Analyst Conference Summary



conference date: May 6, 2021 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2021 (Q1, first quarter 2021)

Forward-looking statements

Overview: Made FDA submission of balstilimab in Q2.

Basic data (GAAP):

Revenue was $11.7 million, down sequentially from $31.3 million and down from $15.1 million year-earlier.

Net income was negative $54.4 million, down sequentially from negative $37.7 million, and down from negative $45.3 million year-earlier.

Earnings per share (EPS) were negative $0.27, down sequentially from negative $0.20, and up from negative $0.31 year-earlier.



Conference Highlights:

CEO Garo Armen stated: "We have delivered on multiple key initiatives since our last update and expect to achieve additional impactful milestones during the remainder of the second quarter and the rest of 2021. Among important developments are the continuing clinical responses we are seeing with AGEN1181. We intend to advance AGEN1181 in combination with balstilimab in cancers for which current immunotherapies have shown no activity given AGEN1181's positive clinical responses in these tumors. Treating these cancers successfully will be of substantial value to patients while potentially representing large commercial opportunities for Agenus" On track for cash-generating corporate transactions starting in Q2 2021.

Agenus is preparing for commercial launch for second line cervical cancer, should balstilimab receive FDA approval.

Jennifer Buell, President and COO said speed of inovation remains an imperative. VISION platform is generating superior assets quickly, using AI and predictive algorithms. It has generated 1181 and other molecules in preclinical and clinical development.

Agenus submitted the BLA for balstilimab on April 19, 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. In Q1 2021 Agenus entered into a clinical collaboration with Nelum Pharmaceuticals for zalifrelimab in combination with NLM-001, Nelum's small molecule hedgehog inhibitor, and chemotherapy for first-line advanced pancreatic cancer.

Discussions with the FDA regarding accelerated BLA filing for balstilimab plus zalifrelimab are ongoing. 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 AACR 2021 report, had seven confirmed objective clinical responses in Phase 1/2. In Q2 2021 a Phase 2 trial in colorectal cancer was initiated; registrational trials are targeted to commence in 2021 with a focus on indications enabling a rapid path to BLA submission. Further data updates expected later this year. 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). Also testing cohorts of second-line NSCLC, endometrial cancer and melanoma.

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 related acute respiratory stress is underway with promising early results.

INKT clinical Phase 1 trial for blood cancerc got underway in Q2 2021.

A data update on a Phase 1 trial of AGEN2373 (a CD137 agonist antibody) will be presented at the 2021 ASCO Annual Meeting in June.

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.

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.

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. Data on AGEN1223, a novel bispecific, will be presented at a future scientific 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.

Cost of sales was $0 million. Research and development expense was $36.7 million. General and administrative expense was $16.4 million. Cost of service reenue $1.1 million. Other income $2.6 million. Non-cash interest expense of $15.6 million. Contingent consideration (non-cash) $1.0 million.

Cash and equivalents balance ended at $119 million, up sequentially from $88.9 million. $43 million cash used in operations. No debt.

Q&A summary:

1181 continuing to treat patient types? Responses in microsatalite stable endometrial, colorectal, melanoma. Looking for large market opportunities. We will follow the signals from the cohorts, particularly for cold tumors. ASCO data is embargoed (to be released later).

ODAC checkpoint inhibitors meeting? We see no negative imparct to our portfolio. Products will continue to be fast tracked.

2373 was designed for durable cancer respones. Prior CD137 agonists had been toxic. Our molecule was designed to not be toxic.

The world's state of mind re pandemics has changed from one of compacency to one of concern. So QS-21 demand is expected to increase, and we are shifting from natural production to scaling up artificial manufacturing.

Specialty cancers may have paths to approval that are very rapid. We are flexible, it depends on signals from cohorts, and the very competitive landscape. We have reached doses of 1181 that we are comfortable with, both as monotherapy and in combination. Expect updated data at meetings this year.

The balstilimab plus zalifrelimab trial is ongoing and data continues to be encouraging.

Believes INKT for Covid 19 related acute respiratory stress can also provide benefits for respiratory stress from causes other than Covid.

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