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What changed in MACROGENICS INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of MACROGENICS INC's 2022 and 2023 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 2023 report.

+455 added−467 removedSource: 10-K (2024-03-07) vs 10-K (2023-03-15)

Top changes in MACROGENICS INC's 2023 10-K

455 paragraphs added · 467 removed · 326 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

119 edited+45 added−72 removed146 unchanged
Biggest changeNine of 42 patients (21.4%), including the nine who achieved cPR, had reductions in their PSA levels of ≥ 90% as of the data cut-off. Based on the above data, we plan to initiate a randomized Phase 2 study of lorigerlimab in combination with docetaxel vs. docetaxel in second-line, chemotherapy-naïve mCRPC patients in the second half of 2023.
Biggest changeBased on the above data, we initiated the randomized Phase 2 LORIKEET study of lorigerlimab in combination with docetaxel vs. docetaxel in second-line, chemotherapy-naïve mCRPC patients in the second half of 2023. A total of 150 patients are planned to be randomized 2:1. The current study design includes a primary study endpoint of radiographic progression-free survival (rPFS).
Such interaction enhances the body's immune ability to mediate the killing of cancer cells through antibody-dependent cellular cytotoxicity (ADCC). ADCC The Fc region mediates the function of IgG antibodies by binding to different activating and inhibitory receptors, referred to as FcγRs, on immune effector cells found within the innate immune system.
Such interaction enhances the body's immune ability to mediate the killing of cancer cells through antibody-dependent cellular cytotoxicity (ADCC). The Fc region mediates the function of IgG antibodies by binding to different activating and inhibitory receptors, referred to as FcγRs, on immune effector cells found within the innate immune system.
In addition, the immuno-oncology field is competitive, with treatments currently approved and, on the market, or in development for various tumor types and patient populations from a variety of different companies such as Merck & Co., Inc. (Merck), The Bristol-Myers Squibb Company (BMS), and Roche, all of which have significantly greater resources than we do.
In addition, the immuno-oncology field is competitive, with treatments currently approved, on the market, or in development for various tumor types and patient populations from a variety of different companies such as Merck & Co., Inc. (Merck), The Bristol-Myers Squibb Company (BMS), and Roche, all of which have significantly greater resources than we do.
Finally, our competition in the contract development and manufacturing organization (CDMO) market includes a number of full-service contract manufacturers and large pharmaceutical companies offering third-party development and manufacturing services to fill their excess capacity. Large pharmaceutical companies have been seeking to divest portions of their manufacturing capacity, and any such divested businesses may compete with us in the future.
Finally, our competition in the contract development and manufacturing organization (CDMO) service market includes a number of full-service contract manufacturers and large pharmaceutical companies offering third-party development and manufacturing services to fill their excess capacity. Large pharmaceutical companies have been seeking to divest portions of their manufacturing capacity, and any such divested businesses may compete with us in the future.
The key competitive factors affecting the success of all of 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.
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.
Our benefits program offers health care, dental and vision coverage, along with benefits designed provide increased financial security to our employees and their families.
Our benefits program offers health care, dental and vision coverage, along with benefits designed to provide increased financial security to our employees and their families.
Clinical trials must be conducted: (i) in compliance with all applicable federal regulations and guidance, including those pertaining to good clinical practice (GCP) standards that are meant to protect the rights, safety, and welfare of human subjects and to define the roles of clinical trial sponsors, 16 investigators, and monitors; as well as (ii) under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.
Clinical trials must be conducted: (i) in compliance with all applicable federal regulations and guidance, including those pertaining to good clinical practice (GCP) standards that are meant to protect the rights, safety, and welfare of human subjects and to define the roles of clinical trial sponsors, investigators, and monitors; as well as (ii) under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.
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, option fees, and 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 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 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.
In addition, the standard of medical care provided to cancer patients continues to evolve as more scientific and medical information becomes available. These changes in medical care relate to pharmaceutical products, but are also 15 affected by other factors, and such changes can positively or negatively affect the prospects of our product candidates as well as those of our competitors.
In addition, the standard of medical care provided to cancer patients continues to evolve as more scientific and medical information becomes available. These changes in medical care relate to pharmaceutical products, but are also affected by other factors, and such changes can positively or negatively affect the prospects of our product candidates as well as those of our competitors.
In addition to patents and patent applications generally providing protection for various aspects of our Fc Optimization, DART, and TRIDENT platforms, we have patent and patent applications for the composition of matter of each of our clinical pipeline product candidates and, in some cases, we also have 12 other patents and patent application related to various aspects of the technology underlying these product candidates or their methods of use.
In addition to patents and patent applications generally providing protection for various aspects of our Fc Optimization, DART, and TRIDENT platforms, we have patent and patent applications for the composition of matter of each of our clinical pipeline product candidates and, in some cases, we also have other patents and patent application related to various aspects of the technology underlying these product candidates or their methods of use.
Manufacturing We currently manufacture drug substance for most of our clinical trials at our manufacturing facility located in Rockville, Maryland. We also rely on 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. We have supplemented our drug substance manufacturing capacity through an arrangement with AGC Biologics, Inc.
Moreover, in the U.S., there have been several presidential executive orders, congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the 20 relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
Moreover, in the U.S., there have been several presidential executive orders, congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
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 grants Gilead the right, within the 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).
Intellectual Property We strive to protect the proprietary technologies that we believe are important to our business, including seeking and maintaining patents intended to protect, for example, the composition of matter of our product candidates, their methods of use, the technology platforms used to generate them, related technologies and/or other aspects of the inventions that are important to our business.
Intellectual Property We strive to protect the proprietary technologies that we believe are important to our business, including seeking and maintaining patents intended to protect, for example, the composition of matter of our product candidates, their methods of use, their formulation, the technology platforms used to generate them, related technologies and/or other aspects of the inventions that are important to our business.
The content of the MAA is similar to that of a New Drug Application or 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 authorisation applications either under a centralised or decentralised procedure.
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.
Targeting two immunoregulatory pathways, such as two checkpoints in a single molecule, affords the clinical benefit of the combination together with the potential for improved efficacy and/or safety, as well as advantages in manufacturing, simplified clinical development and enhanced patient convenience. 1 ◦ Next-Generation T-Cell Engagers.
Targeting two immunoregulatory pathways, such as two checkpoints in a single molecule, affords the clinical benefit of the combination together with the potential for improved efficacy and/or safety, as well as advantages in manufacturing, simplified clinical development and enhanced patient convenience. ◦ Next-Generation T-Cell Engagers.
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.
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 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.
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.
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 19 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 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. 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. 14 Typically, each institution participating in the clinical trial will require review of the protocol before any clinical trial commences at that institution.
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.
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.
We enter into collaborations when there is a strategic advantage to us and when we believe the 11 financial terms of the collaboration are favorable for meeting our short-term and long-term strategic objectives.
We enter into collaborations when there is a strategic advantage to us and when we believe the financial terms of the collaboration are favorable for meeting our short-term and long-term strategic objectives.
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; 18 • 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.
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.
We have created our product candidates based on the following antibody-based technologies: • ADC platforms, which we have licensed from collaboration partners to leverage third-party proprietary linker payloads, and which link monoclonal antibodies that specifically target cancer cells with cytotoxins that are designed to trigger cell death in the cancer cell; • Multi-specific platforms, which enable us to design antibodies that can bind to two (in the case of our bispecific DART product candidates) or more distinct targets, each with antibody-like specificity, with the goal of creating a more significant biological effect than binding any one of the targets as with an antibody or two or more of them separately as a combination.
We have created our product candidates based on the following antibody-based technologies: • ADC platforms, which we have licensed from collaboration partners to leverage third-party proprietary linker payloads, and which link mAbs that specifically target cancer cells with cytotoxins that are designed to trigger cancer cell death. • Multi-specific platforms, which enable us to design antibodies that can bind to two (in the case of our bispecific DART product candidates) or more distinct targets, each with antibody-like specificity, with the goal of creating a 1 more significant biological effect than binding any one of the targets as with an antibody or two or more of them separately as a combination.
While we don’t necessarily believe there is a single best linker-toxin technology capable of addressing all targets and indications, we have selected what we believe are best-in-class technologies for construction of each of our ADC product candidates. For example, to date we have utilized linker-toxin payloads developed by Byondis for vobra duo, by ImmunoGen for IMGC936 and by Synaffix B.V.
While we don’t necessarily believe there is a single best linker-toxin technology capable of addressing all targets and indications, we have selected what we believe are best-in-class technologies for construction of each of our ADC product candidates. For example, to date we have utilized linker-toxin payloads developed by Byondis for vobra duo and by Synaffix B.V.
In-Licensed Intellectual Property We have entered into patent and know-how license agreements that grant us the rights to use certain technologies related to biological manufacturing for our commercial and clinical product candidates, such as but not limited to technology related to the conjugation of cytotoxic payloads to our antibody drugs. We anticipate using these technologies for future product candidates.
In-Licensed Intellectual Property We have entered into patent and know-how license agreements that grant us the rights to use certain technologies related to biological manufacturing for our commercial and clinical product candidates such as, but not limited to, technology related to the conjugation of cytotoxic payloads to our antibody molecules. We anticipate using these technologies for future product candidates.
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 to report any matter of concern.
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.
After completing a dose escalation study in 2020, we initiated the Phase 1/2 dose expansion study of v obra duo in patients with metastatic castration-resistant prostate cancer ( mCRPC ) , non-small cell lung cancer ( NSCLC ) , melanoma, squamous cell carcinoma of the head and neck ( SCCHN ) and triple negative breast cancer ( TNBC ) .
After completing a dose escalation study in 2020, we conducted a Phase 1/2 dose expansion study of v obra duo in patients with metastatic castration-resistant prostate cancer ( mCRPC ) , non-small cell lung cancer ( NSCLC ) , melanoma, squamous cell carcinoma of the head and neck ( SCCHN ) and triple negative breast cancer ( TNBC ) .
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 margetuximab 2029 enoblituzumab 2031 retifanlimab 2036 tebotelimab 2036* lorigerlimab 2036 vobramitamab duocarmazine 2037 MGD024 2039* * 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: 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.
In many cases our confidentiality and other 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 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 addition, we provide focused development for managers and emerging leaders who are designated as “key talent” based on performance and leadership potential. Community 21 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. 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.
This engineered antibody-like protein has a compact and stable structure and enables the targeting of two different antigens with a single recombinant molecule. 9 The DART platform has been specifically engineered to accommodate virtually any variable region sequence with predictable expression, folding and antigen recognition.
This engineered antibody-like protein has a compact and stable structure and enables the targeting of two different antigens with a single recombinant molecule. 8 The DART platform has been specifically engineered to accommodate virtually any variable region sequence with predictable expression, folding and antigen recognition.
Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. (Roche), particularly through its affiliate, Genentech, Inc., as well as Puma Biotechnology, Inc., Daiichi Sankyo Company, Limited and AstraZeneca plc. (AstraZeneca), Seagen Inc., Zymeworks, Inc., Shanghai Hengrui Pharmaceutical, and Byondis, many of which have significantly greater resources than we do.
Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. (Roche), particularly through its affiliate, Genentech, Inc., as well as Puma Biotechnology, Inc., Daiichi Sankyo Company, Limited and AstraZeneca plc. (AstraZeneca), Seagen Inc. (now Pfizer), Zymeworks, Inc., Shanghai Hengrui Pharmaceutical, and Byondis, many of which have significantly greater resources than we do.
MacroGenics’ next-generation T-cell engagers incorporate a CD3 component that is designed to minimize cytokine-release syndrome (CRS), a potentially life-threatening toxicity, while increasing the magnitude of antitumor activity with a longer half-life to permit intermittent dosing; and • Fc Optimization platform, which introduces certain mutations into the Fc domain of a mAb in order to modulate antibody interaction with immune effector cells to enhance the killing of cancer cells.
MacroGenics’ next-generation T-cell engagers incorporate a CD3 component that is designed to minimize cytokine-release syndrome (CRS), a potentially life-threatening toxicity, while increasing the magnitude of antitumor activity with a longer half-life to permit intermittent dosing. • Fc Optimization platform, which introduces certain mutations into the Fc domain of a mAb to modulate antibody interaction with immune effector cells to enhance the killing of cancer cells.
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. In particular, 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. 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.
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. 22
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
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 monoclonal antibody that we have outlicensed and two DART molecules.
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.
Information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health (NIH) for public dissemination on their ClinicalTrials.gov website. Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and there are additional, more frequent reporting requirements for suspected unexpected serious adverse events.
Information about certain clinical trials must be submitted within specific timeframes to NIH for public dissemination on their ClinicalTrials.gov website. Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and there are additional, more frequent reporting requirements for suspected unexpected serious adverse events.
We provide employee wages that are competitive within our industry, and we engage a outside compensation and benefits consulting firm to independently evaluate the effectiveness of our compensation and benefit programs and to provide benchmarking against our peers within the industry.
We provide employee wages that are competitive within our industry, and we engage an outside compensation and benefits consulting firm to independently evaluate the effectiveness of our compensation and benefit programs and to provide benchmarking against our peers within the industry.
As of the December 12, 2022 data cut-off, 118 patients were enrolled at the dose of 6.0 mg/kg, administered intravenously every three weeks (Q3W). Confirmed objective responses were observed across the histology-specific cohorts; preliminary efficacy results for mCRPC were presented in the poster. Preliminary Safety Results .
As of the December 12, 2022 data cut-off, 118 patients were enrolled at the dose of 6.0 mg/kg, administered intravenously Q3W. Confirmed objective responses were observed across the histology-specific cohorts; preliminary efficacy results for mCRPC were presented in the poster. Preliminary Safety Results .
Assuming exercise of the CD123 Option, w e 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 exercise of the Research Program Option, a flat royalty on worldwide net sales of any products resulting from the two research programs.
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, 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; 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.
In the case of employees, the agreements provide that all inventions conceived by the individual, and which are related to our current or planned business or research and development or made during normal working hours, on our premises or using our equipment or proprietary information, are our exclusive property.
In the case of employees, the agreements provide that all inventions made, conceived, created or reduced to practice by the individual, and which are related to our current or planned business or research and development or made during normal working hours, on our premises or using our equipment or proprietary information, are our exclusive property.
We commercially produce material for MARGENZA as well as intend to commercially produce our and partner’s product candidates when and if approved by the FDA.
We commercially produce material for MARGENZA and ZYNYZ as well as intend to commercially produce our product candidates when and if approved by the FDA.
Our senior leadership oversees all human capital management matters and are committed to attracting, developing, engaging and retaining the best people. We strive to offer our employees an intellectually challenging and diverse work environment, opportunities to expand their knowledge and skills, to receive feedback on performance, and for career advancement.
Our senior leadership oversees all human capital management matters and is committed to attracting, developing, engaging and retaining the best people. We strive to offer our employees an intellectually challenging and diverse work environment, opportunities to expand their knowledge and skills, feedback on performance, and paths for career advancement.
Eversana received a co-exclusive right to conduct approved commercialization activities. Eversana utilizes its internal capabilities to support sales and marketing, market access, channel management services, data and analytics, medical affairs, and other 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 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.
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).
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).
Moreover, these technology platforms are complementary in certain cases and can be combined to address the complex biology of cancer. DART and TRIDENT Platforms: Our Proprietary Approach to Engineer Multi-Specific Antibodies We use our DART platform to create derivatives of antibodies with the ability to bind to two distinct targets instead of a single one found in traditional monoclonal antibodies.
Moreover, these technology platforms are complementary in certain cases and can be combined to address the complex biology of cancer. DART and TRIDENT Platforms: Our Proprietary Approach to Engineer Multi-Specific Antibodies We use our DART platform to create derivatives of antibodies with the ability to bind to two distinct targets instead of a single target as with traditional mAbs.
Furthermore, when an Fc domain is coupled with a DART molecule, additional changes can be included that can modulate the DART molecule's engagement with different immune cells. 10 We are currently developing product candidates using this technology, including lorigerlimab, MGD024, tebotelimab, MGD014 and MGD020 in clinical trials, as well as others in preclinical development.
Furthermore, when an Fc domain is coupled with a DART molecule, additional changes can be included that can modulate the DART molecule's engagement with different immune cells. We are currently developing product candidates using our DART technology, including lorigerlimab and MGD024, in clinical trials, as well as others in preclinical development.
These candidates include two bispecific DART product candidates that co-engage PD-1 and other checkpoint molecules and an anti-PD-1 monoclonal antibody that we have out-licensed to a partner. 4 Lorigerlimab (formerly MGD019) Approved monoclonal antibodies that target the immune checkpoints PD-1 and CTLA-4 have shown enhanced clinical antitumor activity when given in combination in various cancers, including renal cell carcinoma and NSCLC with high tumor mutational burden.
These candidates include two bispecific DART product candidates that co-engage PD-1 and other checkpoint molecules and an anti-PD-1 mAb that we have out-licensed to a partner. 3 Lorigerlimab Approved mAbs that target the immune checkpoints PD-1 and CTLA-4 have shown enhanced clinical antitumor activity when given in combination in various cancers, including renal cell carcinoma and NSCLC with high tumor mutational burden.
Under t he Gilead Agreement, we will continue the ongoing phase 1 trial for MGD024 accordi ng to a development plan , during which Gilead will have the right to exercise an option granted to Gilead to obtain an exclusive license to develop and commercialize MGD024 and other bispecific antibodies of ours that bind CD123 and CD3 (CD123 Option).
Under the Gilead Agreement, we will continue the ongoing phase 1 trial for MGD024 according to a development plan, during which Gilead will have the right to exercise an option granted to them to obtain an exclusive license to develop and commercialize MGD024 and other bispecific antibodies of ours that bind CD123 and CD3 (CD123 Option).
Our goal is to be a fully-integrated biotechnology company leading in the discovery, development, manufacturing and commercialization of breakthrough antibody-based biologics for the treatment of patients with cancer.
Our continued strategy is to be a fully-integrated biotechnology company leading in the discovery, development, manufacturing and commercialization of antibody-based biologics for the treatment of patients with cancer.
The Committee focused on raising awareness of DEI in 2022 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.
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.
Human Capital Management As of December 31, 2022, we had 357 full-time employees, 292 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 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.
In addition, we currently rely on and will continue to rely on contract fill-finish service providers, primarily Ajinomoto Bio-Pharma Services and Baxter Healthcare Corporation, to fulfill our fill-finish needs for our current and future product candidates. Most of the principal materials we use in our manufacturing operations are available from more than one source.
In addition, we currently rely on and will continue to rely on contract fill-finish service providers, primarily Ajinomoto Bio-Pharma Services, BSP Pharmaceuticals, and Simtra BioPharma Solutions, to fulfill our fill-finish needs for our current and future product candidates. Most of the principal materials we use in our manufacturing operations are available from more than one source.
We post links to our website to the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (SEC): annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and any amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended.
We post links to http://ir.macrogenics.com/financial-information/sec-filings for the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (SEC): annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and any amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended.
PRV-3279 In 2018, we also entered into a license agreement with Provention pursuant to which we granted them exclusive global rights for the purpose of developing and commercializing PRV-3279 (formerly MGD010), a CD32B × CD79B DART molecule being developed for the treatment of autoimmune indications.
PRV-3279 In 2018, we entered into a license agreement with Provention (now Sanofi) pursuant to which we granted them exclusive global rights for the purpose of developing and commercializing PRV-3279 (previously known as MGD010), a CD32B × CD79B DART molecule being developed for the treatment of autoimmune indications.
As of the December 12, 2022 data cut-off, 42 patients had been enrolled in the mCRPC expansion cohort. Patients had previously received a median of two prior therapies (range: 1 – 9) for advanced disease, with 35 patients (83.3%) having received docetaxel and 34 patients (81.0%) having received androgen receptor antagonist therapy.
Preliminary Anti-tumor Activity in mCRPC Cohort . As of the December 12, 2022 data cut-off, 42 patients had been enrolled in the mCRPC expansion cohort. Patients had previously received a median of two prior therapies (range: 1 – 9) for advanced disease, with 35 patients (83.3%) having received docetaxel and 34 patients (81.0%) having received ARAT therapy.
In addition, we are eligible to receive tiered royalties of 15% to 24% on any global net sales of the product. Incyte has stated it is pursuing development of retifanlimab in potentially registration-enabling indications, including in patients with Merkel cell carcinoma, squamous carcinoma of the anal canal, microsatellite instability-high, or MSI-high, endometrial cancer and non-small cell lung cancer.
In addition, we are eligible to receive tiered royalties of 15% to 24% on any global net sales of the product. Incyte has stated it is pursuing development of retifanlimab in other potentially registration-enabling studies, including in patients with squamous carcinoma of the anal canal, microsatellite instability-high, or MSI-high, endometrial cancer and NSCLC.
(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.
(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.
TRAEs occurred in 86.6% of patients, with the most common among them (≥15%) being fatigue, rash, pruritus, hypothyroidism, and pyrexia. Rates of grade ≥3 TRAEs and immune-related AEs were 35.4% and 7.9%, respectively. AEs resulted in treatment discontinuation in 25.2% of patients. There were no fatal AEs related to lorigerlimab. Preliminary Anti-tumor Activity in mCRPC Cohort .
Treatment-related adverse events (TRAEs) of any grade occurred in 86.6% of patients, with the most common among them (≥15%) being fatigue, rash, pruritus, hypothyroidism, and pyrexia. Rates of grade ≥3 TRAEs and immune-related AEs were 35.4% and 7.9%, respectively. AEs resulted in treatment discontinuation in 25.2% of patients. There were no fatal AEs related to lorigerlimab.
B7-H3 is a member of the B7 family of immune regulator proteins that is widely expressed by different tumor types and may play a key role in regulating the immune response to various cancers. Of the two programs, currently only vobra duo is in active clinical development. There are no currently approved therapeutic agents directed against B7-H3.
B7-H3 is a member of the B7 family of immune regulator proteins that is widely expressed by different tumor types and may play a key role in regulating the immune response to various cancers. There are no currently approved therapeutic agents directed against B7-H3.
We are also developing molecules that target programmed cell death protein 1 (PD-1), a protein that is important in the regulation of the immune system’s response to cancer. Our clinical pipeline includes two product candidates based on our proprietary, bispecific DART technology that co-engage both PD-1 and other checkpoint molecules.
Beyond our B7-H3-targeted product candidates, our pipeline includes molecules that target programmed cell death protein 1 (PD-1), a protein that is important in the regulation of the immune system’s response to cancer. Our clinical pipeline includes two product candidates based on our proprietary, bispecific DART technology that co-engage both PD-1 and other checkpoint inhibitor molecules.
Accordingly, if we were to experience extended plant shutdowns at our own facility, extended failure of a contract supplier or contract manufacturing organization, or extraordinary unplanned increases in demand, we could experience an interruption in supply of certain products or product shortages until production could be resumed or expanded. Commercialization MARGENZA is currently our only approved product in the U.S.
Accordingly, if we were to experience extended plant shutdowns at our own facility, extended failure of a contract supplier or contract manufacturing organization, or extraordinary unplanned increases in demand, we could experience an interruption in supply of certain products or product shortages until production could be resumed or expanded.
Margetuximab 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 metastatic disease. Margetuximab is an Fc-engineered, mAb that targets the HER2 oncoprotein.
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.
In late 2022, we initiated the Phase 2 portion of the TAMARACK Phase 2/3 study of vobra duo in patients with mCRPC who have had prior exposure to a taxane and at least one androgen receptor axis-targeted, or ARAT, agent (including abiraterone, enzalutamide or apalutimide), and a PARP (poly adenosine diphosphate-ribose polymerase) inhibitor, if appropriate.
Based on this data, we initiated the TAMARACK Phase 2 study in late 2022. This study focuses on mCRPC patients who have had prior exposure to a taxane and at least one androgen receptor axis-targeted, or ARAT, agent (including abiraterone, enzalutamide or apalutimide), and a PARP (poly adenosine diphosphate-ribose polymerase) inhibitor, if appropriate.
A Phase 2 study evaluating enoblituzumab in combination with either retifanlimab (anti-PD-1 monoclonal antibody) or tebotelimab (PD-1 × LAG-3 bispecific DART molecule) in the first-line treatment of patients with recurrent or metastatic SCCHN was discontinued in July 2022.
A Phase 2 study evaluating enoblituzumab in combination with either retifanlimab (anti-PD-1 monoclonal antibody) or tebotelimab (PD-1 × LAG-3 bispecific DART molecule) in the first-line treatment of patients with recurrent or metastatic SCCHN was discontinued in July 2022 after an internal review of safety data, as previously disclosed.
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.
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.
We initiated a Phase 1 study of MG024 in patients with CD123-positive hematologic malignancies in July 2022, and this dose escalation study is ongoing. 6 On October 14, 2022, we and Gilead Sciences, Inc.
A Phase 1 dose escalation study of MGD024 in patients with CD123-positive hematologic malignancies was initiated in July 2022 and is ongoing. In October 2022, we and Gilead Sciences, Inc.
Provention disclosed in the first quarter of 2022 that they had initiated a Phase 2a trial in SLE of PRV-3279. The PREVAIL-2 study is a Phase 2a proof-of-concept (POC) study in moderate-to-severe SLE patients induced into response with a short course of corticosteroids, and then monitored for relapse, after randomization to either PRV-3279 or placebo treatment.
The PREVAIL-2 study is a Phase 2a proof-of-concept (POC) study in moderate-to-severe SLE patients. Patients are induced into response with a short course of corticosteroids, and then monitored for relapse, after randomization to either PRV-3279 or placebo treatment.
DART product candidates are therefore bispecific. An example of a bispecific molecule from our DART platform is illustrated below: Because cancer cells have developed ways to escape the immune system, we have created DART molecules, which are alternative antibody-like structures with more potent immune properties than the parent antibody molecules from which they are derived.
DART product candidates are therefore bispecific. Because cancer cells have developed ways to escape the immune system, we have created DART molecules, which are alternative antibody-like structures with more potent immune properties than the parent antibody molecules from which they are derived.
Overview We are a biopharmaceutical company focused on developing and commercializing innovative antibody-based therapeutics for the treatment of cancer. We have a pipeline of product candidates being evaluated in clinical trials sponsored by us or our collaborators in addition to several molecules in preclinical development.
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.
A study sponsor might choose to discontinue a clinical trial or a clinical development program for a variety of reasons. The FDA may impose a temporary or permanent clinical hold, or other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial subjects.
In addition, the FDA may impose a temporary or permanent clinical hold, or other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial subjects.
Cancer is the second leading cause of death in the United States, exceeded only by heart disease. An increasing number of people are also living longer with cancer. We believe that our platforms position us very well strategically to actively develop approaches for the treatment of both solid tumors and hematologic malignancies.
An increasing number of people are also living longer with cancer. We believe that our platforms position us very well strategically to actively develop approaches for the treatment of both solid tumors and hematologic malignancies.
We added the Living Value , Be Inclusive , and completed company-wide training on Diversity, Equity and Inclusion. To further champion our DEI efforts, we formed a DEI Committee with strong advocacy from our senior leadership team and our board of directors.
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.
If we are unable to enter into third-party commercial arrangements for other product candidates with respect to the United States, we believe that we could potentially put in place an appropriately sized organization to commercialize our approved product or products.
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.
Lorigerlimab 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. Dose Escalation Study Results (as of July 21, 2020) We conducted a Phase 1/2 clinical trial of lorigerlimab in patients with advanced solid tumors.
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. 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.
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.
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.
IRRs occurred in 13% of patients treated with MARGENZA, with the majority reported as Grade 2 or less. Grade 3 IRRs occurred in 1.5% of patients. Partnered Programs Retifanlimab Retifanlimab is an investigational mAb targeting PD-1.
IRRs occurred in 13% of patients treated with MARGENZA, with the majority reported as Grade 2 or less. Grade 3 IRRs occurred in 1.5% of patients.
Pipeline Patent Protection As of December 31, 2022, we held 87 patents in the United States with 45 patent applications pending and 757 patents in other countries of the world with 487 patent applications pending.
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.

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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, including as a result of public health crises; • 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; and • approval of potential therapies by competitors.
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.
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; • 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: 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.
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 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 developing product candidates using our technology.
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 • 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: 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.
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; • 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; • 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.
Our future funding requirements will depend on many factors, including but not limited to: • the number and characteristics of other product candidates and indications that we pursue; • the scope, progress, timing, cost and results of research, nonclinical development, and clinical trials, in particular, our planned potential registrational path trial for MCG018; • the costs, timing and outcome of seeking and obtaining FDA and non-U.S. regulatory approvals; • the costs associated with manufacturing our product candidates; • the costs of establishing sales, marketing, and distribution capabilities; • our ability to maintain, expand, and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, defense and enforcement of any patents or other intellectual property rights; • our need and ability to hire additional management, scientific, and medical personnel; • the effect of competing products that may limit market penetration of our product candidates; • our need to implement additional internal systems and infrastructure, including financial and reporting systems; and • the economic and other terms, timing of and success of our existing collaborations, and any collaboration, licensing, or other arrangements into which we may enter in the future, including the timing of receipt of any milestone or royalty payments under these agreements.
Our future funding requirements will depend on many factors, including but not limited to: 35 • the number and characteristics of other product candidates and indications that we pursue; • the scope, progress, timing, cost and results of research, nonclinical development, and clinical trials, in particular, our planned potential registrational path trial for MCG018; • the costs, timing and outcome of seeking and obtaining FDA and non-U.S. regulatory approvals; • the costs associated with manufacturing our product candidates; • the costs of establishing sales, marketing, and distribution capabilities; • our ability to maintain, expand, and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, defense and enforcement of any patents or other intellectual property rights; • our need and ability to hire additional management, scientific, and medical personnel; • the effect of competing products that may limit market penetration of our product candidates; • our need to implement additional internal systems and infrastructure, including financial and reporting systems; and • the economic and other terms, timing of and success of our existing collaborations, and any collaboration, licensing, or other arrangements into which we may enter in the future, including the timing of receipt of any milestone or royalty payments under these agreements.
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 46 • 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: • 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.
If our operations, or those of our collaborators marketing, distributing or commercializing any of our products on our behalf, are found to be in violation of any of the federal and state healthcare laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including without limitation, significant civil, criminal and/or 50 administrative penalties, damages, fines, disgorgement, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private “qui tam” actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
If our operations, or those of our collaborators marketing, distributing or commercializing any of our products on our behalf, are found to be in violation of any of the federal and state healthcare laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including without limitation, significant civil, criminal and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private “qui tam” actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
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 of MARGENZA 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 MARGENZA 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 MARGENZA or product candidates, might lead to additional responsibilities for us with respect to MARGENZA 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 MARGNEZA or applicable product candidates.
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.
In addition, under the 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.
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.
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.
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.
Additionally, if the FDA or a comparable foreign regulatory authority does not approve of our facilities for the manufacture of a customer product or if it withdraws such approval in the future, our customers may choose to identify alternative manufacturing facilities and/or 30 relationships, which could significantly impact our ability to expand our CDMO capacity and capabilities and achieve profitability.
Additionally, if the FDA or a comparable foreign regulatory authority does not approve of our facilities for the manufacture of a customer product or if it withdraws such approval in the future, our customers may choose to identify alternative manufacturing facilities and/or relationships, which could significantly impact our ability to expand our CDMO capacity and capabilities and achieve profitability.
Vobra duo, lorigerlimab, MARGENZA, or any other product candidate that we develop may fail to achieve or maintain market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success. For example, revenues from MARGENZA are not anticipated to enable us to reach profitability.
Vobra duo, lorigerlimab, or any other product or product candidate that we developed or may develop may fail to achieve or maintain market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success. For example, revenues from MARGENZA are not anticipated to enable us to reach profitability.
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 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 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. 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 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.
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 44 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.
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.
Our strategy depends on our ability to identify and seek patent protection for our discoveries. This process is expensive and time consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable 45 cost or in a timely manner or in all jurisdictions where protection may be commercially advantageous.
Our strategy depends on our ability to identify and seek patent protection for our discoveries. This process is expensive and time consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost,in a timely manner, or in all jurisdictions where protection may be commercially advantageous.
These license agreements impose, and we expect that future license agreements may impose, various diligence, milestone payment, royalty, insurance and other obligations on us. For example, we have entered into patent and know-how license agreements that grant us the right to use certain technologies related to biological manufacturing to manufacture our clinical product candidates.
These license agreements impose, and we expect that future license agreements may impose, various diligence, milestone payment, royalty, insurance and other obligations on us. For example, we entered into patent and know-how license agreements that grant us the right to use certain technologies related to biological manufacturing to manufacture our clinical product candidates.
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; • safety and favorable efficacy and acceptable safety 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 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.
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.
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.
Any adverse determination in litigation could also subject us to significant liabilities. 52 The market price of our stock may fluctuate unpredictably in response to factors unrelated to our operating performance. The stock market has recently experienced significant volatility, particularly with respect to pharmaceutical, biotechnology, and other life sciences company stocks.
Any adverse determination in litigation could also subject us to significant liabilities. The market price of our stock may fluctuate unpredictably in response to factors unrelated to our operating performance. The stock market has recently experienced significant volatility, particularly with respect to pharmaceutical, biotechnology, and other life sciences company stocks.
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.
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.
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.
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.
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.
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.
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; 27 • 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: 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.
For example, we have limited experience in building and managing a commercial team, conducting a comprehensive market analysis, and reimbursement, 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 compete with many companies that currently have extensive and well-funded sales and marketing operations.
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 • the inability to commercialize our product candidates.
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.
Further, based on the identification of future adverse events, we may be required to further revise the prescribing information, including MARGENZA’s boxed warning, which could negatively impact sales of MARGENZA or adversely affect MARGENZA’s acceptance in the market.
Based on the possible identification of future adverse events, we may be required to further revise the prescribing information, including MARGENZA’s boxed warning, which could negatively impact sales of MARGENZA or adversely affect MARGENZA’s acceptance in the market.
For example, our expenses could increase if we are required by the FDA to perform trials in addition to those that we currently expect to perform, or if there are any delays in completing our currently planned clinical 38 trials or in the development of any of our product candidates.
For example, our expenses could increase if we are required by the FDA to perform trials in addition to those that we currently expect to perform, or if there are any delays in completing our currently planned clinical trials or in the development of any of our product candidates.
While we have not yet developed any companion diagnostic tests for our product candidates, if 34 we do, there is significant uncertainty regarding our ability to obtain coverage and adequate reimbursement for the same reasons applicable to our product candidates.
While we have not yet developed any companion diagnostic tests for our product candidates, if we do, there is significant uncertainty regarding our ability to obtain coverage and adequate reimbursement for the same reasons applicable to our product candidates.
To the extent that an individual who is not obligated to assign rights in intellectual property to us is rightfully an inventor of intellectual property, we may need to obtain an assignment or a license to that intellectual property 47 from that individual, or a third party or from that individual’s assignee.
To the extent that an individual who is not obligated to assign rights in intellectual property to us is rightfully an inventor of intellectual property, we may need to obtain an assignment or a license to that intellectual property from that individual, or a third party or from that individual’s assignee.
Furthermore, since our board of directors is responsible for appointing the members of our management team, these provisions could prevent 53 or frustrate attempts by our stockholders to replace or remove our management by making it more difficult for stockholders to replace members of our board of directors.
Furthermore, since our board of directors is responsible for appointing the members of our management team, these provisions could prevent or frustrate attempts by our stockholders to replace or remove our management by making it more difficult for stockholders to replace members of our board of directors.
We will continue to require additional funding beyond what was raised in our public offerings and through our collaborations and license agreements to complete the 37 development and commercialization of our product candidates and to continue to advance the development of our other product candidates.
We will continue to require additional funding beyond what was raised in our public offerings and through our collaborations and license agreements to complete the development and commercialization of our product candidates and to continue to advance the development of our other product candidates.
Moreover, in connection with MARGENZA’s approval, the labeling and advertising and promotion of MARGENZA are subject to additional regulatory requirements, which could entail significant expense and could negatively impact the potential commercialization of 35 MARGENZA.
Moreover, in connection with MARGENZA’s approval, the labeling and advertising and promotion of MARGENZA are subject to additional regulatory requirements, which could entail significant expense and could negatively impact the potential commercialization of MARGENZA.
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.
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.
In addition, the use of third-party service providers 42 requires us to disclose our proprietary information to these parties, which could increase the risk that this information will be misappropriated.
In addition, the use of third-party service providers requires us to disclose our proprietary information to these parties, which could increase the risk that this information will be misappropriated.
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 28 receive marketing approval and achieve market acceptance.
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.
Similar to the federal anti- 49 kickback statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
Similar to the federal anti-kickback statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
In addition, others may independently discover or develop our trade secrets and proprietary information, and the existence of our own trade secrets affords no protection against such independent discovery.
In 46 addition, others may independently discover or develop our trade secrets and proprietary information, and the existence of our own trade secrets affords no protection against such independent discovery.
This provision could have the effect of delaying or preventing a change of control, whether or not it is desired by or beneficial to our stockholders. 54
This provision could have the effect of delaying or preventing a change of control, whether or not it is desired by or beneficial to our stockholders.
Our product candidates are in various stages of development and are subject to the risks of failure 25 inherent in drug development. For example, in July 2022 we announced the closure of our Phase 2 study evaluating the investigational regimen of enoblituzumab in combination with either retifanlimab or tebotelimab in the first-line treatment of patients with recurrent or metastatic SCCHN.
Our product candidates are in various stages of development and are subject to the risks of failure inherent in drug development. For example, in July 2022 we announced the closure of our Phase 2 study evaluating the 23 investigational regimen of enoblituzumab in combination with either retifanlimab or tebotelimab in the first-line treatment of patients with recurrent or metastatic SCCHN.
Health reform actions by federal and state governments and health plans may put additional downward pressure on pharmaceutical pricing and health care costs, which could negatively impact coverage and reimbursement for MARGENZA and our product candidates, if approved, our revenue, and our ability to compete with other marketed products and to recoup the costs of our research and development.
Health reform actions by federal and state governments and health plans may put additional downward pressure on pharmaceutical pricing and health care costs, which could negatively impact coverage and reimbursement for our product or our product candidates, if approved, our revenue, and our ability to compete with other marketed products and to recoup the costs of our research and development.
If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators. For vobra duo, lorigerlimab, and our other product candidates, we may in the future determine to collaborate with additional pharmaceutical and biotechnology companies for development and potential commercialization. We face significant competition in seeking appropriate collaborators.
If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators. For vobra duo, lorigerlimab, and our other product candidates, we may in the future decide to collaborate with additional pharmaceutical and biotechnology companies for development and potential commercialization. We face significant competition in seeking appropriate collaborators.
As federal and state governments implement additional health care cost containment measures, including measures to lower prescription drug pricing, we cannot be sure that MARGENZA and our product candidates, if approved, will be covered, or remain covered, by private or public payors, and if covered, whether the reimbursement will be perceived by product purchasers as adequate.
As federal and state governments implement additional health care cost containment measures, including measures to lower prescription drug pricing, we cannot be sure that our products and our product candidates, if approved, will be covered, or remain covered, by private or public payors, and if covered, whether the reimbursement will be perceived by product purchasers as adequate.
Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises, 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, 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.
With respect to vobra duo, lorigerlimab, MARGENZA and any of our other product candidates that are approved for commercial sale, we are, and will be, highly dependent upon physician and patient perceptions of us and the safety and quality of our products. We could be adversely affected if we are subject to negative publicity.
With respect to vobra duo, lorigerlimab, and any of our other products or product candidates that are approved for commercial sale, we are, and will be, highly dependent upon physician and patient perceptions of us and the safety and quality of our products. We could be adversely affected if we are subject to negative publicity.
If we are unable to reach agreements with suitable collaborators on a timely 43 basis, on acceptable terms, or at all, we may have to curtail the commercialization of MARGENZA or a product candidate, reduce the scope of any sales or marketing activities, or increase our expenditures and undertake 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 commercialization of a product or product candidate, reduce the scope of any sales or marketing activities, or increase our expenditures and undertake or commercialization activities at our own expense.
There is no 48 assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws.
There is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws.
We would have little or no control over the marketing and sales efforts of such third parties, and our revenue from product sales may be lower than if we had commercialized our products ourselves. We also face competition in our search for third parties to assist us with the sales and marketing efforts for our products.
We may have little or no control over the marketing and sales efforts of such third parties, and our revenue from product sales may be lower than if we had commercialized our products ourselves. We also face competition in our search for third parties to assist us with the commercialization of our products.
As of December 31, 2022, we hold $20 million in product liability insurance coverage in the aggregate, with a per incident limit of $20 million, which may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage when we begin the commercialization of additional product candidates.
As of December 31, 2023, we hold $20 million in product liability insurance coverage in the aggregate, with a per incident limit of $20 million, which may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage when we begin the commercialization of additional product candidates.
Third parties may have blocking patents that could prevent us from marketing our own patented product and practicing our own patented technology. Third parties may also seek to market biosimilar versions of any approved products. Alternatively, third parties may seek approval to market their own products similar to or otherwise competitive with our products.
Third parties may have blocking patents that could prevent us from marketing our own patented product and practicing our own patented technology. Third parties may also seek to market biosimilar versions of any approved products. Alternatively, third parties may seek approval to market their own products, which are similar to or otherwise competitive with our products.
Vobra duo, lorigerlimab, MARGENZA, or any other product candidate that we develop may fail to achieve or maintain market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
Vobra duo, lorigerlimab, or any other product or product candidate that we developed or may develop may fail to achieve or maintain market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
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 MARGENZA, 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, 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.
If we are sued for patent infringement, we would need to demonstrate that our products, methods, or processes either do not infringe the patent claims of the relevant patent or that the patent claims are invalid, and we may not be able to do this. Proving invalidity is difficult.
If we are sued for patent infringement, we would need to demonstrate that our products, methods, or processes either do not infringe the patent claims of the relevant patent or that the patent claims are invalid, and we may not be able to do so. Proving invalidity is difficult.
If microbial, viral or other contaminations are discovered in MARGENZA and our product candidates or in the manufacturing facilities in which MARGENZA and our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
If microbial, viral or other contaminations are discovered in our products or product candidates or in the manufacturing facilities in which our products and our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
Any adverse developments affecting 31 manufacturing operations for MARGENZA and our product candidates, if any are approved, may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in the supply of our products.
Any adverse developments affecting manufacturing operations for our products and our product candidates, if any are approved, may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in the supply of our products.
It may take several years to establish an alternative source of supply for MARGENZA or our product candidates and to have any such new source approved by the FDA or any other relevant regulatory authorities.
It may take several years to establish an alternative source of supply for our products or product candidates and to have any such new source approved by the FDA or any other relevant regulatory authorities.
We expect to continue to incur losses for the foreseeable future, and we expect these losses to increase as we continue our research and development of, and seek regulatory approvals for, our product candidates, manufacture product and product candidate inventory, prepare for and begin to commercialize any future approved products, and add infrastructure and personnel if needed to support our product development efforts and operations as a public company.
We expect to continue to incur losses for the foreseeable future, and we expect our accumulated deficit to increase as we continue our research and development of, and seek regulatory approvals for, our product candidates, manufacture product and product candidate inventory, prepare for and begin to commercialize any future approved products, and add infrastructure and personnel if needed to support our product development efforts and operations as a public company.
For example, revenues from MARGENZA are unlikely to be sufficient to enable us to reach profitability.
For example, revenues from MARGENZA are highly unlikely to be sufficient to enable us to reach profitability.
In addition, in the future, we may use third parties for the manufacture of some or all components of our product candidates for clinical testing, including anti-body drug conjugates, as well as for commercial manufacture of some of our product candidates that receive marketing approval and that are not manufactured by us or one of our third party collaborators.
In addition, in the future, we may use third parties for the manufacture of some or all components of our product candidates for clinical testing, including antibody drug conjugates, as well as for commercial manufacture of some of our product candidates that receive marketing approval and that are not manufactured by us or one of our third-party collaborators.
Our agreements with employees and our personnel policies also provide that any inventions conceived by the individual in the course of rendering services to us shall be our exclusive property. However, we may not obtain these agreements in all circumstances, and individuals with whom we have these agreements may not comply with their terms.
Our agreements with employees and our personnel policies also provide that any inventions conceived by the individual while rendering services to us shall be our exclusive property. However, we may not obtain these agreements in all circumstances, and individuals with whom we have these agreements may not comply with their terms.
The manufacture of vobra duo, lorigerlimab, MARGENZA and our other 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 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.
If we are unable to further develop marketing and sales capabilities or enter into agreements with third parties to market and sell our products, or our existing arrangements are not successful, we may not be able to generate substantial product sales revenue. • Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel. • Actual or anticipated changes to the laws and regulations governing the health care system may have a negative impact on cost and access to health insurance coverage and reimbursement of health care items and services. • Reimbursement decisions by third-party payors, including government payors, may have an adverse effect on pricing and market acceptance. • 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. • Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish substantial rights. • We contract with, and may in the future contract with, third parties for the distribution and commercialization of MARGENZA and our other product candidates.
If our products achieve regulatory approval and we are unable to further develop marketing and sales capabilities or enter into agreements with third parties to market and sell our products, or our existing arrangements are not successful, we may not be able to generate substantial product sales revenue. • Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel. • Actual or anticipated changes to the laws and regulations governing the health care system may have a negative impact on cost and access to health insurance coverage and reimbursement of health care items and services. • Reimbursement decisions by third-party payors, including government payors, may have an adverse effect on pricing and market acceptance. • 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. • Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish substantial rights. • We contract with, and may in the future contract with, third parties for components of the manufacturing of our products and product candidates, including our antibody drug conjugate candidates.
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, teplizumab, IMGC936 and MGD024 as monotherapies or in combination with other product candidates.
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.
Any of these factors could adversely impact the commercialization of MARGENZA and the delay of approval or commercialization of our product candidates, cause us to incur higher costs or prevent us from commercializing our product candidates successfully.
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.
However, there can be no assurance that we will be able to establish or maintain such collaborative arrangements, or if we are able to do so, that they will 32 have effective sales forces. Any revenue we receive will depend upon the efforts of such third parties.
However, there can be no assurance that we will be able to establish or maintain such collaborative arrangements, or if we are able to do so, that they will be effective. Any revenue we receive will depend upon the efforts of such third parties.
If there were to be a catastrophic event or failure of our manufacturing facilities or processes, we may be unable to meet our requirements for supply of MARGENZA and our product candidates.
If there were to be a catastrophic event or failure of our manufacturing facilities or processes, we may be unable to meet our requirements for supply of our products or product candidates.
We may not be able to obtain or maintain patent protection from our pending patent applications, from those we may file in the future, or from those we may license from third parties. Moreover, even if we are able to obtain patent protection, such patent protection may be of insufficient scope to achieve our business objectives.
We may not be able to obtain or maintain patent protection from our pending patent applications, from those we may file in the future, or from those we may license from third parties. Moreover, even if we can obtain patent protection, it may be of insufficient scope to achieve our business objectives.
For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA, and other government employees and pause or stop critical activities.
For example, over the past decade, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA, and other government employees and pause or stop critical activities.
We also have the capability to manufacture commercial supply of MARGENZA. Although we believe we currently have capacity to produce most of the material required for our and our collaborators’ clinical trials and for the commercial supply of MARGENZA, we may not be able to do so in the future, and may continue to rely on arrangements with third parties.
Although we believe we currently have capacity to produce most or all of the material required for our and our collaborators’ clinical trials and for the commercial supply of MARGENZA, we may not be able to do so in the future and may continue to rely on arrangements with third parties.
COVID-19 (or any variant thereof) 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. Public health crises such as pandemics or similar outbreaks may have a material impact our business.
In conjunction with Eversana, we continue to build commercialization support in United States to commercialize MARGENZA in a manner we believe to be appropriate in light of the modest size of the market opportunity.
In conjunction with Eversana, we continue to support commercialization of MARGENZA in the United States in a manner we believe to be appropriate in light of the limited size of the market opportunity.
We are already subject to Section 382 limitations due to acquisitions we made in 2002 and 2008. As of December 31, 2022, we had federal and state NOL carryforwards of approximately $777 million and federal research and development tax credits of approximately $94 million available.
We are already subject to Section 382 limitations due to acquisitions we made in 2002 and 2008. As of December 31, 2023, we had federal and state NOL carryforwards of approximately $670.0 million and federal research and development tax credits of approximately $94.4 million available.
Further, we have limited experience in large-scale or commercial manufacturing, and there can be no assurance that we will be able to effectively manufacture commercial quantities of MARGENZA, or other products or product candidates, 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 our products or product candidates for ourselves or our collaborators, if and when approved.
Furthermore, patients may be unable or unwilling to enroll in our clinical trials or be unable to comply with clinical trial protocols if COVID-19 related restrictions impede patient movement or interrupt healthcare services.
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.
We contract with, and may in the future contract with, third parties for components of the manufacturing of MARGENZA and our other 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.
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 have limited experience in launching and marketing products. If we are unable to further develop marketing and sales capabilities or enter into agreements with third parties to market and sell our products, or our existing arrangements are not successful, we may not be able to generate substantial product sales revenue.
If our products achieve regulatory approval and we are unable to further develop marketing and sales capabilities or enter into agreements with third parties to market and sell our products, or our existing arrangements are not successful, we may not be able to generate substantial product sales revenue.
Failure of clinical investigators or CROs to meet their obligations to us or comply with GCP procedures could adversely affect the clinical development of our product candidates and harm our business. Commercialization collaborations will be important to our business. If we are unable to maintain commercialization collaborations, or if commercialization collaborations are not successful, our business could be adversely affected.
Failure of clinical investigators or CROs to meet their obligations to us or comply with GCP procedures could adversely affect the clinical development of our product candidates and harm our business. Commercialization collaborations will be important to our business.
If we are unable to maintain any of these collaborations, or if these collaborations are not successful, our business could be adversely affected. We have limited capabilities for drug development and have little to no internal capability for sales, marketing or distribution.
If we are unable to maintain commercialization collaborations, or if commercialization collaborations are not successful, our business could be adversely affected. 40 We have limited capabilities for drug commercialization, with little to no internal capability for sales, marketing or distribution.
If we are unable to maintain any of these collaborations, or if these collaborations are not successful, our business could be adversely affected. • Our product candidates may have undesirable side effects which may delay or prevent further clinical development or marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales. • 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 or top line data may be subject to change or qualification based the complete analysis of data.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We lease a total of approximately 235,000 square feet of manufacturing, office, laboratory and warehouse space in Maryland and California. Our headquarters building in Rockville, Maryland currently houses laboratory, office and manufacturing operations to support clinical and commercial quantities and scale.
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.
Our continuing leases each have one or more five-year options to renew. We believe that our properties are generally in good condition, well maintained, suitable and adequate to carry on our business. We believe our capital resources are sufficient to lease any additional facilities required to meet our expected growth needs.
Our leases each have one or more five-year options to renew. We believe that our properties are generally in good condition, well maintained, suitable and adequate to carry on our business. We believe our capital resources are sufficient to lease any additional facilities required to meet our expected growth needs.
Removed
This location is occupied under a lease that was modified in December 2022 and now expires in 2035. The California facility and the smaller-scale, non-commercial GMP manufacturing site in Maryland will be closed under our restructuring plan announced in August 2022, therefore the leases for those sites will not be renewed when they expire.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
See note 6, Commitments and Contingencies, to the consolidated financial statements for more information.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of March 10, 2023, we had 61,838,565 shares of common stock outstanding held by approximately 58 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 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.
The comparison assumes a $100 investment on December 31, 2017 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, 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.

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, 2022 and 2021 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2022 2021 Collaborative and other agreements $ 119.3 $ 63.3 $ 56.0 88 % Product sales, net 16.7 12.3 4.4 36 % Contract manufacturing 14.0 — 14.0 N/A Government agreements 1.9 1.8 0.1 6 % Total revenue $ 151.9 $ 77.4 $ 74.5 96 % The increase of $56.0 million in revenue from collaborative and other agreements for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily due to: • recognition of $60.0 million in milestone revenue under the asset purchase agreement with Provention; and • an increase of $15.0 million in milestone revenue recognized under the Incyte 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." 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.
Under the 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.
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.
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 APA.
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.
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).
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).
Provention has also agreed to pay third-party obligations, including low single-digit royalties, a portion of which 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 APA.
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.
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.
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).
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 60 research and development expense on a program-by-program basis for our product candidates and recognize these expenses as they are incurred.
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.
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.
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.
Research and development costs are expensed as incurred. We receive estimates from our collaborators when we are 64 sharing development expenses, and use these estimates to record an increase or decrease in research and development expense, depending on how much we have each spent during the period.
Research and development costs are expensed as incurred. We receive estimates from our collaborators when we are sharing development expenses, and use these estimates to record an increase or decrease in research and development expense, depending on how much we have each spent during the 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.
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.
Management considers an accounting estimate to be critical if: 61 • it requires a significant level of estimation uncertainty; and • changes in the estimate are reasonably likely to have a material effect on our financial condition or results of operations.
Management considers an accounting estimate to be critical if: • it requires a significant level of estimation uncertainty; and • changes in the estimate are reasonably likely to have a material effect on our financial condition or results of operations.
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.
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.
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.
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.
Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the 62 accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Licenses.
Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Licenses.
Assuming exercise of the CD123 Option, w e 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. • Zai Lab .
Assuming exercise of the CD123 Option, w e 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.
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, marketing our product, and providing the technology and facilities necessary to support our operations.
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.
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, 2022, 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, 2023, and do not expect any material changes in the near term to the underlying assumptions.
Such arrangements generally are within the scope of ASC 808, Collaborative Arrangements (ASC 808). While ASC 808 defines collaborative arrangements and provides guidance on income statement presentation, classification, and disclosures related to such arrangements, it does not address recognition and measurement matters, such as (1) determining the appropriate unit of accounting or (2) when the recognition criteria are met.
While ASC 808 defines collaborative arrangements and provides guidance on income statement presentation, classification, and disclosures related to such arrangements, it does not address recognition and measurement matters, such as (1) determining the appropriate unit of accounting or (2) when the recognition criteria are met.
Investing Activities 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, 2021 is primarily due to purchases of marketable securities, partially offset by maturities of marketable securities.
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.
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 planned Phase 2 study of lorigerlimab in mCRPC as well as our other clinical and preclinical studies currently ongoing. Through December 31, 2022, we had an accumulated deficit of $1.1 billion.
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.
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 lease liabilities. 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.
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.
As a biotechnology company, we have primarily funded our operations with proceeds from the sale of our common stock in equity offerings, revenue from our multiple collaboration agreements, and contracts and grants from NIAID.
As a biotechnology company, we have primarily funded our operations with proceeds from the sale of our common stock in equity offerings and revenue from our multiple collaboration agreements.
Our operations to date have concentrated on staffing our company, developing our technology platforms, identifying potential product candidates, undertaking preclinical studies, conducting clinical trials, developing collaborations, business planning and raising capital. We only began generating revenues from the sale of products in 2021.
Our operations to date have concentrated on developing our technology platforms, identifying potential product candidates, undertaking preclinical studies, conducting clinical trials, developing collaborations, operating manufacturing facilities, business planning and raising capital. We only began generating revenues from the sale of products in 2021.
We have financed our operations primarily through the public and private offerings of our securities, collaborations with other biopharmaceutical companies, and government grants and contracts.
We have financed our operations primarily through the public and private offerings of our securities, and collaborations with other biopharmaceutical companies.
For the discussion of our financial condition and results of operations for the year ended December 31, 2021 compared to the year ended December 31, 2020, 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, 2021 filed with the SEC on February 24, 2022.
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.
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 labor, materials overhead and other related costs. 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. 59 Research and Development Expense Research and development expense consists of expenses incurred in performing research and development activities.
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 vobra duo TAMARACK study.
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.
Our expected funding requirements reflect anticipated expenditures related to the Phase 2 TAMARACK clinical trial of vobra duo in metastatic castration-resistant prostate cancer (mCRPC), planned 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 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.
We expect that over the next several years this deficit will increase as we increase our expenditures in research and development in connection with our ongoing activities with 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.
Variable consideration relating to the reimbursed materials and other reimbursed costs incurred to manufacture product are allocated to the related manufacturing activities and are recognized as revenue as those activities occur. Cost of product sales Cost of product sales relates to sales of MARGENZA.
Variable consideration relating to the reimbursed materials and other reimbursed costs incurred to manufacture product are allocated to the related manufacturing activities and are recognized as revenue as those activities occur.
The most significant contractual obligations are the operating leases at our facilities in Maryland and California. Our future minimum lease payments as of December 31, 2022 totaled $5.0 million related to short-term lease liabilities, and $70.3 million related to long-term lease liabilities.
The most significant contractual obligations are the operating leases at our facilities in Maryland. Our future minimum lease payments as of December 31, 2023 totaled $4.0 million related to short-term lease liabilities, and $66.3 million related to long-term lease liabilities.
Overview We are a biopharmaceutical company focused on developing and commercializing innovative antibody-based therapeutics for the treatment of cancer. We have a pipeline of product candidates being evaluated in clinical trials sponsored by us or our collaborators in addition to several molecules in preclinical development.
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.
Under this agreement, as amended, Incyte has obtained exclusive worldwide rights for the development and commercialization of retifanlimab in all indications, while we retain the right to develop our pipeline assets in combination with retifanlimab.
We have an exclusive global collaboration and license agreement with Incyte for retifanlimab, an investigational monoclonal antibody that inhibits PD-1(Incyte License Agreement). Under this agreement, as amended, Incyte has obtained exclusive worldwide rights for the development and commercialization of retifanlimab in all indications, while we retain the right to develop our pipeline assets in combination with retifanlimab.
Revenue from product sales is recorded net of applicable provisions for rebates, chargebacks and discounts, distribution-related fees and other sales-related deductions.
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.
Under the amended APA, the $60.0 million milestone for a first approval was split into four $15 million payments. The first two payments were received in November 2022 and March 2023 and the two remaining payments are due June 1, 2023 and September 1, 2023. We are also eligible to receive single-digit royalties on net sales of TZIELD.
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.
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. The increase in product sales, net is due to an increase in volume.
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.
Other Income The increase of $1.0 million in other income for the year ended December 31, 2022 compared to the year ended December 31, 2021 is primarily due to increased investment income.
Interest and Other Income The increase of $8.0 million in interest and other income for the year ended December 31, 2023 compared to the year ended December 31, 2022 is primarily due to increased investment balances and higher interest rates.
These Macroeconomic Conditions have and may continue to create supply chain disruptions, inventory disruptions, and fluctuations in economic growth, including fluctuations in employment rates, inflation, energy prices and consumer sentiment.
These Macroeconomic Conditions have and may continue to create supply chain disruptions, inventory disruptions, and fluctuations in economic growth, including fluctuations in employment rates, inflation, energy prices and consumer sentiment. It remains difficult to assess or predict the ultimate duration and economic impact of the Macroeconomic Conditions.
Research and Development Expense The following represents a comparison of our research and development expense for the years ended December 31, 2022 and 2021 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2022 2021 Vobramitamab duocarmazine (formerly MGC018) $ 55.4 $ 31.3 $ 24.1 77 % Margetuximab 26.9 41.5 (14.6) (35) % Lorigerlimab 21.6 13.4 8.2 61 % ADCs (a) 18.2 3.8 14.4 379 % Enoblituzumab 14.7 19.1 (4.4) (23) % Next-generation T-cell engagers (a) 13.3 18.4 (5.1) (28) % Flotetuzumab 12.9 28.8 (15.9) (55) % Tebotelimab 11.4 19.5 (8.1) (42) % IMGC936 7.9 5.7 2.2 39 % MGD024 7.9 3.7 4.2 114 % DART molecules under HIV government contract 4.7 5.1 (0.4) (8) % Retifanlimab 2.2 14.5 (12.3) (85) % Other programs (a) 9.9 9.8 0.1 1 % Total research and development expense $ 207.0 $ 214.6 $ (7.6) (4) % (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, 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.
To date, we have not recognized any royalty revenue resulting from any of our licensing arrangements. 63 We analyze our collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties who are both active participants in the activities and are both exposed to significant risks and rewards dependent on the commercial success of such activities.
We analyze our collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties who are both active participants in the activities and are both exposed to significant risks and rewards dependent on the commercial success of such activities. Such arrangements generally are within the scope of ASC 808, Collaborative Arrangements (ASC 808).
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. In March 2023, we sold our royalty interest in TZIELD to a wholly-owned subsidiary of DRI Healthcare Trust (DRI).
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.
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. Other Income Other income consists of realized gains and losses on marketable securities and interest income earned on our cash, cash equivalents and marketable securities.
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.
Research and development expense for the year ended December 31, 2022 decreased by $7.6 million compared to the year ended December 31, 2021.
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.
The table below includes a reconciliation of the accounts associated with these deductions (in millions): 65 Rebates and chargebacks Distribution fees, product returns and other Total Balance as of December 31, 2020 $ — $ — $ — Provision related to current year sales 1.7 0.8 2.5 Payments/credits for current year sales (1.3) (0.4) (1.7) Balance as of December 31, 2021 0.4 0.4 0.8 Provision related to current year sales 2.5 1.1 3.6 Payments/credits for current year sales (2.5) (0.2) (2.7) Balance as of December 31, 2022 $ 0.4 $ 1.3 $ 1.7 Revenue recognized under the agreements we entered into during 2022 to provide manufacturing services to produce certain bulk drug substance for Incyte and Provention is recorded as contract manufacturing revenue.
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.
In addition to the upfront payment of $150.0 million and milestone payments totaling $100.0 million received from Incyte through December 31, 2022, we are eligible to receive an additional $335.0 million in development and regulatory milestones and $330.0 million in commercial milestones, assuming successful development and commercialization of retifanlimab by Incyte.
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 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 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.
Our clinical product candidates include multiple oncology programs, many of which were created using our proprietary, antibody-based technology platforms. 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.
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.
The principal use of cash in operating activities for all periods presented was primarily the result of our net loss, adjusted for non-cash items, with the year ended December 31, 2022 benefiting from the $60.0 million upfront payment under the Gilead Agreement, $30.0 million milestone payment received from Incyte, and $15.0 million received from Provention related to the achievement of a milestone.
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.
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 public health crises, such as the COVID-19 pandemic, and geopolitical upheaval, such as Russia’s incursion into Ukraine (collectively, the Macroeconomic Conditions).
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).
Although it is difficult to predict our funding requirements, we anticipate that our cash, cash equivalents and marketable securities as of December 31, 2022, combined with anticipated and potential collaboration payments and product revenues, and $100 million proceeds received in March 2023 pursuant to the sale of our single-digit royalty on future global net sales of TZIELD, should enable us to fund our operations through 2025.
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.
We expect cost of product sales to continue to be positively impacted as we sell through inventory that was expensed prior to FDA approval of MARGENZA. We are currently unable to estimate how long it will be until we begin selling product manufactured post FDA approval.
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.
Product sold during the year ended December 31, 2022 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 for the year ended December 31, 2022. We expect cost of product sales to continue to be positively impacted as we sell through this drug product.
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.
This decrease was primarily attributable to: 66 • decreased development, manufacturing and clinical trial costs related to flotetuzumab (due to discontinuance of our company-sponsored trial); • decreased retifanlimab manufacturing costs related to the Incyte Commercial Supply Agreement; • decreased development, manufacturing and clinical trial costs related to tebotelimab; and • decreased margetuximab manufacturing costs related to the Zai Lab Clinical Supply Agreement.
This decrease was primarily attributable to: • decreased manufacturing related costs for vobra duo; • decreased development and clinical trial costs related to margetuximab, including expenses under the 2018 Zai Lab Agreement; • decreased development and clinical trial costs related to flotetuzumab due to discontinued development of this molecule; • decreased development, manufacturing and clinical trial costs related to enoblituzumab; • decreased development, manufacturing and clinical trial costs related to tebotelimab; and • decreased development costs related to other programs.
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.
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.
In addition, we are eligible to receive up to $50.0 million from DRI upon the occurrence of pre-specified events tied to the advancement of TZIELD for the treatment of newly diagnosed T1D and may also receive an additional $50.0 million if TZIELD achieves a certain level of net sales. • I-Mab Biopharma.
In addition, we received $50.0 million upon the occurrence of the primary endpoint milestone event in September 2023, and we are also eligible to receive an additional $50.0 million if TZIELD achieves a certain level of net sales (the Sales Milestone Payment).
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 labor, materials overhead and other related costs.
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.
These decreases were partially offset by: • increased vobra duo development, manufacturing and clinical trial costs; • increased development of a non-disclosed ADC Investigational New Drug candidate; and • increased clinical trial enrollment costs related to lorigerlimab.
These decreases were partially offset by: • increased development costs related to MGC026 and MGC028; and • increased clinical trial costs related to lorigerlimab.
We retain our other economic interests related to TZIELD, including future potential regulatory and 59 commercial milestones. We received a $100.0 million upfront payment from DRI for the sale of our single-digit royalty on global net sales of TZIELD. We retain the right to receive a 50% share of the royalty on global net sales above a certain annual threshold.
In March 2023, we sold our single-digit royalty interest in TZIELD (Royalty Interest) to a wholly-owned subsidiary of DRI Healthcare Trust (DRI) and received a $100.0 million payment from DRI under a Royalty Purchase Agreement. We retain our other economic interests related to TZIELD, including future potential regulatory and commercial milestones.
Although it is difficult to predict our funding requirements, we anticipate that our cash, cash equivalents and marketable securities as of December 31, 2022, as well as anticipated and potential collaboration payments and product revenues, and $100.0 million proceeds received in March 2023 pursuant to the sale of an interest in a specified portion of royalty payments based on future net sales of TZIELD, should enable us to fund our operations through 2025.
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.
Cost of Manufacturing Services Cost of manufacturing services consists of the costs to provide manufacturing services to produce certain bulk drug substance under the Incyte and Provention Manufacturing and Clinical Supply Agreements. We entered into these agreements in 2022, therefore there are no such costs during the year ended December 31, 2021.
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.
In response to the COVID-19 pandemic, we have taken precautionary measures intended to help protect our employees, including enabling our employees to partially work remotely. Prolonged uncertainty with respect to 57 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.
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.
The year ended December 31, 2021 benefited from the $25.0 million 67 upfront payment under the 2021 Zai Lab Agreement, $15.0 million milestone payment received from Incyte, and $4.5 million milestone payment from I-Mab.
Net cash used in operating activities for the year ended December 31, 2023 benefited from $45.0 million in milestone payments received from Provention and a $15.0 million milestone payment received from Incyte under the Incyte License Agreement.
Liquidity and Capital Resources Cash Flows The following table represents a summary of our cash flows for the years ended December 31, 2022 and 2021 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2022 2021 Net cash provided by (used in): Operating activities $ (87.0) $ (143.8) $ 56.8 39 % Investing activities 70.7 (36.6) 107.3 293 % Financing activities 1.7 122.8 (121.1) (99) % Net increase (decrease) in cash and cash equivalents $ (14.6) $ (57.6) $ 43.0 75 % Operating Activities Net cash used in operating activities reflects, among other things, the amounts used to advance our clinical trials and preclinical activities.
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.
Selling, General and Administrative Expense The following represents a comparison of our general and administrative expenses for the years ended December 31, 2022 and 2021 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2022 2021 Selling, general and administrative expenses $ 58.9 $ 63.0 $ (4.1) (7) % Selling, general and administrative expenses decreased for the year ended December 31, 2022 by $4.1 million compared to 2021 primarily due to decreased selling costs for MARGENZA as well as decreased legal, consulting and stock-based compensation expenses.
Selling, General and Administrative Expense Selling, general and administrative expenses were $52.2 million and $58.9 million for the years ended December 31, 2023 and 2022, respectively. The decrease is primarily due to decreased MARGENZA-related selling expenses.
Removed
To date, two products originating from our pipeline of proprietary or partnered product candidates have received U,S. Food and Drug Administration (FDA) approval.
Added
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.
Removed
In particular, the COVID-19 pandemic (or any variant thereof) may have a negative impact on our clinical trials, preclinical nonclinical studies, development, manufacturing and commercialization of our product and product candidates and other aspects of our business, staff, and operations.
Added
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.
Removed
It remains difficult to assess or predict the ultimate duration and economic impact of the Macroeconomic Conditions including, the path of the COVID-19 pandemic, the evolution of COVID-19 variants or the emergence of other public health crises.
Added
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.
Removed
Collaborations We pursue a balanced approach between product candidates that we develop ourselves and those that we develop with our collaborators.
Added
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.
Removed
We have an exclusive global collaboration and license agreement with Incyte Corporation (Incyte) for retifanlimab, an investigational monoclonal antibody that inhibits programmed cell death protein 1 (PD-1) (Incyte License Agreement).
Added
We retain the right to receive a 50% share of the royalty on global net sales above a certain annual threshold (Retained Interest).
Removed
If retifanlimab is approved and commercialized, we would be 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.
Added
In April 2023, we entered into an agreement (the Tripartite Agreement) with DRI and a subsidiary of Sanofi S.A. (Sanofi), whereby we consented to the sale of DRI’s Royalty Interest and the related milestone payment obligations to Sanofi.
Removed
In 2018, we entered into a collaboration and license agreement with Zai Lab Limited (Zai Lab) under which Zai Lab obtained regional development and commercialization rights in mainland China, Hong Kong, Macau and Taiwan (Zai Lab’s territory) for (i) margetuximab, an immune-optimized anti-HER2 monoclonal antibody, (ii) tebotelimab, a bispecific DART molecule designed to provide coordinate blockade of PD-1 and LAG-3 for the potential treatment of a range of solid tumors and hematological malignancies, and (iii) an undisclosed multi-specific TRIDENT molecule in preclinical development (2018 Zai Lab Agreement).
Added
The Tripartite Agreement eliminated our obligation to deliver payments to DRI related to the Royalty Interest and removed all of our other obligations under the Royalty Purchase Agreement. The Royalty Interest will be paid directly to Sanofi by Provention, therefore we no longer have any obligation to pay DRI.
Removed
Zai Lab will lead clinical development in its territory. Zai Lab has informed us that they have decided to discontinue development of tebotelimab for indications they were enrolling in their territory and is evaluating future development plans in other indications.
Added
There was no modification to our Retained Interest in the Tripartite Agreement. In September 2023, we and Sanofi executed Amendment No. 2 to the Provention APA to incorporate the Sales Milestone Payment obligation from the Royalty Purchase Agreement into the Provention APA and terminated the Royalty Purchase Agreement.

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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, 2022, we had cash, cash equivalents and marketable securities of $154.3 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, 2023, we had cash, cash equivalents and marketable securities of $229.8 million.
Due to the short-term maturities of our cash equivalents and marketable securities and the low risk profile of our marketable securities, an immediate 100 basis point change in interest rates would not have a material effect on 68 the fair market value of our cash equivalents and marketable securities.
Due to the short-term maturities of our cash equivalents and marketable securities and the low risk profile of our marketable securities, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our cash equivalents and marketable securities.

Other MGNX 10-K year-over-year comparisons