Agenus Inc. (AGEN) Earnings Call Transcript & Summary

Hello, everyone. Welcome to the Virtual Jefferies London Healthcare Conference. My name is Jeet Mukherjee. I'm one of the Biotech Equity Research Associates here at Jefferies. And it's my pleasure to have Agenus here with us for this session. And speaking on their behalf is their President and COO, Jennifer Buell. So Jennifer, pleasure to have you with us.

Jeet, thank you very much. We're thrilled to be here. Glad to connect. I'm glad to be part of the conference.

Not a problem. So Jennifer, to start things off, at a high level, I think it goes without saying that Agenus has quite a robust R&D pipeline, spanning from PD-1, CTLA-4, TIGIT, just to name a few. As a company, how are you guys prioritizing these assets going forward as they continue to advance in the clinic as well as other assets continuing to enter the clinic for the first time?

Sure. Happy to go through this with you. And maybe, Jeet, I'm going to highlight a couple of key features of Agenus. And what we have developed essentially is a biotechnology company built on a series of platforms, which has enabled our ability to create the most robust engine and an I-O. And I'll highlight a couple of reasons for that statement, some of the data that supports it. And just by way of background, the company is still just about 200 employees, with all of the capabilities to go from a concept to interrogating the biology, the targets to then advancing to generating the antibodies, whether they're monospecific or bispecific, and then the full GMP manufacturing, bringing them into the clinic, developing them. And now we're en route to BLA. All of this internally with an incredibly efficient footprint. And over the past 4 years, we've delivered 15 new discoveries to the clinic. Now about speaking to the prioritization, I'll tell you how we had defined our approach and then how we're advancing all of those at speed. So our goal would be to increase the optionality for patients, for physicians, for providers by improving and increasing the number of novel discoveries into the clinics. [Audio Gap] Chris will be following, and they're on a fast path to development. And then we've established very formal partnerships with Merck. We've done some discovery of Merck's ILT4 molecule. That was a molecule that we discovered it, data were presented at ESMO, very promising. Gilead, we've formed a partnership with Gilead that generated about $150 million for our preclinical assets advancing in the clinic and options on 2 other programs. UroGen has licensed the rights for zalifrelimab, our first-gen anti-CTLA-4 molecule in a specific formulation in their proprietary formulation for urological cancers. We licensed balstilimab, our PD-1 and zalifrelimab, our CTLA-4 to beta for China, very robust development program. We have, of course, a long-standing partnership with Incyte. And so part of what we have done was create, leverage all of our biology immunology expertise. All of our platforms to advance very quickly, new discoveries, and then we've leveraged partners for speed to patients, to support getting the infrastructure in place so that they can help with that getting the development done as efficiently as possible, but also to generate the kind of financing that we've generated from those partnerships transactions of over $575 million in that same 4-year period. So very productive, both from the research and development as well as then from our ability to finance the company and really less or nondilutive ways through these partnerships and milestones. So as it relates to now advancing our assets, which did we elect to retain and why? So without the capabilities that we have, we have looked at -- there's a lot of ways to approach drug discovery. And in some cases, you could take a high-risk approach, novel targets, deep genome interrogation, or you can look at perfecting molecules that exist by really understanding why they work for some patients and why they don't work for others. We're taking both approaches, but our priority approach was to take validated targets like CTLA-4 and PD-1. We know that those molecules work. They're validated in now over their 8 approved combination indications over 18 monotherapy indications. So we know that these are really important clinically derisked molecules that are really complementary and necessary for combinations with a number of innovative therapies in our portfolio. Those were -- that was our first entree. We wanted to have the freedom, the flexibility for pricing, for access and for combinations and for development within our own hands and within our own portfolio. So that the selection of our first-gen CTLA-4 and PD-1 were really the foundation of that true independence and flexibility in development and pricing. Beyond that, we looked at how can we leverage our antibody engineering expertise to perfect molecules that are validated and really have first or best-in-class targets. That was our next foray. And so how we approach that was with AGEN1181. So we had identified that patients respond to first generation CTLA-4 is a good proportion of that monotherapy may be about 20%. We knew we could do better than that. So we and others interrogated why patients may not respond to first generation, and we identified a large proportion of the population. Over 40% of those patients have a genetic polymorphism in their CD16 allele that renders them less responsive to a first-gen CTLA-4. So we set out to perfect that, and I believe we have. We'll talk about that maybe in a few minutes. But that approach of taking valid targets, validated targets and really perfecting the biology. So you've clinically derisked the target. You've optimized the biology, expanded or broadened the proportion of patients who are eligible or indicated for that agent or who could benefit. And then we've looked at where should we employ this novel engineering. We Fc-engineered our next-generation CTLA-4. We applied a very similar approach to TIGIT, monospecific and bispecific. So again, another validated target in IL generating a lot of enthusiasm, but no monotherapy benefit with the current first generation molecules. Fc silent molecules, we published in 2018 in cancer cell that really Fc competence is necessary for optimal anti-TIGIT benefit. Fc enhance brings it to a superior level where you actually see superior NK cell activation, superior tumor-killing, improved memory responses as well as a broader patient population of responders. So we've Fc-engineered and applied that same technology to another validated target in TIGIT. So that's the -- how we've approached the prioritization of our molecules to really broaden the patient -- the population of patients who can benefit with approaches that are derisked in some respects. And in applications that would allow us to fast for fast-to-market approvals with relatively small trials. And then, of course, we've build on from that, and I won't spend too much time on it, but I will highlight a few additional features. So we are truly experts in immune biology. And we know that while T-cell targeting is really important, myeloid cell biology is incredibly sophisticated and also very important, and conditioning the tumor microenvironment in agents that will do so, whether it's through the adenosine and TGF-beta pathway, which was the molecule we licensed to Gilead, a CD73 TGF-beta-Trap a very interesting molecule and dual approach to an attack on tumor escape mechanisms, both through adenosine and TGF-beta. We've taken a similar approach with respect to myeloid cell biology, the ILT4 antibody that we discovered for Merck has generated some very robust and exciting response. I think they presented 11 responses at ESMO. And that myeloid biology is incredibly important, and we have the expertise in-house to actually optimize how we're going to address tumor microenvironment conditioning through myeloid biology. So those are more nuanced and novel targets, critical and important to the full suite of tools that we need for anticancer immunity. But we didn't prioritize those early because they do come with some additional risk, of course. And now those are becoming less risky as we start to see some of the clinical proof of mechanisms coming out. So I hope that answers your question.

It certainly does really, really informative on that front. Maybe turning to bali/zali in the cervical setting. You guys have certainly updated us in terms of the response profile and the clinical efficacy of the combination throughout the year. Just wanted to get your input and from your conversations with your KOLs and other clinicians, how does the bali/zali combo really differentiate versus standard of care in this setting and even how does it differentiate from other competitors that are trying to enter the cervical space, whether they be TILs or even other ADCs?

Jeet, if you'll let me -- I'll go ahead and let the data speak for itself, and I'll share my screen. And I'll go right to your question here. And thanks for the recognition with respect to the visibility. We've been trying to be incredibly outward about our data disclosures across our programs. And so we've presented at major conferences throughout the course of the year in many of the programs we're talking about. And it sits in 7 of those programs, 4 clinical stage were presented on as well. ESMO was our big -- really our big splash with respect to our lead programs that are supporting our BLA filings. These were the largest clinical trials conducted to date in patients with relapsed metastatic cervical cancer. And I'll just highlight where we are with respect to this field in general. Now this is a really difficult disease. The median age of women impacted are about in the 40s, late 40s. These are moms who have difficulty in taking the time to get the kind of therapeutic treatment that's necessary. And there hasn't been a lot of development in this space because it's somewhat of a rare tumor. Chemotherapy has been the long-standing standard of care with very limited response rates in highly toxic. So we're looking at about 12.5% responses with current chemotherapy. The gynecologic oncology group added bevacizumab to that, and they saw some incremental benefits and duration of response, but really, they came with some complex toxicity. And then most recently, in 2018, midyear, pembrolizumab was approved with 14% response rates in PD-L1 positive tumors only. Merck saw no activity in PD-L1 negative tumors. Now when we brought bali/zali forward, we thought number one, we knew that this -- the activity. So virally induced cancers generally were responsive to checkpoint-modulating antibodies. We pursued 2 approaches. One was Bali monotherapy and then in the pursuit of expanding the duration of benefit in the number of patients who can respond to therapy, we added our CTLA-4 zalifrelimab to the combination. And the data we presented at ESMO showed that we're actually seeing in that same population is Merck PD-L1 positive tumors, we had 19% response rates, and we have responses in PD-L1 negative tumors. We see very impressive duration of response really exceeding 15 months right now, but the duration not reached with the combination and not surprising. CTLA-4 addition, we know in a host of new tumors that CTLA-4 expands not only the number of patients who respond, but also the duration of that response. And we see that here in cervical cancer. And the response rates here in the PD-L1 positive tumor, that's 27% response rates and also activity over 10%, 11% in the PD-L1 negative tumors. That shows really a potential best-in-class opportunity compared to other available therapies today. And then when you look at how this compares to new therapies that are coming currently in development, we know that Seattle Genetics has a molecule showing comparable response rates to our combination around 24%. And the duration is not there yet though. The median duration of response most recently reported was about 8 months. So this comparably, we're starting to see the real value of what this combination can bring to patients. And then similarly, if you look at the column, right most, this is Regeneron's PD-1 molecule. Their response rate appears to be about 10%, with the median duration moving beyond 3.7 months, and we expect additional data to be presented from cemiplimab relatively soon. So that's -- we're really quite excited about what this can do with respect to, first, bring in -- expanding the benefit of what's available to patients with PD-L1 negative tumors because that's a high unmet need right now. Those patients are not indicated for pembrolizumab, and so this would be a real benefit to be able to drive additional therapeutic options for those patients. And then adding CTLA-4 to a potential best-in-class therapeutic option for these patients.

Got it. And maybe as a follow-up, I think the combo data, as you mentioned, certainly, differentiates versus the other agents that you had mentioned. But also, what does stand out is the response rate seen in the PD-L1 negative patients. Again, in your conversations with KOLs and other clinicians, has there been interest on their part in using, say, Bali monotherapy as an agent of choice over perhaps the combination as they look forward to these assets coming to the market openly.

Well, without question, and clinicians, of course, uniformly are very data-driven. And so they are really moved by data demonstration of responses, and they're much less likely to use different therapeutic approaches that don't really have that kind of support. When they saw the data here, and now we had partnered very early many years ago with the GOG as we were launching this program. We launched it internationally, so both with the GOG in the U.S. and then ENGOT in outside of the U.S. and there's uniformly interest in seeing the PD-L1 negative response rates in our study. So we do anticipate that this will help expand the market opportunity for balstilimab as a monotherapy, and then, of course, the combination, I think, will also have a broader opportunity, not only because of the benefit, but also because of the expanded use in PD-L1, independent PD-L1 status.