Analyst Conference Summary

Biotechnology

conference date: May 4, 2017 @ 8:00 AM Pacific Time
for quarter ending: March 31, 2017 (Q1, first quarter 2017)

Forward-looking statements

Overview: Announced new programs and trials.

Basic data (GAAP):

Revenue was $27.0 million, up sequentially from $5.6 million and up from $6.0 million year-earlier.

Net income was negative $17.1 million, up sequentially from negative $26.2 million, and down from negative $31.8 million year-earlier.

Earnings per share (EPS) were negative $0.18, up sequentially from negative $0.30, and down from negative $0.37 year-earlier.

Guidance:

none

Conference Highlights:

CEO Garo Armen stated "In the first quarter we amended our agreement with Incyte and streamlined and optimized our R&D operations; our balance sheet has been strengthened and our projected burn reduced. Importantly, these steps allow us to focus on clinical programs that support our path to rapid commercialization. In the forefront are our antibodies targeting CTLA-4 and PD-1." Cash burn should be reduced by $70 million over an 18 month period.

"Agenus unveils previously undisclosed I-O [immune-oncology] cell therapy discovery program. This program has been advanced over the last 18 months, including the identification of at least one potential development candidate.  The Company plans to pursue its cell therapy assets with the formation of a separate business entity to be majority owned by Agenus and funded externally."

Incyte (INCY) amended its collaboration agreement with Agenus to develop GITR and OX40 antibodies (they are immune checkpoint modulators) to royalty programs. Renames INCAGN1876 & INCAGN1949. Incyte will fund and conduct development, Agenus will receive a 15% royalty if they are commercialized, and possible milestone payments. The TIM-3 and LAG-3 collaboration deals remain unchanged; they are already royalty programs. Agenus also gets a $20 million milestone payment. Incyte also bought 10 million shares of Agenus (AGEN) at $6 per share, a premium above the February 13, 2017 closing price of $4.12.

The Basel, Switzerland facility will be closed down in 2017, functions moved to Cambridge, UK.

Regained rights to TIGIT target, which is a priority for combinations.

The Phase 1 trial for its PD-1 antagonist AGEN2034 in second line cervical cancer began dose escalation.

A Phase 1b combination study of AGEN1884 (CTLA-4) completed its dose escalation phase, so data will be presented at ASCO in June.

1884 + 2034 combination will commence a Phase 1b trial in before the end of 2017.

Prophage for newly diagnosed GBM (glioblastoma, a brain cancer) program continues.

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

With partner Incyte (INCY) continued a Phase I trial for INCAGN1876, anti-GITR antibody.

AutoSynVax for cancers initiated a Phase 1 trial in April and already closed accrual. The ASV program targets cancer neoantigens with an autologous synthetic vaccine approach. This is based on the PhosImmune acquisition made in December. Readouts should be available before the end of 2017. Will be used with QS-21 adjuvant.

4-1BB discovery campaign has been completed, has an antibody chosen, is in IND-enabling preclinical studies. CD155 TIGIT therapy also being prepared.

GSK's malaria vaccine containing QS-21 expects to begin distribution in Africa.The GSK shingles vaccine is expected to get regulatory approvals in 2017.

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.

Cost of sales was $0 million. Research and development expense was $32.7 million. General and administrative expense was $7.8 million. Contingent fair-value adjustment of negative $0.2 million. Leaving operating income at negative $13.3 million. Other expense was $3.8 million.

Cash and equivalents balance ended at $124 million, up $48 million sequentially from $76 million. No debt. Increase cash was from Incyte partnership.

Cash burn has been reduced, so cash now should last until Q4 2018.

Agenus is talking to potential partners about collaborations or licensing of its potential therapies.

Q&A:

Revenue without Incyte payment? $7 million. We are not expecting future milestone payments in 2017 from Incyte. But if shingles vaccine is approved, would be a $15 million milestone.

1884 + 2034 combination dosing roadmap? There is some prior science on combining CTLA-4 and GITR.

Cell therapy, science of? We will disclose more when we get close to the subsidiary launch date. We are behind other players, but we have a differentiated strategy to address a broader market than current therapies. Our emphasis will not be on CART.

Prioritization of R&D dollars? Focus is combinations of checkpoint antibodies, and development of novel antibodies. Plus AutoSynVax in combination with checkpoint antibodies. Cell therapy effort began 18 months ago, yet has already had important developments, including a candidate for the clinic. It needs its own entity to go forward.

TIGIT plans, why did Incyte not pursue? Incyte did want to pursue, we got it back in negotiations. We are sprinting to get it into the clinic, at which time we will make more disclosures.

Agenus web site

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