Analyst Conference Summary


conference date: July 24, 2014 @ 8:00 AM Pacific Time
for quarter ending: June 30, 2014 (Q2, second quarter 2014)

Forward-looking statements

Overview: Two positive trial results reported in the quarter.

Basic data (GAAP):

Revenue was $3.1 million, up sequentially from $0.7 million and up from $0.8 million year-earlier.

Net income was negative $7.8 million, down sequentially from negative $0.4 million, and up from negative $11.1 million year-earlier.

Earnings per share (EPS) were negative $0.12, improved sequentially from negative $0.01, and improved from negative $0.40 year-earlier.



Conference Highlights:

The focus is now to advance the checkpoint modulator (CPM) programs. Agenus is also looking for partnerships based on the good Prophage glioma and HerpV results during the quarter.

GBM (glioblastoma multiforme) Phase 2 Prophage vaccine data final results were announced during the quarter. Half the patients lived almost 2 years, compared to 16 months for standard of care alone. 33% of patients were alive at 2 years. Some data indicated combining the vaccine with a CPM could be even more effective.

HerpV Phase 2 data for genital herpes was positive. A majority of patients showed an immune response. In the more than half who developed a robust T-cell response, "there was a statistically significant 75% reduction in viral load."

During the quarter entered a collaboration and license agreement with Merck to discover antibodies against two Merck-supplied cancer immune checkpoint targets. Milestone payments could be near $100 million, plus royalties on any sales.

Agenus was added to the Russel Global and Russel 3000 indexes. There was a significant uptick in institutional ownership of Agenus stock due to this.

This morning GSK and Agenus announced the Malaria vaccine was accepted for review in Europe. The vaccine includes QS-21 Stimulon adjuvant from Agenus. This triggered a "substantial" milestone payment. (See Malaria Vaccine press release)

As a development stage biotechnology company, Agenus is focused on pipeline development, including QS-21 Stimulon, immunotherapy, and heat shock protein vaccines. Along with partners, Agenus has 22 programs in clinical development.

Cost of sales was $0 million. Research and development expense was $5.2 million. General and administrative expense was $5.8 million. Leaving operating income at negative $8.2 million. Other income was $0.5 million. Net loss was $7.8 million.

Cash and equivalents balance ended at $62.8 million, sequentially from $73.5 million.

Agenus believes it has sufficient cash to fund operations through mid-2015.

Agenus continues to explore possibly working with new licensing partners for QS-21. It is also in active discussions with potential partners for its checkpoint antibodies program.

Because immunotherapies (CPMs) do not immediately cause cancers to shrink (because they become engorged with white blood cells), new techniques (assays) have been developed to enable researchers to see if the therapies are working in their early stages.

Agenus believes is CPM platform gives it a competitive advantage. There are an additional 50 or so checkpoint proteins to explore.


Dynamics of malaria vaccine, milestones, royalties? The filing acceptance triggered a milestone in the low single millions that has already been paid. We will receive milestone payments upon FDA and EMA approvals. Royalties commence upon sales, and should be reasonable.

Launch in sub-Sahara? The approval in Africa will be expedited one the EU approves, but it will be country by country. There is an existing child vaccination system that could be used for rapidly deploying the vaccine.

Believes Malaria vaccine is just the beginning for QS-21.

Trial strategy on GBM? With the final data we are seeing considerable interest from partners, that was not there before. They would bear the cost of further trials. Even though it was a single-arm study, the data is very encouraging, particularly for longer duration survival. Believes a double-blinded Phase III trial could be sufficient for registration, but combining with a PD1 inhibitor also looks like an attractive option.

Revenues in Q2? There are several small items in the revenue. Some is deferred revenue that is recognized over time, and revenue from our subsidiaries.

Milestone payment in Q3 revenue? Yes.

Yervoy + Prophage program? Because of rapid changes in the field, standards are changing. We are re-evaluating how we will move our portfolio forward. Yervoy alone is no longer the standard of care for melanoma. We are looking at modifying the protocol design.

The checkpoint antibody program is based on human cell data, which we do not want to give out for competitive reasons. We want to get the products into the clinical pipeline. This is a very competitive area, but we have some competitive advantages with our antibodies. We have the six most important targets; most competitors don't have all six. The good news out of ASCO is that combining modulators can get great efficacy, but also dangerous side effects.

Who will be the malaria vaccine customers in Africa? The Gates Foundation would provide funding, a consortium including WHO would be responsible for deliveries. Price will negotiated between GSK and buyers.

HerpV viral load reduction range? It does not appear to be clearing virus entirely from anybody.

Reduction in risk? That is an inference. Belief is viral shedding reduction reduces transmission likelihood, but not to zero. We are looking for a partner based on the data we have generated.

HSP platform monetization strategy? We see interesting things from the herpes result. We can get a good T-cell response. The same approach could be used for other virus types. We would love to find a partner for broadening the target list for HSPs.

Agenus web site

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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