Analyst Conference Summary

Biotechnology

conference date: August 9, 2018 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2018 (Q2, second quarter 2018)

Forward-looking statements

Overview: Pipeline progress while negotiating with potential partners. Won milestone payments

Basic data (GAAP):

Revenue was $14.9 million, up sequentially from $1.6 million and up from $4.2 million year-earlier.

Net income was negative $25.2 million, up sequentially from negative $54.3 million, and up from negative $31.7 million year-earlier.

Earnings per share (EPS) were negative $0.24, up sequentially from negative $0.53, and up from negative $0.32 year-earlier.

Guidance:

none

Conference Highlights:

CEO Garo Armen stated: "Innovation and speed are core to our strategy. We have delivered eight new discoveries over the past 2 years. This year alone, 3 INDs from our discovery engines have been filed and 3 additional INDs will be filed by year end; they include our NexGen CTLA-4 and our first-in-class bispecifics. We have delivered on our partnership commitments with Merck and Incyte with 2 programs in the clinic this year and a third expected before the end of the year, each triggering a cash milestone. In addition, our proprietary CTLA-4 and PD-1 programs are advancing in three trials designed to take advantage of accelerated pathways for a BLA filing as early as 2020. Our partnership discussions have advanced towards potential closure. With these developments, we expect to deliver value to our shareholders and partners." We are aware of concerns about our balance sheet. We intend to minimize dilution to shareholders. Third quarter cash should be near Q2 levels because of receipt of milestone payments.

Discussing licensing deals with several potential partners that might close soon. Working to maximize value, including our own development work. Believes could announce one or more deals this year, possibly within next eight weeks. Could include a broad strategic partnership.

The Agenus drug licensed to Merck with an undisclosed target entered clinical trials, triggering a milestone payment.

Shingrix is the most effective shingles vaccine; GSK commercial sales have exceeded projections. Agenus licensed GSK QS-21 Stimulon, a component of Shingrix. A $40 million milestone payment to Agenus is possible if the milestone is achieved.

Agenus continued a Phase 2 combination trial of AGEN1884 with Keytruda for IL NSCLC with over 50% PD-L1 expression. But decided not to pursue NSCLC as a first priority target.

Dose escalation trials for AGEN1884 and AGEN2034 are complete. A Phase 2 trial combining these drugs to treat cervical cancer continued. Some responses have been recorded. AGEN1884 (CTL-4) presented activity at ASCO. Believes a BLA could be filed as early as 2020. AGEN2034 (PD-1) presented activity at ASCO. Believes a BLA could be filed as early as 2020. 1884 and 2014 are in 3 active clinical trials including the two combined.

A combination trial of 1881 and 2034 completed dose escalation, and launched combination trials with this compounds in 2L cervical cancer. More data on the compounds should be released in 2018.

AutoSynVax vaccine trials are being planned for 2018 in combination with QS-21 and 1884.

GSK's Shingrix vaccine, containing Agenus QS-21 Stimulon, received a U.S. approval on October 20, 2017. 97% efficacy "effectively shuts down any contender in this market." Also approved in Canada. The CDC voted to favor Shingrix over Zostavax.

The first cell therapy, through subsidiary Agentus, could be in the clinic in the first half of 2019. Believes has capabilities to target solid tumors.

Agenus West manufacturing supplied GMP material for clinical programs; preparing for GMP material for registrational program in 1H2018.

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

A next generation CTLA-4 antibody should have an IND filed in 2018. This is designed to delete T-regs and increase priming.

Incyte-partnered checkpoint inhibitors from Agenus continue to be advanced in preclinical or clinical trials. INCAGN1876 (GITR) completed dose escalation; INCAGN1949 (OX40) also completed dose escalation. For both development is expected to focus on combination therapy. INCAGN2385 (LAG-3) entered the clinic. INCAGN2390 (TIM-3)is are expected to enter clinical trials in 2018.

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.

3 more INDs are planned for filing before the end of 2018, including another CTLA-4 and two bispecifics. The CTLA-4 compound is designed to deplete T-regs while improving T-cell priming; published in Cancer Cell journal.

Cost of sales was $0 million. Research and development expense was $29.3 million. General and administrative expense was $9.5 million. Contingent fair-value adjustment of $6.3 million.

Cash and equivalents balance ended at $43.2 million, down from $52.3 million. No debt, but has received $187 million advances on vaccine royalties, which is a liability.

Q&A:

Two milestone payments expected this quarter? $10 million for first two, the third in Q4 will be $5 million. Could be other proceeds from unannounced transactions, including potential royalty-capturing.

Shingrix possible milestones? Will not be this year. Sales are 3 times early estimates. Revenue performance milestones would be post 2018.

Cervical cancer trial enrollment? Data at major conferences this year. Accrual is advancing and we are seeing good signals of activity.

Agenus web site

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