Analyst Conference Summary

conference date: February 26, 2015 @ 8:00 AM Pacific Time
for quarter ending: December 30, 2014 (Q4, fourth quarter 2014)

Forward-looking statements

Overview: Agenus continued to develop its pipeline candidates and enroll partners.

Basic data (GAAP):

Revenue was $1.6 million, flat sequentially from $1.6 million and up from $0.4 million year-earlier.

Net income was negative $26.0 million, down sequentially from negative $8.2 million, and down from negative $5.8 million year-earlier.

Earnings per share (EPS) were negative $0.41, down sequentially from negative $0.13, and improved from negative $0.16 year-earlier.

Guidance:

none

Conference Highlights:

The larger than usual net loss for the quarter resulted mainly from a $6.5 million non-cash fair value adjustment from GSK collaboration and other expense of $8.3 million mainly related to a fair value adjustment to contingent royalty obligations. But R&D expense and G&A expense also rose significantly q/q and y/y.

Subsequent to year end, Agenus received an additional $60 million in cash from Incyte as part of its oncology CPM collaboration. This had a milestone and an investment component. The 3 programs having different deals on milestones and royalties.

The many partnerships made in 2014 required building up a larger R&D team.

The focus is now to advance the checkpoint modulator (CPM) programs. Agenus is also looking for partnerships based on the good prior Prophage glioma and HerpV results.

In December Agenus reported that partner GlaxoSmithKline's Phase 3 shingles trial, which had SQ-21 Stimulon as a component, reported "remarkably" positive results, a 97% reduction in risk of shingles. Full results will be published and presented later this year. Royalty payments are potential significant.

Royalties from the malaria vaccine are likely to be modest. A European regulatory decision is expected in 2015.

Agenus made progress in creating 2 CPM antibodies for its deal with Merck, which are separate from Agenus's own 6 CPM programs. Agenus may file to start clinical trials with its CPMs some time in 2015, following IND filings with the FDA.

As a development stage biotechnology company, Agenus is focused on pipeline development, including QS-21 Stimulon, immunotherapy, and heat shock protein vaccines. Along with partners, Agenus has 22 programs in clinical development.

Cost of sales was $0 million. Research and development expense was $7.4 million. General and administrative expense was $5.4 million. Contingent fair-value adjustment benefit of $6.5 million. Leaving operating income at negative $17.7 million. Other expense was $8.3 million.

Included in GAAP net income was $14.3 million in non-cash charges.

Cash and equivalents balance ended at $40.2 million, sequentially from $52.9 million.

Agenus believes it has sufficient cash to fund operations through mid-2015.

Agenus continues to explore possibly working with new licensing partners for QS-21. It is also in active discussions with potential partners for its checkpoint antibodies program.

Continues to evaluate options for advancing glioblastoma vaccine into Phase 3 studies.

Q&A:

European malaria time frame? Filing was accepted in late July 2014. Typically the EMA takes about a year. But the vaccine will be used mainly in Africa, so it needs to be approved in those individual countries as well. It could prevent hundreds of thousands of deaths of children each year.

Shingles vaccine timeline? It is up to GSK, they will do the disclosures. The current vaccine (Zostavax) on the market is much less effective and is a $750 million per year product. About 1 in 5 people contract shingles.

Incyte cash recognition? Already received the cash. It will be amortized over the period of the agreement, 3 to 5 years.

Partners evaluating QS-21? In addition to those already discussed, we have a Phase 2 with J&J. The rest are with academic centers. We believe it is a major driver of efficacy.

Retrocyte display technology for CPMs vs. other antibody platforms? There are variety of platforms now to discover antibodies. We have confidential advancements in our platform we do not wish to disclose. Our platform produces well-behaved antibodies that are easy to develop and does not lead us down a bunch of blind alleys. We are building out a world=class discovery and development organization around the platform. We may partner more broadly outside the current space. Merck came to us to discover antibodies for their target for a reason.

Agenus web site

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