Agenus - Earnings Call - Q2 2018

Transcript

Speaker 0

Good day, ladies and gentlemen, and welcome to the Agenus Second Quarter Financial Results Conference Call. As a reminder, today's conference is being recorded. Now I would like to turn the conference over to Doctor. Jennifer Buell, Head of External Affairs and Communications at Agenus. Please go ahead, Doctor.

Buell. Thank you. Welcome to Agenus' second quarter financial results conference call. Before we provide an update, I'd like to remind you that this call will include forward looking statements, including statements regarding our clinical development plans, timelines, partnership opportunities, timelines for those and our financial position. These statements are subject to risks and uncertainties and we refer you to our SEC filings for more details on these risks.

As a reminder, this call is being recorded for audio broadcast. Joining me today are Doctor. Garo Arman, Chairman and Chief Executive Officer Doctor. Sunil Gupta, Head of Regulatory and Pharmacovigilance and Christine Klaskin, our Vice President of Finance. During this call, Garo will provide a corporate update, Sunil will summarize our clinical progress and path to BLA and Christine will provide a financial review.

We will then open the call for questions. With that, let me turn the call over to Garo.

Speaker 1

Thank you, Doctor. Vuel, and good morning and thank you for joining us for our quarterly update today. In 2014, we started the transformation of Agenus with an intent to make it an immuno oncology engine. In the past four years, we have built a company that is delivering innovation with speed. Today, I will describe our progress and achievements in three areas, which are of great interest to you and to us.

First, we have made substantial progress in delivering our discoveries into the clinic and advancing our PD-one and CTLA-four programs, which are in the clinic and on a path for a potential BLA filing. The evidence for our progress is easy to track. We filed five INDs in the eighteen months prior to the start of 2018. Our programs are on track for additional six IND filings this year, three of which have already been filed. Furthermore, we are working to file two more INDs in the 2019.

All of these represent discoveries from our own research pipeline and are either best in class or first in class compounds. They also represent products designed to address tumor resistant pathways with the potential to be the next major breakthroughs in immuno oncology. In addition, as I alluded to, our proprietary CTLA-four and PD-one antibodies are progressing towards a planned BLA filing in 2020. Second, I will discuss our cash position and balance sheet. Please note that we are aware of concerns related to these issues, and I will address them.

As I mentioned, we are progressing our programs and filing INDs at record pace. At the same time, as you will hear shortly, we are prudently satisfying our near term cash needs. Third, I will provide an update on our recent progress in establishing new strategic partnerships. We expect these to result in potentially significant cash infusions into Agenus this year. I will start with what I believe is in your mind and something which is very important to us, our balance sheet.

Our cash balance at the 2017 was $60,000,000 At the end of Q1, it was $51,000,000 and we closed the second quarter with $43,000,000 in cash. We have been managing our cash position prudently, as I said before, with an intent to minimize dilution to shareholders. At the same time, we have been advancing our compelling and exciting pipeline of programs. We expect these 14 plus innovative immuno oncology candidates to be major near term value drivers. Hence, them rapidly is critically important.

Until we secure additional cash, which I speak I will speak about when I discuss our partnership prospects, we will continue to prudently manage our finances. What this means is that our cash position at the end of our current quarter, that is the third quarter, is expected to be near or above current levels. Next item, which is pressing in everybody's mind is the status of our partnering activities. I will provide an update on this with transparency, while respecting the sensitivity of these discussions. I will outline our partnering strategy first and our plans in prior calls.

However, we have not yet made an announcement. In spite of the additional time that it has taken to close on a transaction, we are working to maximize value to Agenus and to our shareholders with the right fit. Let me first speak to what has changed in the IO landscape. IO, obviously, is immuno oncology and how this has influenced the prospective partner profiles and transaction types that are we that we're pursuing today. The first major change is the unanticipated successes and failures in clinic in the past year alone.

The complexity of immuno oncology is better appreciated today than it was even six months ago. Most biopharma companies are looking for first in licensed assets that belong to one of the following categories, either first in class and multifunctional assets to explore complementary biologic pathways or later stage compounds with clinical safety and efficacy data with an intent to mitigate development risks. Over the past year, with the advancement of our pipeline, we have strengthened our position in both of these categories. To be specific, late last year, we made a deliberate decision to accelerate our two first in class bispecific programs. This resulted in advancing time lines by six months.

Since then, these programs have attracted substantial new interest from partners. And why is this? Because they modulate multiple immunosuppressive pathways that address the limitations of currently approved as well as clinical stage immuno oncology agents of today. We also advanced our PD-one and CTLA-four programs. We continued and confirmed that our antibodies are equivalent, if not superior to competitor agents.

This has generated interest from new prospective partners seeking foundational therapies to establish a footprint in the immuno oncology space and explore combinations of their own novel immuno oncology agents with these foundational antibodies. The second major change has been that new and sophisticated players are entering the immuno oncology field. These companies have invested significant time and resources in specifically understanding the broad and deep immuno oncology portfolio that Agenus has built. Agenus' pipeline of antibodies by specifics vaccines and cell therapies is unparalleled in the field. A broad partnership can offer significant financial resources to advance our pipeline, while also retaining commercial rights to part of our portfolio ourselves.

So what does all of this mean to us? Multiple discussions for broad strategic transactions have matured over the last quarter, and we're currently working 20 fourseven to bring one or more of them to closure with a target announcement date possibly as early as the next eight weeks. Next, I will say a few words about the progress we have made with our existing partnerships. To date, we have delivered on all our obligations in our partnerships with Insight, with Merck and with GSK. We have met or exceeded all research, IND filing and commercialization milestones.

In the current quarter, we expect to receive two additional payments for milestones that have already been achieved and a third is expected by or around year end. Our QS-twenty one adjuvant, as you know, is a component, and I might add a very important component of GSK's Shingrix vaccine. As you may be aware from media coverage, sales for Shingrix are substantially ahead of earlier forecast, making additional milestones from our recent royalty transaction more likely. And lastly, before I turn the call to Doctor. Sunil Gupta, I will provide a summary of our operational activities in the first half of the year actually.

This year, three of our discoveries resulted in three IND filings. These include filings for LAG-three and TIM-three antibodies under our partnership agreement with Incyte. We also filed a third IND, which covers our next generation neoantigen vaccine, Otosynvax, we call it ASV. We expect our ASV neoantigen vaccine to be developed in combination with our CTLA-four and PD-one antibody.

Speaker 0

Expect

Speaker 1

The next IND filing will be for our next generation CTLA-four designed to deplete Tregs while improving Treg T cell priming rather. Our discoveries covering this and other antibodies are published earlier this year in a peer reviewed publication in the high impact journal called Cancer Cell. Our next gen CTLA-four has both potential efficacy and safety advantages relative to approved and clinical stage molecules and is designed to address the limitations of our current immuno oncology products. In addition to our next gen CTLA-four IND filing, we are also on track to file INDs for two of our first in class bispecific antibodies. The first of these improves the tumor microenvironment through multiple mechanisms to enable a better antitumor and immune response when combined with standard of care and other immunotherapies.

The second depletes Tregs, specifically in the tumor microenvironment, but not in the periphery. We are not aware of any other agent in the immuno oncology space that is capable of doing this. These two tumor microenvironment conditioning agents offer critical solutions to also overcoming the limitations of current immuno oncology treatments. You will hear more specifics on these compounds as well as enter of course, as they enter the clinic early next year, we are more likely to talk about their identity specifically. As I said before, speed and innovation for meaningful clinical advances are our job.

Discovery platforms have enabled our pipeline of four therapeutic classes checkpoint modulating, mono and multi specific antibodies, cellular therapies, neoantigen vaccines and adjuvants. Our cell line development and manufacturing platforms enable fast path to INDs, which give us an advantage in advancing products to BLA filings. We've demonstrated the speed in advancing our CTLA-four and PD-one combinations towards potential BLA filing in as early as 2020. This is just four years after our first in man monotherapy trial commenced. Additionally, earlier this year, we set record for production of GMP grade products for our lead bispecific programs.

Our completed development and at scale manufacturing of our AGEN 1223 compound in under two months from research to cell bank is to our knowledge the fastest ever in the industry, surpassing even conventional antibody development timelines of anyone. I want to highlight these accomplishments, even though they may not sound exciting to you, because without them, it would be impossible for us to be filing so many INDs in a four year span. Let me now turn to our progress in the clinic. To date, we have treated a total of approximately 115 patients with our CTLA-four and PD-one antibodies separately and in combinations. This year, we presented compelling data on the pharmacodynamic activity of our anti CTLA-four and anti PD-one antibodies at both AACR and at ASCO.

We reported at ASCO that our PD-one monotherapy AGEN2034, that is the CTLA I'm sorry, PD-one molecule, generated clinical benefit in more than forty percent of treated patients. We look forward to presenting updated data later this year. We anticipate clinical benefit to be even more robust and importantly more durable. We have reported exciting results from our CTLA-four monotherapy trial at ASCO with 31 of treated patients with refractory cancers showing clinical benefit. An angiosarcoma patient who was refractory to multiple prior treatments had a complete and durable response to the lowest dose of our AGEN1884, that is our CTLA-four molecule, this patient remains disease free today over one year later.

Our CTLA-four and PD-one programs are advancing in three active clinical trials today, to take advantage of accelerated pathways for approval, BLA filings in as early as 2020. My colleague and Head of Regulatory and Pharmacovigilance, Doctor. Sunil Gupta, will describe our plans in more detail in just a bit. In summary, our active clinical trials include PD-one monotherapy in patients with refractory cervical cancer. Two, CTLA-four plus PD-one combinations that are we anticipate will further expand response rates and durability of responses in the same cervical cancer setting to monotherapies alone.

And three, and this is an important indication, CTLA-four monotherapy in patients refractory to PD-one, because this is a significant unmet clinical need today. All of these trials require relatively small numbers of patients for approval and short term endpoints for the same. In our trials so far, we have observed particularly exciting clinical benefit in gynecological cancers. These findings impressed key opinion leader experts and catalyzed our recent engagement with the gynecologic oncology group called GOG. This is a group that has had a terrific track record for patient enrollment and trial successes, including the approval of cacotican and later Avastin for patients with cervical cancer.

Our initiatives to advance programs in second line cervical cancer exemplify our commitment to provide access to effective agents, our agents specifically, where current treatment options have limitations. At the same time, these efforts represent important commercial opportunities for us. This year alone, aggregate commercial revenues for antibodies targeting PD-one and CTLA-four are expected to reach $15,000,000,000 and there are forecasts that in several years, these numbers will be as much as $30,000,000,000 We have defined several development paths, including the second line cervical cancer, which are we expect will enable us to capture a meaningful portion of this large market. There are thirteen thousand new cases of cervical cancer annually and four thousand deaths unfortunately in The U. S.

Alone. As we aggressively engage regulators and secure our BLA filing plans, our regulatory team is under the guidance of an industry veteran, Doctor. Sunil Gupta. Doctor. Gupta is a superb regulatory strategist with a thorough medical background, who I might say is one of the more understated individuals I have met.

Doctor. Gupta is trained, as I said, a trained oncologist with nearly thirty years in senior leadership positions. He joins us from Sanofi where he had a distinguished twenty two year career, which included leading the filings of anti PD-one,

Speaker 2

a PARP inhibition or inhibitor and approval of oxalaplatin and savazitaxel. And it's my pleasure to turn the call to Doctor. Gupta. Sunil? Thank you, Garo.

I'm very excited to be part of a very talented team at Agenus. And furthermore, I'm awed by the prolific pipeline and I aspire to rapidly take these programs into market in the next few years. Let me share some of my observations on the regulatory environment. CTLA-four and PD-one is the only validated Io Io combination. In fact, this is the only immuno oncology combination with approvals in three distinct indications, two of which were secured this year.

Today, the regulatory landscape is changing rapidly and is focused on science, adaptive and clinical seamless clinical trial methodology, including acceptance of surrogate or early markers of activity. Recently, the FDA Commissioner has outlined a plan for modernizing drug development to keep pace with the rapidly advancing science and to ensure that innovation remains affordable for patients. We intend to leverage these initiatives to take our Phase one, Phase two trials to product registration. The FDA Oncology Division has been particularly progressive and has taken actions to promptly approve products that provide greater clinical benefit to patients in relatively small trials. In some cases, in single arm trials using surrogate endpoints in a few dozen patients and in a few years of first in human studies.

From a regulatory perspective, we are positioned to take advantage of this more progressive landscape and accelerated pathways for approval. We intend to have early and frequent interactions with the FDA in this endeavor. Of note, CTLA-four and PD-one antibodies have been such programs with accelerated approvals granted for these products in less than four years after first interim studies. In cervical cancer, our AGEN1884 and AGEN2034 regimen represent the most clinically advanced combination with registrational potential in second line cervical cancer. This is an indication for which there is still a large unmet medical need for a durable treatment option.

In June, pembrolizumab was approved in patients with cervical cancer via the accelerated approval pathway in a small trial with fewer than 100 patients. This reported response rate was around twelve percent to fourteen percent. We at Agenus have an opportunity to pursue a similar path of securing fast accelerated approval with our PD-one AGEN2034 with comparable data as monotherapy in this indication. Early signals from our trials provide support that this is a viable approach and we are moving quickly to take advantage of this pathway. Where PD-one is active, particularly in tumors with some baseline immune recognition like cervical cancer, we expect that the addition of CTLA-four will improve both response rates and particularly durability of response compared to PD-one monotherapy.

We have most recently seen this combination's approval in MSI high colorectal cancer where PD-one was approved initially. The label for the CTLA-four plus PD-one combination regimen has a higher response rate with greater durability than PD-one monotherapy. We have upcoming discussions with regulators scheduled for later this year for this combination and I look forward to providing further updates at a relevant time. Going beyond CDD LA4 and PD-one, I would like to share a glimpse as to how we will advance other programs in our pipeline for which we will we have or we will be filing INDs in 2018. As Dara mentioned, our next generation neoantigen vaccine is advancing in the clinic.

Clinically, we have demonstrated that vaccines are important to expose tumors for immune attack and we have outlined our findings in recent presentations and our latest newsletter. We are positioned to combine our vaccine with proprietary CPMs and or bispecific antibodies and further take advantage of accelerated pathways such as the RMAT or the regenerative medicines and advanced therapy designation of CBOO. RMAD designation is equal to breakthrough designation at CBER and allows sponsors to have frequent interactions with the FDA. I must note that neoadjuvant vaccines are a prime example of individualized medicine. Our next generation CTLA-four and tumor microenvironment conditioning specific agents, AGEN1223 and AGEN1423 have unique mechanisms that are definable.

Our translational scientists will validate these mechanisms and in clinical trials will allow us to selectively, I emphasize selectively accrue patients most likely to benefit from this treatment. We will bring meaningful and effective therapies to patients quickly and will leverage innovation at the bench, in the clinic and in partnership with regulators to do so. Thank you very much and I hand over to Gaurav.

Speaker 1

Thank you very much Sunil. And I will now turn it over to Christine Klatzkin, VP of Finance to provide financial highlights.

Speaker 3

Thank you, Gaurav. I am happy to review our second quarter twenty eighteen financial results. Let me first update you on our cash position. At the 2017, our cash balance was $60,000,000 We closed the first quarter with $51,000,000 and closed the most recent quarter with $43,000,000 As you can see from these numbers, we have managed our cash prudently from quarter to quarter. As Garo said earlier, based on our current plans, we expect our cash balance to be similar to or higher than the end of the current quarter.

For the second quarter ended June 3038, we reported a net loss of $25,000,000 or $0.24 per share compared to a net loss for the same period in 2017 of $32,000,000 or $0.32 per share. In this second quarter, we recognized net revenues of $16,000,000 which includes milestone achievements and non cash royalties earned. For the six months ended June 3038, we reported a net loss of $80,000,000 or $0.76 per share compared to a net loss for the same period in twenty seventeen of forty nine million dollars or $0.51 per share. The increased net loss reflects reduced revenue due to an accelerated milestone received during 2017 from Incyte and the loss on the early extinguishment of our debt. I will now turn the call back to Garth.

Speaker 1

Thank you, Christine. In closing, let me outline our key milestones expected over the next twelve months. Number one, complete a crew of our CTLA-four and PD-one trials, which are expected to support our path to BLA and our endeavors to develop, register and launch our CTLA-four and PD-one antibodies. Two, advancing six new discoveries to clinical trials for patient benefit, namely our two first in class bispecific antibodies, our next generation CTLA-four, our TIGIT, which is a differentiated molecule and our CD137 antibodies as well as our personalized neoantigen vaccine, particularly in combination with immuno oncology agents that we control. Three, initiate combination of neoantigen vaccines with our, as I said, TTLA-four and PD-one antibodies.

And four, close at least one of our ongoing partnership discussions and five, with AgenTus, we expect to complete a private placement followed by a potential public offering in the next U. S. Territory. We're progressing our lead AgenTus cell therapy program into the clinic and expect to file an IND within approximately the next twelve months. And that concludes my formal remarks, and I believe we're now ready to take questions.

Speaker 0

We will now begin the question and answer session. First question comes from Biren Amin of Jefferies. Please go ahead.

Speaker 4

Hi guys. Thanks for taking my questions. Gaurav, you mentioned that you're hoping to get two milestones this quarter. Can you just detail for us what the amount would be for those two milestones? And what's the amount for the third milestone that you're expecting by the end of the year?

Speaker 1

For the first two, it will be approximately $10,000,000 and for the third one, another $5,000,000 specifically for from these transactions or these milestone payments. We also potentially expect, which we have not outlined, a number of other proceeds from several other transactions, including potentially additional royalty capturing transactions that we are actively pursuing at the moment.

Speaker 4

Got it. And then what about the Shingrix? You mentioned Shingrix sales are currently ahead of forecast and that you could potentially anticipate milestones from that royalty transaction. What would those amount to, if any, this year?

Speaker 1

So those milestones will not be this year. Even though, as I mentioned earlier, Shingrix sales are tracking 3x what the initial estimates were in the beginning of the year. We expect the milestones that I was referring to, which are revenue performance milestones, and they are in the billions or certainly over $1,000,000,000 those not to be achieved during the course of 2018.

Speaker 4

Got it. Okay. And then as it relates to the second line cervical cancer trial, can you just update us on enrollment and when we can expect the next data update from that study?

Speaker 1

Okay. Jen, if you could give us Sunil will be updating you on these things going forward. But as you know, he has been with the company only for a few weeks now. So I will defer to Jen on this until the next call.

Speaker 0

Hi, Biren. As we have mentioned, we anticipate sharing data out on our three programs upcoming conferences, major conferences this year. So accrual is advancing. We're seeing some very good signals of activity as Geralt mentioned during the call and we'll be providing detailed updates at major conferences.

Speaker 1

And also for your benefit, this trial got initiated very, very recently. So we will have more meaningful accrual numbers for you, I'd say by October, November of this year.

Speaker 4

Great. Thank you.

Speaker 1

Any other questions?

Speaker 0

This concludes our question and answer session. I'd like to turn the conference back over to Doctor. Garo Armen for any closing remarks.

Speaker 1

Thank you very much, Andrea. I think this call will be broadcast on our website and via webcast. And please, if you have any questions subsequently, don't hesitate to contact us. We have a very active communications effort ongoing, as you can see, recently with the publication of our newsletter, which will be a regular publication that we publish every other Monday and are also presence in social media. One of the reasons that we've undertaken this bolstered effort of communications is because we get a lot of questions from investors and others about our vaccine programs, and the world still perceives us as an only vaccine company or vaccine only company.

And as I said earlier, those that have followed us have witnessed the fact that the company has transformed itself in the last four years to be a very certified immuno oncology player. And as such, we take the responsibility for educating investors going forward. And so we will have a much more aggressive stance to provide you with information that you need to understand our company better.

Speaker 0

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.