Analyst Conference Summary



conference date: October 29, 2020 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2020 (Q3, third quarter 2020)

Forward-looking statements

Overview: Multiple pipeline achievements, nearing FDA submissions.

Basic data (GAAP):

Revenue was $14.8 million, down sequentially from $26.9 million and up from $ million year-earlier.

Net income was negative $51.6 million, down sequentially from negative $48.2 million, and down from negative $46.3 million year-earlier.

Earnings per share (EPS) were negative $0.28, down sequentially from negative $0.28, and down from negative $0.33 year-earlier.


Conference Highlights:

CEO Garo Armen stated: "Made excellent progress in advancing programs. These achievements have set us up for potentially transformative events." The VISION platform can examine stages of immune cells, including T-cells, in an in vitro human cancer model. One goal is to drive and keep T cells into an efficatious state. QS-21 in Shingrix could trigger a $25 million milestone payment in 2021. Working on a renewable source for QS-21. In discussion with nine companies about possible licensing or collaboration deals, which could provide a significant amount of cash.

Jennifer Buell, President and COO pointed out that the Agenus pipeline has several agents that will potentially make good combinations with balstilimab. That will help Agenus control pricing for its combinations, and for combinations with other companies. It gives Agenus and partners are pricing advantage. Already preparing an experienced launch team. 1181 data reveal will be impressive. Agenus is the first to show that pseudoprogression in cervical cancer is due to an immune response and patients should not be progressed because of it. The SITC program should be very exciting.

Agenus filed a rolling BLA with the FDA for balstilimab in Q3 2020, and the FDA has begun a review, and it is eligible for priority review. As monotherapy had response rates of 19% in PD-L1 positive tumors and 14% in PD-L1 positive and negative tumors combined. The Phase 2 combination trial with zalifrelimab has completed accrual, so BLA planning for the combination is underway. Response rates were 27% in PD-L1 positive tumors and 22% in PD-L1 positive and negative tumors combined. Median duration of response was 15.4 months for monotherapy; median duration of response in the combination trial had not yet been reached.

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.

INKT clinical Phase 1 trial for cancer will commence before year end 2020. Now screening patients for immanent enrollment.

Data on seven programs will be presented at SITC (Nov. 11 to 14), including AGEN1881, more zali and bali. AGEN2373 an anti-CD137 antibody designed for optimal safely and efficacy. AGEN1777, a Fc-enhanced TIGIT bispecific for optimal anti-tumor action. Preclinical iNKT cell therapy: cancer killing with unmodified iNKTs as well as CAR-iNKTs. And the AGEN VISION platform for identification of biomarkers, new targets, and prediction of responders.

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 provides balstilimab to Rottapharm for clinical testing with CR6086, a potent and selective prostaglandin EP4 receptor antagonist, in patients with advanced metastatic colorectal cancer; trial expected to commence by end of 2020.

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.

There are about 9,600 eligible patients annually in 2nd line cervical cancer. In addition Agenus provides balstilimab to Rottapharm for clinical testing with CR6086, a potent and selective prostaglandin EP4 receptor antagonist, in patients with advanced metastatic colorectal cancer. The trial expected to commence by end of 2020.

In Q3 2020 the MK-4830 (ILT4 agonist licensed to Merck) showed benefit as a monotherapy and in combo with anti-PD-1 with 11 responses (2CR, 9PRs). $10 million milestone was recieved and eligble for an additional $85 million. It will receive royalties if the drug is commercialized.

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). Updated data is expected in November 2020.

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 $0.9 million. Research and development expense was $32.1 million. General and administrative expense was $14.4 million. Other expense $0.9 million. Non-cash interest expense of $15.9 million. Contingent consideration (non-cash) $2.2 million.

Cash and equivalents balance ended at $114 million, up sequentially from $79 million. $32 million cash used in operations. No debt.

Q&A summary:

Bali Zali filings, timing of? We do not yet have the median duration of response, that might take a while, would not prevent us from filing. We are doing Bali first, it is more straightforward and our parnters are interested. The combination will then be a couple of months behind the monotherapy.

Fc engineering, your approach v. competitors? We have a defined strategy of pursuing agents with advantages clearly over competing molecules. We generate other molecules internally, or procure them, to test against so we know we have a commercially worthwhile, superior molecule. 1181 has played out in the clinic quite well. Fc enhancement avoids complement mediated toxicities which hit about 15% of patients in first generatin CTLA4 agents. It also broadens the responders to those with polymorphisms, and we are seeing those respones. Some of the more advanced TIGIT competitors were designed before we understood the importance of Fc competence.

CD-137 agents have been limited by liver toxicity. Ours is engineered to be safer.

Gilead program milestones? There is a minor milestone possible this year from a different partner. Then a GSK larger milestone next year. New transactions will be more meaningful income for next year.

We are planning a next wave of 1181 for tumors with large market opportunities. More later 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