Agenus Inc. (AGEN) Q2 2021 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen. Thank you for standing by and welcome to Agenus Second Quarter 2021 Conference Call and Webcast. [Operator Instructions] Please note that this event is being recorded and may be used in future Agenus promotional material. I would now like to turn the conference over to Jan Medina, Director of Investor Relations. Jan, please go ahead.

Thank you, Myra and thank you, all, for joining us today. Today’s call is being webcast and will be available on our website for replay. I’d like to remind you that this call will include forward-looking statements, including statements regarding our clinical development, regulatory and commercial plans and timelines, as well as timelines for data release and partnership opportunities. These statements are subject to risks and uncertainties and we refer you to our SEC filings for more details on these risks. As another reminder, this call is being recorded for audio broadcast. Joining me today are Dr. Garo Armen, Chairman and Chief Executive Officer; Dr. Jennifer Buell, President and Chief Operating Officer; Andy Hurley, our Chief Commercial Officer; and Christine Klaskin, Vice President of Finance. Now, I’ll turn the call over to Garo to highlight our progress during 2021 so far. Garo?

Thank you very much, Jan, and thank you, everyone for joining us today, in addition to the named officers of the company. We also have Dr. Steven O'Day, our Chief Medical Officer to answer any questions that you may have at the end. I will start by displaying what I did at our Shareholders Meeting approximately eight weeks ago. And there we tried to explain our business in simple terms. So that there’s clarity about what we focus on our key operational drivers, and some of the supportive programs we have. Starting with our significant value creators 1181, that’s AGEN1181, which is our next generation CTLA-4 compound that is beyond what just the CTLA-4 does. And you’ll hear about that on many future occasions as you have heard before. And with our AGEN1181 program, we have already enrolled well over 100 patients in our clinical trials. And the results of updated clinical data will be made available in the second half of this year, at major at least one major clinical conference. Our second significant value driver, which we talked about at the Shareholders Meeting is our AGENT-797 program, which is our iNKT cells. Now, we cannot say very much about that, because we have filed an SI for a proposed public offering. Third major driver is our AGEN2373. Now, this is a 41BB agonist. We also call it CD137. This compound, which has been tested for the last almost a year, has shown excellent safety profile. And we’re seeing now hints of very early critical activity. And in the second half of this year, you’ll hear more about this compound. And of course, we have our QS-21 program, which has gotten a lot of attention because of COVID. And because of what this compound can do for other vaccines beyond what’s been in the headlines with COVID prophylaxis. Now, as you know, we get questions often about, which programs to prioritize, and how do we fund these programs? And of course, early on in the beginning of this quarter, we closed on a very important transaction. It was the Bristol Myers in licensing of our TIGIT bispecific and the bispecific arm has not been disclosed yet. That is a very exciting compound. We have thought that Bristol is one of the best candidates to advance this program, if not the best candidate. And we also disclose that, at the time of our consummation of this transaction, that it was a competitive process. So this transaction allows us to get the $200 million, which we’ve already received. In addition to that, there are well over a $1 billion worth of contingent milestone payments, and royalties upon commercialization. But also, very importantly, we have a number of other potential transactions in the queue. And some may happen during the course of the second half of this year, and some beyond. Now, we also talked about potential spin-out strategies. We talked about the S1 filing for a proposed IPO for MiNK, MiNK by the way, for those of you who may remember, is the original AgenTus Company. This is our cell therapy company. And we also anticipate other potential spin-outs from businesses that have been cultivated with Agenus and are ready to be on their own. Now, we’ve also talked about potential project financings as a strategy to bring in additional cash, particularly for programs that we plan on pursuing ourselves without necessarily having to license them. And there are a number of such programs in our portfolio. Now, the third category that we mentioned, were what we call supportive programs. And supportive programs certainly include balstilimab, our PD-1 antibody. And we’ve said that while our PD-1 antibody, on its own may not be a blockbuster potential, it can be a blockbuster potential product in connection with some of the other elements in our portfolio. We’ve also talked about our balstilimab plus zalifrelimab, and you will hear more about that very soon, at a major medical conference as well, which we announced with our earnings disclosure today. Now, we’ve also been in discussions for potential clinical collaborations for some of our earlier assets, meaning, balstilimab, as well as zalifrelimab, these compounds can be very valuable in connection with other people’s assets that will benefit from the synergy provided by PD-1 and CTLA-4 combinations. And those will benefit us further by expanding the market with these combinations for our PD-1 and first-generation CTLA-4 antibodies. The fourth pillar we spoke about, are our key operational capabilities, which on one hand allow us to advance our programs in the clinic very rapidly. On the other hand, they also allow us to manufacture our candidates, reliably and rapidly. And thirdly, they allow us to be able to launch our own product is that Dr. Andy Hurley today will be speaking about briefly. So with that, I will turn this call to Dr. Jennifer Buell. Thank you, Jennifer.

Thank you very much Garo. I’ll just build a little bit upon what Garo was mentioned, our research and development productivity, which is really unique to Agenus as now become business as usual for us in the past six years, we’ve delivered 17 new discoveries to the clinic, which is really remarkable progress. But in addition to those filings make critical advancement of these programs, we’ve also filed our application for first program or BLA application, we now have balstilimab, as Garo mentioned, has been accepted for priority review by the FDA with an action date of December 16. So, we’re quite excited now as Garo mentioned, Andy will tell you about the commercial infrastructure that we’re setting up to build for balstilimab and then beyond zalifrelimab of course, as you hear from Dr. O'Day in the upcoming months, our data and progress for AGEN1181 has been quite remarkable. So the infrastructure that Andy is going to be building will support well and set us up for the launch of AGEN1181. In addition to these discoveries and advancements one of those seven teams announced a discovery that during the clinic, advancing to the clinic is AGEN1777. Now that’s an TIGIT bispecific molecule, which is now in a strategic collaboration with Bristol. And a few important components Garo mentioned Bristol is really the most remarkable company to bring this forward. They’re committed to advancing it, their experience in this space in IO and intuitive biology, and they have a very aggressive development plan that we’re really quite excited about. In addition, the strategic collaboration marks some important differences from our prior collaborations in that, we have the opportunities to combine this bispecific with certain agents in our portfolio, which is really exciting for us. In addition, upon approval, we have the opportunity to co-promote. So, we’re really excited about the FDA recent clearance of this IND and we’ll be looking forward to making further announcements about the clinical progress of this molecule. Now, beyond these most recent advancements, Garo has mentioned that we expect to present data on AGEN1181, which is making significant progress in the clinic. And that data, those data release will be based upon cohorts, disease specific cohorts that we’ve now been expanding upon. So, we’ll certainly, we have Dr. O'Day, here with us today and we take an answer, questions about this program. Additionally, as we have – we and others have shown when you ask CTLA-4 at the PD-1, we see this with AGEN1181. We also see this with bal-zal particularly in one of our most advanced programs in cervical cancer. We expand response rates and duration of response. And we’re really excited to be presenting an update on our clinical program about plus zal in patients with refractory cervical cancer at ASMO this year. So the titles have been announced and we’ll have a many oral presentations now quite enthusiastic about. Now on MiNK Therapeutics, Garo introduced this, we’ve submitted a confidential S1 for a proposed IPO. Well, we can’t say too much about this, this program – these programs, what I can say is, what we’ve explained to you before. Now, MiNK Therapeutics formerly AgenTus is advancing invariant natural killer T cells, these are actually a subset of T cells in their allogeneic form and they carry both the capacity to modulate innate and adaptive immunity. They have the ability and cancer to directly kill tumors through tumor lysis. They modulate the tumor microenvironment. They suppress myeloid-derived suppressor cells, MDSCs. They also recruit and activate T cells in NK cells. We believe that T cells have potential to deliver the durability and memory responses of T cells with the cytolytic power of NK cells. We have multiple clinical trials underway. We’ve announced those, the progress from those programs and these programs include, taking these cells into patients with solid cancers. And in addition into exploring these cells alone in solid tumors will also be evaluating these cells in combination with validated checkpoint modulating antibodies, such as CTLA-4 and PD-1. We believe that these cells can build on the benefits that we’ve seen with the CTLA-4 and PD-1. And we’ve presented data previously demonstrating in preclinical models where CTLA-4 and PD-1 are about 40% to 50% active, when you add iNKT cells into that combination you see complete tumor eradication and along that model preclinically. So, we will be expect to be presenting data later this year on our ongoing clinical programs in patients with multiple myeloma, as well as patients these cells in patients with severe ARDS secondary into COVID-19. And finally, our VISION platform, we’ve presented data on this platform a number of times this is a tool that enables us to identify, how the best approach is to design molecules to address biology. This platform also enables us to interrogate responses, and identify ways in, which we can predict patients, who will respond to our therapies. We expect the combination of our biologics platform and our new and expanding compute capabilities to be able to identify patients with significant probability of determining who will respond to therapies before those patients who want therapy. This is an evolving platform and we look forward to continuing to update you on the progress of this platform. Now, I’m going to turn it over to Andy Hurley to tell you about our commercials.

Thanks, Jen. I’m happy to report that we’re making great progress in planning the U.S. commercial launch of balstilimab the Advanced Cervical Cancer, ACC for short. We have identified and hired a highly experienced leadership team across the key commercial and medical functions, and very pleased with the collaboration and agility that the team has shown to develop a well defined strategic and tactical launch plan. A launch is only as strong as the team driving it and we have attracted top commercial and medical leaders to Agenus from across the industry to be a part of the continued build out of the company. Our launch planning for balstilimab in ACC has two main goals in mind. First, that every patient that can benefit from balstilimab has access to it with few barriers. We are leveraging innovative programs at launch to reduce or eliminate normal reimbursement hurdles that physicians often face, when trying newly approved medications. And second, in line with its market potential, a cost efficient launch leveraging a targeted personal and non-personal promotion approach across medians and channels that physicians have told us, they prefer in our market research. COVID challenged every pharma company to we think, how to promote their products and provide medical education to physicians. And from this physicians determined, how they want to receive information now and in the future. And we will be leveraging these learning’s and how we will bring balstilimab to the ACC market. To comment a bit further on the progress made in our launch planning, we have hired an experienced team of commercial leaders, including account directors that will be engaging with payers pre launch to support widespread formulary coverage of balstilimab at launch. We have conducted extensive market research across a wide audience or physicians and payers to determine our product positioning and messaging for all key stakeholders. We built a data management infrastructure that will allow for deep and fast insights generation to enable us to react in real time to signals that we hear at launch. This is where I’ve seen a lot of launches fail, and not being able to be agile, and quickly act on an insight that has happened in a market. We are spending a great deal of time ensuring that there are no silos and how we support our launch execution. We have partnered with best in industry vendors and agencies to support our reimbursement hub, creative marketing campaigns, medical education planning, CRM platforms, and other critical areas. And these vendor partners will be embedded within our teams, so they can also support future launches following the balstilimab launch in ACC. However, the overarching goal of this launch is for it to be a foundational step for Agenus. It will serve as the catalyst to initiate the build of a fully integrated commercial infrastructure, which in turn would allow us to easily scale our teams and operational systems for future launches, maximizing the value of our vast pipeline. Specifically as Garo and Jen mentioned, we are very excited that the possibilities for AGEN1181 in big indications with high unmet needs. As much as balstilimab monotherapy could offer the small population of second line, Advanced Cervical Cancer with cancer patients a therapeutic option. We could potentially see AGEN1181 providing a much broader range of patients life changing outcomes, potentially a range of outcomes unmatched in recent IO history. I’ve had the good fortune to have led and been a part of over 20 product launches in my career. I believe that the promise that AGEN1181 has clinically and commercially is seldom seen in a career. And it is a big reason of what got me to come to Agenus. There are certainly exciting times ahead for Agenus and the patients, we hope to help. I’ll now turn it over to Christine Klaskin to review our financial results.

Thank you, Andy. We ended the second quarter of 2021 with a cash balance of $74 million, as compared to $100 million at December 31, 2020. Subsequent to the quarter end, we received $200 million related to our BMS partnership. For the second quarter ended June 30, 2021, our cash used in operations was $56 million and we reported a net loss of $84 million or $0.37 per share. This compares to cash used in operations for the same period in 2020 of $37 million, and a net loss of $48 million, or $0.28 per share. Non-cash operating expenses for the second quarter ended June 30, 2021 were $30 million, compared to $18 million for the second quarter of 2020. Our cash used in operations for the six months ended June 30, 2021, with $98 million, with a net loss of $138 million or $0.65 per share, compared to cash used in operations of $72 million, and a net loss for the same period in 2020 of $94 million, or $0.59 per share. We recognized revenue of $22 million and $42 million for the six months ended June 30, 2021 and 2020 respectively. This revenue includes related – revenue related to non-cash royalties earned, revenue recognized under our collaboration agreements, and in 2020 $14 million from an upfront license fee we received. I’ll now turn the call back Garo.

Thank you very much, Christine. And thank you once again for participating in our call. I will make a few closing remarks before I will turn it to the operator for questions. Just to summarize, some of the highlights for the second half of this year that you may expect. As Jen mentioned, we have a PDUFA date for balstilimab monotherapy in December. And we’re diligently working in preparation for all aspects of the final phases, or what is required. As Andy mentioned, we’re preparing diligently for commercial launch for second line cervical cancer. But as you said, we’re putting together an infrastructure, so that we can capitalize on our leveraging for our future launches. We’re going to be defining our strategy for bal-zal. And as Jen mentioned, you can expect the exciting presentation at the upcoming ESMO conference. We will continue with our development for AGEN1181 with a strategy to transition our studies to an approvable study for AGEN1181. And additional data presentations for our own pipeline of agents and partnered agents are also due in the second half. We will be advancing our AGEN1777, which is now Bristol Myers’s asset. It’s the TIGIT program into and through the clinics. We will be completing enrollment or various other programs. And I will not give you the specifics on what we expect with our iNKT program based on our confidential S1 filing, which puts us in a quiet period. We will be progressing our commercial manufacturing capabilities for antibodies. This is a very important aspect of our strategy. It will be critical for us to do this, so that we can launch, potentially launch AGEN1181 as speedily as possible upon demonstration of compelling data, as Andy said, in patients who are otherwise not benefiting from immunotherapy, or for that matter, any other therapy. We’re also progressing with our sustainable supply of QS-21, which we believe is a very, very important agent for all both prophylactic as well as therapeutic vaccine adjutancy. And, as I mentioned earlier, we will be anticipating additional transactions, financial and corporate transactions in the second half of this year. Thank you again for your attention. And now we’re open to any questions you may have.

Thanks, Myra, if you could open the Q&A please.

Thank you. [Operator Instructions] Our first question comes from the line of Kelly Shi from Jefferies. Your line is open. Please go ahead.

Congrats on the progress. And thank you for taking my questions. I have two questions. So, first one is, what is your marketing strategy of about monotherapy in second-line cervical cancer upon approval, given that a combo is probably not too far behind the in the progress? And also, what are we going to hear median overall survival data from monotherapy trial? Does this data have an impact on your commercial strategy for mono versus combo? That’s my first question. And my second question is, could you give us some color the combo data at ESMO? Thank you.

Let me address the question top-line, and then I’ll turn it to my colleagues to get into the specifics. But remember that we cannot say very much about the ESMO specifics. Otherwise, we’ll simply be kicked-out of the presentation, which is not a very desirable outcome for us. Now, so if you’re patient, you will see today that we’ve classified data as being very exciting. And getting back to your first question, as you know combinations with IO therapies, generally, and when I say generally, I’m talking about the great majority of the time; certainly, with the existing marketed products achieve better results than monotherapy. And when I say better results, we’re talking about improved response rates, but also very critically improved duration of responses. And that’s typical of that. So in an ideal world, where everybody would accept these facts, we would imagine that the combination should be the desired path forward. But there are hurdles, including regulatory hurdles, and allowing for these combinations to be practiced and so we will worked very respectfully, with the regulatory agencies in the U.S. and elsewhere to make sure that these combinations become the best options available for the appropriate patient population, but with that, Dr. Buell and Dr. Hurley, if you have any other?

Sure. I’m going to turn it over to Andy to get started on your question, Kelly, question number one.

Yes, so thank you, Kelly. I looked at every launch as you have to really establish a foundation with the community you’re going to be targeting and bringing a product to and balstilimab monotherapy launch allows for us to build those relationships, get to understand the marketplace, get to really understand the dynamics that are going to be needed for subsequent launches in that particular space. So part of our strategy is really bringing a much needed therapy to that particular wide audience of physicians. And then and doing so, they’re going to get comfort with balstilimab. And because if they’re going to be bringing a combination that has balstilimab in it, and they already have comfort with the monotherapy option, and seeing it really work, where other agents may not have worked in the past, that is a good first step for us to really establish credibility and a marketplace that we’re going to be looking to really make a significant impact in. So, I believe that’s really what it is, and I’ll go back to the initial point that I made is the fact that we’re not looking at launches in isolation. We’re not looking at one versus another as is our primary focus; our primary focus is to build a fully integrated commercial infrastructure that we can pivot to whatever products we’re looking to bring to market. And at the combination in cervical cancer looks promising and we want to continue to explore it then we’ll have the necessary support, both on the in-house commercial leadership, as well as the field presence to be able to really make that impact.

Thank you.

Thank you very much. Our next question comes from the line of Mayank Mamtani from B. Riley Securities. Your line is open. Please go ahead.

Good morning team. Thanks for taking our question, and congrats on the progress and to Jen in particularly for the new role that when can Andy, great to have you on the call. So maybe first a couple of questions for Dr. O'Day. So for AGEN1181, can you just looks like it’s dot, maybe at ESMO, maybe it’s after, just curious what sort of update we should expect in terms of you have a number of different tumor types, PD-1 refractory setting versus, doing this in combination, and also like what number of patients you may have on the MSS colorectal cohort, that would be question number one.

Thank you for that question. We’re very obviously excited about the AGEN1181 program as we’ve publicly disclosed. This agent, which is a next generation CTLA-4 has been engineered to be more active both from a priming and memory point of view, as well as depleting T regs in the tumor microenvironment and having a better toxicity profile. So, we continue to advance the Phase 1, Phase 1b program, as Garo said, we now have over 100 patients treated with either single AGEN1181 or combination. We will be hopefully presenting this data by the end of the year at a major conference. And we can’t say more than that, at this point. Well, I think the take home messages from this program to date have been it’s been designed to be a next generation CTLA-4, and it’s performing as such in the clinic in the sense that tumors that historically have had little to no PD-1 or CTLA-4 activity, we’ve reported responses, particularly in cold solid tumors, like MS stable colorectal cancer, ovarian, as well as PD-1 resistance settings. So this is all very encouraging to us. And in terms of numbers around cohorts, again, that that we have not publicly released updates on that, but look forward to doing that at a major meeting. But as you know, colorectal MS stable cohort is one of the cohorts that we are rapidly expanding in this trial, and look forward to updating you further later in the year.

Thank you for all the details. And then on the bal monotherapy PDUFA, have you prepared for that, are there any parallel should draw from, for instance, that a retifanlimab recent experience with FDA, or are you expecting an AdCom by any chance?

The question is – are we expecting date?

In AdCom?

AdCom. Okay, I think between now and the PDUFA date, you can expect that we are going to do a lot of work in communication with the agency. There are mandated inspections in the process. And we’re going through all of that right now. And I think out of respect to the process, we will not disclose the details.

Okay, fair enough. And then maybe for Jen and Garo, I have a follow-up for you, but maybe Jen, are you able to comment on sort of the patients dosed across solid tumors and COVID-19 ARDS, and what sort of territories have you been enrolling for the iNKT any color there?

Hi Mayank, we can’t say too much right now for obvious reasons, given where we are in the process. But rest assure, we’ll be aggressive with data releases as we have always been at across the portfolio.

Great, thank you. And maybe for Garo, Garo as you look at scaling up a lot across R&D, G&A CapEx, great to see this Vacaville facility coming online here in California, expanding your XOMA antibody efforts. But I’m just curious, like, how should we think about this going forward? Especially if QS-21 adjuvant becomes something that would require investment, how would you think about expanding CapEx and obviously, continuing to find the R&D pipeline?

Okay. So, let me address that in several ways. And I don’t mean to be complex about my answer, but just bear with me. Now, if you look at the history, Mayank, of how we have managed our expenditures versus our cash balance? It has been done in a very orderly way. Meaning, at any given quarter, we have managed our cash outflows and cash inflows very well. Of course, the Bristol transaction that brought in $200 million and is expected to deliver another milestone this year, in terms of cash infusion, has provided a bit of a jump into our cash balances. And I expect that in the second half of the year, we will have additional jumps in our cash balances. Now, where do they come from several sources? In addition to corporate transactions, milestones, project financing transactions. In addition to those, we expect to fund some of our separated subsidiaries by means of outside capital infusion, and that will certainly reduce some of our cash, this cash burn associated with those businesses. That includes for example, our MiNK Therapeutics asset, it also includes our QS-21 and related assets. You can also expect to see some asset sales, possibly in the second half of this year. And so if you add all those things, relative to unusual items that will occur from time to time that will represent jumps, I can promise you on a quarter-to-quarter basis what the impact of that will be. But I expect that we’ll be able to manage our cash position so that we are left with a substantial cushion at the end of each period. So other than that, unfortunately, I cannot give you any more specific dollar guidance.

No, that’s helpful color. Thanks again for taking our questions.

[Operator Instructions] Our next question comes from the line of Matt Phipps from William Blair. Your line is open. Please go ahead.

Good morning. Thanks for taking my questions. Just a few, do you guys have any update on the timing of the bell bal-zal filing? Just you can give a little bit more clarity on ahead of the PDUFA for bal that we have to really wait for that PDUFA to clear.

I think on the bal-zal filing, Matt, that we’ve said that we’ll provide guidance in the second half of this year. Of course, it’s going to be a function of us disclosing the data and the final data from that combination trial at ESMO, and then deliberations with the FDA. So bear with us. Once we get some clarity through both processes will give you a definition on the path forward. But with regard to the PDUFA date, what was the question again?

No, that’s pretty much answers that. Then secondly, for AGEN1327 now wholly owned TIGIT monospecific antibody, do you still plan to move that into Phase 1 this year? Or just what are the thoughts for that asset after the outline into the bispecific?

So clearly, the bispecific has advantages over the monospecific. And the data that we’ve generated so far, it’s very suggestible. However, having said that, can the monospecific antibody be an important reagent, just like PD-1 is an important reagent? For some of the other combination possibilities you have portfolio, the answer is most likely, yes. And so hence we will advance this program with that in mind, and we – I don’t think we’ve provided guidance on the exact timing of the IND filing, but bear with us, it be within a reasonable period of time.

Okay, thanks. And then Garo, then look at you’re really kind of earliest stage pipeline disclosures, it does seem like there’s a bit of a move to bispecific formats or kind of therapies is that – do you think that is kind of a direction that you are moving more broadly, I mean, obviously, TIGIT, and then also the TGFß TRAP are kind of in that realm. So just curious if that’s kind of where we should think about for the evolution of your kind of antibody based platform?

I thank you for that, Matt. I think that’s a presumption versus assumption. Meaning, we have bispecifics in our portfolio that have not been disclosed, that have very, very exciting activity that we’re seeing very early on. But we also have some phenomenal monospecifics that will be announced, and one specifically will be filed to enter the clinic this year. And of course, with these agents, as you know, the immune system is like a Symphony of a lot of activities. And, yes, certain immuno-oncology agents have activity as single agents. But I think it’s fair to say that the most exciting activity is being seen with the Symphony process of agents. And so I think it will be very exciting for us to see from our own portfolio combinations and sue, that will be generating very exciting data, as we have seen using our VISION technology and other means in our preclinical development process. So very exciting and very exciting, particularly because we control the different components of the Symphony, if you will.

Great, thanks, Garo. There are no further questions at this time. You may continue.

Thank you very much all. Thank you very much for your attendance and listening to our updates.

This concludes today’s conference call. You may now disconnect. Have a great day.