Agenus Inc. (AGEN) Earnings Call Transcript & Summary

Good morning, and welcome to Agenus Second Quarter 2024 Conference Call and Webcast. [Operator Instructions] Please note, this event is being recorded. [Operator Instructions] I would now like to turn the conference over to Zack Armen, Head of Investor Relations at Agenus. Zack, please go ahead.

Thank you, Leonardo, 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 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. Steven O'Day, Chief Medical Officer; and Christine Klaskin, Vice President of Finance. Dr. Robin Taylor, Chief Commercial Officer, will be participating in the Q&A session. Now I'd like to turn the call over to Garo to highlight our progress in the second quarter. Garo?

Good morning, everyone, and thank you for joining us today. On the merits of our circumstances and on matters within our control with a strong emphasis on impacting patient lives, we have made significant progress in the development of botensilimab, which we call BOT, and balstilimab, which we call BAL. And these are for the treatment of colorectal cancer, even though the combination has been used for many other cancers. Recently, Agenus disclosed top line data from its global Phase II trial, evaluating the BOT/BAL combination in patients with relapsed/refractory microsatellite stable, which is called MSS colorectal cancer. These patients constitute about 95% of the diagnosed colorectal cancer patients globally. And as you know, colorectal cancer has been on a significant rise as of late. The results from our second trial, the Phase II trial, are consistent with those observed in our Phase I trial, demonstrating a confirmed overall response rate of approximately 20% in the cohorts receiving 75 milligram of BOT, plus 240 milligrams of BAL combination. This dosage has been identified as the active dose during a recent meeting with the U.S. FDA, allowing Agenus to proceed with further development, including our planned confirmatory Phase III trial. BOT/BAL is demonstrating unprecedented activity in treating challenging cancers across various stages, both as a chemotherapy-free IO-IO only combination as well as in combination with standard chemotherapy in first-line metastatic patients where chemotherapy is the standard of care. It is important to recognize that key opinion leaders and clinical investigators globally, including significant numbers in the U.S. who have seen our data and/or have experienced the outcomes in their patients strongly advocate making BOT/BAL available to their patients. In our trials of significant numbers of patients totaling more than 315 with colorectal cancer and over 1,000 patients across 10 different cancer types, we are seeing deep durable responses in patients who otherwise face grim prognosis with current standard treatment. We believe along with the experts in the field that these durable responses translate to long-term patient benefit. While the FDA has not yet concurred with this view and the urgency to make BOT/BAL widely available for patients and their treating physicians, we are optimistic that our mature data will influence their thinking. On the other hand, we're very encouraged with the initial feedback from other regulatory agencies, which has been notably much more positive thus far. On this note, we've started engaging with regulatory bodies outside of the U.S., including the European agency in order to explore rapid approval pathways for BOT/BAL. In Europe, this could mean conditional approval to bring these potentially life-saving agents to patients as soon as possible. Separately from all of this, we are very excited to share that important and very exciting data from a multi-cancer neoadjuvant study, which is being conducted at a major European cancer center, will be presented at a major cancer conference in upcoming months. Our clinical data, as you know, has generated strong support from medical and scientific communities. Recent publications in Nature Medicine and Cancer Discovery, along with a peer-reviewed journal article that came from Dana-Farber Cancer Institute here in Boston, emphasized the importance of bringing BOT/BAL to patients with MSS colorectal cancer. By the way, MSS colorectal cancer is one of the most difficult cancers to treat, not just within the colorectal realm, but across the board. We've also seen an unprecedented number of compassionate use requests, driven by the deep and durable responses in a cancer where patients had no acceptable options among many approved drugs, highlighting the urgent demand for BOT/BAL in colorectal cancer community. Dr. O'Day will describe this reality in more detail during our call. On the business side, we're actively exploring global partnership for BOT/BAL and other assets in our pipeline. We've regained full rights to AGEN1777 and AGEN2373 from BMS and Gilead, respectively, and are evaluating new partnerships for these programs among the biopharma industry players. As you know, many companies out there are scrambling to cut costs. And I'm talking about large companies, medium-sized companies and small companies. But there are still pockets of brilliance amongst them. Interestingly, we've been having increased interest from some of these innovative companies following our announcement about the FDA guidance discouraging accelerated filing. We've strengthened our cash position in the second quarter with the first transfer of the $75 million royalty financing led by Ligand Pharmaceuticals, and we're in talks with investors for a second closing. We're encouraged by the fact that we have received inquiries to potentially invest at premium prices to our current stock price. Additionally, I'd like to let you know ahead of time, because the filing will be this afternoon, that we will be expanding our ATM filling facility to be in a state of readiness in spite of the fact that we have no current plans to issuing stock at these prices. And you will see in this filing that we've done some minor sales in the first half of the year, but the average price has been approximately $15 a share. Given the uniquely active nature of our agents, our commitment to advancing BOT/BAL is stronger than ever before. We're dedicated to ensuring that patients get access to these life-saving therapies as quickly as possible. And you will hear about some of the plans that we're contemplating on putting into place as soon as possible from my colleagues later on. Before we hear from Dr. O'Day about more details on our patient-centric, exciting and life-altering outcomes, I'm delighted to announce that Tom Harrison has joined our Board of Directors. A few words about Tom before I introduce him. Tom is one of the true transformative leaders in the healthcare industry, having grown diversified agency services into Omnicom Group's largest division with over 5,000 clients and annual revenues exceeding $6 billion. His deep experience in healthcare, communications and branding, combined with a strong scientific background from his early days at Pfizer, makes him very uniquely equipped to guide Agenus in our next phase of growth. Tom's innovative approach in merging high science with creative marketing will be key in our ability to educate the global community about the critical benefits of our therapies. I want to emphasize educating. His strategic vision and operational experience is key in our efforts to bring groundbreaking cancer treatments to patients worldwide, not just the U.S. Please join me in welcoming Tom Harrison to say a few words on this call. Tom?

Thank you so much for that most, most kind introduction. Hopefully, I'm worthy of those wonderful words. I'm truly honored to join the Board of Directors of Agenus, a company that is at the forefront of innovation in the field of immuno-oncology. The work that is being done here at Agenus is not only groundbreaking, but it's also life-changing for patients battling some of the most challenging cancers that Garo has already outlined on the call. As someone who has spent a significant portion of my career in healthcare advertising and strategic advising of CEOs across the healthcare industry, I'm excited to bring my experience to Agenus. The opportunity to help elevate the awareness of our innovative pipeline and to communicate the significant advances that we are making in cancer treatment is something that I am really deeply passionate about. My career, as Garo said, has always been driven by a commitment to excellence and innovation founded on a basis of science. From cofounding Harrison & Star Business Group to my current role as Senior Operating Partner at Merida Capital Partners, I have been fortunate to work throughout my career with very talented teams, such as the one here at Agenus, and to drive growth and deliver impactful results. I see a similar spirit of innovation and dedication here at Agenus, and I am eager to contribute to our shared mission. One of my key priorities, as Garo said, will be to enhance our strategic communications efforts to ensure that our scientific advancements and our therapeutic potential are clearly understood by healthcare providers, by patients, by investors and regulatory bodies around the world. By doing so, we can not only elevate the visibility and reputation of Agenus, but also help accelerate the delivery of our life-saving therapies to those who are in dire need. I'm particularly excited about the progress we are making with our BOT/BAL program and the potential it holds to address unmet medical needs across multiple cancer indications. Robust data that we have generated, coupled with our active engagements with global regulatory authorities, positions us well to bring these innovative treatments to market. I look forward to working closely with Garo, with the full Board of Directors and the entire senior Agenus team to drive our mission forward. Together, we will continue to push our boundaries of what is possible in cancer immunotherapy and improve patient outcomes. Thank you again, Garo, for the warm welcome and everyone for the warm welcome with whom I've spoken, and I'm excited about the journey that we have ahead. So now I'm going to turn the call over to Steven to go over our update -- of our clinical progress to date.

Thank you, Tom and Garo. I'm pleased to provide an update on our clinical progress across the BOT/BAL program, now, as Garo as said, spanning over 1,100 patients treated in refractory advanced cancers as well as earlier stages of metastatic disease and most recently in the neoadjuvant setting. BOT/BAL is demonstrating remarkable activity with a manageable safety profile in patients with relapsed/refractory MS stable colorectal cancer and nonactive liver metastatic disease. Our data remains consistent between the Phase I expanded cohort and our Phase II randomized trials, particularly in terms of RECIST-confirmed overall response rates, duration of response, and importantly, overall survival. [Technical Difficulty] the MS stable colorectal cancer patient population of 23% in the Phase I trial, and now 19.4% in the Phase II trial is roughly 3x the low single-digit overall response rate of any available standard of care therapy in this setting. Our median overall survival for the Phase I trial of 21.2 months with a remarkable 18-month estimated overall survival of 63% stands in marked contrast to approximately, at best, 12 months with the best standard of care therapies. While survival with the Phase II data set is early and maturing, we see consistency in the 6-month survival rate of 90% in our selected combination BOT/BAL arm in the Phase II trial as compared with the 88% in the Phase I BOT/BAL arms. And this is very reassuring to us. We plan to submit the Phase II data after a later maturity data cut later this year to a major medical congress in the early part of 2025. We are confident that as these data mature, they will continue to demonstrate differentiation in overall response, duration response and survival compared to standard of care therapies in this late-line refractory MS stable colorectal cancer. In addition, we are seeing remarkable activity of BOT/BAL in earlier stages of CRC treatment lines, which is highlighted by our data in the NEST neoadjuvant trial, which was updated with an oral presentation at ESMO GI in Munich in this past June. This trial evaluated 1 dose of BOT with 2 to 4 doses of BAL before surgery. In the updated NEST-2 cohort, which provided longer time between the first dose of BOT/BAL and surgery of up to 8 weeks, remarkably 7 of 9 MS stable colorectal patients, or 78%, achieved at least a 50% tumor regression at the time of surgery, with 5 out of 9, or 56%, achieving complete pathologic regressions of their tumors. Importantly, no surgeries were delayed due to adverse events. This data stands in stark contrast to historical data with attempts at neoadjuvant IO therapy in poorly immunogenic MS-stable colorectal cancer where pathologic response rates have been poor. We plan to continue to build on these groundbreaking data in the neoadjuvant setting with additional studies, and as Garo alluded to, and additional IST studies are ongoing. Data in our Phase II BOT/BAL melanoma and pancreas trials continue to mature, and we look forward to updating these data in the coming months. Finally, we will be presenting updated data with BOT and BAL in a relapsed/refractory sarcoma population in an oral presentation at the ESMO conference in Barcelona in September. Now, I'll turn the call over to Christine to review our financials.

Thank you, Steven. We ended the second quarter 2024 with a consolidated cash balance of $93.7 million compared to $76.1 million on December 31, 2023. For the 3 and 6 months ended June 30, 2024, we recognized revenue, which includes [Technical Difficulty] of $23.5 million and $51.5 million, respectively. This compares to $25.3 million and $48.2 million for the same period in 2023. Our cash used in operations for the first half of 2024 was $76.4 million, a reduction from $118.6 million for the first half of 2023. Our net loss for the 3 and 6 months ended June 30, 2024, is $54.8 million and $118.3 million. These include noncash operating expenses of $33.5 million and $71.8 million, respectively. I will now turn the call back for closing remarks.

Thank you very much, Tom, Stephen and Christine. I'd like to extend my gratitude to everyone for joining us today to review our second quarter progress. Our unwavering focus remains on delivering BOT/BAL to individuals living with advanced MSS colorectal cancer and many other cancers where we have shown activity. We are steadfastly exploring innovative and expedited methods to make these treatment options available worldwide. Remember, amongst the importance of these treatment options is that they represent IO-IO, that is immuno-oncology, immuno-oncology combo treatments, without chemotherapy with an extended life extension potential. This is very important for patients that have absolutely no options going forward, with limited benefit and horrible toxicity. Patients are counting on us, and we are deeply committed to fulfilling our mission to provide therapies with curative intent, not only for colorectal cancer, but as I said, for many other cancer types where we have seen some profound activity. Thank you very much for your continued support and trust in Agenus. I will now turn the call back to the operator to facilitate any questions you may have.

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

My first one is if you can discuss the FDA's guidance for the Phase III design in terms of the number of patients that you might need per arm, including the second and third arm, specific endpoints that you plan to look at? And then maybe if you can give any guidance to how soon you believe you could initiate a Phase III study and whether you believe the resources you have financially could support you running one along?

So Emily, among the options that we're considering right now is a Phase III trial that can commence as early as the next 4 months and enrolled in side of a year. And the reason I say enrolled in side of a year is because there is touch outcry or patient demand out there that we're getting, and this has been at an increasing pace before the FDA guidance was issued, which we announced a couple of weeks ago and particularly after the FDA guidance because now patients are very concerned that they're not going to be able to get this drug in a commercial setting. And so there is a huge interest of patients coming to us for drug globally. So that's why we believe that once we initiate a Phase III trial, we'll be able to enroll very rapid. That's why I feel confident that enrolling patients in side year post commencement is something that is highly possible. Now among the options that we are considering for Phase III trial, we've been approached by certain groups that have significant subsidies offered to bring innovative medicines to patients as soon as possible. Among these groups is an outfit that has proposed to do a randomized Phase III trial that will satisfy the needs of regulatory agencies globally, not just the FDA for as little as $10 million. So that's what we're exploring now amongst other options. And stay tuned, the decision will be made in the next couple of months.

And I believe you mentioned that you're expecting to have data in pancreatic and melanoma cancers in the coming months. Could you just confirm if that's expected for this year? And if so, how much data should we be expecting?

So we are expecting maturing data to be disclosed in pancreatic cancer, in melanoma, in lung cancer and Neoadjuvant cancer patients of all comers, which is a trial that I spoke about, which is being conducted at a major cancer center in Europe by a very, very visible investigator who has had experience with other neoadjuvant trials. So these are amongst the most important data outputs that you will see in coming months.

Your next question comes from the line of Kelly Shi of Jefferies.

This is Clara on for Kelly. So wondering if you could provide more color on the initial meeting you have with the European agency, like what kind of data did you show them and whether you have the same data package as what you provided to FDA. And for the subsequent meetings, could you let us know what will be the key discussion points with them?

So we're not going to disclose much detail other than the following. And the reason we're not going to disclose my details is because we do not want background efforts to basically stop another agency from doing what they think is the right thing to do. And if you can read between the lines and what I'm saying, I think it will be very clear in the future to know that all of these interactions are confidential. We've had the very initial interaction with one of the agency, major agencies. And I will tell you their stent on this is diametrically opposite to the U.S. FDA. Diametrically opposite. What do I mean by that? They have done their homework. They understand the data. They have had more -- slightly more mature data than what we had presented to the FDA. Because, as you know, the FDA has very strict rules on not considering data post submission of the package. And between the submission of the package and the meeting could be several months. So we -- even though we had more mature data by the time we had the actual meeting, this data wasn't being formally considered in their consideration of their guidance to us. But the European agency has seen this more mature data. And their guidance to us is very simple, that they have indicated several pointers that will be helpful to us in making sure that we meet all the requirements, but they've also said to us that they hope that these requirements, which are box checking -- important box checking elements will not get in the way of our rapid exploration of submission.

Your next question comes from the line of Madison El-Saadi of B Riely Financial.

A couple for me. Just as we look at this November data cut, kind of just wondering what the expectations on survival and durability are if we look -- if you just kind of maintain that 19.5/20% ORR? And then could you also confirm -- sorry if I missed it, could you confirm that the 2 patients that had not had their confirmatory scan if they did have those scans? And then lastly, on the Phase III design, just wondering thoughts on the control arm, if it will look like the Phase II or if it could be different.

Okay. So #1, all of the data that we reported are strictly confirmed ORR. Okay? Which means that there is still some upside to that, but there is no downside. In other words, we will not have any downside revisions to what we have already reported as overall response rates in the second trail, the Phase II trial, multiform Phase II trial. Now of course, from the Phase I trial, we almost have 24 months of follow-up. And as we said earlier, the follow-up in the Phase II travel will be at a point of about 12 months maturity. And the trends that we're seeing in the Phase II trial are almost identical to the trends that we've seen in our Phase I trail. And so with all of that, we are confident about the integrity of our data. We're confident about the patient selection. In other words, there is no cheating here. All patients that are enrolled in this trial fall into the category of either third- or fourth-line patients in the metastatic study. So that has been confirmed. And of course, that adds to the validity of the data. And as Dr. O'Day would say, deep, underlining -- deep and durable underlining durable responses in immuno-oncology trials that are particularly mediated with a CTLA-4 binding antibody. As you know, BOT doesn't just bind the CTLA-4. It is a multifunctional antibody. But one of the things that it does is bind to CTLA-4. We are confident that in an immuno-oncology treatment setting, any trial that is an IO-IO trial that binds to CTLA-4 and shows significant overall response rates always translates to survival there. I think this is a point that certain agencies understand and other agencies like the FDA, I think, need to be schooled in this phenomenon. And it is frankly our responsibility, not the FDA's responsibility, for us to present the data to convince them of the reality of the power of immuno-oncology with IO-IO agents that are mediated with CTLA-4 binding in addition to PD-1.

Your next question comes from the line of Madeleine Stone of William Blair.

This is Madeleine on for Matt Phipps. So for future discussions planned with the FDA, how much additional follow-up from the Phase II trial will you need if not that more mature data set?

Approximately 6 more months of follow-up versus what we have presented to them in a submitted data.

That concludes our question-and-answer session. I will now turn the conference back over to Garo Armen for closing remarks.

Thank you very much, Leonardo. And once again, thank you for your attention. I appreciate the questions that we've gotten. And the basic conclusion that I had is that I know we made reference to the fact that we will be having more follow-up on patients before we engage with regulatory agencies, including the FDA. But I'd like to further indicate to you that we feel confident in the follow-up data from this trial because we have the data by and large. And it will be only a question of cleaning up the data and presenting it in that format with the appropriate arguments that will hopefully align our way of thinking, our KOL's way of thinking, our investigators who have significant experience in the field with our agents, their way of thinking with the regulatory. So this is what we hope to accomplish in the next few months. Stay tuned and we always welcome your engagement in the form of off-line additional questions that you may have. Thank you again.

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