Agenus - Q3 2024

Executive Summary

• Agenus’ Q3 2024 maintained operational momentum on BOT/BAL with EMA alignment on Phase 3 MSS CRC design and dose, while addressing liquidity via cost reductions, asset monetization plans, and ongoing strategic transaction discussions.
• Financially, revenue was $25.1M and net loss was $(67.2)M, with cash at $44.8M; the company raised $7.1M post-quarter under its ATM, and highlighted meaningfully reduced cash used in operations versus prior year-to-date.
• Clinical narrative strengthened: BOT/BAL continues to show unprecedented activity in hard-to-treat tumors, including neoadjuvant MSS CRC, with additional European neoadjuvant datasets expected early 2025 and maturing Phase 2 CRC data planned for early 2025 presentation.
• Wall Street consensus estimates from S&P Global for Q3 were unavailable via our feed on this request; comparisons to estimates cannot be provided (S&P Global data unavailable due to access limits).
• Near-term stock catalysts: Phase 3 initiation path clarity (EMA/FDA), strategic transaction progress, and early-2025 European neoadjuvant data readouts supporting BOT/BAL’s breadth.

What Went Well and What Went Wrong

What Went Well

• EMA alignment on Phase 3 MSS CRC study design/dose selection, advancing registrational path for BOT/BAL.
• Operational discipline reduced cash used in operations year-to-date vs prior year, alongside active asset monetization and strategic transaction processes to support liquidity.
• Management emphasized compelling BOT/BAL activity across tumor types, with expected early-2025 neoadjuvant data from Europe to reinforce breadth; “BOT/BAL represents one of the most significant advancements in cancer immunotherapy” (Garo Armen).

What Went Wrong

• Cash balance declined to $44.8M at quarter-end with net loss of $(67.2)M, highlighting persistent financing needs despite subsequent $7.1M ATM proceeds.
• Non-cash interest expense remained high ($36.2M in Q3), contributing to reported net loss and underscoring capital structure constraints.
• FDA remains cautious on accelerated approval based on interim BOT/BAL data; management continues to pursue more mature datasets and international pathways to mitigate regulatory timing risk.

Transcript

Operator (participant)

Good morning and welcome to Agenus' Q3 2024 Conference Call and Webcast. All participants will be in a listen-only mode until the question-and-answer session. Please note this event is being recorded. If anyone has any objections, you may disconnect at this time. I would now like to turn the conference over to Alexa Buffa from Agenus Corporate Communications. Alexa, please go ahead.

Alexa Buffa (Head of Investor Relations)

Thank you, Operator, 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 releases and partnership opportunities, among other updates. These statements are subject 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. Robin Taylor, Chief Commercial Officer, and Christine Klaskin, Vice President of Finance. Dr. Steven O'Day, Chief Medical Officer, will be participating in the question-and-answer session. Now I'd like to turn the call over to Garo to highlight our progress in the Q3.

Garo Armen (Chairman and CEO)

Thank you, Alexa, and good morning, everyone, and thank you all for joining us today. At Agenus, we are driven by the belief that we can redefine what is possible in cancer treatment. This belief is embodied in the progress we've made with bot/bal. bot/bal is showing unprecedented results in cancers that have resisted all previous therapies, as well as in patients with earlier stages of disease who face morbidities associated with conventional treatment options such as chemotherapy, radiation, and radical, and sometimes debilitating or even mutilating surgeries. bot/bal represents a paradigm shift in how we approach cancer treatment. In the neoadjuvant setting, for example, bot/bal has demonstrated the potential to address diseases such as MSS colorectal cancer, which do not typically respond to immunotherapy and which account for more than 85% of all colorectal cancers.

The initial data we presented at ESMO GI in 2024, just a few months ago, from the Cornell study highlights this potential. These results in a tumor type historically resistant to immunotherapy are absolutely groundbreaking. Ongoing trials in Italy and the Netherlands will further expand on these results and provide insights with data anticipated early next year. We believe these studies will reinforce the strength and breadth of botensilimab and balstilimab's impact, not just in colorectal cancer, but across multiple cancers which generally respond poorly to other treatments. While the science is advancing, the financial challenges we face are significant. Developing therapies with this level of promise requires significant resources, and we're operating under financial constraints. For example, we ended the quarter with just $44.8 million in cash and subsequently raised another $7 million and change. These figures underscore the need for decisive action.

Let me give you a glimpse of what we're doing. First, we've implemented measures that have significantly reduced cash outflow, ensuring we remain focused on our highest priorities and internalizing as many expensive functions as possible, such as CRO and CDMO services, for which we have spent a significant amount of money in the first nine months of this year. Second, by the way, these were necessary expenditures. But now we are internalizing this as we wind down some of these activities as trials are maturing. Secondly, for the first time in almost a year, the window is opening up for us to monetize on our real estate assets. Remarkably, this effort has gained momentum with the improved financial environment following the U.S. elections just a week ago, and the assets that we're talking about are valued, or they are appraised at, our Vacaville property at over $45 million.

That's an appraisal about a year ago. And our Berkeley facility, which was our first manufacturing facility, which is appraised at $25 million. And thirdly, and most importantly, we are in advanced discussions on several strategic transactions designed to deliver substantial value and resources. We see one or more, or a combination of these transactions, as key to our long-term growth, enabling us to sustain and accelerate our progress with Buck Valve. These steps reflect our commitment to building a strong foundation for Agenus, one that allows us to deliver on the extraordinary promise of Buck Valve while meeting the needs of our patients and shareholders. The progress we've made thus far is a testament to the strength of our science and the dedication of our team. With that, I'll now turn it over to Dr. Robin Taylor, our Chief Commercial Officer, to provide further insights into our business strategy and patient access initiatives. Robin?

Robin Taylor (CCO)

Thank you, Garo, and good morning, everyone. Building on Garo's remarks, I'd like to provide more detail on the strategic initiatives that are driving our progress. First, let's start with the clinical data. Bot/Bal's results are reshaping expectations for immunotherapy, especially in microsatellite stable colorectal cancer, a setting that has been resistant to treatment with prior immunotherapy approaches. These unprecedented outcomes, combined with data across multiple tumor types, are driving significant interest in Bot/Bal from key stakeholders, including the medical community, patient advocates, and potential collaborators. From a business development perspective, we are actively engaged in discussions with pharmaceutical partners, regional collaborators, and other stakeholders to ensure Bot/Bal reaches its full potential. These discussions are focused on optimizing value creation for both patients and shareholders.

We are also advancing our compassionate use and named patient programs globally, ensuring that patients with limited options will have broader access to botensilimab and balstilimab outside of clinical trials. These initiatives are critical for addressing the urgent needs of patients around the world. On the financial front, our strategy is built on a combination of operational discipline, asset monetization, and strategic transactions. The recent uptick in market conditions, particularly following the U.S. elections, has bolstered the value of our real estate and operational assets. We expect to close on these monetization opportunities soon, which will provide a bridge to a transformative transaction currently under active discussion. This transaction, which we anticipate finalizing in the near term, is expected to bring in significant resources to support our mission while optimizing long-term value for our shareholders.

In summary, we are making significant strides in advancing botensilimab and balstilimab and positioning Agenus for long-term success. I'll now hand it over to Christine to discuss the financials.

Christine Klaskin (VP of Finance)

Thank you, Robin. Agenus entered the Q3 2024 with a consolidated cash balance of $44.8 million, compared to $76.1 million on December 31, 2023. As Garo mentioned, we have raised $7.1 million through sales of common stock under our market issuance sales agreement since the end of the Q3. Cash used in operations for the nine months ended September 2024 was $129.7 million. This is a reduction from spend of $183.8 million for the same period in 2023. For the three and nine months ended September 30, 2024, we recognize revenue, which includes non-cash revenue, of $25 million and $77 million, respectively. This compares to $24 million and $7 million for the same periods in 2023. Net loss for the three and nine months ended September 30, 2024, is $67 million and $186 million, respectively.

This net loss includes non-cash operating expenses of $41 million for the Q3 and $112 million for the nine months ended September. This compares to a net loss for the three and nine months ended September 30, 2023, of $65 million and $20 million, respectively. Oh, sorry, $209 million, respectively. I'll now turn the call back to Garo.

Garo Armen (Chairman and CEO)

Thank you, Robin and Christine. As we close, I want to leave you with a sense of what we are striving for at Agenus. Botensilimab and balstilimab is not just a new therapy. It is an opportunity to redefine the future of cancer treatment, and these are the sentiments of not just Agenus team members, but the sentiments of scores of clinicians around the world. Botensilimab and balstilimab is an opportunity to redefine cancer treatment in ways that we think will benefit patients in an unprecedented manner. In MSS colorectal cancer and other hard-to-treat cancers, botensilimab and balstilimab is showing that it's possible to intervene earlier, more effectively, and with outcomes that could preserve not just the survival, but the quality of life that patients deserve.

You will see significant evidence of that at conference presentations very early next year, two separate presentations representing two separate trials in the neoadjuvant setting, one in colorectal cancer, one in cancers that are across the board. This is why we are so committed to advancing this therapy. We know the financial challenges we face, and we are addressing them with deliberate and focused action. By reducing costs, monetizing assets, and advancing discussions on strategic transactions, we are laying the foundation for sustained progress. This is a critical moment for our company and for patients. The science is strong, the clinical momentum is real, and the opportunities ahead of us are extraordinary. But above all, this is about the patients, those who are counting on us to deliver hope and a path forward. I want to thank you for your continued support and belief in our vision.

We remain committed to realizing the full potential of botensilimab and balstilimab for the benefit of patients, shareholders, and the broader medical community. With that, we'll now open the call for questions. Operator?

Operator (participant)

At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. We ask that you please limit your questions to one question, one follow-up. We will pause for just a moment to compile the Q&A roster. The first question comes from the line of Emily Bodnar with H.C. Wainwright. Hold on a moment, please.

Emily Bodnar (Analyst)

Hi.

Operator (participant)

Please go ahead.

Emily Bodnar (Analyst)

Oh, hi. Good morning. Thanks for taking the question. I guess first one for me, now that you have guidance from the FDA and the EMA around the Phase 3 design, can you maybe just summarize how you're thinking about the Phase 3 design and next steps and timelines for getting that study initiated? And then on the three investigator trials that you mentioned in the neoadjuvant setting, can you maybe just go through each of those and kind of how the designs for those studies differ and maybe set some expectations to what we can see in the early 2025 data readout? Thank you.

Garo Armen (Chairman and CEO)

Okay, so the first question I will ask Robin Taylor to answer because he has been in deep discussions with potential collaborators and investors in the company on this very issue, and the second question I have to ask our Chief Medical Officer, Dr. Steven O'Day, to address.

Robin Taylor (CCO)

Hi, Emily. To address your question around the Phase 3 design and timing, we now have, as you've noted, we have feedback both from EMA and FDA that really allows us to proceed. Of course, we will do that when we have a strategic partnership that allows us to be able to finance the study. That can come in either through our efforts on the financing side or through a potential collaboration with a pharma partner, both of which we are in active discussions at the moment. That is really the level of detail that we can provide at the moment. We definitely are excited by the fact that the door is now open for us to be able to proceed with that study.

Our two neoadjuvant studies beyond Cornell, there has been some concern, Steven, that because of some personnel changes at Cornell, our neoadjuvant efforts have come to a halt. In reality, it's just the opposite. In fact, we have expanded, if you can articulate without disclosing too much data so that we don't jeopardize our presentation.

Steven O’Day (CMO)

Thank you, Emily, for the question. As you know, we've presented our NEST data, which is the Cornell data, at several conferences, most recently at ESMO GI, updating that data, which continues to really be remarkable in the signal that it's giving in both MS stable and MS high colon cancer. There are two, as Garo referred to, other data sets that are emerging, which we will be presented in early 2025, both from Europe. One of them is a similar scenario to the Cornell in the sense that it's looking at colorectal cancer in the neoadjuvant setting with Buck and Bal. We look forward to sharing that independent second data set in the setting of what Cornell showed. The other data set that's emerging from Europe is from the Netherlands.

And this will be a broader patient population that includes colorectal patients, but also includes other solid tumors that historically have had major challenges or had inability to respond to immunotherapy. So those are the two other data sets that will be emerging in the first part of next year.

Emily Bodnar (Analyst)

Got it. Okay. Makes sense. And then maybe just lastly, on the Phase 2 relapse refractory setting in CRC, I believe previously you were saying you would have additional data, I believe, in the first half of 2025. Is that still on track?

Steven O’Day (CMO)

Emily, thank you. Steve O'Day again. Yes, that data has continued to mature. The last patient was enrolled in the Phase 2 colorectal refractory study in November a year ago, and we look forward to continuing to allow that data to mature and present it at a conference in early 2025.

Emily Bodnar (Analyst)

Okay. Great. Thank you so much.

Operator (participant)

Your next question comes from the line of Matt Phipps with William Blair.

Madeline Schiller (Analyst)

Great. Hi. This is Madeline on for Matt. Thanks for taking our questions. First, should we expect any data from some of the cohorts and other tumor types like melanoma and pancreatic cancer in the near term, or could you provide any updated timing for those cohorts?

Garo Armen (Chairman and CEO)

I mean, Steve and I will address that. But as you know, we have generated data across approximately 10 tumors. And most recently, at ESMO, we presented data on sarcoma. The data, as it matures, is getting more and more compelling. And our investigators at places like ESMO that convene and discuss the prospects for treating their patients in the future are very excited about the need to make botensilimab and balstilimab available for their patients at a wider scale. But Dr. O'Day is the gatekeeper of all of these efforts, and he'll give you more color on what we're going to be doing.

Steven O’Day (CMO)

Thank you for the question. In addition to our Phase 2 colorectal data, two other Phase 2 trials, as you mentioned, one in pancreas in a refractory setting and one in melanoma in a very refractory setting, have completed accrual and are maturing. We expect to have randomized data in those settings in the first half of the next year.

Madeline Schiller (Analyst)

Great. Thank you.

Operator (participant)

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.