Agenus Inc. (NASDAQ:AGEN) Q4 2023 Earnings Call Transcript

Agenus Inc. (NASDAQ:AGEN) Q4 2023 Earnings Call Transcript March 14, 2024

Agenus Inc. misses on earnings expectations. Reported EPS is $-0.13 EPS, expectations were $-0.053. AGEN isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Agenus Inc. Fourth Quarter and Full-Year 2023 Results Conference Call. Today’s conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] At this time, I would like to turn the conference over to Zack Armen, Head of Investor Relations. Please go ahead.

Zack Armen: Thank you, Audra, and thank you all for joining us today. Today’s call is being webcast and will be available on our website for replay. I’d like to remind you that this call will include forward-looking statements, including statements regarding our clinical development, regulatory and commercial plans and timelines, as well as timelines for data release and partnership opportunities among other updates. These statements are subjects to risks and uncertainties, and we refer you to our SEC filings available on our website for more details on these risks. Joining me today are Dr. Garo Armen, Chairman and Chief Executive Officer; Dr. Steven O’Day, Chief Medical Officer; and Christine Klaskin, Vice President of Finance.

Dr. Robin Taylor, Chief Commercial Officer; and Dr. Todd Yancy, Chief Strategic Advisor, will be participating in the Q&A session. Now, I’d like to turn the call over to Garo to highlight our progress in 2023 and to speak to our outlook for 2024. Garo?

Garo Armen: Thank you very much. Ladies and gentlemen, today it is with great enthusiasm that we gather to share the remarkable strides Agenus has made over the past year. Our journey has been marked by significant achievements, pivotal milestones and a steadfast commitment to innovation in the field of oncology. In 2023, Agenus reached crucial milestones, particularly with our BOT/BAL program, a cornerstone of our operational focus. BOT/BAL therapy has undergone rigorous testing in over 900 patients, demonstrating promising activity in cancers that represent significant unmet medical needs, notably colon cancer, where we are poised for potential first approval. The impressive response rates, sustained durability and overall clinical efficacy observed across multiple challenging cancer types have garnered attention and excitement from leading experts in the field.

It is essential to note that the patients enrolled in our trials have exhausted available standard treatments, making clinical responses achieved all the more meaningful. Our achievements in the past year underscore the immense potential of Botensilimab, both as a standalone therapy and in combination with Balstilimab and/or chemotherapy. All of these trials are currently ongoing. The presentation of our data at six prestigious scientific forms and publication in five peer reviewed journals is a testament to the robustness and significance of our findings. Dr. O’Day will delve into the clinical data shortly, providing more detailed insights during this call. The resounding feedback from over 1,000 physicians we engaged with over the past year, underscores the transformative impact of our work and the impact it could have on patient care.

Furthermore, the fast track designation granted by the FDA acknowledges the urgent need for new treatments in our lead indications, which is refractory, MSS-CRC in non-liver metastatic patients. As we stand on the threshold of a clinical and a critical phase in our regulatory journey, our focus is squarely on advancing activities for a potential accelerated approval filing. Our immediate efforts are directed towards ensuring that our development strategies align seamlessly with the FDA’s rigorous standards. In 2024, our primary objective is to pursue a global regulatory strategy for BOT/BAL in our fast track indication. Following alignment with the FDA, we intend to initiate the submission of our Biologics License Application, otherwise known as a BLA, for potential accelerated approval.

Subsequently, pending feedback from scientific and regulatory advice in Europe, we plan to submit to the European Medicines Agency, known as the EMA, in 2025. To achieve our regulatory objectives, we are intensifying our efforts to provide regulatory authorities with a comprehensive data package that demonstrates the safety, efficacy and clinical pharmacology of BOT/BAL in refractory MSS-CRC. Our Phase 2 study completed in October 2023 or I should say completed enrollment in 2023, was meticulously designed to evaluate BOT/BAL’s dosage and the contribution of its components. Additionally, by the end of 2024, we anticipate initiating a Phase 3 study in the patient population of our proposed indication. Our commitment to transparency and stakeholder engagement remains unwavering as we progress towards delivering these potentially life altering treatments to patients.

Looking ahead, our mission to enhance the lives of cancer patients to the power of the immune system remains steadfast. That’s been our mission from day one, 30 years ago, of course, today, with BOT/BAL leading the charge in our dynamic portfolio of agents. To expedite this transformative journey, we are actively exploring strategic partnerships. Our ongoing collaborations have already yielded significant returns, exemplify, for example, by the recent $25 million milestone payment from BMS. Triggered by the commencement of a Phase 2 study with BMS-986442. This is a TIGIT bispecific antibody discovered, and the early development was done by Agenus and it was licensed to BMS. We have received a total of $250 million from this collaboration thus far.

Moreover, we are progressing our efforts to monetize non-core assets and explore royalty financing and project funding opportunities with the potential to generate an additional $100 million to $200 million in the relatively near term. Furthermore, we’re engaged in discussions with several prospective pharmaceutical partners, exploring avenues for co-marketing and co-development agreements, specifically for BOT/BAL. Dr. O’Day will not provide an overview of our latest clinical findings, further eliminating the groundbreaking progress we’ve made so far. Thank you for your continued support and confidence in Agenus. Together, we are pioneering a new era in cancer treatment, one that offers hope and healing to patients worldwide. Dr. O’Day?

Steven O’Day : Thank you, Garo. Together with our investigators and key opinion leaders, we presented updates from BOT/BAL development program at ASCO-GI, Society of Gynecologic Oncology; ESMO-GI, CTOS and at a corporate event hosted during the ESMO Congress in October. Throughout 2023, new clinical data was presented for nearly all of our programs, and I refer you to our press release issued today that provides a comprehensive summary of our 2023 clinical development updates. Today, I’d like to share a selection of our data updates from the last year, which highlights some of the compelling opportunities we have to transform care for patients. Starting with safety, we continue to observe a manageable safety profile. As of May, 2023 data cut from our solid tumor Phase 1B study with doses of 1 milligram per kilo or 2 milligrams per kilo of Botensilimab in combination with Balstilimab.

The most common adverse events were immune related, and the most common of these were diarrhea and colitis. Grade 3 or greater treatment-related diarrhea colitis occurred in 14% of patients. These findings are consistent with the mechanism of action of BOT and BAL as both are immuno-oncology agents. Now turning to our CRC development program for BOT and BAL, where we have made significant progress. As of our latest update during our corporate event in October 2023, our Phase 1b expanded cohort of 70 evaluable patients had a median follow-up now of 12.3 months and RECIST confirmed overall response rate of 24%. Based on literature review, the response rate in a similar population treated with standard of care therapies ranges from 1% to 6%. In addition, patients in our trial showed a 12-month overall survival rate of 74%.

Median overall survival has not been reached. We anticipate having top line data from the Phase 2 trial publicly available in the second half of 2024, to align with our planned regulatory timeline and allow for sufficient data maturation. At ASCO GI in January of this year, data was presented from an investigator-sponsored trial being conducted by Dr. Pashtoon Kasi at Weill-Cornell Medical Center. In which 12 patients with colorectal cancer were treated with one dose of BOT at 75 milligrams and two doses balstilimab at 240 milligram in a neoadjuvant therapy window of opportunity setting. Surgery was performed on average 4 weeks after the initiation of immunotherapy. All 3 of 3 MSI high colorectal patients had complete or near complete pathologic responses.

And even more importantly, 6 out of 9 patients with MS stable colorectal cancer had pathologic responses of 50% or greater including two complete pathologic responses. None of the 12 patients had tumor growth during the treatment interval and no surgeries were delayed due to immune-related toxicities. There were only two instances of Grade 3 treatment-related adverse events, diarrhea and fatigue, which were reversible. These results represent an important opportunity to move into earlier non-metastatic lines of therapy and potentially change the treatment paradigm, particularly for early-stage MS stable colorectal cancer. This IST is currently adding an additional 24 patients. The expansion extends dosing of immunotherapy and the timing of surgery from 4 to 6 to 8 weeks, which is more reflective of traditional neoadjuvant therapy studies.

Depending on the data, we plan to prioritize neoadjuvant development and are evaluating study designs for further pivotal studies. And lastly, in second-line pancreatic cancer, we reported data on six patients with the combination of botensilimab and with two chemotherapy agents, gemcitabine and abraxane as a triplet therapy. All six patients had progressed following the most aggressive first-line metastatic regimen of FOLFIRINOX chemotherapy, and all six had liver metasis. Four of the patients achieved marked and sustained tumor marker reductions. We reported two of the four patients achieving a partial response at 16 weeks with a confirmed target lesion reductions of 47% and 37%, which was pending confirmation at the time the data was reported.

Two other patients showed stable disease at their first 8-week scan with tumor reductions of 20% and 13%, respectively. A randomized Phase 2 study is currently enrolling, and we anticipate preliminary data being available in the second half of this year. These results demonstrate clear activity of botensilimab in cold tumors in both the refractory setting and in early disease, combining botensilimab with either balstilimab or chemotherapy. And this offers hope for patients and families where current standards provide limited benefit. We remain committed to improving patient outcomes and are grateful of the support of our team, trial participants and stakeholders. Now I’ll turn the call over to Christine to discuss financials.

Christine Klaskin : Thank you, Steven. For the year ended December 31, 2023, we recognized revenue of $156 million and incurred a net loss of $257 million or $0.69 per share. For the fourth quarter ended December 31, 2023, we recognized revenue of $84 million and incurred a net loss of $49 million or $0.13 per share. Revenue primarily includes revenue under our collaboration agreements, including milestones achieved and revenue related to non-cash royalties earned. We ended the year with $76 million in cash, subsequent to which in January 2024, we received a $25 million milestone payment from BMS triggered by the commencement of a Phase 2 study with BMS-986442, the Agenus discovered TIGIT bispecific antibody. Additionally, we’ve progressed in monetizing non-strategic assets and future milestones and royalties from ongoing partnerships.

These efforts are expected to yield significant cash proceeds by mid-2024. Accordingly, we anticipate being funded through 2024. In parallel, we’re pursuing potential partnership discussions with five biopharmaceutical parties to further expand our cash resources. I’ll now turn the call back to Garo.

Garo Armen : Thank you, Steven and Christine. As we look ahead, of course, we’re excited about the opportunities that will lead both cancer patients and Agenus in 2024. Our steadfast indication remains centered on providing cancer patients with enhanced treatment options, a mission that not only benefits patients, but also enhances shareholder value and secures the long-term prosperity of our company through continued innovation. Innovation has been critical to our existence and our growth, and it will continue to be. This year, a paramount objective for us is to present a compelling data package to the FDA, seeking their consent to initiate the filing of our biologics license application. At Agenus pioneering advancements in oncology has been more than a mission for us.

It’s been our enduring commitment over many years. We expand our heartfelt gratitude to our shareholders, partners and the entire Agenus team for their unwavering support. Together, we stand at the threshold of a transformative journey, one poised to make a profound impact on the lives of patients worldwide with the ultimate aim of delivering chemotherapy-free treatment options. Thank you very much for your time and attention. And now we invite any questions that you may have. Audra?

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Q&A Session

Operator: [Operator Instructions] We’ll take our first question from Emily Bodnar at H.C. Wainright.

Emily Bodnar: My first one is on the neoadjuvant CRC study. You mentioned that you’re extending the treatment period from 4 weeks to 6 to 8 weeks. So I was curious if you could discuss how you think the longer treatment period may impact efficacy and if there are certain metrics that you think could improve with a greater treatment period? And also if you’re following patients in that study post surgery to eventually look at their surgical outcomes. And then second question on MSS CRC. Could you just confirm that the timing of the BLA submission? And I believe you were previously saying mid-2024. So that’s still the obstract or is that looking more like second half now?

Garo Armen: So Emily, I’ll start with the last question on the timing of the BLA submission. So as we’ve guided investors before, the very first step for us is to meet with the FDA, which we’re planning on doing mid-year and they’re giving their specific guidance on our BLA submission. So we do not want to jump the gun ahead of that meeting and provide different guidance than what we will get out of that FDA meeting. So bear with us, I think we’re talking about only a few months from now, that we will be able to give you a much more specific guidance on our BLA solution.

Steven O’Day: Garo, would you like me to?

Garo Armen: Yes. Emily, in terms of the neoadjuvant, the very exciting neoadjuvant data, very exciting. And in fact, when I was talking to one of our long-term advisers yesterday, the first thing he mentioned in the conversation was how remarkable this neoadjuvant data has been because of all the reasons you cited, Emily, and Dr. O’Day will elucidate further.

Steven O’Day: Thank you, Garo. Emily, yes. I mean, given that MS-stable colorectal cancer immune therapy has not previously been effective, the 4-week window period was what surgeons were comfortable with allowing, which was essentially no delay in the surgery. And these results are remarkable in terms of the percentage of patients with deep tumor regressions in four weeks. So the extension of the study will allow now a proper 6- to 8-week treatment period. And we do anticipate that over that time, we will see further deepening of responses. So we’re looking forward to that. The study is really looking at surgical outcomes and obviously post surgery relapses. So this will be a comprehensive neoadjuvant study.

Operator: We’ll go next to Mayank Mamtani at B. Riley Securities.

Mayank Mamtani: Appreciate the comprehensive update. So maybe just on the Phase 2 MSS-CRC data, are you able to comment on what statistically we should be focused on? And if the slight push out here is relating to you wanting to have the OS data or mature durability data, which I could see makes sense if you’re thinking about Phase 3 design? And maybe if you can also comment on thinking and timing for launching that Phase 3, should we be aware of any planned regulatory meetings, discussions around that? And then I have a couple of follow-ups.

Garo Armen: Yes. So as you know, we have — as we said before, we’ve completed enrollment in October. And typically, 80% of the patients respond within six months of the first dose. So when we complete enrollment by the time the patients get the first dose you’re talking about November. And by the time we get the 6-month readout or 80% of responses, it’s sometimes around May. Now needless to say, we have already started cleaning up the data and all of the nitty gritty process so that we can provide all of the outcomes as soon as possible. So it will be in the next few months and our first step is to share this data with the FDA because the timing of the data generation and the FDA meeting will be very close. And then after the FDA meeting, we plan on making top line data public appropriately.

Mayank Mamtani: Phase 3, design, timing of launch, could you comment on that? [indiscernible]

Garo Armen: Steven, would you like to take that, please?

Steven O’Day: Yes. I mean our plans with the Phase 3 trial is in the same line of therapy as the Phase 2, and we anticipate getting that trial started by the end of the year, so it can be substantially enrolled at a potential PDUFA date in 2025.

Mayank Mamtani: Got it. And then you’re being a bit more precise about your biopharma strategic discussions than you’ve been before. Garo, could you comment on what areas are more or less alignment that could unlock the Coco deal structure that it looks like you’re prioritizing and maybe how much does the neoadjuvant CRC opportunity kind of play a role? Because it obviously expands the market, but it also comes with a commitment of doing a long-term study.

Garo Armen: I think it’s very important to address your question in a way that doesn’t violate any confidentiality. So we have, as you know, talked about partnering BOT/BAL for the last couple of years. Now of course, when we started our discussions with prospective partners, we had a fraction of the data we have today. Fraction of the data. And thanks to our enthusiastic physicians, investigators and of course, patient inquiries, we have had an explosive growth in our clinical trial enrollment. I mean if you look at, for example, our Phase 2 trial enrollment, we enrolled 230 patients in less than five months, which is a record that has surprised many people. Now with all of that, you would expect, of course, that there’s a fair amount of enthusiasm by prospective pharmaceutical companies amidst, as we’ve talked about earlier, all of the fascination with treatments that result in weight reduction and radio biopharmaceuticals as well as ADCs. But when I ask a question to experts, I say, do ADCs and biopharmaceutical cure cancer?