Analyst Conference Summary


conference date: March 5, 2014, 8:00 AM Pacific Time
for quarter ending: December 30, 2013 (Q4, fourth quarter 2013)

Forward-looking statements

Overview: Developmental stage biotechnology company that has been successful raising money lately on anticipation of good results from a variety of therapies from preclinical to Phase II stages.

Basic data (GAAP):

Revenue was $393 thousand, down sequentially from $736 thousand and down from $1.1 million year-earlier.

Net income was negative $5.8 million , improved sequentially from negative $7.4 million, and slightly more than the negative $5.6 million year-earlier.

Earnings per share (EPS) were negative $0.16, improved sequentially from negative $0.24, and improved from negative $0.23 year-earlier.


none given. But expects cash burn of $35 million to $40 million in 2014.

Conference Highlights:

Agenus announced that three immune checkpoint modulator antibodies acquired with 4-Antibody AG would be advanced into preclinical development, in collaboration with Ludwig Cancer Research. These antibodies may be useful in combination cancer therapies. The acquisition was completed on February 12, 2014, so did not effect Q4 results.

As a development stage company, Agenus is focused on pipeline development, including QS-21 Stimulon, immunotherapy, and heat shock protein vaccines. Along with partners, Agenus has 23 programs in development. Agenus management believes it has sufficient funds to operate the company through 2014.

If the QS-21 products are commercialized by partners they could become a significant source of income.

A Phase II trial was initiated with Prophage and Yervoy for state III and IV metastatic melanoma.

Phase II data was published showing after treatment with Prophage 90% of patients with recurrent glioblastoma multiform (GBM) were alive after 6 months and 30% were alive after 12 months. In a separate Phase II study newly diagnosed GBM patients were given surgery plus temazolomode and radiation, plus Prophage vaccine, in a single arm open label study, with median progression-free survival of 18 months, vs. expected 7 months without Prophage. Overall survival with Prophage was nearly 2 years vs. expected 15 months without Prophage. Agenus is discussing a Phase III trial design with the FDA.

A Phase II study of HerpV for herpes simplex virus 2 (HSV-2) reported statistically significant results.

Possible milestones in 2014 include: Phase 3 data from GlaxoSmithKline (GSK) for a vaccine including QS-21 for non-small cell lung cancer; submission of GSK's malaria vaccine including QS-21; Phase II booster data for HerpV; at least one corporate collaboration deal with the 4-Antibody platform.

Patient enrollment continues in the Phase II study of Prophase + Avastin for surgically resectable recurrent GBM.

Cost of sales was $0.0 million. Research and development expense was $3.2 million. General and administrative expense was $3.4 million. Leaving operating income at negative $6.2 million. Other expense was $0.5 million. Net loss was $5.8 million. A loss of $50 thousand was recorded for dividends on Series A convertible preferred stock.

Cash and equivalents balance ended at $27.4 million, down sequentially from $30.2 million. After the quarter ended Agenus sold stock generating an additional $56 million in cash.

Agenus continues to explore possibly working with new licensing partners for QS-21.


How do you Agenus to look in a year, as far as partnering or other monetizing? The key drivers of Agenus have been oncology and immunology. We will want to be in a position to commercialize small specialized immuno-oncology therapies. Of the checkpoint modulators, it is reasonable to assume that some will be licensed out and others will be kept by Agenus.

As to therapies like the Herpes vaccine, we would like to take them to the point where they are partnerable, since our core expertise does not cover this area.

Duplication of checkpoint inhibitors across the competitive landscape? Checkpoint modulators are broadly applicable. We may pursue smaller applications that are not targeted by the larger players. There are a lot of niche indications we are looking at. A broad portfolio will help with specific applications. These inhibitors have side effects, so you don't want to give them in situations where they are not crucial. Agenus realizes it is highly competitive, with everyone going after the same six targets. We began to work on this 3 years ago. We are near the front of the pack on two targets, about even with two, and frankly behind with two. We can also target geographies that are not priorities for the other players.

The IP situation for checkpoint inhibitors is complicated. We believe we are set up to find freedom to operate and achieve composition of matter patents. Bristol has a patent on pattern of exposure for CTLA-4, but we believe we have a more potent version and believe we have a way around that.

The other parties interested in 4-Antibody included major pharmaceutical companies, but Agenus did a deal that gave the 4-Antibody stakeholders a stake in the long-term outcome.

How do you move a combination with Yervoy forward? We did a small study in metastatic melanoma, Yervoy plus Prophage, the question is why some patients respond and some don't. It is just 25 patients, monitored to extract information about the interaction between the tumor and immune system. It will help design future registrational studies.

When people's cancer progresses that may help us understand the checkpoint inhibition process, as in the Avastin plus Prophage trial. If that trial gives a signal would could extend it into a Phase III trial.

The t-lymphocyte agonist systems could be added to Prophage to send more armed lymphocytes towards the tumor. Other combinations like tumor necrosis, radiation, or chemotherapy combined with the vaccine and checkpoint inhibitors would enhance auto-vaccination and overcome the tumor's defenses for particular patients. "Ten years from now the treatment of cancer will be profoundly different."

Corporate collaboration, what are you looking for? With cash, we don't have to sell anything off for financial reasons. A number of parties are clearly interested. Some large companies have woken up and realized they may have missed the boat. We have the goal to create real medicines including combinations out of this portfolio.

The timeframe to move the new candidates to INDs is 15 to 18 months. It is a very competitive area so we will be very careful about disclosures on these therapies.

Our main goal right now is advancing our CPM (checkpoint modulator) portfolio.

Mouse systems are only vaguely useful for CPMs. We have good evidence that these are good points of intervention.

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Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. Before making or terminating an investment you should always verify any factual basis of your decision.

Copyright 2014 William P. Meyers