Analyst Conference Summary



conference date: March 15, 2021 @ 5:30 AM Pacific Time
for quarter ending: December 30, 2020 (Q4, fourth quarter 2020)

Forward-looking statements

Overview: Nearing FDA submissions in Q2. Possible cash generating transactions in Q2.

Basic data (GAAP):

Revenue was $31.3 million, up sequentially from $14.8 million and down from $34.5 million year-earlier.

Net income was negative $37.7 million, up sequentially from negative $51.6 million, and down from negative $30.9 million year-earlier.

Earnings per share (EPS) were negative $0.20, up sequentially from negative $0.28, and up from negative $0.22 year-earlier.



Conference Highlights:

CEO Garo Armen stated: "2020 was a pivotal year for Agenus, marking the beginning of our transition to a commercial company with the initiation of our rolling BLA filing for balstilimab monotherapy. We also reported positive data on multiple programs. We expect 2021 to be even more impactful, with the expected completion of our balstilimab monotherapy BLA filing in the first half. This filing, followed by an anticipated commercialization, will provide a solid foundation to support the development of our next-generation pipeline. Our best-in-class pipeline reveals true differentiation potential, notably our next-generation anti-CTLA-4 AGEN1181 and our anti-TIGIT bispecific AGEN1777." Expects cash-generating corporate transactions starting in Q2 2021.

Pitched QS-21 as a potential Covid vaccine adjuvant.

Jennifer Buell, President and COO pointed to AGEN1777 as a breakthrough that could work as a monotherapy. Expects Balstilimab data to be better than Keytruda and other commercial PD-1 antibodies. Expects AGEN1181 to become the leading IO combination agent.

Agenus expects to complete rolling BLA with the FDA for balstilimab in Q2 2021. It is eligible for priority review. Target is second-line cervical cancer. 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.

Balstilimab + zalifrelimab Phase 2 trial in second line cervical cancer achieved response rates of 27% in PD-L1 positive tumors with 22% in all tumors (PD-L1 positive and negative) with a median duration of response not yet reached, per data presented at ESMO 2020. Responses continue to improve as data matures. Discussions with the FDA regarding accelerated BLA filing for balstilimab plus zalifrelimab are ongoing; additional guidance and updated response rate data will be provided upon FDA acceptance of balstilimab monotherapy BLA.

Next-Gen CTLA-4, AGEN1181, as of the February 9, 2021 report, had six confirmed objective clinical responses in Phase 1/2 trial out of 46 evaluable patients: 1 confirmed response among 24 treated with monotherapy, and 5 confirmed responses among 22 treated with AGEN1181 in combination with balstilimab. Could be a best-in-class combination agent, works for cold tumors. 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). A Phase 2 trial in colorectal cancer is planned to start in 2021 designed to allow for regulatory approval. Also cohorts second-line NSCLC, endometrial cancer and melanoma. More data expected at AACR in Q2 2021. Goal is to become the leading IO combination agent.

Agenus plans to file for INDs in 2021 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. Expected IND in Q2 to commence clinical trail in Q3 2021.

INKT clinical Phase 1 trial for Covid 19 underway with promising early results. Data is expected in Q4 2021.

INKT clinical Phase 1 trial for cancer starting in Q2 2021. Now screening patients for immanent enrollment.

MK-4830 (antibody targeting ILT4 licensed to Merck) advanced into Phase 2 in patients with PD-L1 positive advanced non-small cell lung cancer in Q4 2020, with a $10 million milestone payment received. MK-4830 positive Phase 1 data presented at ESMO 2020. Agenus is eligible for up to an additional $85M in milestone payments plus royalties. Agenus retains 90% of all milestones from Merck and 67% of future royalties under its Royalty Purchase Agreement with XOMA LLC.

Data on seven programs were presented at SITC (Nov. 11 to 14), 2020, 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 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.

In 2020 and early 2021 Agenus expanded its staff including 4 high-level adds. This is partly in anticipation of commercialization of balstilimab.

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. Updates on AGEN2373, a anti-CD137 antibody, and AGEN1223, a novel bispecific, will be presented at future scientific and medical conferences.

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) is in Phase 2; INCAGN1949 (OX40) 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. One agent is iNKTs designed to eliminate COVID-19 virus, dampen harmful inflammation, and promote protection from reinfection, reported early positive results in Q1 2021. The other is designed to promote anti-tumor immunity in cancer and enable optimal combinations with Agenus checkpoint antibodies and has started a Phase 1 trial.

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 $35.6 million. General and administrative expense was $20.0 million. Other expense $0.9 million. Non-cash interest expense of $15.9 million. Contingent consideration (non-cash) $3.4 million.

Cash and equivalents balance ended at $88.9 million, down sequentially from $114 million. $ million cash used in operations. No debt.

Full year 2020 revenue was $88.2 million. GAAP net loss $182.9 millin. GAAP EPS negative $1.05.

Q&A summary:

Timing fom Bal filing to combo filing? Data is getting better as it matures. Due to the regulatory demands, we prioritized Bal filing. Then we will announce details of the comination filing.

Commercialization of Bali? Launch planning is underway, including how to position to meet unmet need. We are looking at pricing within the landscape, we want to establish relationships with payers. We want patients to have unencumbered access. Feedback so far is good.

1181 AACR just clinical? When clinical update? AACR will also provide a clinical update on the program, including more mature data, including duration.

Colorectal cancer 1181? The preclinical predictions seem to be playing out in the clinic. We are excited to see objective responses in cold tumors. We are seeing results with lower heterozygous tumors. MS stable cohorts are important both for single anc combination agents.

QS-21? WE are working on a sustainable supply of Q2-21 with help from the Gates Foundation. It will require a limited clinical program to show equivalence. It can allow for lower amounts of antigen to become effective.

Tigit target disclosure? Our bispecific is the first of its kind, it addresses an entirely new area, we will not disclose the target any time soon.

Cash accretive transactions? Stay tuned. Starting in Q2 we will see transactions.

Regeneron and Sanofi announcement? Accelerated approval pathway remains open for Bali and for the combination.

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 2021 William P. Meyers