and there can be no assurance that we will be able to effectively manufacture commercial quantities of our products or product candidates for ourselves or our collaborators, if and when approved.
Further, we have limited experience in large-scale commercial manufacturing, and there can be no assurance that we will be able to effectively manufacture commercial quantities of products or product candidates for ourselves or our collaborators, if and when approved.
If there is not sufficient reimbursement for our products, it is less likely that our products will be widely used. Market acceptance and sales of our products and product candidates, if approved for sale by the appropriate regulatory authorities, may depend on reimbursement policies and may be affected by future healthcare reform measures.
If there is not sufficient reimbursement for our products, it is less likely that our products will be widely used. Market acceptance and sales of our product candidates, if approved for sale by the appropriate regulatory authorities, may depend on reimbursement policies and may be affected by future healthcare reform measures.
In addition, failure to comply with FDA and non-U.S. regulatory requirements may, either before or after product approval, subject our company or our collaborators to administrative or judicially imposed sanctions, including: • restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; • restrictions on the products, manufacturers, manufacturing facilities or manufacturing process; • fines, warning letters or untitled letters; • civil and criminal penalties; • injunctions; • suspension or withdrawal of regulatory approvals; • product seizures, detentions or import bans; • voluntary or mandatory product recalls; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; • total or partial suspension of production; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • imposition of restrictions on marketing or operations, including costly new manufacturing requirements; and • refusal to approve pending BLAs or supplements to approved BLAs or analogous marketing approvals outside the United States.
In addition, failure to comply with FDA and non-U.S. regulatory requirements may, either before or after product approval, subject our company or our collaborators to administrative or judicially imposed sanctions, including: • restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; • restrictions on the products, manufacturers, manufacturing facilities or manufacturing process; • fines, warning letters or untitled letters; • civil and criminal penalties; • injunctions; • suspension or withdrawal of regulatory approvals; • product seizures, detentions or import bans; • voluntary or mandatory product recalls; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; • total or partial suspension of production; 24 • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • imposition of restrictions on marketing or operations, including costly new manufacturing requirements; and • refusal to approve pending BLAs or supplements to approved BLAs or analogous marketing approvals outside the United States.
The following are examples of litigation and other adversarial proceedings or disputes that we could become a party to involving our patents or patents licensed to us: • we or our collaborators may initiate litigation or other proceedings against third parties to enforce our patent rights; • third parties may initiate litigation or other proceedings seeking to invalidate patents owned by or licensed to us or to obtain a declaratory judgment that their product or technology does not infringe our patents or patents licensed to us; • third parties may initiate opposition, reexamination or inter partes review proceedings challenging the validity or scope of our patent rights, requiring us or our collaborators and/or licensors to participate in such proceedings to defend the validity and scope of our patents; • there may be a challenge or dispute regarding inventorship or ownership of patents currently identified as being owned by or licensed to us; • the USPTO may initiate an interference between patents or patent applications owned by or licensed to us and those of our competitors, requiring us or our collaborators and/or licensors to participate in an interference proceeding to determine the priority of invention, which could jeopardize our patent rights; or • third parties may seek approval to market biosimilar versions of our future approved products prior to expiration of relevant patents owned by or licensed to us, requiring us to defend our patents, including by filing lawsuits alleging patent infringement.
The following are examples of litigation and other adversarial proceedings or disputes that we could become a party to involving our patents or patents licensed to us: 43 • we or our collaborators may initiate litigation or other proceedings against third parties to enforce our patent rights; • third parties may initiate litigation or other proceedings seeking to invalidate patents owned by or licensed to us or to obtain a declaratory judgment that their product or technology does not infringe our patents or patents licensed to us; • third parties may initiate opposition, reexamination or inter partes review proceedings challenging the validity or scope of our patent rights, requiring us or our collaborators and/or licensors to participate in such proceedings to defend the validity and scope of our patents; • there may be a challenge or dispute regarding inventorship or ownership of patents currently identified as being owned by or licensed to us; • the USPTO may initiate an interference between patents or patent applications owned by or licensed to us and those of our competitors, requiring us or our collaborators and/or licensors to participate in an interference proceeding to determine the priority of invention, which could jeopardize our patent rights; or • third parties may seek approval to market biosimilar versions of our future approved products prior to expiration of relevant patents owned by or licensed to us, requiring us to defend our patents, including by filing lawsuits alleging patent infringement.
Our existing therapeutic collaborations, and any future collaborations we enter into, may pose a number of risks, including the following: 37 • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators' strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays in payment, or non-payment, of royalties, milestones or other monies owed, delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Our existing therapeutic collaborations, and any future collaborations we enter into, may pose a number of risks, including the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators' strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays in payment, or non-payment, of royalties, milestones or other monies owed, delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and 36 • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
The types of situations in which we may become a party to such litigation or proceedings include: • we or our collaborators may initiate litigation or other proceedings against third parties seeking to invalidate the patents held by those third parties or to obtain a judgment that our products or processes do not infringe those third parties' patents; • if our competitors file patent applications that claim technology also claimed by us or our licensors, we or our licensors may be required to participate in interference, opposition or other proceedings to determine the priority of invention, which could jeopardize our patent rights and potentially provide a third party with a dominant patent position; • if third parties initiate litigation claiming that our processes or products infringe their patent or other intellectual property rights, we and our collaborators will need to defend against such proceedings; and 43 • if a license to necessary technology is terminated, the licensor may initiate litigation claiming that our processes or products infringe or misappropriate their patent or other intellectual property rights and/or that we breached our obligations under the license agreement, and we and our collaborators would need to defend against such proceedings.
The types of situations in which we may become a party to such litigation or proceedings include: • we or our collaborators may initiate litigation or other proceedings against third parties seeking to invalidate the patents held by those third parties or to obtain a judgment that our products or processes do not infringe those third parties' patents; • if our competitors file patent applications that claim technology also claimed by us or our licensors, we or our licensors may be required to participate in interference, opposition or other proceedings to determine the priority of invention, which could jeopardize our patent rights and potentially provide a third party with a dominant patent position; • if third parties initiate litigation claiming that our processes or products infringe their patent or other intellectual property rights, we and our collaborators will need to defend against such proceedings; and • if a license to necessary technology is terminated, the licensor may initiate litigation claiming that our processes or products infringe or misappropriate their patent or other intellectual property rights and/or that we breached our obligations under the license agreement, and we and our collaborators would need to defend against such proceedings.
Failure to comply with applicable FDA and other regulatory requirements may subject us to administrative or judicially imposed sanctions, including: notices or Warning Letters by the FDA or other regulatory agencies; • issuance of Form FDA 483 notices or Warning Letters by the FDA or other regulatory agencies; • imposition of fines and other civil penalties; • criminal prosecutions; • injunctions, suspensions or revocations of regulatory approvals; • suspension of any ongoing clinical trials; • total or partial suspension of manufacturing; • delays in commercialization; • refusal by the FDA to approve pending applications or supplements to approved applications submitted by us; • refusals to permit drugs to be imported into or exported from the United States; • restrictions on operations, including costly new manufacturing requirements; and • product recalls or seizures.
Failure to comply with applicable FDA and other regulatory requirements may subject us to administrative or judicially imposed sanctions, including: • issuance of Form FDA 483 notices or Warning Letters by the FDA or other regulatory agencies; • imposition of fines and other civil penalties; • criminal prosecutions; • injunctions, suspensions or revocations of regulatory approvals; • suspension of any ongoing clinical trials; • total or partial suspension of manufacturing; • delays in commercialization; 34 • refusal by the FDA to approve pending applications or supplements to approved applications submitted by us; • refusals to permit drugs to be imported into or exported from the United States; • restrictions on operations, including costly new manufacturing requirements; and • product recalls or seizures.
Our existing commercialization collaboration, and any future commercialization collaborations we enter into, may pose a number of risks, including the following: • collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue commercialization our products or any product candidates that achieve regulatory approval or may elect not to continue commercialization based on clinical trial results, changes in the collaborators' strategic focus or other factors that divert resources or create competing priorities; • collaborators could independently commercialize products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully commercialized under terms that are more economically attractive than ours; • collaborators with marketing and distribution rights to our products or our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements on contract interpretation, commercialization strategy or tactics, might cause delays or termination of the commercialization of products or product candidates, might lead to additional responsibilities for us with respect to our products or product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly utilize our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may violate, or be investigated for potentially violating, health care compliance and related laws and regulations, which may expose us to litigation, enforcement actions or inquiries, or other potential liability; and • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further commercialization of our products or applicable product candidates.
Any future commercialization collaborations we enter into may pose a number of risks, including the following: • collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue commercialization our products or any product candidates that achieve regulatory approval or may elect not to continue commercialization based on clinical trial results, changes in the collaborators' strategic focus or other factors that divert resources or create competing priorities; • collaborators could independently commercialize products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully commercialized under terms that are more economically attractive than ours; • collaborators with marketing and distribution rights to our products or our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements on contract interpretation, commercialization strategy or tactics, might cause delays or termination of the commercialization of products or product candidates, might lead to additional responsibilities for us with respect to our products or product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly utilize our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may violate, or be investigated for potentially violating, health care compliance and related laws and regulations, which may expose us to litigation, enforcement actions or inquiries, or other potential liability; and • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further commercialization of our products or applicable product candidates.
In addition, under the federal Physician Payment Sunshine Act provisions of the ACA, covered manufacturers of drugs, devices, biological and medical supplies for which payment is available under a federal health care program (with certain exceptions) are subject to annual federal reporting and disclosure requirements with regard to payments or other transfers of value made to physicians defined to include doctors, dentists, optometrists, podiatrists and chiropractors, other healthcare 48 professionals (such as physician assistants and nurse practitioners), and teaching hospitals as well as information regarding certain ownership and investment interests held by physicians and their immediate family members.
In addition, under the federal Physician Payment Sunshine Act provisions of the ACA, covered manufacturers of drugs, devices, biological and medical supplies for which payment is available under a federal health care program (with certain exceptions) are subject to annual federal reporting and disclosure requirements with regard to payments or other transfers of value made to physicians defined to include doctors, dentists, optometrists, podiatrists and chiropractors, other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals as well as information regarding certain ownership and investment interests held by physicians and their immediate family members.
Our clinical trials may be suspended or terminated at any time by the FDA, other regulatory authorities, the IRB overseeing the clinical trial at issue, any of our clinical trial sites with respect to that site, or us, due to a number of factors, including: 25 • failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols; • unforeseen safety issues or any determination that a clinical trial presents unacceptable health risks; • lack of adequate funding to continue the clinical trial due to unforeseen costs or other business decisions; and • upon a breach or pursuant to the terms of any agreement with, or for any other reason by, current or future collaborators that have responsibility for the clinical development of any of our product candidates.
Our clinical trials may be suspended or terminated at any time by the FDA, other regulatory authorities, the IRB overseeing the clinical trial at issue, any of our clinical trial sites with respect to that site, or us, due to a number of factors, including: • failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols; • unforeseen safety issues or any determination that a clinical trial presents unacceptable health risks; • lack of adequate funding to continue the clinical trial due to unforeseen costs or other business decisions; and • upon a breach or pursuant to the terms of any agreement with, or for any other reason by, current or future collaborators that have responsibility for the clinical development of any of our product candidates.
If we are unable to maintain any of these collaborations, or if these collaborations are not successful, our business could be adversely affected. • If clinical trials for our product candidates are prolonged, delayed or stopped for any reason, including for safety reasons or lack of efficacy, we may be unable to obtain regulatory approval and commercialize our product candidates on a timely basis, which would require us to incur additional costs and delay our receipt of any product revenue. • The results of previous clinical trials may not be predictive of future results, and interim or top line data may be subject to change or qualification based the complete analysis of data.
If we are unable to maintain any of these collaborations, or if these collaborations are not successful, our business could be adversely affected. • If clinical trials for our product candidates are prolonged, delayed or stopped for any reason, including for safety reasons or lack of efficacy, we may be unable to obtain regulatory approval and commercialize our product candidates on a timely basis, which would require us to incur additional costs and delay our receipt of any product revenue. • The results of previous clinical trials may not be predictive of future results, and interim, immature, or top line data may be subject to change or qualification based the complete analysis of data.
Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured products or product candidates ourselves, including: • the possibility of a breach of the manufacturing agreements by the third parties because of factors beyond our control; • the possibility of termination or nonrenewal of the agreements by the third parties before we are able to arrange for a qualified replacement third-party manufacturer; and 39 • the possibility that we may not be able to secure a manufacturer or manufacturing capacity in a timely manner and on satisfactory terms in order to meet our manufacturing needs.
Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured products or product candidates ourselves, including: • the possibility of a breach of the manufacturing agreements by the third parties because of factors beyond our control; • the possibility of termination or nonrenewal of the agreements by the third parties before we are able to arrange for a qualified replacement third-party manufacturer; and • the possibility that we may not be able to secure a manufacturer or manufacturing capacity in a timely manner and on satisfactory terms in order to meet our manufacturing needs.
These factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential 38 market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally.
These factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally.
Several states have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, track, and report gifts, compensation and other remuneration made to physicians and other healthcare providers, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.
Several states have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, track, and report gifts, compensation and other remuneration made to physicians and other healthcare providers, clinical trials and other activities, and/or register their sales 47 representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.
Even if we are successful in continuing to build our pipeline, the potential 26 product candidates that we identify may not be suitable for initial or continued clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance.
Even if we are successful in continuing to build our pipeline, the potential product candidates that we identify may not be suitable for initial or continued clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance.
If we are unable to successfully complete clinical development, obtain additional regulatory approvals and commercialize our products and product candidates, or experience significant delays in doing so, our business will be materially harmed and we may not be able to generate sufficient revenues and cash flows to continue our operations. • Clinical drug development involves a lengthy and expensive process, with a highly uncertain outcome.
If we are unable to successfully complete clinical development, obtain additional regulatory approvals and commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed and we may not be able to generate sufficient revenues and cash flows to continue our operations. • Clinical drug development involves a lengthy and expensive process, with a highly uncertain outcome.
If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, MARGENZA, product candidates, or future revenue streams, or grant licenses on terms that are not favorable to us. We cannot assure you that we will be able to obtain additional funding if and when necessary.
If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, product candidates, or future revenue streams, or grant licenses on terms that are not favorable to us. We cannot assure you that we will be able to obtain additional funding if and when necessary.
Some of the factors that may cause the market price of our common stock to fluctuate include: • results and timing of our clinical trials and clinical trials of our competitors’ products; • failure or discontinuation of any of our development programs; • issues in manufacturing our product candidates or future approved products; • regulatory developments or enforcement in the United States and foreign countries with respect to our product candidates or our competitors’ products; • competition from existing products or new products that may emerge; • developments or disputes concerning patents or other proprietary rights; • introduction of technological innovations or new commercial products by us or our competitors; • announcements by us, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • changes in estimates or recommendations by securities analysts, if any cover our common stock; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • public concern over our product candidates or any future approved products; • threatened or actual litigation; • future or anticipated sales of our common stock; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • additions or departures of key personnel; • changes in the structure of health care payment systems in the United States or overseas; 52 • failure of any of MARGENZA or our product candidates, if approved, to achieve commercial success; • economic and other external factors or other disasters or crises; • period-to-period fluctuations in our financial condition and results of operations, including the timing of receipt of any milestone or other payments under commercialization or licensing agreements; • general market conditions and market conditions for biopharmaceutical stocks; and • overall fluctuations in U.S. equity markets.
Some of the factors that may cause the market price of our common stock to fluctuate include: • results and timing of our clinical trials and clinical trials of our competitors’ products; • failure or discontinuation of any of our development programs; • issues in manufacturing our product candidates or future approved products; • regulatory developments or enforcement in the United States and foreign countries with respect to our product candidates or our competitors’ products; • competition from existing products or new products that may emerge; • developments or disputes concerning patents or other proprietary rights; • introduction of technological innovations or new commercial products by us or our competitors; • announcements by us, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • changes in estimates or recommendations by securities analysts, if any cover our common stock; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • public concern over our product candidates or any future approved products; 51 • threatened or actual litigation; • future or anticipated sales of our common stock; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • additions or departures of key personnel; • changes in the structure of health care payment systems in the United States or overseas; • failure of any of our product candidates, if approved, to achieve commercial success; • economic and other external factors or other disasters or crises; • period-to-period fluctuations in our financial condition and results of operations, including the timing of receipt of any milestone or other payments under commercialization or licensing agreements; • general market conditions and market conditions for biopharmaceutical stocks; and • overall fluctuations in U.S. equity markets.
We expect to experience pricing pressures in connection with the sale of any products that we develop, due to the trend toward managed healthcare, the increasing influence of various and evolving payor models and additional legislative proposals. 31 Reimbursement decisions by third-party payors may have an adverse effect on pricing and market acceptance.
We expect to experience pricing pressures in connection with the sale of any products that we develop, due to the trend toward managed healthcare, the increasing influence of various and evolving payor models and additional legislative proposals. Reimbursement decisions by third-party payors may have an adverse effect on pricing and market acceptance.
We face significant competition and if our competitors continue to develop and market products that are more effective, safer or less expensive than our product and our product candidates, our current or future commercial opportunities may be negatively impacted. 28 The life sciences industry is highly competitive and subject to rapid and significant technological change.
We face significant competition and if our competitors continue to develop and market products that are more effective, safer or less expensive than our product candidates, our current or future commercial opportunities may be negatively impacted. The life sciences industry is highly competitive and subject to rapid and significant technological change.
If our patents are invalidated or otherwise limited or will expire prior to the commercialization of our approved products and product candidates, other companies may be better able to develop products that compete with ours, which could adversely affect our competitive business position, business prospects and financial condition.
If our patents are invalidated or otherwise limited or will expire prior to the commercialization of any approved product candidates, other companies may be better able to develop products that compete with ours, which could adversely affect our competitive business position, business prospects and financial condition.
An 45 adverse outcome in a litigation or proceeding involving our own patents could limit our ability to assert our patents against these or other competitors, affect our ability to receive royalties or other licensing consideration from our licensees, and may curtail or preclude our ability to exclude third parties from making, using and selling similar or competitive products.
An adverse outcome in a litigation or proceeding involving our own patents could limit our ability to assert our patents against these or other competitors, affect our ability to receive royalties or other licensing consideration from our licensees, and may curtail or preclude our ability to exclude third parties from making, using and selling similar or competitive products.
On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
Further, on December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives, including the Patient 30 Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the ACA, which became law in 2010.
In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives, including the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the ACA, which became law in 2010.
Our failure to become or remain profitable would depress our market value and 36 could impair our ability to raise capital, expand our business, develop other product candidates, or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.
Our failure to become or remain profitable would depress our market value and could impair our ability to raise capital, expand our business, develop other product candidates, or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.
If we are unable to obtain adequate financing on a timely basis, we could be required to delay, scale back or eliminate one or more of our development programs or grant rights to develop and market MARGENZA or product candidates that we would otherwise prefer to develop and market ourselves.
If we are unable to obtain adequate financing on a timely basis, we could be required to delay, scale back or eliminate one or more of our development programs or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
The issuance of a patent does not ensure that a court or agency finds or will find the patent valid or enforceable, so even if we obtain patents, they may not be valid or enforceable against third parties. In addition, the issuance of a patent does 44 not give us the right to practice the patented invention.
The issuance of a patent does not ensure that a court or agency finds or will find the patent valid or enforceable, so even if we obtain patents, they may not be valid or enforceable against third parties. In addition, the issuance of a patent does not give us the right to practice the patented invention.
If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected. 47 Our research and development involves, and may in the future involve, the use of potentially hazardous materials and chemicals. Our operations may produce hazardous waste products.
If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected. Our research and development involves, and may in the future involve, the use of potentially hazardous materials and chemicals. Our operations may produce hazardous waste products.
However, one third-party payor’s determination to provide coverage for a product candidate does not assure that other payors will also provide coverage for the product candidate. Further, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor.
However, one third-party payor’s determination to provide coverage for a product candidate does not assure that other payors 32 will also provide coverage for the product candidate. Further, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor.
Additionally, the facilities used by any contract manufacturer to manufacture any of our product candidates must be the subject of a satisfactory inspection before the FDA and other regulatory authorities approve a BLA or marketing authorization for the product candidate manufactured at that facility.
Additionally, the facilities used by any contract manufacturer to manufacture any of 37 our product candidates must be the subject of a satisfactory inspection before the FDA and other regulatory authorities approve a BLA or marketing authorization for the product candidate manufactured at that facility.
There can be no assurance that we will be able to further develop or successfully maintain internal sales and commercial capabilities or establish or maintain relationships with third-party collaborators to successfully commercialize any product, and as a result, we may not be able to generate substantial product sales revenue.
There can be no assurance that we will be able to develop or successfully maintain internal sales and commercial capabilities or establish or maintain relationships with third-party collaborators to successfully commercialize any product, and as a result, we may not be able to generate substantial product sales revenue.
Further, regulatory agencies must approve these manufacturing facilities before they can be used to manufacture our products and product candidates, and these facilities are subject to ongoing regulatory inspections. In addition, regulatory agencies subject an approved product, its manufacturer and the manufacturer’s facilities to continual review and inspections, including periodic unannounced inspections.
Further, regulatory agencies must approve these manufacturing facilities before they can be used to manufacture our product candidates, and these facilities are subject to ongoing regulatory inspections. In addition, regulatory agencies subject an approved product, its manufacturer and the manufacturer’s facilities to continual review and inspections, including periodic unannounced inspections.
A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our products. 42 We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.
A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our products. We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.
Third parties could possess patents that we may ultimately be found to infringe, or such third-party patents could issue in the future. Third parties may have or may obtain valid and enforceable patents or proprietary rights that could block us from developing product candidates using our technology.
Third parties could possess patents that we may ultimately be found to infringe, or such third-party patents could issue in the future. Third parties may have or may obtain valid and enforceable patents or proprietary rights that could block us from 41 developing product candidates using our technology.
We contract with, and may in the future contract with, third parties for components of the manufacturing of our products and our product candidates, including our antibody drug conjugate candidates. Failure of third-party contractors to successfully perform their obligations could harm our ability to develop or commercialize our product or product candidates.
We contract with, and may in the future contract with, third parties for components of the manufacturing of our product candidates, including our antibody drug conjugate candidates. Failure of third-party contractors to successfully perform their obligations could harm our ability to develop or commercialize our product or product candidates .
The results of previous clinical trials may not be predictive of future results, and interim or top line data may be subject to change or qualification, based on several factors, including a complete analysis of data, or in the case of interim analysis, the continued or ongoing accrual of data.
The results of previous clinical trials may not be predictive of future results, and interim or top line data may be subject to change or qualification, based on several factors, including a complete analysis of data, or in the case of interim analysis, 26 the continued or ongoing accrual of data.
Public health crises such as pandemics or similar outbreaks may have a significant negative impact on our clinical trials, nonclinical studies, development, manufacturing and commercialization of our product candidates and other aspects of our business, staff, and operations. Public health crises such as pandemics or similar outbreaks may have a material impact our business.
Public health crises such as pandemics or similar outbreaks may have a significant negative impact on our clinical trials, nonclinical studies, development, manufacturing and commercialization of our product candidates and other aspects of our business, staff, and operations. 30 Public health crises such as pandemics or similar outbreaks may have a material impact our business.
If our therapeutic collaborations do not result in the successful development and commercialization of products or if one of our collaborators terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration.
If our collaborations do not result in the successful development and commercialization of products or if one of our collaborators terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration.
Termination of the license agreements or reduction or elimination of our licensed rights may result in our having to negotiate new or reinstated licenses with less favorable terms, which could adversely affect our competitive business position and harm our business.
Termination of the license agreements or reduction or elimination of our licensed rights may result in our having to negotiate 44 new or reinstated licenses with less favorable terms, which could adversely affect our competitive business position and harm our business.
Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
Furthermore, we may discover security issues that were not found during due diligence of such 40 acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs. Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish substantial rights.
Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs. 22 Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish substantial rights.
These investigators and CROs will not be our employees and we will not be able to control, other than by contract, the amount of resources, including time, which they devote to our product candidates and clinical trials.
These investigators and CROs are not and will not be our employees and we will not be able to control, other than by contract, the amount of resources, including time, which they devote to our product candidates and clinical trials.
If our manufacturing facilities, our collaborators' manufacturing facilities, or those of our 33 respective suppliers, fail to comply with applicable regulatory requirements, such noncompliance could result in regulatory action and additional costs to us.
If our manufacturing facilities, our collaborators' manufacturing facilities, or those of our respective suppliers, fail to comply with applicable regulatory requirements, such noncompliance could result in regulatory action and additional costs to us.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions take effect progressively starting in fiscal year 2023.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions began to take effect progressively starting in fiscal year 2023.
Regardless of their merit or eventual outcome, liability claims may result in: • decreased demand for our current or future approved products; 32 • injury to our reputation; • withdrawal of clinical trial participants; • termination of clinical trial sites or entire trial programs; • increased regulatory scrutiny; • significant litigation costs; • substantial monetary awards to or costly settlement with patients or other claimants; • product recalls or a change in the indications for which they may be used; • loss of revenue; • diversion of management and scientific resources from our business operations; and • the inability to commercialize our product candidates.
Regardless of their merit or eventual outcome, liability claims may result in: • decreased demand for our future approved products; • injury to our reputation; • withdrawal of clinical trial participants; • termination of clinical trial sites or entire trial programs; • increased regulatory scrutiny; • significant litigation costs; • substantial monetary awards to or costly settlement with patients or other claimants; • product recalls or a change in the indications for which they may be used; • loss of revenue; • diversion of management and scientific resources from our business operations; and 33 • the inability to commercialize our product candidates.
In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.
In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for significant statutory damages, depending on the volume of data and the number of violations.
We could incur substantial costs defending this or similar lawsuits, as well as diversion of the time and attention of our management, any or all of which could seriously harm our business. Provisions of our charter, bylaws, third-party agreements and Delaware law may make an acquisition of us or a change in our management more difficult.
We could incur substantial costs defending these similar lawsuits, as well as diversion of the time and attention of our management, any or all of which could seriously harm our business. Provisions of our charter, bylaws, third-party agreements and Delaware law may make an acquisition of us or a change in our management more difficult.
Ongoing or future trials of our product candidates may not 27 support the conclusion that one or more of these product candidates have acceptable safety profiles.
Ongoing or future trials of our product candidates may not support the conclusion that one or more of these product candidates have acceptable safety profiles.
The success of our products and product candidates depends on many factors, including but not limited to: • successful enrollment in, and completion of, clinical trials, as well as completion of nonclinical studies; • the acceptability and adequacy of safety, tolerability and efficacy data from our clinical trials and other studies; • the sufficiency of our financial resources and ability to obtain additional funding for the development of our products and product candidates; • receipt of regulatory approvals; • the performance by clinical research organizations (CROs) or other third parties we may retain of their duties to us in a manner that complies with our protocols and applicable laws and that protects the integrity of the resulting data; • obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity; • ensuring we do not infringe, misappropriate or otherwise violate the valid patent, trade secret or other intellectual property rights of third parties; • successfully launching our product candidates, including vobra duo or lorigerlimab, if and when approved; • maintaining commercial manufacturing capabilities, either by utilizing our current manufacturing facilities or making arrangements with third-party manufacturers; • manufacturing or obtaining sufficient supplies of our products and product candidates that may be necessary for use in clinical trials for evaluation of our product candidates and commercialization of our products; • obtaining favorable reimbursement from third-party payors for products and product candidates; • competition with other products; • post-marketing commitments to regulatory agencies following regulatory approval; and • continued acceptable safety profile following regulatory approval.
The success of our product candidates depends on many factors, including but not limited to: • successful and timely patient enrollment in, and completion of, clinical trials, as well as completion of nonclinical studies; • the acceptability and adequacy of safety, tolerability and efficacy data from our clinical trials and other studies; • the sufficiency of our financial resources and ability to obtain additional funding for the development of our product candidates; • receipt of regulatory approvals; 23 • the performance by clinical research organizations (CROs) or other third parties we may retain of their duties to us in a manner that complies with our protocols and applicable laws and that protects the integrity of the resulting data; • obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity; • ensuring we do not infringe, misappropriate or otherwise violate the valid patent, trade secret or other intellectual property rights of third parties; • successfully launching our product candidates if and when approved; • maintaining commercial manufacturing capabilities, either by utilizing our current manufacturing facilities or making arrangements with third-party manufacturers; • manufacturing or obtaining sufficient supplies of our product candidates that may be necessary for use in clinical trials for evaluation of our product candidates and commercialization of our products; • obtaining favorable reimbursement from third-party payors for product candidates; • competition with other products; • post-marketing commitments to regulatory agencies following regulatory approval; and • continued acceptable safety profile following regulatory approval.
Any negative impact public health crises could adversely affect our ability to seek and obtain regulatory approval for and to commercialize any approved product candidates, increase our operating expenses and have a material adverse effect on our business and financial results. We have limited experience in launching and marketing internally developed products.
Any negative impact public health crises could adversely affect our ability to seek and obtain regulatory approval for and to commercialize any approved product candidates, increase our operating expenses and have a material adverse effect on our business and financial results. We have limited experience in launching and marketing approved products.
If we are unable to successfully complete clinical development, obtain additional regulatory approvals and commercialize our products and product candidates, or experience significant delays in doing so, our business will be materially harmed and we may not be able to generate sufficient revenues and cash flows to continue our operations.
If we or our collaborators are unable to successfully complete clinical development, obtain additional regulatory approvals and commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed and we may not be able to generate sufficient revenues and cash flows to continue our operations.
In addition, the biopharmaceutical industry is characterized by rapid technological change. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Technological advances or products developed by our competitors may render our technologies, products or product candidates obsolete, less competitive or not economical.
In addition, the biopharmaceutical industry is characterized by rapid technological change. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Technological advances or products developed by our competitors may render our technologies, products or product candidates obsolete, less competitive or not profitable.
In addition, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
For example, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
Risks Relating to Our Common Stock We have been and may in the future be subject to securities litigation, which is expensive and could divert management attention and adversely impact our business. The market price of our common stock has been and may continue to be volatile.
Risks Related to Our Common Stock We have been and may in the future be subject to securities litigation, which is expensive and could divert management attention and adversely impact our business. The market price of our common stock has been and may continue to be volatile.
If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of vobra duo, lorigerlimab, or our other product candidates, reduce or delay one or more of our other development programs, delay the commercialization of a product candidate or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of our product candidates, reduce or delay one or more of our other development programs, delay the commercialization of a product candidate or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials.
If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials.
We may not be able to effectively manage our operations which may result in 51 weaknesses in our infrastructure, give rise to operational errors, loss of business opportunities, loss of employees and reduced productivity among remaining employees.
We may not be able to effectively manage our operations which may result in 50 weaknesses in our infrastructure, give rise to operational errors, loss of business opportunities, loss of employees and reduced productivity among remaining employees.
Furthermore, patients may be unable or unwilling to enroll in our clinical trials or be unable to comply with clinical trial protocols if public health restrictions impede patient movement or interrupt healthcare services.
Further, patients may be unable or unwilling to enroll in our clinical trials or be unable to comply with clinical trial protocols if public health restrictions impede patient movement or interrupt healthcare services.
Any of these factors could adversely impact the commercialization of our products or product candidates, delay approval of our product candidates, or cause us to incur higher costs or prevent us from commercializing our products or product candidates successfully.
Any of these factors could adversely impact the development of our product candidates, delay approval of our product candidates, or cause us to incur higher costs or prevent us from commercializing our products or product candidates successfully.
Our future financial performance and our ability to commercialize MARGENZA, our product candidates and compete effectively with others in our industry will depend, in part, on our ability to effectively manage any such growth.
Our future financial performance and our ability to develop and commercialize our product candidates and compete effectively with others in our industry will depend, in part, on our ability to effectively manage any such growth.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties on whom we rely may fail to comply with such obligations, which could negatively impact our business operations.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations.
Our internal estimates of the potential market opportunities for vobra duo, lorigerlimab, and our other product candidates include several key assumptions based on a variety of factors, which may include our industry knowledge, industry publications, third-party research reports, assessment of competition, and other surveys. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.
Our internal estimates of the potential market opportunities our product candidates include several key assumptions based on a variety of factors, which may include our industry knowledge, industry publications, third-party research reports, assessment of competition, and other surveys. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.
Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, political crises, geopolitical events, such as the ongoing military conflict in Ukraine, or other macroeconomic conditions, which have in the past and may in the future negatively impact our business and financial performance.
Our business could be adversely affected by economic downturns, inflation, increases in interest rates, disruption in global supply chains, natural disasters, political crises, geopolitical events, such as the ongoing military conflict in Ukraine, or other macroeconomic conditions, which have in the past and may in the future negatively impact our business and financial performance.
If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop vobra duo, lorigerlimab, or our other product candidates or bring them to market or continue to develop our technology platforms and our business may be materially and adversely affected.
If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our product candidates or bring them to market or continue to develop our technology platforms and our business may be materially and adversely affected.
Clinical drug development involves a lengthy and expensive process, with a highly uncertain outcome. We expect to incur significant additional costs related to the development of vobra duo, lorigerlimab, and our other product candidates and may experience delays in completing, or ultimately be unable to complete, the development and commercialization of our other products and product candidates.
Clinical drug development involves a lengthy and expensive process, with a highly uncertain outcome. We expect to incur significant additional costs related to the development of our product candidates and may experience delays in completing, or ultimately be unable to complete, the development and commercialization of our other product candidates.
In the pharmaceutical industry, significant litigation and other proceedings regarding patents, patent applications, trademarks and other intellectual property rights have become commonplace.
In the biopharmaceutical industry, significant litigation and other proceedings regarding patents, patent applications, trademarks and other intellectual property rights have become commonplace.
It is unclear how such challenges and any healthcare reform measures of the Biden administration will impact the ACA and our business. Further, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs.
It is unclear how such challenges and any healthcare reform measures of the second Trump administration will impact the ACA and our business. 31 Further, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs.
Risks Relating to Employee Matters and Human Capital Management Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel. 50 We are highly dependent on the research and development, clinical and business development expertise of certain of our executive officers and other key employees.
Risks Related to Employee Matters and Human Capital Management Our future success depends on our ability to attract or retain key executives and to attract, retain and motivate qualified personnel. We are highly dependent on the research and development, clinical and business development expertise of certain of our executive officers and other key employees.
We, or our collaborators, are either currently enrolling patients in clinical trials or anticipate initiating, continuing, or designing, or supporting clinical trials for molecules that include vobra duo, lorigerlimab, retifanlimab, enoblituzumab, MGD024, and MGC026 or other molecules, as monotherapies or in combination with other product candidates.
We, or our collaborators or investigators, are either currently enrolling patients in clinical trials or anticipate initiating, continuing, designing, or supporting clinical trials for molecules that include lorigerlimab, retifanlimab, vobra duo, MGD024, MGC026, MGC028, or other molecules, as monotherapies or in combination with other product candidates.
In the ordinary course of our business, we and the third parties upon which we rely, process, collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) proprietary, confidential, and sensitive data, including personal data (such as health-related data), intellectual property, trade secrets and any other sensitive data the we may process, e.g., business plans, transactions, financial information, etc.
In the ordinary course of our business, we and the third parties with whom we work, process, collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) proprietary, confidential, and sensitive data, including personal data (such as health-related data), intellectual property, trade secrets and any other sensitive data the we may process, e.g., business plans, transactions, financial information, etc.
The manufacture of vobra duo, lorigerlimab, and other products or product candidates, for ourselves and our collaborators, is complex, and we may encounter difficulties in production. There can be no assurance that we will be able to effectively manufacture clinical quantities of our product candidates in the future.
The manufacture of products or product candidates, for ourselves and our collaborators, is complex, and we may encounter difficulties in production. There can be no assurance that we will be able to effectively manufacture clinical quantities of our product candidates in the future.
We and our collaborators are subject to extensive ongoing obligations and continued regulatory review from applicable regulatory agencies with respect to any product obtaining regulatory approval, including vobra duo, lorigerlimab, and our other products and product candidates, such as continued adverse event reporting requirements and post-marketing commitments, all of which may result in significant expense and limit our and our collaborators' ability to commercialize our current and any future approved products.
We and our collaborators are subject to extensive ongoing obligations and continued regulatory review from applicable regulatory agencies with respect to any product obtaining regulatory approval, , such as continued adverse event reporting requirements and post-marketing commitments, all of which may result in significant expense and limit our and our collaborators' ability to commercialize our current and any future approved products.
The standards which the United States Patent and Trademark Office (USPTO) and its foreign counterparts use to grant patents are not always applied predictably or uniformly and can change. There is also no uniform, worldwide policy regarding the subject matter and scope of claims granted or allowable in pharmaceutical or biotechnology patents.
The standards which the USPTO and its foreign counterparts use to grant patents are not always applied predictably or uniformly and can change. There is also no uniform, worldwide policy regarding the subject matter and scope of claims granted or allowable in pharmaceutical or biotechnology patents.
Inadequate funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
Inadequate funding or government efficiency initiatives for the FDA and other government agencies could reduce agency staffing or hinder agency ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
We may need to grow or contract our organization, and we may experience difficulties in managing this growth or contraction, which could disrupt our operations. As of December 31, 2023, we had 339 full-time employees.
We may need to grow or contract our organization, and we may experience difficulties in managing this growth or contraction, which could disrupt our operations. As of December 31, 2024, we had 341 full-time employees.
For example, we have limited experience in building and managing a commercial team, conducting a comprehensive market analysis or managing distributors and a field force for our products. We compete with many companies that currently have extensive and well-funded sales and marketing operations.
For example, we have limited experience in building and managing a commercial team, conducting a comprehensive market analysis or managing distributors and a field force for our products. We will compete with many companies that currently have extensive and well-funded sales and marketing operations with respect to any approved products.
Failure of third-party contractors to successfully perform their obligations could harm our ability to develop or commercialize our product or product candidates. • If our information technology systems or those third parties upon which we rely for our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences. • Our success depends significantly on our ability to operate without infringing the valid patents and other proprietary rights of third parties. • If we are unable to obtain and enforce patent protection for our products and our product candidates and related technology, our business could be materially harmed. 22 • We have been and may in the future be subject to securities litigation, which is expensive and could divert management attention and adversely impact our business. • Failure to successfully develop and commercialize companion diagnostics with third party contractors for use with our product candidates could harm our ability to commercialize our product candidates.
Failure of third-party contractors to successfully perform their obligations could harm our ability to develop or commercialize our product or product candidates. • If our information technology systems or those third parties upon which we rely for our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences. • Our success depends significantly on our ability to operate without infringing the valid patents and other proprietary rights of third parties. • If we are unable to obtain and enforce patent protection for our products and our product candidates and related technology, our business could be materially harmed. • We have been and may in the future be subject to securities litigation, which is expensive and could divert management attention and adversely impact our business. 20 • Failure to successfully develop and commercialize companion diagnostics with third party contractors for use with our product candidates could harm our ability to commercialize our product candidates. • If any product liability lawsuits are successfully brought against us or any of our collaborators, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.
We currently manufacture product and product candidates for ourselves and our collaborators in our in-house manufacturing facility, and we anticipate manufacturing both commercial product as well as product candidates in the future, including for example commercial manufacturing of MARGENZA. We have limited experience in manufacturing at commercial scale.
We currently manufacture product and product candidates for ourselves and our collaborators in our in-house manufacturing facility, and we anticipate manufacturing both commercial product as well as product candidates in the future. We have limited experience in manufacturing at commercial scale.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeDepending on the environment and system, we implement and maintain various technical, physical, and organizational measures, processes, and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including: an incident response plan and procedures, incident detection and response playbook, business continuity plans, encryption of certain data, network security controls, identity management and access controls, physical security controls, 24/7 systems monitoring, vendor risk management processes, employee cybersecurity and privacy training, penetration testing, cybersecurity insurance, and dedicated cybersecurity staff.
Biggest changeThese include: an incident response plan and procedures, incident detection and response playbook, business continuity plans, encryption of certain data, network security controls, identity management and access controls, physical security controls, 24/7 systems monitoring, vendor risk management processes, employee cybersecurity and privacy training, penetration testing, cybersecurity insurance, and dedicated cybersecurity staff.
Our Senior Information Security Manager holds CISSP certification, an MSc. in Information Security, and has over 20 years government and industry cybersecurity experience. 54 Company management is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Our Senior Information Security Manager holds CISSP certification, an MSc. in Information Security, and has over 20 years government and industry cybersecurity experience. Company management is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify and mitigate cybersecurity risks associated with a provider.
Depending on the nature of the services provided, the sensitivity of the Information 53 Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify and mitigate cybersecurity risks associated with a provider.
For example, (1) cybersecurity risk is addressed as a component of our enterprise risk management program and identified in our risk register; (2) the information security function works with management to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; (3) our Technology Steering Committee evaluates material risks from cybersecurity threats against our overall business objectives and reports to the Audit Committee of the board of directors, which evaluates our overall enterprise risk.
Specifically, (1) cybersecurity risk is addressed as a component of our enterprise risk management program and identified in our risk register; (2) the information security function works with management to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; (3) our Technology Steering Committee evaluates material risks from cybersecurity threats against our overall business objectives and reports to the Audit Committee of the board of directors, which evaluates our overall enterprise risk.
In addition, the Company’s incident response process includes reporting to the audit and technology steering committees of the board of directors for certain cybersecurity incidents. The board of directors’ Audit Committee receives periodic reports from our Executive Director Information Technolog concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them.
In addition, the Company’s incident response process includes reporting to the audit and technology steering committees of the board of directors for certain cybersecurity incidents. The board of directors’ Audit Committee receives periodic reports from our Vice President Information Technology concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them.
We use third-party service providers to perform a variety of functions throughout our business, such as application providers, hosting companies, contract research organizations, distributors, and supply chain management resources.
In addition, we use third-party service providers to perform a variety of functions throughout our business, such as application providers, hosting companies, CROs, distributors, and supply chain management resources.
We use third-party service providers to assist us to identify, assess, and manage material risks from cybersecurity threats, including professional services firms, cybersecurity consultants, cybersecurity software providers, managed cybersecurity service providers, penetration testing firms, and dark web monitoring services.
We engage third-party service providers, including professional services firms, cybersecurity consultants, cybersecurity software providers, managed cybersecurity service providers, penetration testing firms, and dark web monitoring services, to assist in identifying, assessing, and managing material risks from cybersecurity threats.
Our information security function, which is led by our Executive Director of Information Technology, with support from our Senior Information Security Manager, our legal team, a management-level Technology Steering Committee, and the Audit Committee of the Board, helps identify, assess, and manage the Company’s cybersecurity threats and risks.
Our information security function is led by our Executive Director of Information Technology and supported by the Senior Information Security Manager, our legal team, a management-level Technology Steering Committee, and the Audit Committee of the Board of Directors. This function is responsible for identifying, assessing, and managing the Company’s cybersecurity threats and risks.
We identify and assess cybersecurity risks by monitoring and evaluating our threat environment using various methods including, for example using automated tools, subscribing to reports and services that identify cybersecurity threats, evaluating threats reported to us, evaluating our and our industry’s risk profile, analyzing reports of threats and actors, audits, conducting vulnerability assessments, and conducting tabletop incident response exercises.
We employ various methods to monitor and evaluate the threat environment, including automated tools, subscriptions to cybersecurity threat reports and services, analysis of threats reported to us, evaluations of our and our industry’s risk profile, threat actor analyses, audits, vulnerability assessments, and tabletop incident response exercises.
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Depending on the environment and system, we implement and maintain various technical, physical, and organizational measures, processes, and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We lease a total of approximately 205,000 square feet of manufacturing, office, laboratory and warehouse space in Maryland. Our headquarters building in Rockville, Maryland currently houses laboratory, office and manufacturing operations to support clinical and commercial quantities and scale. This location is occupied under a lease that expires in 2035.
Biggest changeITEM 2. PROPERTIES We lease a total of approximately 190,000 square feet of manufacturing, office, laboratory and warehouse space in Maryland. Our headquarters building in Rockville, Maryland currently houses laboratory, office and manufacturing operations to support clinical and commercial quantities and scale. This location is occupied under a lease that expires in 2035.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS In the ordinary course of business, we are or may be involved in various legal or regulatory proceedings, claims or class actions related to alleged patent infringements and other intellectual property rights, or alleged violation of commercial, corporate, securities, labor and employment, and other matters incidental to our business.
Biggest changeIn the ordinary course of business, we are or may be involved in various legal or regulatory proceedings, claims or class actions related to alleged patent infringements and other intellectual property rights, or alleged violation of commercial, corporate, securities, labor and employment, and other matters incidental to our business.
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ITEM 3. LEGAL PROCEEDINGS Securities Litigation In July 2024, a putative securities class action suit, entitled Crain v. MacroGenics, Inc. (Case No. 24-cv-02184), was filed in the U.S.
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District Court for the District of Maryland against the Company and Scott Koenig, M.D., Ph.D., the Company’s President, Chief Executive Officer and a member of the Company’s Board of Directors, alleging violations of securities laws during 2024.
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The suit asserted certain claims under Section 10 and Rule 10b-5 of the Securities and Exchange Act of 1934 based on alleged misstatements or omissions concerning the Company's TAMARACK Phase 2 study of vobramitamab duocarmazine in patients with metastatic castration-resistant prostate cancer. On December 20, 2024, the District Court issued an Order dismissing the case, without prejudice.
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On December 9, 2024, a shareholder derivative suit, entitled Gregora v. Heiden et al. (Case No. 24-cv-03546), was filed in the U.S. District Court for the District of Maryland against certain of the Company’s officers and directors and naming 54 the Company as a nominal defendant.
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The suit asserts certain claims under Section 10(b) and Rule 10b-5 of the Securities and Exchange Act of 1934 and for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, and waste of corporate assets based on the same facts as the Securities Class Action.
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On March 10, 2025, the plaintiff filed a notice of voluntary dismissal. On December 11, 2024, a shareholder derivative suit, entitled Cottle v. MacroGenics, Inc., et al. (Case No. 8:24-cv-03578), was filed in the U.S. District Court for the District of Maryland against the same defendants and alleging similar claims as the Gregora derivative action.
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On March 20, 2025, the parties filed a stipulation of dismissal without prejudice.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of March 1, 2024, we had 62,432,013 shares of common stock outstanding held by approximately 57 holders of record, which include shares held by a broker, bank or other nominee. We have never declared or paid any cash dividends. We do not anticipate declaring or paying cash dividends for the foreseeable future.
Biggest changeAs of March 14, 2025, we had 63,090,323 shares of common stock outstanding held by approximately 52 holders of record, which include shares held by a broker, bank or other nominee. We have never declared or paid any cash dividends. We do not anticipate declaring or paying cash dividends for the foreseeable future.
The comparison assumes a $100 investment on December 31, 2018 in our common stock, the stocks comprising the Nasdaq Composite Index, and the stocks comprising the Nasdaq Biotechnology Index, and assumes reinvestment of the full amount of all dividends, if any. Historical stockholder return is not necessarily indicative of the performance to be expected for any future periods.
The comparison assumes a $100 investment on December 31, 2019 in our common stock, the stocks comprising the Nasdaq Composite Index, and the stocks comprising the Nasdaq Biotechnology Index, and assumes reinvestment of the full amount of all dividends, if any. Historical stockholder return is not necessarily indicative of the performance to be expected for any future periods.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRecent Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements for information under the caption "Recent Accounting Pronouncements." Results of Operations Revenue The following represents a comparison of our revenue for the years ended December 31, 2023 and 2022 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2023 2022 Collaborative and other agreements $ 29.0 $ 119.3 $ (90.3) (76) % Product sales, net 17.9 16.7 1.2 7 % Contract manufacturing 9.8 14.0 (4.2) (30) % Royalty revenue 0.4 — 0.4 NM Government agreements 1.6 1.9 (0.3) (16) % Total revenue $ 58.7 $ 151.9 $ (93.2) (61) % NM: Not Meaningful The decrease of $90.3 million in revenue from collaborative and other agreements for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to: • a net decrease of $54.5 million in revenue recognized under the Provention APA due to the recognition of a $60.0 million milestone in 2022 compared to $5.5 million recognized in 2023 related to other consideration under the Provention APA and Side Letter Agreement; • a decrease of $22.1 million in revenue recognized under our agreements with Zai Lab; • a decrease of $10.0 million in revenue recognized under the Incyte License Agreement; and • a decrease of $5.1 million in revenue recognized under the I-Mab License Agreement.
Biggest changeRecent Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements for information under the caption "Recent Accounting Pronouncements." 63 Results of Operations Revenue The following represents a comparison of our revenue for the years ended December 31, 2024 and 2023 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2024 2023 Collaborative and other agreements $ 118.9 $ 29.4 $ 89.5 304 % Product sales, net 16.4 17.9 (1.5) (8) % Contract manufacturing 13.1 9.8 3.3 34 % Government agreements 1.6 1.6 — — % Total revenue $ 150.0 $ 58.7 $ 91.3 156 % The increase of $89.5 million in revenue from collaborative and other agreements for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to a net increase of $85.0 million in revenue recognized from milestones achieved under the Incyte License Agreement.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2023 includes net cash proceeds from our Royalty Purchase Agreement with DRI of $149.7 million. Our multiple product candidates currently under development will require significant additional research and development efforts that include extensive preclinical studies and clinical testing, and regulatory approval prior to commercial use.
Net cash provided by financing activities for the year ended December 31, 2023 includes net cash proceeds from our Royalty Purchase Agreement with DRI of $149.7 million. Our multiple product candidates currently under development will require significant additional research and development efforts that include extensive preclinical studies and clinical testing, and regulatory approval prior to commercial use.
The following are items we include in research and development expense: • employee-related expenses, such as salaries and benefits; • employee-related overhead expenses, such as facilities and other allocated items; • stock-based compensation expense to employees engaged in research and development activities; • depreciation of laboratory and manufacturing equipment, computers and leasehold improvements; • fees paid to consultants, subcontractors, clinical research organizations (CROs) and other third party vendors for work performed under our preclinical and clinical trials including, but not limited to, investigator grants, laboratory work and analysis, database management, statistical analysis, and other items; • amounts paid to vendors and suppliers for laboratory supplies; • internal and third party costs related to manufacturing clinical trial materials, including vialing, packaging and testing; • license fees and other third party vendor payments related to in-licensed product candidates and technology; and • costs related to compliance with regulatory requirements.
The following are items we include in research and development expense: • employee-related expenses, such as salaries and benefits; • employee-related overhead expenses, such as facilities and other allocated items; • stock-based compensation expense to employees engaged in research and development activities; • depreciation of laboratory and manufacturing equipment, computers and leasehold improvements; • fees paid to consultants, subcontractors, clinical research organizations (CROs) and other third party vendors for work performed under our preclinical and clinical trials including, but not limited to, investigator grants, laboratory work and analysis, database management, statistical analysis, and other items; 59 • amounts paid to vendors and suppliers for laboratory supplies; • internal and third party costs related to manufacturing clinical trial materials, including vialing, packaging and testing; • license fees and other third party vendor payments related to in-licensed product candidates and technology; and • costs related to compliance with regulatory requirements.
Research and development costs consist of salaries and benefits, including related stock-based compensation, laboratory supplies and facility costs, as well as fees paid to other entities that conduct certain research and development activities on our behalf, such as CROs, and the cost of acquiring and 63 manufacturing clinical trial materials, including costs incurred under agreements with contract manufacturing organizations (CMOs).
Research and development costs consist of salaries and benefits, including related stock-based compensation, laboratory supplies and facility costs, as well as fees paid to other entities that conduct certain research and development activities on our behalf, such as CROs, and the cost of acquiring and manufacturing clinical trial materials, including costs incurred under agreements with contract manufacturing organizations (CMOs).
Prolonged uncertainty with respect to Macroeconomic Conditions could cause further economic slowdown or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition. 57 Collaborations We pursue a balanced approach between product candidates that we develop ourselves and those that we develop with our collaborators.
Prolonged uncertainty with respect to Macroeconomic Conditions could cause further economic slowdown or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition. Collaborations We pursue a balanced approach between product candidates that we develop ourselves and those that we develop with our collaborators.
We constrain (reduce) the estimates of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur. When determining if variable consideration should be constrained, management considers whether there are factors outside our control that could result in a significant 61 reversal of revenue.
We constrain (reduce) the estimates of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur. When determining if variable consideration should be constrained, management considers whether there are factors outside our control that could result in a significant reversal of revenue.
Under our strategic collaborations to date, we have received significant non-dilutive funding and continue to have rights to additional funding upon completion of certain research, achievement of key product development milestones and royalties and other payments upon the commercial sale of products. Our current collaborations include the following: • Incyte.
Under our strategic collaborations to date, we have received significant non-dilutive funding and continue to have rights to additional funding upon completion of certain research, achievement of key product development milestones and royalties and other payments upon the commercial sale of products. Our current collaborations include the following: • Incyte Corporation (Incyte).
We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the research and development and licensing agreement.
We evaluate the measure 61 of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the research and development and licensing agreement.
The preparation of these consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and 60 liabilities as of the date of the balance sheets and the reported amount of the revenue and expenses recorded during the reporting period.
The preparation of these consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the balance sheets and the reported amount of the revenue and expenses recorded during the reporting period.
At the inception of each arrangement that includes development milestone payments, management evaluates whether the milestones are considered probable of being achieved and estimates the amount to be 62 included in the transaction price using the most likely amount method.
At the inception of each arrangement that includes development milestone payments, management evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method.
Management regularly reviews our available 67 liquidity relative to our operating budget and forecast to monitor the sufficiency of our working capital, and anticipates continuing to draw upon available sources of capital, including equity and debt instruments, to support our product development activities.
Management regularly reviews our available liquidity relative to our operating budget and forecast to monitor the sufficiency of our working capital and anticipates continuing to draw upon available sources of capital, including equity and debt instruments, to support our product development activities.
The agreement also grants Gilead the right, within its first two years, to nominate a bispecific cancer target set for up to two research programs conducted by us and to exercise separate options to obtain an exclusive license for the development, commercialization and exploitation of molecules created under each research program (Research Program Option).
The agreement also granted Gilead the right, within its first two years, to nominate a bispecific cancer target set for up to two research programs conducted by us and to exercise separate options to obtain an exclusive license for the development, commercialization and exploitation of molecules created under each research program (Research Program Option).
We are also eligible to receive tiered royalties of 15% to 24% on any global net sales and we have the option to co-promote retifanlimab with Incyte. We retain the right to develop our pipeline assets in combination with retifanlimab, with Incyte commercializing retifanlimab and us commercializing our asset(s), if any such potential combinations are approved.
We receive tiered royalties of 15% to 24% on any global net sales and we have the option to co-promote retifanlimab with Incyte. We retain the right to develop our pipeline assets in combination with retifanlimab, with Incyte commercializing retifanlimab and us commercializing our asset(s), if any such potential combinations are approved.
In October 2022, we and Gilead Sciences, Inc. (Gilead) entered into an exclusive option and collaboration agreement (Gilead Agreement) to develop and commercialize MGD024 and create bispecific cancer antibodies using our DART platform and undertake their early development under a maximum of two separate bispecific cancer target research programs.
In October 2022, we and Gilead entered into an exclusive option and collaboration agreement (Gilead Agreement) to develop and commercialize MGD024 and create bispecific cancer antibodies using our DART platform and undertake their early development under a maximum of two separate bispecific cancer target research programs.
Our future success is dependent on our ability to identify and develop our product candidates, and ultimately upon our ability to attain profitable operations. We have devoted substantially all of our financial resources and efforts to research and development and general and administrative expense to support such research and development.
Our future success is dependent on our ability to identify and develop our product candidates, and ultimately upon our ability to attain profitable operations. We have devoted substantially all of our financial resources and efforts to research and development and general and administrative expenses to support such research and development.
We also have an agreement with Incyte under which we are to perform development and manufacturing services for Incyte's clinical needs of retifanlimab (Incyte Clinical Supply Agreement) and another agreement under which we are entitled to manufacture a portion of Incyte’s global commercial supply of retifanlimab (Incyte Commercial Supply Agreement). • Gilead .
We also have an agreement with Incyte under which we performed development and manufacturing services for Incyte's clinical needs of retifanlimab (Incyte Clinical Supply Agreement) and another agreement under which we are entitled to manufacture a portion of Incyte’s global commercial supply of retifanlimab (Incyte Commercial Supply Agreement). • Gilead .
Actual results and experiences may differ from these estimates. We did not make any material changes to these assumptions during the year ended December 31, 2023, and do not expect any material changes in the near term to the underlying assumptions.
Actual results and experiences may differ from these estimates. We did not make any material changes to these assumptions during the year ended December 31, 2024, and do not expect any material changes in the near term to the underlying assumptions.
Investing Activities Net cash used in investing activities during the year ended December 31, 2023 is primarily due to purchases of marketable securities, partially offset by maturities of marketable securities. Net cash provided by investing activities during the year ended December 31, 2022 is primarily due to maturities of marketable securities, partially offset by purchases of marketable securities.
Net cash used in investing activities during the year ended December 31, 2023 is primarily due to purchases of marketable securities, partially offset by maturities of marketable securities.
For the discussion of our financial condition and results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 15, 2023.
For the discussion of our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 7, 2024.
Although it is difficult to predict our funding requirements, we anticipate that our cash, cash equivalents and marketable securities as of December 31, 2023, combined with anticipated and potential collaboration payments, product revenue, contract manufacturing revenue, and royalties, should enable us to fund our operations into 2026.
Although it is difficult to predict our funding requirements, we anticipate that our cash, cash equivalents and marketable securities as of December 31, 2024, combined with anticipated and potential collaboration payments, contract manufacturing revenue, and royalties, should enable us to fund our operations into the second half of 2026.
Although it is difficult to predict our funding requirements, we anticipate that our cash, cash equivalents and marketable securities as of December 31, 2023, combined with anticipated and potential collaboration payments, product revenue, contract manufacturing revenue, and royalties, should enable us to fund our operations into 2026.
Although it is difficult to predict our funding requirements, we anticipate that our cash, cash equivalents and marketable securities as of December 31, 2024, combined with anticipated and potential collaboration payments, contract manufacturing revenue, and royalties, should enable us to fund our operations into the second half of 2026.
Gain on Royalty Monetization Arrangement In April 2023, we entered into the Tripartite Agreement with DRI and Sanofi, whereby we consented to the sale of DRI’s Royalty Interest and the related milestone payment obligations to Sanofi.
Gain on Royalty Monetization Arrangement In April 2023, we entered into the Tripartite Agreement with DRI Healthcare Acquisitions LP (DRI) and Sanofi S.A (Sanofi), whereby we consented to the sale of DRI’s royalty interest in TZIELD and the related milestone payment obligations to Sanofi.
In September 2023, Gilead nominated the first of the two research programs contemplated in the Gilead Agreement (First Research Program), we granted Gilead a research license, and the parties agreed on a research plan for the First Research Program under which we will provide research and development services.
In 2023, Gilead nominated the first of the two research programs contemplated in the Gilead Agreement (First Research Program) and paid us a $15.7 million nomination fee. We granted Gilead a research license, and the parties agreed on a research plan for the First Research Program under which we will provide research and development services.
Cost of Manufacturing Services Cost of manufacturing services consists of the costs to provide manufacturing services to produce certain bulk drug substance under manufacturing and clinical supply agreements with third parties, including salaries and benefits and related stock-based compensation, materials, overhead and other related costs. 59 Research and Development Expense Research and development expense consists of expenses incurred in performing research and development activities.
Cost of Manufacturing Services Cost of manufacturing services consists of the costs to provide manufacturing services to produce certain bulk drug substance under manufacturing and clinical supply agreements with third parties, including salaries and benefits and related stock-based compensation, materials, overhead and other related costs.
Liquidity and Capital Resources Cash Flows The following table represents a summary of our cash flows for the years ended December 31, 2023 and 2022 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2023 2022 Net cash provided by (used in): Operating activities $ (78.2) $ (87.0) $ 8.8 10 % Investing activities (80.1) 70.7 (150.8) 213 % Financing activities 150.4 1.7 148.7 NM Net decrease in cash and cash equivalents $ (7.9) $ (14.6) $ 6.7 46 % NM: Not Meaningful Operating Activities Net cash used in operating activities consists of our net loss adjusted for non-cash items such as depreciation and amortization expense and stock-based compensation, gain on royalty monetization arrangement which is classified as a financing activity, and changes in working capital.
Liquidity and Capital Resources Cash Flows The following table represents a summary of our cash flows for the years ended December 31, 2024 and 2023 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2024 2023 Net cash provided by (used in): Operating activities $ (68.4) $ (78.2) $ 9.8 13 % Investing activities 149.3 (80.1) 229.4 286 % Financing activities 1.0 150.4 (149.4) (99) % Net increase (decrease) in cash and cash equivalents $ 81.9 $ (7.9) $ 89.8 NM NM: Not Meaningful Operating Activities Net cash used in operating activities consists of our net loss adjusted for non-cash items such as depreciation and amortization expense and stock-based compensation, gain on royalty monetization arrangement which is classified as a financing activity, gain on sale of MARGENZA which is classified as an investing activity, and changes in working capital.
The transaction price for net product revenue represents the amount we expect to receive, which is net of estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns, and other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable accruals. Customer discounts are recorded as reductions of accounts receivable on the consolidated balance sheets.
The transaction price for net product revenue represents the amount we expect to 62 receive, which is net of estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns, and other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable accruals.
The table below includes a reconciliation of the accounts associated with these deductions (in millions): Rebates and chargebacks Distribution fees, product returns and other Total Balance as of December 31, 2021 $ 0.4 $ 0.4 $ 0.8 Provisions 2.5 1.1 3.6 Payments/credits (2.5) (0.2) (2.7) Balance as of December 31, 2022 0.4 1.3 1.7 Provisions 2.8 1.2 4.0 Adjustments related to prior year sales (0.1) (0.7) (0.8) Payments/credits (2.9) (1.0) (3.9) Balance as of December 31, 2023 $ 0.2 $ 0.8 $ 1.0 Contract manufacturing revenue for the years ended December 31, 2023 and 2022 consists of revenue recognized from providing manufacturing services under the Incyte Manufacturing and Clinical Supply Agreement.
The table below includes a reconciliation of the accounts associated with these deductions (in millions): Rebates and chargebacks Distribution fees, product returns and other Total Balance as of December 31, 2022 $ 0.4 $ 1.3 $ 1.7 Provisions 2.8 1.2 4.0 Adjustments related to prior year sales (0.1) (0.7) (0.8) Payments/credits (2.9) (1.0) (3.9) Balance as of December 31, 2023 0.2 0.8 1.0 Provisions 2.3 1.0 3.3 Adjustments related to prior year sales 0.4 (0.8) (0.4) Payments/credits (2.7) (0.9) (3.6) Balance as of December 31, 2024 $ 0.2 $ 0.1 $ 0.3 Contract manufacturing revenue increased by $3.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to increased manufacturing under the Incyte Manufacturing and Clinical Supply Agreement and the revenue recognized under the Emergent BioSolutions Manufacturing and Clinical Supply Agreements executed in the second half of 2023.
Cost of manufacturing services includes the costs to provide manufacturing services to produce certain Incyte bulk drug substance under the Incyte Manufacturing and Clinical Supply Agreement for both years.
Cost of manufacturing services includes the costs to provide manufacturing services to produce certain Incyte bulk drug substance under the Incyte Manufacturing and Clinical Supply Agreement for both years. Cost of manufacturing services for the year ended December 31, 2024 also includes costs to provide manufacturing services under the Emergent BioSolutions Manufacturing and Clinical Supply Agreement.
Our expected funding requirements reflect anticipated expenditures related to the Phase 2 TAMARACK clinical trial of vobramitamab duocarmazine (vobra duo) in metastatic castration-resistant prostate cancer (mCRPC), our Phase 2 LORIKEET study of lorigerlimab in mCRPC as well as our other clinical and preclinical studies currently ongoing. Through December 31, 2023, we had an accumulated deficit of $1.1 billion.
Our expected funding requirements reflect anticipated expenditures related to the ongoing Phase 2 LORIKEET study of lorigerlimab in mCRPC as well as our other clinical and preclinical studies currently ongoing. Through December 31, 2024, we had an accumulated deficit of $1.2 billion.
These decreases were partially offset by an increase of $2.2 million in revenue recognized under the Gilead Agreement. 64 Revenue from collaborative and other agreements may vary substantially from period to period depending on the progress made by our collaborators with their product candidates and the timing of milestones achieved under current agreements, and whether we enter into additional collaboration agreements.
Revenue from collaborative and other agreements may vary substantially from period to period depending on the progress made by our collaborators with their product candidates and the timing of milestones achieved under current agreements, and whether we enter into additional collaboration agreements.
Research and Development Expense The following represents a comparison of our research and development expense for the years ended December 31, 2023 and 2022 (dollars in millions): 65 Year Ended December 31, Increase/(Decrease) 2023 2022 Vobramitamab duocarmazine $ 39.2 $ 55.4 $ (16.2) (29) % Lorigerlimab 27.7 21.6 6.1 28 % Margetuximab 16.1 26.9 (10.8) (40) % MGC028 14.4 — 14.4 NM MGC026 13.5 5.3 8.2 155 % Other antibody-drug conjugates (ADCs) 11.2 12.9 (1.7) (13) % Next-generation T-cell engagers (a) 10.5 13.3 (2.8) (21) % MGD024 7.0 7.9 (0.9) (11) % Tebotelimab 5.7 11.4 (5.7) (50) % Enoblituzumab 5.3 14.7 (9.4) (64) % Retifanlimab 3.5 2.2 1.3 59 % Flotetuzumab 3.2 12.9 (9.7) (75) % IMGC936 3.1 7.9 (4.8) (61) % DART molecules under HIV government contract 2.3 4.7 (2.4) (51) % Other programs (a) 3.9 9.9 (6.0) (61) % Total research and development expense $ 166.6 $ 207.0 $ (40.4) (20) % (a) Includes research and discovery projects, as well as early preclinical molecules and molecules not advanced to clinical development.
Research and Development Expense The following represents a comparison of our research and development expense for the years ended December 31, 2024 and 2023 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2024 2023 Vobramitamab duocarmazine $ 39.8 $ 39.2 $ 0.6 2 % Lorigerlimab 36.8 27.7 9.1 33 % MGC028 24.1 14.4 9.7 67 % Preclinical antibody-drug conjugates (ADCs) 18.1 11.2 6.9 62 % MGC026 14.1 13.5 0.6 4 % Margetuximab 10.8 16.1 (5.3) (33) % MGD024 9.7 7.0 2.7 39 % Next-generation T-cell engagers (a) 8.4 10.5 (2.1) (20) % Retifanlimab 2.1 3.5 (1.4) (40) % Enoblituzumab 1.9 5.3 (3.4) (64) % Other programs (a) (b) 11.4 18.2 (6.8) (37) % Total research and development expense $ 177.2 $ 166.6 $ 10.6 6 % (a) Includes research and discovery projects, as well as early preclinical molecules and molecules not advanced to clinical development.
These expenses include conducting preclinical experiments and studies, clinical trials, manufacturing efforts and regulatory filings for all product candidates, and other indirect expenses in support of our research and development activities. We capture research and development expense on a program-by-program basis for our product candidates and recognize these expenses as they are incurred.
Research and Development Expense Research and development expense consists of expenses incurred in performing research and development activities. These expenses include conducting preclinical experiments and studies, clinical trials, manufacturing efforts and regulatory filings for all product candidates, and other indirect expenses in support of our research and development activities.
Net cash used in operating activities for the year ended December 31, 2022 benefited from the $60.0 million upfront payment under the Gilead Agreement, a $30.0 million milestone payment received from Incyte, and $15.0 million received from Provention.
Net cash used in operating activities for the year ended December 31, 2024 benefited from a $100.0 million milestone payment received from Incyte under the Incyte License Agreement.
Product sales, net We entered into a limited number of arrangements with specialty distributors in the United States to distribute MARGENZA. The delivery of our product represents a single performance obligation for these transactions and we record net product revenue when control is transferred to the customer, generally upon receipt by the customer.
The delivery of our product represents a single performance obligation for these transactions and we record net product revenue when control is transferred to the customer, generally upon receipt by the customer.
Critical Accounting Estimates Our management's discussion and analysis of financial conditions and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
We recognized a gain of $36.3 million related to the ASA with TerSera during the year ended December 31, 2024. Critical Accounting Estimates Our management's discussion and analysis of financial conditions and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
There are uncertainties associated with our research and development expenses for future periods which are impacted by multiple variables, including timing of wind down activities for recently closed studies and current and expected expenditures associated with our ongoing clinical studies.
There are uncertainties associated with our research and development expenses for future periods which are impacted by multiple variables, including timing of wind down activities for recently closed studies and current and expected expenditures associated with our ongoing clinical studies. 65 Selling, General and Administrative Expense Selling, general and administrative expenses were $71.0 million and $52.2 million for the years ended December 31, 2024 and 2023, respectively.
We received an upfront payment of $150.0 million and milestone payments totaling $115.0 million from Incyte through December 31, 2023, including $15.0 million upon the FDA approval of ZYNYZ (retifanlimab-dlwr) in March 2023 . We are eligible to receive an additional $320.0 million in development and regulatory milestones and $330.0 million in commercial milestones.
We received an upfront payment of $150.0 million and milestone payments totaling $215.0 million from Incyte through December 31, 2024, including $100.0 million received in August 2024 . We are eligible to receive up to an additional $210.0 million in development and regulatory milestones and $330.0 million in commercial milestones.
The increase in product sales, net is primarily due to an increase in volume. Revenue from product sales is recorded net of applicable provisions for rebates, chargebacks and discounts, distribution-related fees and other sales-related deductions.
The decrease in product sales, net is due to the fact that we sold the global rights to MARGENZA to TerSera in November 2024. Revenue from product sales is recorded net of applicable provisions for rebates, chargebacks and discounts, distribution-related fees and other sales-related deductions.
Our expected funding requirements reflect anticipated expenditures related to the Phase 2 TAMARACK clinical trial of vobra duo in mCRPC, our Phase 2 study of lorigerlimab in mCRPC as well as our other clinical and preclinical studies currently ongoing.
Our expected funding requirements reflect anticipated expenditures related to the ongoing Phase 2 LORIKEET study of lorigerlimab in mCRPC as well as our other clinical and preclinical studies currently ongoing. Material Cash Requirements Our short-term and long-term material cash requirements consist of operational and capital expenditures, some of which contain contractual obligations.
Allowance for product returns, provider chargebacks, government and other rebates and service fees are recorded as a component of accrued expenses and other current liabilities on the consolidated balance sheets. Sales deductions are based on management's estimates that consider payor mix in target markets and experience to-date.
Customer discounts are recorded as reductions of accounts receivable on the consolidated balance sheets. Allowance for product returns, provider chargebacks, government and other rebates and service fees are recorded as a component of accrued expenses and other current liabilities on the consolidated balance sheets.
We do not have any off-balance sheet arrangements, as defined under the rules and regulations of the Securities and Exchange Commission.
We expect to fund these requirements with current cash, cash equivalents and marketable securities as well as anticipated and potential collaboration payments. We do not have any off-balance sheet arrangements, as defined under the rules and regulations of the Securities and Exchange Commission.
Revenue Recognition We recognize revenue under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customer s, (ASC 606) when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.
While a summary of significant accounting policies is described fully in Note 2 in our consolidated financial statements, we believe that the following accounting policies are the most critical to assist you in fully understanding and evaluating our financial results and the effect of the estimates and judgments we used in preparing our consolidated financial statements. 60 Revenue Recognition We recognize revenue under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customer s, (ASC 606) when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.
Product revenue is recorded net of applicable reserves for variable consideration, including discounts and other allowances; • contract manufacturing revenue which is earned from manufacturing third parties’ drug substance; and • government agreements revenue which reflects amounts earned through grants and/or contracts with the U.S. government and other research institutions on behalf of the U.S. government, primarily with respect to research and development activities related to infectious disease product candidates.
In November 2024, we sold global rights to MARGENZA to TerSera Therapeutics, LLC (TerSera) for an upfront payment of $40.0 million; • contract manufacturing revenue which is earned from providing development and manufacturing services to third parties and manufacturing their drug substance; and • government agreements revenue which reflects amounts earned through grants and/or contracts with the U.S. government and other research institutions on behalf of the U.S. government, primarily with respect to research and development activities related to infectious disease product candidates.
The terms of these arrangements typically include an upfront payment to us to reserve manufacturing capacity, scheduled payments during the manufacturing process and reimbursement for materials used to manufacture product.
Contract Manufacturing Revenue We enter into agreements with third parties to manufacture their drug substance at our Good Manufacturing Practice (GMP) facility. The terms of these arrangements can include an upfront payment to us to reserve manufacturing capacity, scheduled payments during the manufacturing process and reimbursement for materials used to manufacture product.
Selling, general and administrative expense also includes costs incurred under the arrangement with our commercialization partner, Eversana Life Science Services, LLC, and other legal and professional fees.
Selling, general and administrative expense also includes costs incurred under the arrangement with our commercialization partner, Eversana Life Science Services, LLC, and other legal and professional fees. Gain on Sale of MARGENZA On October 17, 2024, we entered into an Asset Purchase and Sale Agreement (ASA) with TerSera, which closed in November 2024.
Cost of product sales includes product royalties and fill finish costs for both years, and cost of product sales for 2022 also includes reserves for unsaleable inventory. Product sold during both periods consisted of drug product that was previously charged to research and development expense prior to FDA approval of MARGENZA, which favorably impacted our gross margin.
Product sold during both periods consisted of drug product that was previously charged to research and development expense prior to FDA approval of MARGENZA, which favorably impacted our gross margin. 64 Cost of Manufacturing Services Cost of manufacturing services was $11.5 million and $7.6 million for the years ended December 31, 2024 and 2023, respectively.
Material Cash Requirements Our short-term and long-term material cash requirements consist of operational and capital expenditures, some of which contain contractual obligations. Our primary uses of cash relate to paying salaries and benefits, administering clinical trials and providing the technology and facilities necessary to support our operations.
Our primary uses of cash relate to paying salaries and benefits, administering clinical trials and providing the technology and facilities necessary to support our operations. The most significant contractual obligations are the operating leases at our facilities in Maryland.
We expect that over the next several years this deficit will increase as we continue to incur research and development expense in connection with our ongoing activities and several clinical trials.
We expect that over the next several years this deficit will increase as we continue to incur research and development expense in connection with our ongoing activities and several clinical trials. 57 Macroeconomic Conditions The global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of significant worldwide events, including, fluctuating interest rates, and geopolitical upheaval (collectively, the Macroeconomic Conditions).
NM: Not Meaningful Research and development expense for the year ended December 31, 2023 decreased by $40.4 million compared to the year ended December 31, 2022.
(b) Includes discontinued projects. Research and development expense for the year ended December 31, 2024 increased by $10.6 million compared to the year ended December 31, 2023.
We expect cost of product sales to continue to be positively impacted for the next four to five years as we sell through inventory that was expensed prior to FDA approval of MARGENZA.
As a result, cost of product sales was positively impacted as we sold through inventory that was expensed prior to FDA approval of MARGENZA. In November 2024, we sold global rights to MARGENZA to TerSera.
In September 2023, we amended the Provention APA and terminated the Royalty Purchase Agreement with DRI. See Note 7, Royalty Monetization Arrangement, of the Notes to Consolidated Financial Statements, for additional information.
In September 2023, we amended the Provention asset purchase agreement and terminated the Royalty Purchase Agreement with DRI.
Overview We are a biopharmaceutical company focused on discovering, developing, manufacturing and commercializing innovative antibody-based therapeutics for the treatment of cancer. We have a pipeline of product candidates designed to target either various tumor-associated antigens or immune checkpoint molecules. These candidates are being evaluated in clinical trials sponsored by us or our collaborators or are in preclinical development.
Overview We are a clinical-stage biopharmaceutical company focused on discovering, developing, manufacturing and commercializing innovative antibody-based therapeutics for the treatment of cancer. We generate our pipeline of product candidates from our proprietary suite of antibody technology platforms.
See Note 6, Commitments and Contingencies, in the Notes to the Financial Statements in this Annual Report on Form 10-K for additional information about our contractual obligations. We expect to fund these requirements with current cash, cash equivalents and marketable securities as well as anticipated and potential collaboration payments, and product revenues.
Our future minimum lease payments as of December 31, 2024 totaled $5.2 million related to short-term lease liabilities, and $65.3 million related to long-term lease liabilities. See Note 6, Commitments and Contingencies, in the Notes to the Financial Statements in this Annual Report on Form 10-K for additional information about our contractual obligations.
Cost of manufacturing services for the year ended December 31, 2022 also includes costs to provide manufacturing services to produce certain bulk drug substance under the Provention Manufacturing and Clinical Supply Agreement. We expect cost of manufacturing services to vary from period to period based on the agreed-upon manufacturing schedule.
We expect cost of manufacturing services to vary from period to period based on the agreed-upon manufacturing schedule.
These decreases were partially offset by: • increased development costs related to MGC026 and MGC028; and • increased clinical trial costs related to lorigerlimab.
These increases were partially offset by: • decreased development, manufacturing and clinical trial costs related to discontinued projects; • decreased development and clinical trial costs related to margetuximab; • decreased development and clinical trial costs related to enoblituzumab; • decreased development costs related to t-cell engagers; and • decreased manufacturing costs related to retifanlimab.
Contract manufacturing revenue for the year ended December 31, 2022 also includes revenue recognized from providing manufacturing services under the Provention Manufacturing and Clinical Supply Agreement. Cost of Product Sales Cost of product sales was $0.6 million and $3.4 million for the years ended December 31, 2023 and 2022, respectively.
Cost of Product Sales Cost of product sales was $0.8 million and $0.6 million for the years ended December 31, 2024 and 2023, respectively. Cost of product sales includes product royalties and fill finish costs for both years, and cost of product sales for 2023 also includes reserves for unsaleable inventory.
These estimates involve a substantial degree of judgment, in particular, for government-mandated rebates and chargebacks, such as for the Medicaid and 340B programs. Contract manufacturing revenue We enter into agreements with third parties to manufacture their drug substance at our GMP facility.
Sales deductions are based on management's estimates that consider payor mix in target markets and experience to-date. These estimates involve a substantial degree of judgment, in particular, for government-mandated rebates and chargebacks, such as for the Medicaid and 340B programs.
Removed
Our clinical product candidates include multiple oncology programs which have either been created using our proprietary, antibody-based technology platforms or enabled through our technology licensing arrangements with other companies.
Added
We are currently developing therapeutics utilizing multiple modalities, including antibody-drug conjugates (ADCs) and multi-specific antibodies (which we refer to as DART and TRIDENT molecules). The combination of our technology platforms and antibody engineering expertise has allowed us to generate promising product candidates – three of which have received marketing approval by the U.S.
Removed
We believe our product candidates have the potential, if approved for marketing by regulatory authorities, to have a meaningful effect on treating patients' unmet medical needs as monotherapy or, in some cases, in combination with other therapeutic agents. To date, three products originating from our pipeline of proprietary or partnered product candidates have received U.S.
Added
Food and Drug Administration (FDA) – and to enter into several strategic collaborations with global biopharmaceutical companies. These collaborations have provided us with over $1.4 billion of non-dilutive funding since our inception in 2000, and have enabled us to leverage the additional expertise of our collaborators to advance the development of multiple partnered product candidates.
Removed
In March 2021, we and our commercialization partner commenced U.S. marketing of MARGENZA (margetuximab-cmkb), a human epidermal growth factor receptor 2 (HER2) receptor antagonist indicated, in combination with chemotherapy, for the treatment of adult patients with metastatic HER2-positive breast cancer who have received two or more prior anti-HER2 regimens, at least one of which was for metastatic disease.
Added
In addition, we operate a 5 × 2,000 liter commercial-scale cGMP antibody manufacturing facility in our Maryland headquarters to support our clinical programs. We also provide outsourced contract development and manufacturing services to our collaborators and other third parties for commercial and clinical products to offset a portion of the operating costs of this facility.
Removed
In November 2022, the FDA approved TZIELD™ (teplizumab-mzwv) to delay the onset of Stage 3 Type 1 Diabetes (T1D) in adult and pediatric patients aged 8 years and older with Stage 2 T1D. Teplizumab was acquired from us by Provention Bio, Inc. (Provention) in 2018, pursuant to an asset purchase agreement (Provention APA).
Added
We are currently advancing three proprietary product candidates in clinical development: lorigerlimab, a bispecific DART molecule that targets checkpoint inhibitors PD-1 and CTLA-4; MGC026, an ADC that targets B7-H3 and delivers a novel topoisomerase I inhibitor (TOP1i)-based linker-payload, and MGC028, an ADC that targets ADAM9 and delivers a novel TOP1i-based linker-payload.
Removed
In March 2023, the FDA approved ZYNYZ™ (retifanlimab-dlwr), a humanized monoclonal antibody targeting programmed death receptor-1 (PD-1). Retifanlimab was previously developed by us and licensed to Incyte Corporation (Incyte) pursuant to an exclusive global collaboration and license agreement in October 2017.
Added
We are also actively developing multiple preclinical-stage ADC and next generation T-cell engager programs. We and our partners are developing or commercializing product candidates for which we retain certain economic rights.
Removed
Macroeconomic Conditions The global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of significant worldwide events, including adverse events involving financial institutions or the financial services industry, inflation and rising interest rates and geopolitical upheaval (collectively, the Macroeconomic Conditions).
Added
These include three products approved by the FDA: MARGENZA ® (margetuximab-cmkb), an anti-HER2 monoclonal antibody (mAb) that we recently sold to a partner, ZYNYZ ® (retifanlimab-dlwr), an anti-PD-1 mAb that we out-licensed; and TZIELD ® (teplizumab-mzwv), an anti-CD3 mAb that we sold to a partner. We are also collaborating with Gilead Sciences, Inc.
Removed
Gilead paid us a $15.7 million nomination fee in October 2023. • Provention . In 2018, we entered into the Provention APA pursuant to which Provention acquired our interest in teplizumab.
Added
(Gilead) on the development of MGD024, a bispecific DART antibody targeting CD123 and CD3 that utilizes our next-generation T-cell engager technology, as well as two additional undisclosed pre-clinical DART development programs.
Removed
Under the Provention APA, if Provention successfully develops, obtains regulatory approval for, and commercializes teplizumab, we will be eligible to receive up to $170.0 million in regulatory milestones, and up to $225.0 million in commercial milestones.
Added
In January 2024, the parties amended the Gilead Agreement to revise certain matters related to intellectual property in the performance of the research plans under the agreement. In 58 June 2024, Gilead paid us variable consideration totaling $3.3 million upon achievement of a research plan milestone.
Removed
In November 2022, the FDA approved TZIELD (teplizumab-mzwv) to delay the onset of Stage 3 T1D in adult and pediatric patients aged 8 years and older with Stage 2 T1D, and we recognized $60.0 million in milestone revenue during the year ended December 31, 2022. In November 2022 we and Provention amended the Provention APA.
Added
On August 30, 2024, the parties entered into a second letter agreement under which Gilead will pay us to conduct certain research and which extends the period for Gilead to select its second research target combination.
Removed
Under the amended Provention APA, the $60.0 million milestone for a first approval was split into four $15.0 million payments, all of which were received prior to June 30, 2023. Under the Provention APA we are also eligible to receive single-digit royalties on net sales of TZIELD.
Added
Product revenue is recorded net of applicable reserves for variable consideration, including discounts and other allowances.
Removed
Provention has also agreed to pay third-party obligations, including low single-digit royalties, a portion of which 58 is creditable against royalties payable to us, aggregate milestone payments of up to approximately $1.3 million and other consideration, for certain third-party intellectual property under agreements Provention assumed pursuant to the Provention APA.
Added
We capture research and development expense on a program-by-program basis for our product candidates and recognize these expenses as they are incurred.
Removed
Further, Provention is required to pay us a low double-digit percentage of certain consideration to the extent it is received in connection with a grant of rights by Provention to a third party.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed3 unchanged
Biggest changeOur current investment policy is to invest principally in deposits and securities issued by the U.S. government and its agencies, Government Sponsored Enterprise agency debt obligations, corporate debt obligations and money market instruments. As of December 31, 2023, we had cash, cash equivalents and marketable securities of $229.8 million.
Biggest changeOur current investment policy is to invest principally in deposits and securities issued by the U.S. government and its agencies, Government Sponsored Enterprise agency debt obligations, corporate debt obligations and money market instruments. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $201.7 million.
We have the ability to hold our marketable securities until maturity, and we therefore do not expect a change in market interest rates to affect our operating results or cash flows to any significant degree.
We have the ability to hold our marketable securities 67 until maturity, and we therefore do not expect a change in market interest rates to affect our operating results or cash flows to any significant degree.

Other MGNX 10-K year-over-year comparisons