Analyst Conference Summary

Biotechnology

conference date: November 4, 2019 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2019 (Q3, third quarter 2019)

Forward-looking statements

Overview: Pipeline development proceeds at a very rapid pace.

Basic data (GAAP):

Revenue was $19.9 million, up sequentially from $15.6 million and up from $12.8 million year-earlier.

Net income was negative $46.3 million, down sequentially from negative $20.0 million, and up from negative $34 million year-earlier.

Earnings per share (EPS) were negative $0.33, down sequentially from $0.38, and down from negative $0.29 year-earlier.

Guidance:

none

Conference Highlights:

CEO Garo Armen stated: "We expect clinical readouts from six separate antibody programs in 2020 as our robust pace continues. We expect to commence combo trials of our NexGen CTLA-4 with our own PD-1 this month. 2020 is expected to be an important year of data generation, substantial milestone payments and prudent collaborations for Agenus. We look forward to discussing these developments in more detail during our call and at our R&D day on November 15th." The aim is to fund development with money from partnerships rather than stock offerings. Also plans to keep more North American rights while licesning outside the U.S. Expects clinical data out of 6 agents in 2020, including licensed agents.

Agenus is in negotiations with potential partners for the use of its agents in combinations with other therapies. There could be the first announcement in the next few weeks. Deals would include a modest upfront payment plus milestones and double-digit royalties if commercialization is achieved.

In August the IND was accepted by the FDA for AGEN2373, which has been licensed to Gilead. This triggered a $7.5 million milestone payment. AGEN2373 is a bi-specific antibody that will be tested on undisclosed cancers. In late august the FDA accepted the IND for Gilead's AGEN1223, triggering another $7.5 million milestone payment. A third $7.5 milestone was achieved for filing AGEN1423 (now GS-1423)

Research Day on November 15.

Shingrix is the most effective shingles vaccine; GSK commercial sales have exceeded projections, on track to reach $1.3 billion in 2019. Agenus licensed GSK QS-21 Stimulon, a component of Shingrix. A $40 million payment to Agenus is possible if the milestone is achieved, and that point is being approached. The contingent debt has now been extinguished.

A large-scale trial with GSK's Mosquirix vaccine, containing QS-21, against malaria, continued in Africa

Agenus continued a Phase 2 combination trial of AGEN1884 with Keytruda for IL NSCLC with over 50% PD-L1 expression. Expanding targets and combinations as data has been good.

The AGEN1884 (CTLA-4) and AGEN2034 (PD-1) phase 2 trial combining these drugs to treat cervical cancer continued. Data believed to show better outcomes than current PD-1 agents, but will not present interim data in order to proceed to BLA as rapidly as possible. Dicussions with FDA indicate a BLA for for AGEN2034 and AGEN1884 could be filed as early as 2020. 1884 and 2034 are in 3 active clinical trials including the two combined.

Next-Gen CTLA-4, AGEN1181, began enrollment in 2019. Could be a best-in-class combination agent. This is designed to delete T-regs and increase priming.

First-in-class bispecific, AGEN1223, should enter the clinic in 2019. Believes the new antibodies can differentiate Agenus from competitors.

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

Paisley Myers, spoke about Agentus, program's proprietary PCT targets. Will file for first cell therapy this year. PCTs are highly specific and so allow therapies to attack cancers with minimal side effects. First trial will be in AML. Will also have a TCR which should enter the clinic in 2020. Combo therapy with Agenus CPMs planned for 2020.

In total Agenus hopes to file 3 INDS in 2019.

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

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) and INCAGN2390 (TIM-3)are in Phase 1 trials.

A portfolio of undisclosed bispecific 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. Some new molecules may be partnered. Expects meaningful clinical data this year.

Cost of sales was $0 million. Research and development expense was $46.1 million. General and administrative expense was $11.1 million. Non-cash interest expense of $10.8 million. Contingent consideration (non-cash) $1.8 million.

Cash and equivalents balance ended at $93 million, down sequentially from $122 million. No debt, but has received advances on vaccine royalties, which is a liability. $28 million cash used by operations.

Q&A summary:

2034 combination with 1884, which arm was interim analysis? Combination had the planned interim. This is a pre-planned interim analysis for the monotherapy coming up soon. They are being conducted as two single-arm trials for support the accelerated approve BLA. We need to do better than Pembro in the monotherapy arm. For the combination accelerated approval in cervical cancer, accrual is complete. We talked to regulators, we will not release interim data, but will give you some idea of the results at a later date. On track for filing in 2020. We will keep accruals open in order to support further development possbilities, including with partners.

Combination trial patients, dosing, etc.? Enrolled regardless of PDL1 status, though it was tested for. Interim analysis is based on small number of patients, mostly for futility and safety, the committee did recommend to continue the study. Combination dosage CTLA4 1 mg/kg, much lower than in monotherapy. Biweekly dosing 3mg/kg for PL1. We have designed to allow for flexible dosing. We believe there may be benefit for the combination regardless of PDL1 status. We are very confident in the results we are seeing.

1181 development for melanoma? Had an advisory board meeting. We are looking for accelerated approval for various tumors. We have opened the trials to a broad group.

Agentus funding, spin off? After the two leading cell therapy companies were acquired, interest in the field cooled down. Agentus was already spun out and is getting ready to file and IND. The focus is on the allegenaic format, dropped autologus. We believe we will be able to fund this company separately in the next few months.

Gilead filing to sell Agenus shares? We fulfilled our 2019 milestone obligations. Cooperation is very positive. Legal requirements led to a misleading filing. This filing is just a registration statement, it does not indicate Gilead's intent to sell shares. We did this with previous parnters, and none of them sold shares.

A misperception is that we have a substantial amount of debt on our balance sheet. We do not. The accounting number is from the royalty stream, our only obligation for Shingrix has been extinguished. We will meet the next two milestones in 2020 for the $40 million payment, presuming sale remain steady.

Agenus web site

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