Good morning. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to the Agenus Second Quarter 2022 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Ethan Lovell, Chief of External Affairs and Communications Officer. You may begin your conference.

Thank you. Good morning, everyone, and welcome to our second quarter earnings results conference call. I’m Ethan Lovell, Agenus' Chief External Affairs and Communications Officer, and I have with me today on the call, Agenus', Chairman and CEO, Garo Armen; and the company's Vice President of Finance, Christine Klaskin. Also joining us today is the Genesis' Chief Medical Officer, Dr. Steven O'Day, who will be available during the Q&A portion of this call. Before I turn the call over to Garo for his prepared remarks, I would like to read our forward-looking statement disclosure. This call will include forward-looking statements, including statements regarding our clinical development, regulatory and commercial plans and timelines including time lines for data release and partnership opportunities. Such statements are subject to risks and uncertainties and speak only as of the date they are made. Agenus is under no obligation to update any of these forward-looking statements and we refer you to our SEC filings for more details on these risks. With that, I'd like to turn the call over to Garo Armen. Garo?

Thank you very much, Ethan, and thank you for joining us today. We will concentrate to start on our priority clinical programs, which have demonstrated highly exciting activity. We will also provide updates on our earlier stage programs, which we expect to deliver successful outcomes interconnect based on the robust research and preclinical data that's been generated so far. Agenus has had a successful second quarter capped by a groundbreaking presentation at the World Congress on Gastrointestinal Cancer in Barcelona. Our late-breaking submission was offered prime of place at the conference's opening session, and Dr. Anthony El-Khoueiry presented on heavily pretreated MSS colorectal patients who are treated with our novel adaptive innate immune activator called balstilimab in combination with our anti-PD-1 antibody balstilimab. We will call these buck bang for sure, but this combination delivered 24% overall response rates and 73% disease control rate with a substantial number of these patients showing responses at data care. No grade 4 or 5 events were reported, and the combination was generally well-tolerated. What makes these responses unique is the fact that these patients had cold tumors and cold tumors are historically not responsive to immunotherapy. In addition, these patients had tumors, which were PD-L1 negative with low tumor mutational burden responsive patients included those who had failed prior I-O therapies. All of these make the patients treated in our trial, highly unlikely to respond to immunotherapy or conventional immunotherapy and certainly, not other treatments either. While this trial was not randomized, experts in the field were satisfied with our criteria for selecting patients who are heavily pretreated and that we're not confounding factors, which would subjectively favor outcomes achieved in the study. We observe 24% objective response rates when compared to 1% to 2% responses in similar patients are achieved with current…

Thank you, Garo. We ended our second quarter 2022 with a cash and short-term investment balance of $238 million. This compares to $253 million at the end of the first quarter and $307 million at year-end. We recognized revenue of $21 million for the second quarter ended June 2022, which represents an increase of $10 million from the $11 million reported for the same period in 2021. Revenue for the six months ended June 2022 was $47 million, an increase of $25 million from the same period in 2021. Amounts include revenue under our collaboration agreement in 2022 milestones earned and revenue related to non-cash royalties earned. For the second quarter ended June 2022, our cash used in operations was $43 million, compared to $56 million for the same period in 2021. Our net loss for the quarter ended June 2022 was $49 million or $0.17 per share, compared to a net loss of $84 million or $0.37 per share for the quarter ended June 2021. Non-cash operating expenses for the second quarter ended June 2022 were $19 million, compared to $30 million for the second quarter ended of 2021. Our cash used in operations for the six months ended June 2022 was $96 million with a net loss of $100 million or $0.35 per share, compared to cash used in operations of $98 million and a net loss for the same period in 2021 of $138 million or $0.65 per share. I'll now turn the call back to Garo to handle our Q&A. Garo?

Thank you very much, Christine, and I think we're ready for any questions that you may have from the field.

[Operator Instructions] Your first question comes from Mayank Mamtani with B. Riley Securities. Your line is now open.

Good morning team. Thanks for taking our question. So maybe first on the ILT2 program that just ended clinic. Could you just review with us the rationale for combining with both PD-1 as well as your next-gen CTLA-4. And also would love to hear what we already know and should look out for the – in the field with these ID drugs in the clinic and how those might be evolving going forward for validation of use in a combination setting.

Sure, Mayank. I think if your question is the rationale for combining ILT2 with balstilimab and botensilimab. Is that the question?

Yes, the first part of the question.

Okay. So I'm going to ask Dr. O'Day and perhaps even Dhan Chand, who has joined us today for why we have query this in preclinical models and the research rationale and perhaps Dr. O’Day can elaborate on that more.

Thank you, Garo, thank you, Mayank, for the question. So there are a couple of evidence that support the combination of AGEN1571 with botensilimab and balstilimab. But first is that you will recall from our – our AACR poster actually earlier this year, demonstrating the high expression of ILT2 and ILT2 positive myeloid cells in patients that did not respond to checkpoint therapy. And the checkpoints are on referring to PD-1 or PD-1 anti-CTLA-4 combination. The second is that we've demonstrated in preclinical disease relevant models that the combination of PD-1 and AGEN1571 enhances T cell activation, NK cell activation and NKT activation and the combination of botensilimab and AGe1571 potentiates immune activation. One of the reasons for this is that ILT2 is known to inhibit Fc Gamma R signaling, which is critical for therapies like botensilimab and AGEN1571 release that. And then lastly, when you look at patient sample, particularly tumor-infiltrating lymphocytes and tumor cells, as shown in our AACR poster, you'll notice that PD-L1 and HLA-G, the ligand for ILT2 are expressed on different subsets of tumor cells and in cells. Same goes for ILT2 and PD-1. This suggests that a combination of balstilimab, botensilimab with AGEN1571, where we leverage different arms of immune system with potential anti-human unity. I'll turn it over to Stephen to add a bit more color on our clinical rationale.

Yes. Thank you, Mayank. And yes, we're very excited about this ILT2 program as potentially best first-in-class based on Dan said, the preclinical data suggests that we have both a myeloid and lymphoid checkpoint that could be quite synergistic and really build into some of the mechanism of resistance of PD-1 and CTLA-4. And obviously, the ILT4 program that we -- our antibody that Merck is – is using is obviously advancing in the clinic with objective responses. So there's improvement concept in this myeloid class. But we think we have a more broad myeloid lymphoid checkpoint that may answer some of the resistance issues to first-generation checkpoints. So -- and as you know, we dosed the first human patient with our ILT2 several weeks ago. And what's exciting about this program is we will be looking for monotherapy, single-agent activity but obviously, the program is designed to fold in both tau ILT2 combinations and Botensilimab combination. So we have the flexibility to move forward quickly with combinations, as well as monotherapy. So more to come, but a very exciting program that's now in the clinic after some tremendous preclinical work and drug design.

Thank you.

Thank you so much for that comprehensive overview. And then just maybe a follow-up, more focus on Botensilimab, could you just give us an update on how far along you are with the melanoma cohort? And how might your progress to-date is informing your thinking for future development plan, which is looking like you are working towards some sort of a Phase 2 trial starting later this year or next year?

So the question is to be answered at an upcoming major conference that's going to release data, not just for the additional patients that have been enrolled and studied in the CRC cohort, but some of the major cohorts as well. So, unfortunately, we cannot publicly disclose the specifics, but it will be during the course of this year.

Got it. And my final question on financials. Could you just remind us what outstanding non-dilutive milestones remain for the remainder of the year? Can you just comment on that, or even into early next year?

Yes. So, once again, given the sensitivity of this very subject, we will not comment on any specific deal structures or, I should say, the numerical relevance of anything, such as that. Now, as far as any particular milestones, as we've said publicly and I think we've alluded to this during the course of our press release that we expect this year to receive a total of approximately $25 million from the payment that's due to us as part of the transaction that we consummated with HCR for QS-21. So that will happen during the course of this year, and that's, of course, a non-dilutive component, but additional partnership discussions and consummation of these discussions to take them to conclusion, we'll wait for more specific deal announcements for that.

Thank you, Garo, for that helpful overview.

And your next question comes from the line of Matt Phipps with William Blair. Your line is now open.

Good morning. Thanks for taking the question. Just curious, when we might get some more details on the design of these impending Phase 2 studies for balstilimab? Can you comment on the MSS-CRC arm will require a monotherapy trial or arm? And maybe any thoughts on comparators for that trial?

So, I think, in terms of the specific design of the trials, I mean, as you know, Matt, we have said specifically that we expect to start three randomized Phase 2 trials, those will commence soon. I think the first cohort of details will be disclosed during the week of ESMO coming up.

Interesting. Okay -- and I guess as far as the expansion cohorts coming up later this year, is there any details you can give on maybe how many patients you expect total in advanced cohorts that are going out of date?

So, the plan is for us to present the -- a number of cohorts of this study at another major conference coming up, which we have not announced yet.

Okay. All right. Great. Well, look forward to update. Thanks guys.

Thank you very much, Matt.

[Operator Instructions] Your next question -- my apologies, the questioner has jumped out of queue. Okay, here we go. Kelly Shi with Jefferies. Your line is now open.

Thank you for taking our question. This is Dev on for Kelly. And my question is -- could you talk about potential impact of Relatlimab plus Nivo approval in melanoma on your Phase 2 trial design in melanoma?

So, I think Dr. O'Day will tackle that question. Steven?

Sorry, the question is what is the impact of Nivo LAG-3 in the melanoma space with our trial design. Is that the question?

Yes. So, the approval of Relatlimab and Nivo, how does it impact your design for melanoma?

Yes. Well, I think that the exhaustion checkpoints like LAG-3 and TIM-3 and obviously PD-1 are obviously very different targets than CTLA-4. So obviously, with first-line melanoma, now there's three frontline options, CTLA-4 with PD-1, PD-1 monotherapy and then PD-1 LAG-3. So, we'll be addressing all those cohorts with our design of our Botensilimab, which we think is obviously, a very unique different checkpoint than the exhaustion checkpoints. But we will address it and look forward to getting data around all those subgroups.

All right. Great. Thank you.

And there are no further questions at this time. Mr. Armen, I will turn the call back over to you.

Thank you very much for your attention and interest in our company. In closing, I'd like to just reiterate the point that with the data disclosure of Botensilimab plus balstilimab, we have received many accolades about the robustness of the responses that we've seen, in fact, many of the long-term experts in the field, including certainly CRC experts have commented on the fact that they have not seen such responses with conventional immunotherapy. So, clearly, this is a very exciting period for the next steps of immunotherapy. And we're delighted to have botensilimab lead that effort for the future of these patients and there will be. So with that, stay tuned for additional information that we will be disclosing between now and the end of the year. And that will set the stage for us to be able to do our next set of trials, randomized trials with the hope that we will get to the finish line with the collaboration of many of the experts in the field, as well as regulatory agencies throughout the world. So, I'll end my comments and if you have any additional questions and queries, please don't hesitate to get in touch with us. Thank you very much. End of Q&A:

This concludes today's conference call. You may now disconnect.