Analyst Conference Summary



conference date: March 14, 2019 @ 5:30 AM Pacific Time
for quarter ending: December 31, 2018 (Q4, fourth quarter 2018)

Forward-looking statements

Overview: Successful deal with $150 million collaboration payment from Gilead, pipeline progress.

Basic data (GAAP):

Revenue was $1.1 million, down sequentially from $12.8 million and down from $8.4 million year-earlier.

Net income was negative $48.8 million, down sequentially from negative $33.7 million, and up from negative $35.0 million year-earlier.

Earnings per share (EPS) were negative $0.40, down sequentially from negative $0.29, and down from negative $0.35 year-earlier.



Conference Highlights:

CEO Garo Armen stated: "In the past year, we entered into an important partnership with Gilead, delivered 6 INDs, and confirmed benefit in the majority of patients treated with our lead CTLA-4 and PD-1 antibodies. Our next steps will target submission and commercial launch readiness for our first two antibodies."

In Q4 quarter ended made a transaction with an investor generating $30 million in cash. Also sold more future Shingrix royalties.

Completed licensing deal with Gilead in Q1 2019, resulting in a $150 million up front payment. This week the IND was filed, resulting in a $7.5 million milestone payment.

Shingrix is the most effective shingles vaccine; GSK commercial sales have exceeded projections, exceeding $1 billion. 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. Expanding targets and combinations as data has been good.

The AGEN1884 and AGEN2034 phase 2 trial combining these drugs to treat cervical cancer continued. Dicussions with FDA indicate a BLA for for AGEN2034 and AGEN1884 could be filed as early as 2020. 1884 and 2034 are in 3 active clinical trials including the two combined.

Using the BEST program to provide funding for AGEN2034, in which cash is raised for the specific program. See Agenus Launches First Asset-Backed Digital-Security Offering.

Next-Gen CTLA-4, AGEN1181, should enter the clinic in 2019. Could be a best-in-class combination agent. This is designed to delete T-regs and increase priming.

First-in-class bispecific, AGEN1223, should enter the clinic in 2019. Believes the new antibodies can differentiate Agenus from competitors.

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

Believes the new antibodies can be advanced rapidly through clinical trials.

The Agenus drug licensed to Merck with an undisclosed target entered clinical trials, triggering a milestone payment in Q2 2018.

The first cell therapy, through subsidiary Agentus, could be in the clinic in 2019. Believes has capabilities to target solid tumors. Working on collaboration or private investment in the subsidiary.

In total Agenus hopes to file 3 INDS in 2019.

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

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.

Cost of sales was $0 million. Research and development expense was $36.0 million. General and administrative expense was $8.7 million. Other expense of $9.4 million.

Cash and equivalents balance ended at $53 million, up sequentially from $46.4 million. No debt, but has received advances on vaccine royalties, which is a liability. In Q1 2019 received $150 million payment from Gilead plus a $7.5 million milestone.

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

Q&A summary:

Update on the size of the token offering? BEST will be in three tranches, with the first closing this week. It is complicated. We will end the pricing this week, but the closing will take a bit longer. This is a discretionary financing mechanism, the capital is not needed until the end of this year.

More details on 2034 upfront capital use? Our focus is on clinical trials where readouts of proof of principle will be possible with small number of patients. Also we have partners Merck, Gilead, and Incyte. So we are building the resources to advance our own agenda. We have not raised cash be selling stock for four years now.

Clinical data presentations in 2019? PD-1 monotherapy trials are designed and on track for accelerated approval requirements, also CTLA-4 trials. We have not announced when or where we will release data. Our PD-1 refractory patients treated with our CTLA-4 may also release data. Our partner programs will be announced by partners, but the Incyte program is advancing. Our novel agents AGEN1181, and the bispecific are advancing in the clinic, we have not announced a data timeline yet.

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 2019 William P. Meyers