Analyst Conference Summary



conference date: March 12, 2020 @ 5:30 AM Pacific Time
for quarter ending: December 31, 2020 (Q4, fourth quarter 2019)

Forward-looking statements

Overview: FDA grants Fast Track Designation for the investigation of combination balstilimab and zalifrelimab. Improved response rates in trial. Milestone payment for QS-21 triggered.

Basic data (GAAP):

Revenue was $34.5 million, up sequentially from $19.9 million and up from $6.5 million year-earlier.

Net income was negative $30.9 million, up sequentially from negative $46.3 million, and up from negative $35.8 million year-earlier.

Earnings per share (EPS) were negative $0.22, up sequentially from $0.33, and up from negative $0.40 year-earlier.


Expects receipts in Q1 2020 to result in end of Q1 2020 balance over $100 million. Can finance operations from milestones and other payments, including new collaboration deals. Expects about $60 million in milestone payments in 2020.

Conference Highlights:

CEO Garo Armen stated: "We are excited by the clinical responses seen in our phase 1 trial of AGEN1181 alone and in combination with our PD-1. 2020 is a year of clinical data for us; with readouts from 6 separate programs. Additionally, the data we have generated from our cervical cancer combination trial may represent the most meaningful treatment option for these patients." The presentation was made by Jennifer Buell, President and COO.

The following milestones are expected in 2021: 2 BLA filings for balstilimab (anti-PD-1) and zalifrelimab (anti-CTLA-4); 3 INDs for new discoveries targeting myeloid & macrophage biology and allogeneic iNKT cell therapy; 6 clinical data readouts. Agenus expects to trigger about $60M in milestone payments in 2021. Additional partnerships and/or collaboration discussions are underway.

Expects to generate $60 million from existing milestones in 2021.

Managing coronavirus outbreak with bans on travel, etc. A few employees are currently affected by quarantien, but none have been diagnosed with the virus.

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 $10 million payment to Agenus was generated in Q1 2020. The contingent debt has now been extinguished. 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 (CTLA-4) and AGEN2034 (PD-1) onging phase 2 trial combines these drugs to treat cervical cancer continued. Balstilimab (AGEN2034, anti-PD-1) and zalifrelimab (AGEN1884, anti-CTLA-4) in second line cervical cancer demonstrate 26.5% response rates (4 CRs, 5 PRs, 8 SD), median response not yet reached at 6.9 mos and may reveal best in class treatment option. Some partial responses are turing to complete responses over time. The combination received FDA Fast Track designation for the investigation in relapsed/refractory metastatic cervical cancer 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. Low-dose AGEN1181 (1 mg/kg) generated a complete response in advanced endometrial cancer with a poor prognosis (PD-L1[-], MSS, CD16a low affinity). Low-dose AGEN1181 + balstilimab delivered new partial responses. As of Q1 2020 trial is in dose escalation and expansion to support rapid development. The goal is a 60% response rate for the combination. Discussing ex-US partnerships with potential partners.

First-in-class bispecific, AGEN1223, continues development. 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. 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. Combo therapy with Agenus CPMs planned for 2020.

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 $36.8 million. General and administrative expense was $12.3 million. Non-cash interest expense of $11.8 million. Contingent consideration (non-cash) $4.6 million.

Cash and equivalents balance ended at $62 million, down sequentially from $93 million. $17 million cash used in operations. Expects receipts in Q1 2020 to result in end of Q1 2020 balance over $100 million. No debt, but has received advances on vaccine royalties, which is a liability. $ million cash used by operations.

Q&A summary:

Bali combination data needed to complete BLA? Talked to FDA, deliverable set is clear. Will be a rolling submission. Commercial product is ready, clinical data is mature. Cleaning data and getting ready for submission. We have all manufacturing and clinical data needed. Will continue to meet with the FDA.

Phase 2 Rapid study? Will provide additional data and could support full approval. Done with gynecological oncology group.

The field is moving away from higher doses of CTLA4. More is better is mistaken. Our maturing data at low dow has shown improving responses. We are seeing few immune related toxicities at our dose. For 1181, it also primes and deletes regulatory T cells. We understand why many patients don't respond to first generation CTLA4s. We believe instead of getting an about 20% response rate, first gen, 1181 may get responses from an additional 40%. More data at an upcoming medical conference.

Not disclosing the breakdown of the $60 million in expected milestones beyond those already announced. But 3 small milestones. Our cash management practices are not dependent on potential new collaborations.

Expects a readout on 1223 in 2020. 2373 too. Gileads GS1423 bifunctional antibody is very important.

Innovative approach to market launch? Can't give details yet, but talking to payers and providers. Will not be industry standard way, but innovative launch should offset the risks.

Next 1181 update? Process requires peer review, but may not be at AACR or ASCO.

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 2020 William P. Meyers