mgnx-20250930

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, 2025


☐			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 November 7, 2025, 63,258,532 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, 2025 (unaudited) and December 31, 2024

			Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended Septem ber 30, 2025 and September 30, 2024 (unaudited)

			Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2025 and September 30, 2024 (unaudited)

			Consolidated Statements of Cash Flows for the ni ne months ended Sept ember 30, 2025 and September 30, 2024 (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 5.			Other Information

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 fiscal year ended December 31, 2024 and "Part II, Item 1A. Risk Factors" of this Quarterly Report on Form 10-Q), could affect future performance and cause actual results to differ materially from those matters expressed in or implied by forward-looking statements:

•our plans to develop and commercialize 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, enrollment of trials, 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 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;

•the anticipated receipt of sales milestone payments in connection with the sale of MARGENZA to TerSera Therapeutics, LLC (TerSera);

•the compromise of our or our third parties’ information technology systems and resultant costs, disruptions in our operations or related impact on our reputation;

•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;

•our failure to maintain effective internal controls; and

•the impact of legislative and regulatory developments, public health crises, geopolitical tensions or other macroeconomic factors on our business, operations, clinical programs, manufacturing, financial results and other aspects of our business.

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, 2025		December 31, 2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	80,129	$	182,840
Marketable securities	66,268		18,827
Accounts receivable	69,230		4,309
Inventory, net	8,750		—
Prepaid expenses and other current assets	7,714		11,514

Total current assets	232,091		217,490
Property, equipment and software, net	13,975		18,100
Operating lease right-of-use assets	23,305		24,509
Other non current assets	1,392		1,556
Total assets	$	270,763	$	261,655

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	5,940	$	5,013
Accrued expenses and other current liabilities	23,087		29,334
Deferred revenue	10,302		16,319
Lease liabilities	5,141		4,864

Total current liabilities	44,470		55,530
Liability related to future royalties	70,256		—
Deferred revenue, net of current portion	55,840		55,503
Lease liabilities, net of current portion	31,868		32,597
Other non current liabilities	1,328		1,968
Total liabilities	203,762		145,598
Stockholders' equity:
Common stock, $0.01 par value -- 125,000,000 shares authorized, 63,258,532 and 62,819,857 shares outstanding at September 30, 2025 and December 31, 2024, respectively	633		628
Additional paid-in capital	1,296,546		1,285,143
Accumulated other comprehensive income	5		4
Accumulated deficit	(1,230,183)		(1,169,718)
Total stockholders' equity	67,001		116,057
Total liabilities and stockholders' equity	$	270,763	$	261,655

See notes to consolidated financial statements.

MACROGENICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(unaudited)

(in thousands, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Revenues:
Collaborative and other agreements	$	53,003	$	101,408	$	66,915	$	105,180
Product sales, net	—		4,161		—		14,270
Contract manufacturing	19,836		4,573		41,358		9,742

Government agreements	—		566		—		1,417
Total revenues	72,839		110,708		108,273		130,609
Costs and expenses:
Cost of product sales	—		168		—		614
Cost of manufacturing services	11,589		1,702		25,894		6,195
Research and development	32,709		40,543		113,198		138,304
Selling, general and administrative	9,905		14,104		29,925		43,237
Total costs and expenses	54,203		56,517		169,017		188,350
Income (loss) from operations	18,636		54,191		(60,744)		(57,741)

Interest and other income	1,528		2,118		4,620		7,335
Interest and other expense	(3,342)		—		(4,236)		(1,139)
Income (loss) before income taxes	16,822		56,309		(60,360)		(51,545)
Income tax provision	—		—		105		—
Net income (loss)	16,822		56,309		(60,465)		(51,545)
Other comprehensive income:
Unrealized gain on investments	12		38		1		20
Comprehensive income (loss)	$	16,834	$	56,347	$	(60,464)	$	(51,525)

Net income (loss) per common share:
Basic	$	0.27	$	0.90	$	(0.96)	$	(0.82)
Diluted	$	0.27	$	0.90	$	(0.96)	$	(0.82)
Weighted average common shares outstanding:
Basic	63,233,266		62,744,005		63,112,560		62,566,723
Diluted	63,283,624		62,865,841		63,112,560		62,566,723

See notes to consolidated financial statements.

MACROGENICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)

(in thousands, except share amounts)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Shares	Amount
Balance, December 31, 2024	62,819,857	$	628	$	1,285,143	$	(1,169,718)	$	4	$	116,057
Share-based compensation	—	—		4,386		—		—		4,386

Stock plan related activity	270,466	3		(286)		—		—		(283)
Unrealized loss on investments	—	—		—		—		(5)		(5)
Net loss	—	—		—		(41,036)		—		(41,036)
Balance, March 31, 2025	63,090,323	631		1,289,243		(1,210,754)		(1)		79,119
Share-based compensation	—	—		3,690		—		—		3,690

Stock plan related activity	115,380	1		65		—		—		66
Unrealized loss on investments	—	—		—		—		(6)		(6)
Net loss	—	—		—		(36,251)		—		(36,251)
Balance, June 30, 2025	63,205,703	632		1,292,998		(1,247,005)		(7)		46,618
Share-based compensation	—	—		3,549		—		—		3,549

Stock plan related activity	52,829	1		(1)		—		—		—
Unrealized gain on investments	—	—		—		—		12		12
Net income	—	—		—		16,822		—		16,822
Balance, September 30, 2025	63,258,532	$	633	$	1,296,546	$	(1,230,183)	$	5	$	67,001


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income		Total Stockholders' Equity
	Shares	Amount
Balance, December 31, 2023	62,070,627	$	621	$	1,254,750	$	(1,102,752)	$	(6)	$	152,613
Share-based compensation	—	—		5,512		—		—		5,512

Stock plan related activity	489,875	5		243		—		—		248
Unrealized loss on investments	—	—		—		—		(29)		(29)
Net loss	—	—		—		(52,190)		—		(52,190)
Balance, March 31, 2024	62,560,502	626		1,260,505		(1,154,942)		(35)		106,154
Share-based compensation	—	—		6,693		—		—		6,693

Stock plan related activity	160,467	1		624		—		—		625
Unrealized gain on investments	—	—		—		—		11		11
Net loss	—	—		—		(55,664)		—		(55,664)
Balance, June 30, 2024	62,720,969	627		1,267,822		(1,210,606)		(24)		57,819
Share-based compensation	—	—		5,969		—		—		5,969

Stock plan related activity	42,151	—		(69)		—		—		(69)
Unrealized gain on investments	—	—		—		—		38		38
Net income	—	—		—		56,309		—		56,309
Balance, September 30, 2024	62,763,120	$	627	$	1,273,722	$	(1,154,297)	$	14	$	120,066

See notes to consolidated financial statements.

MACROGENICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)


	Nine Months Ended September 30,
	2025		2024
Cash flows from operating activities
Net loss	$	(60,465)	$	(51,545)
Adjustments to reconcile net income loss to net cash used in operating activities:
Depreciation and amortization expense	5,467		5,487
Amortization of premiums and discounts on marketable securities	(1,004)		(2,625)
Stock-based compensation	11,625		18,174
Non-cash royalty revenue	(3,333)		—
Non-cash interest expense	3,916		—
Non-cash lease expense	1,204		1,835
Other adjustments	—		(55)

Changes in operating assets and liabilities:
Accounts receivable	(64,921)		1,616
Inventory	(8,750)		(2,023)
Prepaid expenses and other current assets	3,800		108
Other non current assets	164		200
Accounts payable	921		170
Accrued expenses and other current liabilities	(5,913)		648
Lease liabilities	(452)		128
Deferred revenue	(5,680)		(2,084)
Other non current liabilities	(640)		—
Net cash used in operating activities	(124,061)		(29,966)
Cash flows from investing activities
Purchases of marketable securities	(119,490)		(63,394)
Proceeds from sale and maturities of marketable securities	73,053		174,150
Purchases of property, equipment and software	(1,670)		(3,086)
Proceeds from sales of equipment	—		160
Net cash (used in) provided by investing activities	(48,107)		107,830
Cash flows from financing activities

Proceeds from stock option exercises and ESPP purchases	66		3,276
Taxes paid related to net share settlement of equity awards	(282)		(2,471)

Net proceeds from sale of future royalties	69,673		—
Net cash provided by financing activities	69,457		805
Net change in cash and cash equivalents	(102,711)		78,669
Cash and cash equivalents at beginning of period	182,840		100,956
Cash and cash equivalents at end of period	$	80,129	$	179,625

Supplemental cash flow disclosures
Cash paid for income taxes	$	105	$	—
Non-cash operating and investing activities
Property and equipment included in accounts payable or accruals	$	7	$	—

See notes to consolidated financial statements.

MACROGENICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Nature of Operations

Description of the business

MacroGenics, Inc. (the Company) is incorporated in the state of Delaware. The Company is a biopharmaceutical company focused on developing innovative antibody-based therapeutics for the treatment of cancer. The Company generates its pipeline of product candidates from its proprietary suite of antibody technology platforms. The Company is currently developing therapeutics utilizing multiple modalities, including antibody-drug conjugates (ADCs) and multi-specific antibodies (which are referred to as DART® and TRIDENT® molecules). The combination of the Company’s technology platforms and antibody engineering expertise has allowed the Company to generate promising product candidates – three of which have received marketing approval by the U.S. Food and Drug Administration (FDA) – and to enter into several strategic collaborations with global biopharmaceutical companies. These collaborations have provided the Company with over $1.6 billion of non-dilutive funding since its inception in 2000, and have enabled the Company to leverage the additional expertise of its collaborators to advance the development of multiple partnered product candidates. In addition, the Company operates a commercial-scale cGMP antibody manufacturing facility in its Maryland headquarters to support its clinical programs. The Company also provides outsourced contract development and manufacturing services to its collaborators and other third parties for commercial and clinical products to offset a portion of the operating costs of this facility.

The Company is currently advancing three proprietary product candidates in clinical development: lorigerlimab, a bispecific DART molecule that targets checkpoint inhibitors PD-1 and CTLA-4; MGC026, an ADC that targets B7-H3 and delivers a novel topoisomerase 1 inhibitor (TOP1i)-based linker-payload, and MGC028, an ADC that targets ADAM9 and delivers a novel TOP1i-based linker-payload. The Company is also actively developing multiple preclinical-stage programs, including ADC and next generation T-cell engager programs.

The Company and its partners are developing or commercializing product candidates for which the Company retains certain economic rights. These include three products approved by the FDA: MARGENZA® (margetuximab-cmkb), an anti-HER2 monoclonal antibody (mAb) that the Company sold to a partner; ZYNYZ® (retifanlimab-dlwr), an anti-PD-1 mAb that the Company out-licensed; and TZIELD® (teplizumab-mzwv), an anti-CD3 mAb that the Company sold to a partner. The Company is also collaborating with Gilead Sciences, Inc. (Gilead) on the development of MGD024, a bispecific DART antibody targeting CD123 and CD3 that utilizes its next-generation T-cell engager technology, as well as two additional undisclosed pre-clinical development programs.

Liquidity

The Company’s multiple product candidates currently under development will require significant additional research and development efforts that include extensive preclinical studies and clinical testing, and regulatory approval prior to commercial use.

The future success of the Company is dependent on its ability to identify and develop its product candidates, and ultimately upon its ability to attain profitable operations. The Company has devoted substantially all of its financial resources and efforts to research and development and general and administrative expense to support such research and development. Net losses and negative cash flows have had, and will continue to have, an adverse effect on the Company’s stockholders’ equity and working capital, and accordingly, its ability to execute its future operating plans.

As a biotechnology company, the Company has primarily funded its operations with proceeds from the sale of its common stock in equity offerings and revenue from its multiple collaboration agreements. Management regularly reviews the Company’s available liquidity relative to its operating budget and forecast to monitor the sufficiency of the Company’s working capital. The Company plans to meet its future operating requirements by generating revenue from current and future strategic collaborations or other arrangements and royalties. The Company anticipates continuing to draw upon available sources of capital, including equity and debt instruments, to support its product development activities. If the Company is unable to enter into new arrangements or to perform under current or future agreements or obtain additional capital, the Company will assess its capital resources and may be required to delay, reduce the scope of, or eliminate one or more of its product research and development programs or clinical studies, reduce other operating expenses, and/or downsize its organization. Based on the Company’s most recent cash flow forecast, the Company believes its current resources are sufficient to fund its operating plans for a minimum of twelve months from the date that this Quarterly Report on Form 10-Q was filed.

Other risk factors pertinent to the Company's business, including significant equity market volatility and availability of funding in the biotechnology sector, as well as potential issues in the global economy, credit markets and financial markets as a result of significant worldwide events, including inflation, fluctuating interest rates and geopolitical upheaval, might unfavorably impact the Company's ability to generate such additional funding. Given the uncertainty in the rapidly changing market and economic conditions related to these uncertainties, the Company will continue to evaluate the nature and extent of the impact of these uncertainties on its business and financial position.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. The financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period.

The accompanying unaudited interim consolidated financial statements include the accounts of MacroGenics, Inc. and its wholly owned subsidiaries, MacroGenics UK Limited and MacroGenics Limited. All intercompany accounts and transactions have been eliminated in consolidation. These consolidated financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission (SEC) on March 20, 2025.

2. Summary of Significant Accounting Policies

As of September 30, 2025, the following accounting policy is considered significant in addition to those disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Liability related to the sale of future royalties and related interest expense

The Company assesses the relevant accounting criteria under the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 470, Debt (ASC 470) to determine whether the upfront payment received from the purchaser should be accounted for as debt or deferred income depending on the facts and circumstances. If the criteria in ASC 470 is met, the Company accounts for net proceeds from sales of its rights to receive future royalty payments as a liability that is amortized using the effective interest method over the term of the arrangement. The liability related to future royalties is presented net of unamortized issuance costs on the consolidated balance sheets. Interest expense on the liability related to future

royalties is recognized using the effective interest rate method over the life of the arrangement. The Company calculates an effective interest rate which will amortize its related obligation to zero over the anticipated repayment period. The liability related to future royalties and the related interest expense are based on the Company’s current estimates of future revenues expected to be received over the life of the arrangement, which the Company determines by using internal sales projections and external information from market data sources, which are considered Level 3 inputs. The Company periodically assesses the expected payments and to the extent the Company’s estimates of future royalty payments are greater or less than previous estimates or the estimated timing of such payments is materially different than previous estimates, the Company will adjust the effective interest rate and recognize related non-cash interest expense on a prospective basis. Non-cash amortization is reflected as interest expense in the consolidated statements of operations and comprehensive loss.

Recent Accounting Pronouncements

In November 2024, the FASB issued Accounting Standards Update (ASU) No. 2024-03, Disaggregation of Income Statement Expense. The standard requires further disaggregation of relevant expense captions in a separate note to the financial statements. The standard is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently assessing the impact of adopting this guidance on its consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740). The standard requires disaggregation of the effective rate reconciliation into standard categories, enhances disclosure of income taxes paid, and modifies other income tax-related disclosures. The standard is effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-09 will expand our income tax disclosures, but will have no impact on reported income tax expense or related tax assets or liabilities.

3. Fair Value of Financial Instruments

The Company's financial instruments consist of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and accrued expenses. The carrying amount of accounts receivable, accounts payable and accrued expenses are generally considered to be representative of their respective fair values because of their short-term nature. The Company accounts for recurring and non-recurring fair value measurements in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820). ASC 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and requires expanded disclosures about fair value measurements. The ASC 820 hierarchy ranks the quality of reliability of inputs, or assumptions, used in the determination of fair value and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories:

•Level 1 - Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities.

•Level 2 - Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data.

•Level 3 - Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by a reporting entity - e.g., determining an appropriate adjustment to a discount factor for illiquidity associated with a given security.

The Company evaluates financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them each reporting period. This determination requires the Company to make subjective judgments as to the significance of inputs used in determining fair value and where such inputs lie within the ASC 820 hierarchy. There were no transfers between levels during the periods presented.

Financial assets measured at fair value on a recurring basis were as follows (in thousands):


	Fair Value Measurements at September 30, 2025
	Total		Level 1		Level 2
Assets:
Money market funds	$	10,605	$	10,605	$	—
U.S. Treasury securities	4,984		—		4,984
Government-sponsored enterprises	31,215		—		31,215
Corporate debt securities	58,969		—		58,969

Total assets measured at fair value(a)	$	105,773	$	10,605	$	95,168


	Fair Value Measurements at December 31, 2024
	Total		Level 1		Level 2
Assets:
Money market funds	$	67,886	$	67,886	$	—
U.S. Treasury securities	5,000		—		5,000
Government-sponsored enterprises	3,994		—		3,994
Corporate debt securities	25,548		—		25,548

Total assets measured at fair value(b)	$	102,428	$	67,886	$	34,542

(a) Total assets measured at fair value at September 30, 2025 includes approximately $39.5 million reported in cash and cash equivalents on the consolidated balance sheet.

(b) Total assets measured at fair value at December 31, 2024 includes approximately $83.6 million reported in cash and cash equivalents on the consolidated balance sheet.

4. Marketable Securities

The following tables summarize the Company's marketable securities (in thousands):


	September 30, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasury securities	$	4,983	$	1	$	—	$	4,984
Government-sponsored enterprises	26,222		7		—		26,229
Corporate debt securities	35,058		2		(5)		35,055
Total	$	66,263	$	10	$	(5)	$	66,268


	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

Government-sponsored enterprises	$	1,995	$	—	$	—	$	1,995
Corporate debt securities	16,828		4		—		16,832
Total	$	18,823	$	4	$	—	$	18,827

All of the Company's available-for-sale securities held as of September 30, 2025 and December 31, 2024 had contractual maturities of less than one year. All of the Company's available-for-sale securities in an unrealized loss position as of September 30, 2025 were in a loss position for less than twelve months. Unrealized losses on available-for-sale debt securities as of September 30, 2025 were not significant and were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities. Accordingly, no allowance for credit losses related to the Company's available-for-sale debt securities was recorded. The Company does not intend to sell its investments and it is not more likely than not that the Company will be required to sell its investments before recovery of their amortized cost bases, which may be at maturity.

5. Inventory, Net

Inventory at September 30, 2025 consists of $8.8 million in materials and supplies procured for the purpose of manufacturing drug substance for the Company's contract manufacturing customers.

6. Royalty Monetization Arrangement

In June 2025, the Company and Sagard Healthcare Partners (Sagard) entered into a Purchase and Sale Agreement (Royalty Purchase Agreement) pursuant to which the Company sold to Sagard its right to receive royalties on global net sales of ZYNYZ (retifanlimab-dlwr) occurring on and after July 1, 2025 under the Company’s Global Collaboration and License Agreement, dated as of October 24, 2017, as amended (Incyte License Agreement), with Incyte Corporation (Incyte).

Under the terms of the Royalty Purchase Agreement, the Company received a cash payment of $70.0 million. In exchange, Sagard acquired the royalties payable to the Company under the License Agreement for global net sales of ZYNYZ, subject to a cap. Following Sagard’s receipt of aggregate royalty payments totaling $140.0 million, the Company will resume collecting all future royalties under the License Agreement. The Company has retained its other economic interests related to ZYNYZ, including future potential development, regulatory and commercial milestones.

The $70.0 million proceeds received from Sagard under the Royalty Purchase Agreement were recorded as a liability related to future royalties, net of transaction costs of $0.3 million, which will be amortized over the estimated life of the arrangement using the effective interest rate method. The Company accounted for the Royalty Purchase Agreement as a financing arrangement because the Company has significant continuing involvement in the generation of cash flows due to Sagard and other existing obligations under the License Agreement. Royalty revenue will be recognized as earned on net sales of ZYNYZ, and the Company will record the royalty payments Incyte makes to Sagard as a reduction of the liability when earned. The aggregate future estimated payments, less the $69.7 million of net proceeds, will be recorded as interest expense over the estimated life of the arrangement. As such payments are made to Sagard, the balance of the liability will be effectively repaid over the life of the Royalty Purchase Agreement. The Company estimates the payments to be made to Sagard over the term of the Royalty Purchase Agreement based on forecasted royalties and will calculate the effective interest rate required to

discount such payments back to the liability balance. As of September 30, 2025, the estimated effective interest rate under the agreement was approximately 18.6%. Over the course of the Royalty Purchase Agreement, the actual effective interest rate will be affected by the amount and timing of net royalty revenue recognized and changes in forecasted revenue. On a quarterly basis, the Company will reassess the effective interest rate and adjust the rate prospectively as necessary. The company recognized non-cash interest expense of $3.3 million and $3.9 million during the three and nine months ended September 30, 2025, respectively, which is reflected in the interest and other expense line on the consolidated statements of operations.

Changes to the liability related to future royalties were as follows for the nine months ended September 30, 2025 (in thousands):


Liability related to future royalties - beginning balance	$	—
Proceeds from sale of future royalties	70,000
Deferred transaction costs	(327)
Non-cash royalty revenue payable to Sagard	(3,333)
Non-cash interest expense recognized	3,916
Liability related to future royalties - ending balance	$	70,256

7. Revenue

Collaborative and Other Agreements

Incyte Corporation

Incyte License Agreement

In 2017, the Company entered into an exclusive global collaboration and license agreement with Incyte, which was amended in March 2018, April 2022, July 2022 and July 2024, for retifanlimab, an investigational monoclonal antibody that inhibits PD-1 (Incyte License Agreement). Incyte has obtained exclusive worldwide rights for the development and commercialization of retifanlimab in all indications, while the Company retains the right to develop its pipeline assets in combination with retifanlimab. Under the terms of the Incyte License Agreement, Incyte paid the Company an upfront payment of $150.0 million in 2017. The Company manufactures a portion of Incyte’s global commercial supply of retifanlimab. In March 2023, the FDA approved ZYNYZ (retifanlimab-dlwr) for the treatment of adults with metastatic or recurrent locally advanced Merkel cell carcinoma. In May 2025, the FDA approved ZYNYZ with carboplatin and paclitaxel for the first-line treatment of adults with inoperable locally recurrent or metastatic squamous cell carcinoma of the anal canal (SCAC), and as a single agent, for adults with locally recurrent or metastatic SCAC with disease progression on or intolerance to platinum-based chemotherapy. Furthermore, Incyte has stated it is pursuing development of retifanlimab in potentially registration-enabling studies, including in patients with non-small cell lung cancer. Incyte is also pursuing development of retifanlimab in combination with select product candidates from its pipeline.

SEC Form 10-Q filed by MacroGenics Inc.