Analyst Conference Summary



conference date: May 7, 2020 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2020 (Q1, first quarter 2020)

Forward-looking statements

Overview: Great data on cancer drugs. Reducing expenses.

Basic data (GAAP):

Revenue was $15.1 million, down sequentially from $34.5 million and down from $79.9 million year-earlier.

Net income was negative $45.3 million, down sequentially from negative $30.9 million, and down from $17.4 million year-earlier.

Earnings per share (EPS) were negative $0.31, down sequentially from negative $0.22, and up from $0.12 year-earlier.


Conference Highlights:

CEO Garo Armen stated: "We accelerated the development of AGEN1181, advanced our plans to file our BLAs and filed two INDs for our allogeneic iNKT cell therapy to treat cancer and COVID-19. Our ability to rapidly enroll in our bali and zali trials, in just 2 years, underscores the speed with which we can advance our AGEN1181 +/- bali and our innovative pipeline of products including allogeneic cell therapy programs. . . Interruptions of work by the pandemic have been minimal." But the remaining $45 million in milestones expected in 2020 are at risk for delay, so cutting back expenses. First BLA filing could be in Q3 2020. In term sheet discussions with companies for more collaborations.

The main presentation was made by Jennifer Buell, President and COO. Despite the pandemic there is a queue of patients waiting to be enrolled in the 1884 trial

Revenue in Q1 2020 was primarily from the milestone for Shingrix.

New iNKT program is advancing towards the clinic. One agent is iNKTs designed to eliminate COVID-19 virus, dampen harmful inflammation, and promote protection from reinfection (FIM 1H2020). The other is designed to promote anti-tumor immunity in cancer and enable optimal combinations with Agenus checkpoint antibodies

Agenus plans to file for INDs in Q4 2020 for 2 TIGIT antibodies. Fc enhanced TIGIT antibody (AGEN1327) has outperformed all tested competitor antibodies with superior T cell activation in PD-1 or LAG-3 combos. TIGIT bispecific (AGEN1777) demonstrated potent tumor killing in a difficult to treat colon cancer model where PD-1 antibodies alone are ineffective

Agenus expects there to be more partnerships to license its drugs, which would give it more cash for operations.

Shingrix is the most effective shingles vaccine; GSK commercial sales have exceeded projections, reached $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.

Balstilimab (AGEN2034, anti-PD-1) and zalifrelimab (AGEN1884, anti-CTLA-4) in Phase 2 trial for second line cervical cancer demonstrate 26% response rates (7% CR, 18% PR), with responses durable over 12 months, and appears to be the best in class treatment option. Analyzed cohort was 55 patients, not biomarker selected. 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 late 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. Early Phase 1 data included a confirmed CR in advanced endometrial cancer and a confirmed PR when combined with balstilimab, plus disease stabilization in a majority of patients evaluate. AGEN1181 is designed to delete T-regs and increase priming. It also overcomes the genetic polymorphism displayed by about 40% of the target cancers (which makes Yervoy unresponsive). As of Q1 2020 trial is in dose escalation and expansion to other cancer types to support rapid development strategy. Latest (Q1 2020) data had a 70% disease control rate. Also appears to be safer than Yervoy. 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.

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 $36.4 million. General and administrative expense was $10.6 million. Other expense $1.2 million. Non-cash interest expense of $13.8 million. Loss on debt modification $2.7 million. Contingent consideration (non-cash) $4.4 million.

Cash and equivalents balance ended at $92 million, up sequentially from $62 million. $32 million cash used in operations. No debt, but has received advances on vaccine royalties, which is a liability.

Q&A summary:

Unmentioned feature of TIGIT bispecific? We have been evaluating competitors while we did TIGIT development, looking for an advantage. Our programs are designed to address what is needed. It is a first in class target expessed on T cells and K cells. Co-specific approach gets better results in models.

1181 low dose pending response from earlier? Both responses were confirmed by independent radiology review, and they are continuing. We are seeing indications of lasting responses that may convert into cures.

Steps to submit Zali/Bali BLA? We are pursuing a rolling submission, including FDA meetings. FDA has remarked on the quality of our manufacturing. Confident in a number of molecules including manufacturing. Continuing to gather clinical data and analyze it. Second half filing.

1181 stable disease, new cancer types? We will present at major medical conferences. Solid tumor study. Lung, melanoma, seen activity beyond those including ovarian and a gynecologic case, which is very unusual. We are seeing diseas stabilization in the majority of patients treated.

COVID IND, plans? We need to do dose escalation and look at blood markers. We will be working with New York hospitals.

Second tranch of Shingrix milestone was expected in second half, but GSK has indicated vaccine uptake has slowed down. We have no control of the timing of clinical trials that could generate other milestones, so we are just assuming zero, but that does not mean those milestones won't come in, this year or later.

We are in term sheet discussions with two separate parties that could result in cash this year.

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