Analyst Conference Summary

conference date: July 28, 2016 @ 8:00 AM Pacific Time
for quarter ending: June 30, 2016 (Q2, second quarter 2016)

Forward-looking statements

Overview: Continues to make progress with pipeline, including moving preclinical therapies into clinical trials.

Basic data (GAAP):

Revenue was $6.6 million, up 10% sequentially from $6.0 million and up from $6.4 million year-earlier.

Net income was negative $28.4 million, up sequentially from negative $31.8 million, and down from negative $40.5 million year-earlier.

Earnings per share (EPS) were negative $0.33, up sequentially from negative $0.37, and down from negative $0.53 year-earlier.

Guidance:

No financial guidance.

Conference Highlights:

CEO Garo Armen stated "“In the second quarter, we made important advances in the clinic, saw external validation of our immuno-oncology agents and strategy and further integrated our capabilities to improve speed, cost and quality of product development efforts. We also strengthened our management team with the addition of a new Board member, Ulf Wiinberg, and Global Head of Clinical Development, Dr. Jean-Marie Cuillerot.”

GlaxoSmithKline (GSK) should be filing for approval of its shingles vaccine, which used Agenus QS-21 stimulon, in the second half of 2016. But Agenus already raised money against the potential royalties.

In the second half of 2016 Agenus plans to advance Prophage for newly diagnosed GBM (glioblastoma, a brain cancer) into a Phase 3 trial. There is very encouraging long-term survival in a group of patients. Agenus hopes to retain U.S. rights while funding the trial or trials with collaborators. Part of the trial will be in combination with a CPM.

Agenus initiated a Phase 1 clinical trial for AGEN 1884 in April 2016. This is an anti-CTLA-4 antibody being tested on solid tumors. The first cohort of patients completed enrollment. In 2017 will start combination trials with 1884, and has talked to potential partners. Believes this is the third CTLA-4 antagonist developed.

AGEN2041, a distinct CTLA-4 antibody, will start clinical studies in 2017.

With partner Incyte (INCY) started a Phase I trial for INCAGN1876, anti-GITR antibody, in June. In April preclinical data was presented at AACR.

Another Incyte partnership, INCAGN1949, an OX40 agonist antibody, also presented positive preclinical data at AACR. Clinical studies should start this year.

In June Merck selected an Agenus CPM antibody product to advance into preclinical studies, generating a $2 million milestone payment. Merck will be responsible for all future development expenses. Agenus may receive up to $100 million in milestone payments, plus global royalties on product sales.

Plans initiation of Phase I trial of first ASV vaccine product candidate in the next twelve months. The ASV program targets cancer neoantigens with an autologous synthetic vaccine approach. This is based on the PhosImmune acquisition made in December.

A portfolio of undisclosed checkpoint modulators is being advanced in the lab. Neoantigen vaccines continue to be developed. Animal models have shown synergy between CPMs and vaccines. Agenus is identifying mutated proteins from cancers that could serve as a basis for vaccines.

As a development stage biotechnology company, Agenus is focused on pipeline development, including QS-21 Stimulon, immunotherapy, and heat shock protein vaccines.

Cost of sales was $0 million. Research and development expense was $22.4 million. General and administrative expense was $7.1 million. Contingent fair-value adjustment of $0.7 million. Leaving operating income at negative $23.6 million. Other expense was $4.7 million.

Cash and equivalents balance ended at $123.3 million, down sequentially from $148.2 million. No debt.

Manufacturing capabilities were upgraded, allowing all production to be brought in house by early 2017. Our first cell lines are compatible with commercial production. European research facilities are being consolidated.

Agenus believes it has sufficient cash to fund operations for now. Agenus has no plans to raise cash through equity offerings, for now. Hopes for commercial revenue in the next 5 years. In the meantime is looking for non-dilutive funding.

Q&A:

41BB agonist? We have not disclosed anything outside the antibody targets we have announced. It is an interesting target, as discussed at ASCO. It could help upregulate T-cells and have other positive effects, including transduction domains. We have many undisclosed programs.

When will Merck announce what its targets are? It is up to Merck. They are a little bit off the beaten path and should perform well in their portfolio.

Product development timelines are getting compressed. It is a competitive field, so confidentiality is important. We disclose what we legally need to disclose. We don't want our competitive positions to be revealed. We expect to be at meaningful doses early in 2017 for the most advanced trials.

We are confident, based on preclinical work with human cells, that our molecules will show efficacy. The agents will likely be most effective in combinations. "Combinations will be paramount for success." We are aiming for best in class regimens. We are also looking at tumor types that have not been addressed yet. We are also working with large potential partners.

Agenus web site

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