Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Agenus Second Quarter 2019 Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Dr. Jennifer Buell, Chief Operating Officer of Agenus. Dr. Buell, please go ahead.

Thank you, Brandon. Today's call is being webcast and will be available on our website with our accompanying slide material for replay. Before we start, we would like to remind you that this call will include forward-looking statements, including statements regarding our clinical development plans and time lines for data release and partnership opportunities and time lines. These statements are subject to risks and uncertainties, and we refer you to our SEC filings for more details on these risks. As a reminder, this call is being recorded for audio broadcast. I am Jennifer Buell, Chief Operating Officer of Agenus. Today we are delighted to provide an update on our business. Joining me are Dr. Garo Armen, Chairman and Chief Executive Officer; Dr. Paisley Myers, a member of our innovation team; and Christine Klaskin, our Vice President of Finance. In the first half of 2019, we have continued to deliver new discoveries to the clinic and advance our proprietary and partnered programs with path-breaking speed. Let me expand on this progress. In 2019, we have filed two INDs and we're on track to file additional INDs before end. Our first filing this year was for our anti-CD137 molecule. This is AGEN2373 that includes important safety and efficacy advantages designed into the molecule. We spoke about this during our Q1 call and have now cleared the IND. This molecule AGEN2373 is a fully human monoclonal antibody that boosts the immune response to cancer cells by enhancing CD137 co-stimulatory signaling and activated immune cells, both adaptive T-cells and innate NK-cells. The potential to duly target innate and adaptive immunity makes CD137 a highly attractive target for cancer immune therapy. Additionally, the unique binding properties of our molecule AGEN2373 are designed to enhance efficacy while limiting the systemic toxicity observed with competitor molecules. Now…

Thank you Jen. As you can see, a lot is going on and a lot must go on in order for us to defeat cancer. If it were easy to do it, it would've been done already. So, by definition it isn't. But Jen very well summarized all of our key accomplishments, including the attributes and design advantages of our immuno-oncology agents. While we have put a lot of emphasis on our checkpoint antibodies, deservedly so because they are the most advanced in the clinic and there are a lot of them in our portfolio. We must also not overlook the significance of the rest of our portfolio of IO innovation. These include our cell therapies, particularly our allogeneic cell format about which we haven't talked very much, which includes our proprietary targets. We expect to file our first cell therapy IND this year. Also important in our portfolio is our off-the-shelf vaccines targeting our proprietary PTTs. You’ll hear more about that in a bit. As Jen mentioned, we filed our first IND on these class of vaccines very recently. Before I go on, I would like to refer you to the slide that exemplifies our innovation. So we're going to do things a little bit differently. We're going to reflect on some of what has happened operationally with Agenus and why there is a disconnect between our accomplishments and the value. So the first thing, if I can refer you to the slide that exemplifies our innovation manufacturing and development capabilities, this bar chart shows our performance relative to leading in much larger IO companies. It represents the number of INDs filed in the past three and half years in immuno-oncology and as you can see here, we are number one in the number of INDs that have been…

Thank you, Garo. I'm Paisley Myers. I'm a Senior Scientist at Agenus and an expert in the discovery of phosphorylated antigen targets that are unique to cancer. I completed my graduate research in the lab of Dr. Don Hunt at the University of Virginia where I focused on the discovery of unique tumor exposing antigens in patients with cancer. Cancer hides from the surveillance of the immune system. We can expose the cancer if we can make the tumor fingerprint visible to the immune system. We have a unique and proprietary set of antigens that can do just that. We refer to this class as phosphopeptide tumor targets or PTTs. These targets represent an important class of druggable target for patients with cancer. And for ease of understanding, you can think of these approachable targets like MSS signature in solid tumors. These are common, targetable and can be used to direct a single product for multiple different cancers. My work at Agenus allows me to transform these targets into products that can benefit patients. Most importantly, Agenus is the only nimble immuno-oncology company that has the tools to bring combinations of immune-modulating antibodies with cell therapy and vaccines. The tool is necessary to deliver high impact for patient. Specifically, we can leverage these targets to develop proprietary allogeneic cell therapies that can address solid tumors through an approach that is highly specific and therefore expected to deliver without the toxic side effects observed with current therapies. We can combine our allogeneic cell therapy approaches with antibodies for optimal responses. And we can deliver off-the-shelf vaccines for hematologic or solid tumor. PTTs are attractive targets for immunotherapeutic development for three reasons. First, PTTs are tumor-specific. The dysregulated cellular signaling event which leads to their presentation at the cell surface is a…

Thank you very much, Paisley for the very nice summary of the fantastic work that's going on with our antigen and T cell discovery efforts with phosphopeptides. As I mentioned, our strategy is to balance between monetizing a portion of our discoveries every year while increasingly keeping rights to North America for some of our very valuable assets. We expect to generate meaningful clinical data in the next 12 months on both partnered and wholly-owned programs. This we expect to help our efforts to monetize on our ex-U.S. rights with significant value consideration. Our strategy in this regard will be tested with our second generation CTLA-4 antibody currently in clinical development with prospects of generating early but potentially meaningful clinical data by year-end. Our ability to control key components of immuno-oncology combinations that is checkpoint-modulating antibodies, neoantigen vaccines, adjuvants and adoptive cell therapy approaches both TCR and CAR-T based. All of these in-house we believe is a key advantage from a development, flexibility and pricing perspectives. Cancer is a complex disease and we believe that the right combination will be a key to delivering optimal benefit for patients. Our cell therapy business, AgenTus has made important progress on the advancement of the pipeline with IND filing is expected this year as you heard before. Before turning the call over to Christine for recapping our quarterly financial report, I wanted to summarize a few key strategic points. One, we have developed and have been successfully practicing a complete set of capabilities and immuno-oncology agents in our efforts to rapidly deliver high impact products. We have an outstanding pipeline of novel and second generation immuno-oncology agents that we expect will deliver substantial benefits to patients with cancer. Three, our operational excellence has put us on a path to a BLA filing that remains on track and could even be ahead of schedule. And four, we are emphasizing smaller focus trials to achieve high response rates, specifically targeting patients who are not being effectively treated today by first-generation immuno-oncology agents. Now I will turn over to Christine Klaskin to provide a brief financial highlight summary.

Thank you, Garo. We ended the second quarter of 2019 with a cash balance of $122 million as compared to $53 million at December 31, 2018. For the six months ended June 30, 2019, we reported a net loss of $34 million or $0.24 per share compared to a net loss for the same period in 2018 of $79 million or $0.76 per share. During the first half of this year, we recognized revenue of $96 million, which includes revenue from our transaction with Gilead and non-cash royalties earned. We also recorded $20 million of non-cash interest expense due to our liability related to the sale of future royalties. Our operating expenses for the first half of 2019 increased by $29 million as a result of the advancement of our programs. For the second quarter ended June 30, 2019, we reported a net loss of $52 million or $0.38 per share compared to a net loss for same period of 2018 of $25 million, or $0.24 per share. Both of these periods results include non-cash items. I'll now turn the call back to Garo.

Thank you, Christine. In closing, we expect the following key catalysts for 2019: one, completing accrual of PD-1 and CTLA-4 trials by year-end and sharing data from our preclinical or pre-planned interim analysis. Both of these are designed, that is the pre-planned interim analysis is designed to lead the product approval in the U.S. on the data outcomes. Two, upon a successful outcome of these trials, we expect to file our first BLA in 2020. Three, We plan to initiate first-in-class combinations with our second generation CTLA-4 with our proprietary PD-1 molecule in the next few months. Four, advance additional breakthrough discoveries and file at least two additional INDs for the remainder of 2019. Five, advance our next-generation best-in-class molecules into the clinic including our selective Treg-depleting bispecific, AGEN1223, a very interesting product. Six, advance our cell therapy programs and have AgenTus funded independently. And seven, very importantly, we expect to complete one or more business development transactions in 2019. We are committed to our mission of delivering for our patients and for all our stakeholders. Our efforts and staying power over the last 25 years speaks for this commitment. We thank you for your staying the course and joining us on this journey. Now we would be happy to entertain your questions.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Harshita Polishetty with B. Riley FBR. Please go ahead.

Hi. Good morning, Garo. Thank you for hosting the call and congrats on the tremendous progress this quarter. A couple of questions on my end, the first one is more of a general one with regards to your pipeline. I guess, Agenus’ pipeline is so expensive. It does provide the opportunity to unlock different opportunities in several areas of oncology. As you said in your prepared remarks, a lot is going on and a lot must go on to defeat cancer and I agree. But I guess, the other side of the argument is that it's also sometimes hard to streamline your focus towards maybe what's a key in the short-term. While it is a bit of a hard question, I can imagine. Could you maybe help us understand what are the top three priorities for the company going into the rest of the year and into early 2020?

Sure, very good question, Harshita. And no arguments with your reflection on the fact that we need to focus on certain things. Just to start, remember our focus is immuno-oncology. That is treating cancers using immuno-oncology product tools. So to have the flexibility to be able to utilize our reagents, our tools, our treatment, maximally gives us a major advantage. And so that's a very important point to consider because to go with a narrow process or saying, let's just concentrate on one or two leads, I think is a recipe for failure. And perhaps it is the reason why so many immuno-oncology companies have failed to deliver appropriate second-generation products, the next-generation of immuno-oncology. Our strategy is designed to not do that and in fact, it's designed to maximize our probabilities of success. Now with regard to your specific question of concentrating on three things, if I were to pick three things to really focus on for the remainder of this year and into next year. Among others, it would be one to complete the enrollment of our registrational trials so we can file our BLA and we eventually become independent financially. Two, advancing our next-generation CTLA-4 to generate very meaningful data as soon as possible and we believe that product is going to be very value-added for us, for potential ex-U.S. partners as well as for patients; and three, to complete at least one or more important business development transactions that could help us in our pathway to financial independence going forward. So those are the three key priorities. Does that answer your question?

Yes. Yes, it does, Garo. Thank you. That's very helpful. I guess just one more from me, piggybacking off of what you just said, that the CTLA-4 and PD-1 readouts quickly approaching. Are you able to provide a more crystallized timeline on regulatory submission and commercialization? Or do we have to wait till data comes out?

It will – I'll let Jen speak to that, but the regulatory filing will be in the second half of 2020 and commercialization shortly thereafter as soon as possible. But Jen, would you like to add to that?

Thanks Garo. Thanks Harshita for your question. That's absolutely correct. We mentioned during our last call that our accrual is going very well with our lead CTLA-4 and PD-1, we anticipate filing the BLA earlier than we have previously disclosed and we're on track to do that. So as I mentioned at the beginning of the call, we now trigger the interim analysis and expect to be sharing data more publicly relatively quickly.

Great. That's helpful. Thank you so much for the color and I look forward to the exciting updates to come. Thank you.

Thanks Harshita.

Our next question comes from Matt Phipps with William Blair. Please go ahead.

Good morning, guys. This is Rob Andrew on for Matt Phipps. Congrats on all the progress. And thanks very much for taking our questions. So obviously just going back to the CTLA/PD-1 combo trials, I know you mentioned the interim data is expected later this year. Just to clarify is that likely to be a medical conference? And can you give any further information on what data we can expect there with respect to kind of patient numbers, any other details that you can provide at this time? And then secondly, can you provide any additional details on indications you guys thinking about beyond second line cervical for AGEN2034 and the PD-1/CTLA combo? Thanks very much.

Jen is the perfect person to answer that question, please.

Thanks very much. Thank you for your question. So CTLA-4 and PD-1 data, the interim analysis, what we'll say is it will be a meaningful analysis with a meaningful number of patients. I hesitate to share with you right now the formal number. The interim analysis is underway actively now. This analysis will demonstrate, it will share a more robust data set to demonstrate that our products are active in second line cervical cancer. And just a reminder, this will be PD-1 as a monotherapy and PD-1/CTLA-4 as a combination therapy where we believe we can expand the response rates and the durability of response in patients with second line cervical cancer. We anticipate sharing these results out in a major conference. In the absence of that we’ll certainly inform our stakeholders on via mechanisms that are otherwise available. So we will be certain to publicize the data as soon as available. I'll also share that we anticipate sharing some additional data at some major medical conferences that will reveal the activity, the clinical activity beyond second line cervical cancer and other indications where we've seen activity that appears to be what our experts call unusual responses in certain indications. So those data in cervical and beyond cervical will be presented at some major upcoming conferences. And all of these will support what Garo outlined is our top priority. And that will be to register and launch CTLA-4/PD-1 combination and PD-1 monotherapy for patients with second line cervical cancer. We will develop, register and launch in the U.S. we will seek partners for ex-U.S. And we will also enable access to these active agents to partners who have complimentary technology, who need access to active PD-1 and CTLA-4 molecules. So all of that activity will be updated in our next call as we continue to make progress.

That's great. Thanks very much, guys.

Our next question comes from Brian Visneski, a Private Investor. Please go ahead.

Hello, Garo. Thank you for taking my questions. My questions are threefold, one is regarding the best financing, if you could give us an update on that. The second part is if you could maybe give us more color on the independent financing of AgenTus, how was that going? And also third, maybe in a general sense if you'd give us an idea, President Trump has mentioned that he's going to be pretty forth, right-to-try and how that might be utilized by some of the immuno-oncology community. And if you could go ahead and maybe give us a color – maybe if that can help accelerate any of the programs that you've outlined. Thank you.

Thank you very much. Let me answer the first two questions and then I'm going to make a comment on the third one and then have Jen, address it in more detail. So the first question is about BEST. As you know, we announced BEST, which by the way, is it very innovative financing mechanisms. And I know there was a lot of confusion at the time as to whether or not Agenus is going into the cryptocurrency business. And I am sorry about the fact that there was this confusion that impeded our ability to take it forward at that time, combined with obviously the stigma associated with so-called cryptocurrencies. And so we slowed down the process and in our last earnings call, I made a statement that we expect to complete a financing with BEST or with any other mechanism that is designed for project financing by the end of the year. And that remains on track. Now we believe BEST will have utility in many different formats in our industry and perhaps in other industries going forward. It is a novel idea. It is an incubation so to speak and we will be in the forefront when the time is right. But suffice it to say that we do plan on completing a bet based or a product based financing by year-end for PD-1 and perhaps for CTLA-4 as well. The second question is about AgenTus. When will the independent financing for AgenTus be put into place? So, we have been going back and forth on this possibility. And, we have decided that since we're so close to entering the clinic and the value inflection for a company, once it enters the clinic with an IND filing goes up significantly, we will slow down the process in…

Thanks for your question Brian. Right-to-try is legislation for those of you who aren't aware, that enables patients who have life threatening diseases with really nothing available for them that's approved. They can enable access to these treatments. There is now legislation that will support this access. However, as Garo mentioned, there are many steps in the process that are independent of regulations and of the FDA and that requires willingness of a treating clinician to treat the patient, to take the time to actually submit the required documentation that's required to enable the product to ship to that patient. And the institutions, these hospitals to support physicians in enabling access. So, giving time to clinicians to prepare the documentation that's required, this has no impact on Agenus. And the reason for that, the right-to-try itself is we have long since our inception, we've been committed to enabling access for the individual patients who need access to our therapies, to when patients require access or request access and they have a treating clinician who's supported by their institution to enable access. We without question will support that initiative and enable access to that products. So nothing has changed from our end. We are hopeful and optimistic that perhaps the regulations and legislations will remove some of the challenges in the process, but we still need to have treating clinicians who have the time and interest in willingness to support access and hospitals and institution to enable that access. And that's still a hurdle, right now for patients and their families.

Thank you very much for taking my call.

Our next question comes from Zachary Ralston with Retail. Please go ahead.

Yes. My question is in regards to Shingrix, is selling faster than anticipated. And I wonder if there is any timeline to paying off Agenus’ debt associated with the development of that?

Sorry, can you paraphrase that question clearly so we know what it is.

Okay. So there's debt associated with the development of Shingrix and the vaccine is selling faster than anticipated. So, I'm wondering if you guys had a time frame from when Agenus’s debt will be paid off with that vaccine.

Okay, so this is a big confusion and I apologize for this, it has to do with accounting standards rather than anything else. That something because of the unknown nature for the accounting system of this particular royalty monetization transaction, it is recorded as debt on our balance sheet, which isn't. It categorically isn’t. So we show on an entry in the balance sheet of a debt upwards of 150 million plus. And the reality is we have, zero and I underline is zero exposure associated with that accounting entry. So we have zero debt with our royalty monetization process. What happens is that as the royalties are paid off for the company that we sold the royalties to, that balance sheet entry gets extinguished. But under no circumstances would that translate to a debt for us.

Okay. So is there a timeline on when that balance sheet entry will be fully extinguished?

It is to be fully extinguished. But remember it is not debt that will be fully extinguished. It's the entry that will be fully extinguished.

So, Agenus has no debt associated with the royalty monetizations.

Okay. Thank you for your time.

Sure. This concludes our question and answer session. I would like to turn the conference back over to Garo Armen for any closing remarks.

Thank you very much Brandon. Just in closing, I know that in the past, we have been advised to restrict questions from non-qualified institutions and analysts. That policy will change. I have decided to change that policy so that every single investor, retail investor, has an opportunity to ask questions. Of course, we ask your questions to be well thought through and so that we don't waste people's time on the call. But we welcome your questions going forward. And if you have any additional questions, post this call that you'd like to submit to us, to our investor relations portal feel free to do that as well. But we are improving our communications with all constituencies, very importantly, communications with the investment community analysts. And that process is ongoing. We have a newsletter, gets published every two weeks, that is both an Agenus centric piece as well as it will be increasingly an educational piece for the industry, on the subject of immuno-oncology, so that this very complex scientific and medical field becomes clearer to people that follow us, invest in us and for people that do this for other companies as well. And so that is our mission and we will continue with that. Of course, every time we do something novel, there's misunderstandings and confusions and other things that happen. And so bear with us and we will clarify those misunderstandings and confusions and please be proactive in conveying your ideas to us so that we address them going forward. But thank you very much for your time and we look forward to your being a part of the Agenus family going forward.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.