Analyst Conference Summary



conference date: November 6, 2018 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2018 (Q3, third quarter 2018)

Forward-looking statements

Overview: Pipeline progress while still negotiating with potential partners.

Basic data (GAAP):

Revenue was $12.8 million, down % sequentially from $14.9 million and up % from $3.4 million year-earlier.

Net income was negative $33.7 million, down sequentially from negative $25.2 million, and up from negative $36.8 million year-earlier.

Earnings per share (EPS) were negative $0.29, up sequentially from negative $0.24, and up from negative $0.37 year-earlier.



Conference Highlights:

CEO Garo Armen stated: "We have shown that our CTLA-4 and PD-1 antibodies are active in the clinic with clinical benefit seen in the majority of the more than 130 patients treated. Recently we met with the FDA to confirm our clinical path to a BLA filing with accelerated approval. In addition to these, our discovery engines have produced 4 INDs which have been filed this year, including our next generation CTLA-4. We plan to finish the year with two additional IND filing of first-in-class bispecifics. We also expect the closure of at least one corporate partnership transaction by year end."

After the quarter ended made a transaction with an investor generating $30 million in cash. Also sold more future royalties. Goal is to maintain cash without dilution until the major commercial deal closes.

AGEN1181, the next-generation CTLA-4 new generation molecule with improved characteristics, has filed an IND.

Discussing licensing deals with several potential partners that might close by year end. Working to maximize value, including our own development work. Believes could announce one or more deals this year. Could include a broad strategic partnership. Had hoped could have closed earlier in the quarter, but there were delays.

The Agenus drug licensed to Merck with an undisclosed target entered clinical trials, triggering a milestone payment in Q2.

Shingrix is the most effective shingles vaccine; GSK commercial sales have exceeded projections. Agenus licensed GSK QS-21 Stimulon, a component of Shingrix. A $40 million milestone payment to Agenus is possible if the milestone is achieved.

Agenus continued a Phase 2 combination trial of AGEN1884 with Keytruda for IL NSCLC with over 50% PD-L1 expression. But decided not to pursue NSCLC as a first priority target.

Dose escalation trials for AGEN1884 and AGEN2034 are complete. Clinical benefit rate of 68% and 63% for AGEN2034 and AGEN18842 for multiple solid tumor types was released at ESMO. A Phase 2 trial combining these drugs to treat cervical cancer continued. Dicussions with FDA indicate a BLA for for AGEN2034 and AGEN18842 could be filed as early as 2020. 1884 and 2034 are in 3 active clinical trials including the two combined.

A combination trial of 1881 and 2034 completed dose escalation, and launched combination trials with this compounds in 2L cervical cancer. Data was released

AutoSynVax vaccine trials are being planned for 2018 in combination with QS-21 and 1884.

GSK's Shingrix vaccine, containing Agenus QS-21 Stimulon, received a U.S. approval on October 20, 2017. 97% efficacy "effectively shuts down any contender in this market." Also approved in Canada. The CDC voted to favor Shingrix over Zostavax.

The first cell therapy, through subsidiary Agentus, could be in the clinic in the first half of 2019. Believes has capabilities to target solid tumors.

Agenus West manufacturing supplied GMP material for clinical programs; preparing for GMP material for registrational program in 1H2018.

Prophage for newly diagnosed GBM (glioblastoma, a brain cancer) program continues.

A next generation CTLA-4 antibody should have an IND filed in 2018. This is designed to delete T-regs and increase priming.

Incyte-partnered checkpoint inhibitors from Agenus continue to be advanced in preclinical or clinical trials. INCAGN1876 (GITR) completed dose escalation; INCAGN1949 (OX40) also completed dose escalation. For both development is expected to focus on combination therapy. INCAGN2385 (LAG-3) entered the clinic. INCAGN2390 (TIM-3)is are expected to enter clinical trials in 2018.

A portfolio of undisclosed checkpoint modulators is being advanced in the lab. Neoantigen vaccines continue to be developed. Animal models have shown synergy between CPMs and vaccines. Agenus is identifying mutated proteins from cancers that could serve as a basis for vaccines.

3 more INDs are planned for filing before the end of 2018, including another CTLA-4 and two bispecifics. The CTLA-4 compound is designed to deplete T-regs while improving T-cell priming; published in Cancer Cell journal.

Cost of sales was $0 million. Research and development expense was $29.9 million. General and administrative expense was $9.2 million. Other expense of $7.9 million.

Cash and equivalents balance ended at $46.4 million, up sequentially from $43.2 million. No debt, but has received $187 million advances on vaccine royalties, which is a liability.

Making greater efforts to inform investors of the company's value.

Q&A summary:

Any indications beyond second line cervical cancer? Looking at other indications, not disclosing yet for competitive reasons.

Advancing of CTLA-4 agents over time? We will continue to develop the first generation of CTLA-4 as it has shown utility. Could slide 1881 into the trials for redundance, or independently develop.

Cost of advancing pipeline v. cash for first products? We are prudent. Obsolescence rates are going to increase for drugs, so speed is becoming more important. At least until the transaction alleviates our cash concerns, which should happen pretty soon. At that point there will be a modest but not substantial uptick to our spending.

Delay? Financial terms have been finalized, the delay is in process.

Are you thinking of retiring? I have no intention of retiring.


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. This is journalism, not investment advice.

Copyright 2018 William P. Meyers