Analyst Conference Summary



conference date: August 8, 2019 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2019 (Q2, second quarter 2019)

Forward-looking statements

Overview: Gilead partnered AGEN2373 IND accepted by FDA, triggering 47.5 million milestone.

Basic data (GAAP):

Revenue was $15.6 million, down sequentially from $79.9 million and down from $15.9 million year-earlier.

Net income was negative $51.9 million, down sequentially from $17.4 million, and up from negative $25.2 million year-earlier.

Earnings per share (EPS) were negative $0.38, down sequentially from $0.14, and down from negative $0.24 year-earlier.



Conference Highlights:

CEO Garo Armen stated: "A lot is going on, and a lot has to go on for us to defeat cancer." Agenus filed first . Focussed on why there is a disconnect between Agenus capability and its stock market value. Compared to other companies with IO therapies that have higher market capitalizations. Believes Wall Street no longer sees any low-hanging fruits in IO, with few new therapies being large revenue generators. Garo believes there will be another wave of new and combination therapies that will have a large impact on cancer therapeutics. Expects more transactions with partners generating significant upfront cash, selling foreign rights but retaining U.S. rights. Filed two INDs already in 2019 and will file two more before the end of the year. This is possible because of Agenus's antigen discovery platform. PhosImmune acquisition a key to this phosphorylated antigen targets, which was addressed by Paisley Myers. Second-generation CTLA4 antibody could be a key revenue generator.

The IND was accepted by the FDA for AGEN2373, which has been licensed to Gilead. This triggered a $7.5 million milestone payment. AGEN2373 is a bi-specific antibody that will be tested on undisclosed cancers.

Shingrix is the most effective shingles vaccine; GSK commercial sales have exceeded projections, on track to reach $1.3 billion in 2019. Agenus licensed GSK QS-21 Stimulon, a component of Shingrix. A $40 million payment to Agenus is possible if the milestone is achieved.

A large-scale trial with GSK's Mosquirix vaccine, containing QS-21, against malaria, continued in Africa

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.

Next-Gen CTLA-4, AGEN1181, began enrollment 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.

Paisley Myers, spoke about Agentus, program's proprietary PCT targets. Will file for first cell therapy this year. PCTs are highly specific and so allow therapies to attack cancers with minimal side effects. First trial will be in AML. Will also have a TCR which should enter the clinic in 2020.

In Q1 2019 Gilead filed an IND for GS-1423, which was AGEN1423 and generated $90 million in an upfront payment and $7.5 million for the IND. In addition Gilead invested $30 million in Agenus equity.

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) and INCAGN2390 (TIM-3)are in Phase 1 trials.

A portfolio of undisclosed bispecific 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. Some new molecules may be partnered. Expects meaningful clinical data this year.

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

Cash and equivalents balance ended at $122 million, down sequentially from $158 million. No debt, but has received advances on vaccine royalties, which is a liability.

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

Q&A summary:

Pipeline, what are top 3 priorities? Overall immuno-oncology focus. Maximizing advantage with breadth of program. 1, complete enrollment of registrational trials and file BLA; advance second generation CTLA4 into trials; complete at least one business development transaction to generate cash.

Timeline for BLA? Second half of 2020. Accrual is going well will lead PD1 and first-gen CTLA4. We have triggered the first interim analysis, should share data soon.

Details on this year's data release? CTLA4 and PD-1 data will have a meaningful number of patients, in cervical cancer, meaningful data. The PD-1 will be in a monotherapy, plus a PD-1 and CTLA4 combination. Our experts have noted 'unusual responses' in patients.

BEST financing update? There was confusion with the cryptocurrency business, which created a stigma. Looking for a project financing mechanism for PD1, should announce by end of year, may not be BEST.

Agentus financing? Since close to entering clinic, will wait for that, as it should create value. Could happen in the next few months.

Right to try effects? Patients are being denied innovative, novel therapies. It is not just the law, it is the willingness of individual physicians and hospital support. We already do what we can to provide access to our therapies.

Shingrix timeline for debt payment? It has to do with accounting standards. It is recorded as debt, but it is not. You can see the entry over $150 million, but we have zero exposure associated with that accounting entry. As the royalties are paid the balance sheet entry is extinguished. Will be fully extinquished. [Would not give a timeline].

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