mgnx-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36112

MACROGENICS, INC.

(Exact name of registrant as specified in its charter)


Delaware			06-1591613
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

9704 Medical Center Drive Rockville, Maryland			20850
(Address of principal executive offices)			(Zip code)

301-251-5172

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	MGNX	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "accelerated filer," "large accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 29, 2021, 61,258,001 shares of the registrant's common stock, par value $0.01 per share, were outstanding.

TABLE OF CONTENTS


PART I.			FINANCIAL INFORMATION

Item 1.			Financial Statements

			Consolidated Balance Sheets at September 30, 2021 (unaudited) and December 31, 2020

			Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2021 and September 30, 2020 (unaudited)

			Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2021 and September 30, 2020 (unaudited)

			Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and September 30, 2020 (unaudited)

			Notes to Consolidated Financial Statements (unaudited)

Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.			Quantitative and Qualitative Disclosures about Market Risk

Item 4.			Controls and Procedures

PART II.			OTHER INFORMATION

Item 1.			Legal Proceedings

Item 1A.			Risk Factors

Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds

Item 6.			Exhibits

			Signatures

FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. Many of these statements appear, in particular, under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q. Forward-looking statements can often be identified by the use of terminology such as "subject to", "believe", "anticipate", "plan", "expect", "intend", "estimate", "project", "may", "will", "should", "would", "could", "can", the negatives thereof, variations thereon and similar expressions, or by discussions of strategy.

All forward-looking statements, including, without limitation, our examination of historical operating trends, are based upon our current expectations and various assumptions. We believe there is a reasonable basis for our expectations and beliefs, but they are inherently uncertain. We may not realize our expectations, and our beliefs may not prove correct. Actual results could differ materially from those described or implied by such forward-looking statements. The following uncertainties and factors, among others (including those set forth under "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2020), could affect future performance and cause actual results to differ materially from those matters expressed in or implied by forward-looking statements:

•the severity and duration of the impact of the COVID-19 global pandemic on our business, operations, clinical programs, manufacturing, financial results and other aspects of our business;

•our ability to commercialize MARGENZA and our plans to develop and commercialize our product candidates;

•our ability to develop and successfully maintain sales and commercial distribution capabilities or establish or maintain relationships with third-party collaborators to successfully commercialize any of our product candidates;

•the outcomes of our ongoing and planned clinical trials and the timing of those outcomes, including when clinical trials will be initiated or completed, and when data will be reported or regulatory filings will be made;

•the timing of and our ability to obtain and maintain regulatory approvals for MARGENZA and our product candidates and the labeling for any approved products;

•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•our ability to raise additional capital through the capital markets or through one or more corporate partnerships, equity offerings, debt financings, collaborations, licensing arrangements or asset sales;

•our expectations regarding product candidates currently being developed by our collaborators;

•our ability to enter into new collaborations or to identify additional products or product candidates with significant commercial potential that are consistent with our commercial objectives;

•the potential benefits and future operation of our existing collaborations;

•our ability to recover the investment in our manufacturing capabilities;

•the rate and degree of market acceptance and clinical utility of our products;

•our commercialization, marketing and manufacturing capabilities and strategy;

•significant competition in our industry;

•costs of litigation and the failure to successfully defend lawsuits and other claims against us and our expectations regarding the outcome of any regulatory or legal proceedings;

•economic, political and other risks associated with our international operations;

•our ability to receive research funding and achieve anticipated milestones under our collaborations;

•our ability to protect and enforce patents and other intellectual property;

•costs of compliance and our failure to comply with new and existing governmental regulations including, but not limited to, tax regulations;

•loss or retirement of key members of management;

•failure to successfully execute our growth strategy, including any delays in our planned future growth; and

•our failure to maintain effective internal controls.

Consequently, forward-looking statements speak only as of the date that they are made and should be regarded solely as our current plans, estimates and beliefs. You should not place undue reliance on forward-looking statements. We cannot guarantee future results, events, levels of activity, performance or achievements. Except as required by law, we do not undertake and specifically decline any obligation to update, republish or revise forward-looking statements to reflect future events or circumstances or to reflect the occurrences of unanticipated events.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MACROGENICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	September 30, 2021		December 31, 2020
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	190,531	$	181,131
Marketable securities	108,367		91,400
Accounts receivable	13,759		23,081
Inventory, net	3,979		—
Prepaid expenses and other current assets	18,062		16,982

Total current assets	334,698		312,594
Property, equipment and software, net	38,684		42,225

Other assets	18,778		23,924
Total assets	$	392,160	$	378,743

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	6,170	$	8,031
Accrued expenses and other current liabilities	41,859		34,198
Deferred revenue	16,314		4,456
Lease liabilities	4,521		3,988

Total current liabilities	68,864		50,673
Deferred revenue, net of current portion	9,575		6,926
Lease liabilities, net of current portion	22,025		25,260
Other non current liabilities	258		—
Total liabilities	100,722		82,859
Stockholders' equity:
Common stock, $0.01 par value -- 125,000,000 shares authorized, 61,254,693 and 56,244,771 shares outstanding at September 30, 2021 and December 31, 2020, respectively	613		562
Additional paid-in capital	1,206,742		1,067,150
Accumulated other comprehensive income (loss)	(3)		(7)
Accumulated deficit	(915,914)		(771,821)
Total stockholders' equity	291,438		295,884
Total liabilities and stockholders' equity	$	392,160	$	378,743

See notes to consolidated financial statements.

MACROGENICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(in thousands, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues:
Revenue from collaborative and other agreements	$	11,986	$	17,415	$	54,338	$	46,018
Product revenue, net	3,591		—		7,681		—
Revenue from government agreements	85		838		1,281		6,174
Total revenues	15,662		18,253		63,300		52,192
Costs and expenses:
Cost of product sales	1,665		—		1,704		—
Research and development	49,823		44,656		158,724		150,901
Selling, general and administrative	17,161		9,732		47,431		30,181
Total costs and expenses	68,649		54,388		207,859		181,082
Loss from operations	(52,987)		(36,135)		(144,559)		(128,890)
Other income	101		92		466		1,238
Net loss	(52,886)		(36,043)		(144,093)		(127,652)
Other comprehensive income (loss):
Unrealized gain (loss) on investments	(4)		(15)		4		(14)
Comprehensive loss	$	(52,890)	$	(36,058)	$	(144,089)	$	(127,666)

Basic and diluted net loss per common share	$	(0.86)	$	(0.66)	$	(2.42)	$	(2.49)
Basic and diluted weighted average common shares outstanding	61,169,754		54,463,412		59,494,836		51,176,884

See notes to consolidated financial statements.

MACROGENICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)

(in thousands, except share amounts)


	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance, December 31, 2020	56,244,771	$	562	—	$	—	$	1,067,150	$	(771,821)	$	(7)	$	295,884
Share-based compensation	—	—		—	—		5,243		—		—		5,243
Issuance of common stock, net of offering costs	3,622,186	36		—	—		98,164		—		—		98,200
Stock plan related activity	144,249	2		—	—		2,456		—		—		2,458
Unrealized gain on investments	—	—		—	—		—		—		18		18
Net loss	—	—		—	—		—		(51,272)		—		(51,272)
Balance, March 31, 2021	60,011,206	600		—	—		1,173,013		(823,093)		11		350,531
Share-based compensation	—	—		—	—		6,113		—		—		6,113
Stock plan related activity	122,241	1		—	—		2,345		—		—		2,346
Unrealized loss on investments	—	—		—	—		—		—		(10)		(10)
Net loss	—	—		—	—		—		(39,935)		—		(39,935)
Balance, June 30, 2021	60,133,447	601		—	—		1,181,471		(863,028)		1		319,045
Share-based compensation	—	—		—	—		6,309		—		—		6,309
Issuance of common stock, net of offering costs	958,467	10		—	—		19,630		—		—		19,640
Stock plan related activity	162,779	2		66,295	(1,457)		789		—		—		(666)
Retirement of treasury stock	—	—		(66,295)	1,457		(1,457)		—		—		—
Unrealized loss on investments	—	—		—	—		—		—		(4)		(4)
Net loss	—	—		—	—		—		(52,886)		—		(52,886)
Balance, September 30, 2021	61,254,693	$	613	—	$	—	$	1,206,742	$	(915,914)	$	(3)	$	291,438


	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance, December 31, 2019	48,958,763	$	490	—	$	—	$	872,204	$	(642,082)	$	16	$	230,628
Share-based compensation	—	—		—	—		4,451		—		—		4,451
Stock plan related activity	172,387	2		—	—		160		—		—		162
Unrealized gain on investments	—	—		—	—		—		—		56		56
Net loss	—	—		—	—		—		(44,724)		—		(44,724)
Balance, March 31, 2020	49,131,150	492		—	—		876,815		(686,806)		72		190,573
Share-based compensation	—	—		—	—		5,136		—		—		5,136
Issuance of common stock, net of offering costs	4,060,482	40		—	—		96,472		—		—		96,512
Stock plan related activity	173,371	2		—	—

SEC Form 10-Q filed by MacroGenics, Inc.