Agenus (AGEN) 12 Nov 242024 Q3 Earnings call transcript

Good morning, and welcome to Agenus Third Quarter 2024 Conference Call and Webcast. [Operator Instructions]. 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.

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 third quarter.

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 surgery. 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 cancer.   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. [Audio Gap] in 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 BOT/BALs' 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. [Audio Gap]   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 9 months of this year.

Second, by the way, these were necessary expenditures.

So 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 [indiscernible] 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 BOT/BAL. These steps reflect our commitment to building a strong foundation for Agenus; one that allows us to deliver on the extraordinary promise of BOT/BAL while meeting the needs of our patients and [indiscernible]. 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?

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 BOT/BAL 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 BOT/BAL and positioning Agenus for long-term success. I'll now hand it over to Christine to discuss the financials.

Thank you, Robin. Agenus ended the third quarter 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 third quarter. Cash used in operations for the 9 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 3 and 9 months ended September 30, 2024, we recognized revenue, which includes noncash revenue of $25 million and $77 million, respectively. This compares to $24 million and $7 million for the same period in 2023. Net loss for the 3 and 9 months ended September 30, 2024, is $67 million and $186 million, respectively. This net loss includes noncash operating expenses of $41 million for the third quarter and $112 million for the 9 months ended September. This compares to a net loss for the 3 and 9 months ended September 30, 2023, of $65 million and $20 million, respectively -- sorry, $209 million, respectively. I'll now turn the call back to Garo.

Thank you, Robin and Christine.

As we close, I want to leave you with a sense of what we are striving for at Agenus. BOT/BAL 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. BOT/BAL 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, BOT/BAL 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, 2 separate presentations representing 2 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 actions. 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 BOTBAL for the benefit of patients, shareholders, and the broader medical community. With that, we'll now open the call for questions. Operator?

[Operator Instructions] Your first question comes from the line of Emily Bodnar.

I guess first one for me, now that you have [Audio Gap] can you maybe just summarize how you're thinking about the Phase III design and next steps and timelines for getting that study initiated? And then on [Audio Gap] 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?

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'll ask our Chief Medical Officer, Dr. Steven O'Day, to address.

Emily, so to address your question around the Phase III design and timing, we now have, as you've noted, we have feedback both from EMA and FDA that [Audio Gap] to be able to finance the study. And that can come in either through our efforts on the financing side or through a potential collaboration with a pharma partner, both [Audio Gap], but we definitely are excited by the fact that the door is now open for us to be able to proceed with that study.

And our 2 neoadjuvant studies beyond [Audio Gap] changes at Cornell, our neoadjuvant efforts have come to a halt. But 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 [Indiscernible] presentation.

Thank you, Emily, for the question.

As you know, we 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 2, as Garo referred to, there are 2 other data sets that are emerging, which 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 BOT and BAL, and we look forward to sharing that independent second data set in the setting of what Cornell showed. And then 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 2 other data sets that will be emerging in the first part of next year.

And then maybe just lastly on the Phase II relapsed/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?

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

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

First, should we expect any data from some of the cohorts in other tumor types like melanoma and pancreatic cancer in the near term or could you provide any updated timing for those cohorts?

I mean Steven O'Day 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 [Audio Gap] and are very excited about the need to make BOT/BAL 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.

So thank you for the question.

In addition to our Phase II colorectal data with 2 other Phase II 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, and we expect to have randomized data next year.