Analyst Conference Summary



conference date: August 6, 2020 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2020 (Q2, second quarter 2020)

Forward-looking statements

Overview: Multiple pipeline achievements, nearing FDA submissions.

Basic data (GAAP):

Revenue was $26.9 million, up sequentially from $15.1 million and up from $15.7 million year-earlier.

Net income was negative $48.2 million, down sequentially from negative $45.3 million, and up from negative $51.9 million year-earlier.

Earnings per share (EPS) were negative $0.28, down sequentially from negative $0.31, and up from negative $0.38 year-earlier.


Believes has adequate cash to operate through Q3 2021.

Conference Highlights:

CEO Garo Armen stated: "We have advanced our extensive clinical pipeline of agents. You can expect additional updates on up to 5 of our programs at major conferences before the year end. Agenus is a fundamentally a technology and biology company focused on overcoming the challenges posed by cancer." While there are several PD-1 agents on the market or in development, we decided to have our own to enable our combination therapies. Pricing is an issue for PD-1 combinations, so we will have an advantage. Other companies may want to use our PD-1 for their combinations. We are building our own CMC and manufacturing capabilities.

The presentation was introduced by Jennifer Buell, President and COO. Focus is on value creation. There are 8 molecules in preclinical development; some will enter the clinic this year.

Agenus plans to file a BLA with the FDA for balstilimab in Q3 2020, and it is eligible for priority review. The Phase 2 combination trial with zalifrelimab has completed accrual, so BLA planning for the combination is underway. Zalifrelimab as monotherapy showed active responses in PD-1 refractory tumors, with 1 complete response and 3 partial responses, so a Phase 2 expansion trial of multiple tumor types was launched in Q3 2020, with additional cancers to follow.

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. In Q3 2020 announced the completion of a partnership with Betta Pharmaceuticals with $15 million upfront, a $20 million equity investment, $100 million potential milestones, and royalties, for rights to balstilimab and zalifrelimab for Greater China

Shingrix is the most effective shingles vaccine; GSK commercial sales have exceeded projections, reached over $2 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. There are about 9,600 eligible patients annually in 2nd line cervical cancer.

Dr. Bree Wilky presented very encouraging data for sarcomas, particularly angiosarcoma treated with balstilimab and zalifrelimab. While there are only 200 to 300 cases in the US each year, it is much more common in Asia. Has examined resistance mechanisms in other sarcomas. Combining doxorubicin with checkpoint inhibitors in metastatic soft tissue sarcomas is now in an investigator-initiated trial.

Next-Gen CTLA-4, AGEN1181, began enrollment in 2019. Could be a best-in-class combination agent. In Phase 1, combined with Balstilimab, AGEN 1181 achieved two complete responses and 65% clinical benefit rate, so expansion cohorts in NSCLC, MSS, melanoma and RCC have been initiated. 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. In Phase 1 achieved durable SD in ovarian, lung cancer, sarcoma, without liver toxicity. It is being advanced into a combination trial with balstilimab.

In Q3 2020 announced Agenus can now produce QS-21 from a renewable source, and it enhanced antibody responses in SARS-CoV-2 models.

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.

New iNKT program is advancing towards the clinic. The IND has been cleared. One agent is iNKTs designed to eliminate COVID-19 virus, dampen harmful inflammation, and promote protection from reinfection, could enter the clinic in August 2020. The other is designed to promote anti-tumor immunity in cancer and enable optimal combinations with Agenus checkpoint antibodies

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 $39 million. General and administrative expense was $14 million. Other expense $1 million. Non-cash interest expense of $14 million. Loss on debt modification $0 million. Contingent consideration (non-cash) $7 million.

Cash and equivalents balance ended at $79 million, down sequentially from $92 million. $37 million cash used in operations. No debt, but has received advances on vaccine royalties. After the end of Q2 received $35 million from Betta.

Q&A summary:

Ovarian 9 pending scans for ESMO? Patients scanned every 6 weeks. Will present waterfall plots. Seeing a continuous shrinking, looking for conversions to complete or partial responses. Cervical and 1181 abstracts submitted for conferces.

Strategy for bali+zali and 1181? Within responses we see mutations of the allele. Data indicates they would not have responded to first generation therapies. We can expand targets for bali+zali with relatively quick new indications. For 1181 we have PD-1 refractory cases where we expect to have activity. CD16 LDL patients are low hanging ftuit for this.

Gilead partnership? You should be hearing about milestones with partners as we go forward. Our commercialization efforts will be concentrated in US, we will retain more of our portfolio for that and license ex-US rights.

GSK QS21 for Covid? No, there is not enough QS-21 available for that many vaccine doses. QS-21 has been used in over 10 million vaccinations. Agenus is actively working on upscaling our manufacturing capabilities, have verified the new plant-based QS-21 works.

2373 no liver toxicity; other safety? Quite tolerable. No unusual adverse events have emerged.

Doxorubicin bali+zali tolerability? We are in safety lead in, to date we have not seen any prohibitive DLTs.

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