Financial Data and Key Metrics Changes - The company ended Q3 2023 with a cash balance of $100.63 million, down from $193.4 million at the end of the previous year [23] - For Q3 2023, the company recognized revenue of $24.3 million, resulting in a net loss of $64.5 million, while the net loss for the nine months of 2023 totaled $208.9 million [23] Business Line Data and Key Metrics Changes - The company is focusing on three key priorities: submitting a biologics license application for colorectal cancer, prioritizing clinical programs for rapid approval, and reallocating resources to achieve these goals [6][9] - The Phase II clinical trial in MSS-CRC has shown a 24% overall response rate, with a median overall survival rate exceeding 21 months, significantly better than the standard of care [11][19] Market Data and Key Metrics Changes - The company is addressing an urgent unmet need in the colorectal cancer market, particularly for patients with advanced disease, by initiating a compassionate use program [7][8] - The company is also expanding its clinical trials to include earlier lines of therapy, potentially changing treatment paradigms for colorectal cancer [12] Company Strategy and Development Direction - The company aims to submit its first biologics license application in mid-2024, focusing on late-stage colorectal cancer [6][10] - The strategic focus includes advancing clinical programs in refractory pancreatic cancer and new adjuvant settings in colorectal cancer [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of Botensilimab to provide significant benefits over existing therapies, particularly in challenging cancer types [17][19] - The company is optimistic about securing additional cash through milestone payments and asset sales, which are expected to total approximately $200 million [9][10] Other Important Information - The company is in advanced discussions for potential structured financing and corporate collaborations with larger pharmaceutical or biotech companies [10][48] - Management emphasized the importance of rapid development and the need for substantial financial commitments from potential partners [48] Q&A Session Summary Question: When can we expect initial Phase II data for the MSS CRC study? - Management indicated that data from the first 70 patients has been disclosed, with further data needing cleanup before publication, ideally around the time of the BLA submission [27] Question: What is the regulatory bar for the randomized CRC study? - The company needs to demonstrate a meaningful improvement over standard care, with current response rates showing a significant advantage [32] Question: What is the updated cash guidance? - The company expects a cash burn of approximately $40 million for Q4 and anticipates bringing in around $200 million through non-stock issuance transactions by mid-next year [38] Question: What is the plan for CRC patients in the Phase III confirmatory study? - The company is exploring options for both second and first-line studies, with ongoing discussions with the FDA to determine the best path forward [40][51]

Part I - Financial Information [Financial Statements](index=2&type=section&id=ITEM%201.%20Financial%20Statements%3A) This section presents the unaudited condensed consolidated financial statements for Agenus Inc. as of June 30, 2023, and for the three and six-month periods then ended, including Balance Sheets, Statements of Operations, Statements of Stockholders' Equity (Deficit), Statements of Cash Flows, and accompanying notes Condensed Consolidated Balance Sheets As of June 30, 2023, Agenus reported a decrease in total assets driven by reduced cash, an increase in total liabilities, and a widened stockholders' deficit reflecting the period's net loss Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $143,205 | $178,674 | | Total current assets | $170,735 | $213,122 | | Total assets | $383,593 | $413,556 | | **Liabilities & Stockholders' Deficit** | | | | Total current liabilities | $204,068 | $188,952 | | Liability related to sale of future royalties and milestones, net | $266,920 | $271,263 | | Total liabilities | $460,354 | $468,458 | | Total stockholders' deficit | ($76,761) | ($54,902) | Condensed Consolidated Statements of Operations and Comprehensive Loss For Q2 and H1 2023, Agenus reported increased total revenues but a widened net loss compared to 2022, primarily driven by higher research and development expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $25,296 | $20,926 | $48,198 | $46,867 | | Research and development expense | ($59,285) | ($44,960) | ($116,402) | ($87,404) | | General and administrative expense | ($20,415) | ($18,914) | ($38,653) | ($37,866) | | Operating loss | ($54,666) | ($44,565) | ($109,007) | ($80,027) | | Net loss | ($73,430) | ($49,235) | ($144,323) | ($99,839) | | Net loss per share (basic & diluted) | ($0.20) | ($0.17) | ($0.41) | ($0.35) | Condensed Consolidated Statements of Cash Flows For H1 2023, net cash used in operating activities increased, while financing activities provided substantial cash, primarily from equity sales, resulting in an overall net decrease in cash Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($118,569) | ($95,844) | | Net cash used in investing activities | ($10,972) | ($11,591) | | Net cash provided by financing activities | $94,513 | $43,834 | | **Net decrease in cash** | **($35,469)** | **($63,546)** | Notes to Unaudited Condensed Consolidated Financial Statements The notes provide detailed information on the company's business, liquidity, accounting policies, and financial statement line items, including its immuno-oncology focus, liquidity assessment, royalty liability, and equity offering proceeds - The company is a clinical-stage company focused on immuno-oncology, with key assets including **botensilimab** (an Fc-enhanced CTLA-4 antibody), which received FDA Fast Track designation for non-MSI-H metastatic colorectal cancer[18](index=18&type=chunk)[24](index=24&type=chunk) - Management believes its cash resources of **$157.9 million** as of June 30, 2023, are sufficient to fund operations for more than one year from the financial statement issuance date[22](index=22&type=chunk) - The company recognized **$41.2 million** in non-cash royalty revenue and **$36.8 million** in non-cash interest expense in H1 2023 related to the HCR Royalty Purchase Agreement[37](index=37&type=chunk) - During H1 2023, the company received net proceeds of approximately **$102.8 million** from the sale of **58.3 million shares** of common stock through at-the-market offerings[67](index=67&type=chunk) - Subsequent to the quarter end, from July 1 to August 4, 2023, the company sold an additional **13.2 million shares** for net proceeds of approximately **$20.3 million**[76](index=76&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, covering business overview, operational results, R&D expenses, liquidity, and future funding plans Overview Agenus is a clinical-stage immuno-oncology company with a pipeline of antibodies, cell therapies, and vaccine adjuvants, with its lead program botensilimab in Phase 2 trials and a planned BLA filing in 2024, supported by strategic partnerships - The company's lead asset is **botensilimab**, an Fc-enhanced CTLA-4 antibody, which in combination with balstilimab (PD-1) showed a median Overall Survival of **20.9 months** in a subset of colorectal cancer patients[83](index=83&type=chunk) - Agenus plans to file its first Biologics License Application (BLA) for the botensilimab/balstilimab combination in colorectal cancer in **2024**[84](index=84&type=chunk) - Incyte has notified Agenus of its intent to terminate the OX40, GITR, and an undisclosed target program, with rights reverting to Agenus upon termination in **October 2023** and **May 2024**[86](index=86&type=chunk) Results of Operations The analysis of operations highlights a significant increase in R&D expenses for both the three and six-month periods ended June 30, 2023, driven by the advancement of antibody programs, alongside a substantial rise in non-cash royalty revenue Comparison of Results for the Three Months Ended June 30 (in millions) | Item | 2023 | 2022 | Change | Reason | | :--- | :--- | :--- | :--- | :--- | | R&D Expense | $59.3 | $45.0 | +32% | Increased third-party services for antibody programs and higher headcount. | | G&A Expense | $20.4 | $18.9 | +8% | Increased personnel-related expenses due to higher headcount. | | Non-cash royalty revenue | $22.1 | $0.1 | +$22.0M | Achievement of final sales milestone under HCR agreement. | Comparison of Results for the Six Months Ended June 30 (in millions) | Item | 2023 | 2022 | Change | Reason | | :--- | :--- | :--- | :--- | :--- | | R&D Revenue | $5.1 | $8.6 | -41% | 2022 included a $5.0M milestone from Gilead. | | R&D Expense | $116.4 | $87.4 | +33% | Increased third-party services for antibody programs and higher headcount. | | G&A Expense | $38.7 | $37.9 | +2% | Increased personnel costs, partially offset by lower professional fees. | | Non-cash royalty revenue | $41.2 | $17.8 | +131% | Increased net sales of GSK's vaccines containing QS-21 adjuvant. | Research and Development Programs For the first six months of 2023, Agenus's R&D expenses primarily focused on antibody programs, with significant allocations also to cell therapies, vaccine adjuvants, and other research initiatives R&D Expenses by Program for Six Months Ended June 30, 2023 (in thousands) | Research and Development Program | Expense | | :--- | :--- | | Antibody programs | $82,402 | | Cell therapies | $9,292 | | Vaccine adjuvant (QS-21 STIMULON) | $7,816 | | Other research and development programs | $16,892 | | **Total R&D Expenses** | **$116,402** | Liquidity and Capital Resources As of June 30, 2023, Agenus maintained substantial cash resources despite a history of operating losses, primarily funding operations through partnerships, royalty sales, and equity issuances, with management assessing current liquidity as sufficient for over one year - The company had cash, cash equivalents, and short-term investments of **$157.9 million** at June 30, 2023[117](index=117&type=chunk) - Agenus raised **$123.1 million** in net proceeds from its at-the-market (ATM) equity offering program between January 1, 2023, and August 4, 2023[114](index=114&type=chunk) - Management has concluded that current cash resources are sufficient to satisfy liquidity needs for more than one year from the report's issuance date[118](index=118&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures are foreign currency exchange rate and interest rate fluctuations, which are not currently managed with derivative instruments or hedging - Primary market risks are foreign currency exchange rate fluctuations (mainly British Pound, Euro, Swiss Franc) and interest rate changes on its **$157.9 million** cash and investment portfolio[123](index=123&type=chunk)[124](index=124&type=chunk) - The company does not currently employ derivative instruments or hedging strategies to manage market risk exposures[123](index=123&type=chunk)[126](index=126&type=chunk) [Controls and Procedures](index=26&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control over financial reporting during the quarter - Management concluded that as of June 30, 2023, the company's disclosure controls and procedures were effective[127](index=127&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[128](index=128&type=chunk) Part II - Other Information [Legal Proceedings](index=27&type=section&id=ITEM%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any material legal proceedings - Agenus is not party to any material legal proceedings[131](index=131&type=chunk) [Risk Factors](index=27&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - No material changes have been made to the risk factors described in the **2022 Form 10-K**[132](index=132&type=chunk) [Other Information](index=27&type=section&id=ITEM%205.%20Other%20Information) During the second quarter of 2023, none of the company's directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan during the quarter ended June 30, 2023[133](index=133&type=chunk) [Exhibits](index=27&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications pursuant to the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002, as well as Inline XBRL documents

Financial Data and Key Metrics Changes - The company ended Q1 2023 with cash, cash equivalents, and short-term investments of $189.2 million, down from $193.4 million as of December 31, 2022 [16] - Revenue for Q1 2023 was recognized at $22.9 million, with a net loss of $70.9 million, which included non-cash expenses of $24.9 million [16] Business Line Data and Key Metrics Changes - The botensilimab program has shown response rates of up to 50% in highly refractory cancers across nine solid tumor types, indicating significant clinical progress [5][6] - In colorectal cancer, the 12-month overall survival rate for patients treated with the bot/bal combination was reported at 63%, significantly higher than the standard-of-care rate of 25% [11] - In ovarian cancer, the overall response rate was 33%, with a disease control rate of 67% [13] Market Data and Key Metrics Changes - The company is focusing on expanding its clinical pipeline, particularly in colorectal, melanoma, and pancreatic cancers, with ongoing Phase 2 studies expected to conclude enrollment in 2023 [8] - The FDA granted Fast Track Designation for the balstilimab combination for treating non-MSI high colorectal patients without active liver metastasis, indicating a significant unmet medical need [8] Company Strategy and Development Direction - The company aims to revolutionize cancer treatment through innovative therapies like botensilimab, which targets both cold and hot tumors [5][6] - There is a commitment to advancing clinical programs and exploring partnerships to maximize the potential of botensilimab and the overall pipeline [19] - The focus is on delivering high-quality medicines and ensuring patient access to innovative treatments [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the progress made in clinical programs and the potential impact on patient outcomes [17] - The company is actively exploring discussions with potential partners to enhance its capabilities and maximize the therapeutic potential of its pipeline [19] Other Important Information - The company has presented updates at major medical conferences, showcasing the clinical data generated from its programs [10][12] - The company is also exploring additional programs in combination therapies to expand the therapeutic potential of botensilimab [13] Q&A Session Summary Question: What should be expected at ASCO for AGEN2373? - Management indicated that AGEN2373 is an important product with complementary attributes to patient care, focusing on T-cell activation and memory generation [23] Question: What are the criteria for moving into a randomized trial in non-small cell lung cancer? - Management noted that they are expanding the cohort of lung cancer patients to confirm response rates and are planning a randomized Phase 3 trial based on encouraging early data [30][31] Question: Can you comment on the Fast Track Designation and other regulatory mechanisms? - Management stated that they are keeping regulatory agencies informed about developments and emphasized the meaningful responses seen in heavily pretreated patients [36][38] Question: What is the expected sample size for the randomized trial in non-small cell lung cancer? - Management has not disclosed specific numbers but assured that it will not be excessively large [45] Question: What are the benchmarks for the melanoma cohort study? - Management expects to complete enrollment in the first half of 2023, with data anticipated later in the year [47]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the company's financial performance, condition, and related disclosures for the reporting period [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the three months ended March 31, 2023, show a net loss of $70.9 million, an increase from the $50.6 million loss in the same period of 2022. Total assets remained stable at approximately $412.9 million. The company ended the quarter with $164.8 million in cash and cash equivalents, down from $178.7 million at the end of 2022, with cash used in operations totaling $58.5 million [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets provide a snapshot of the company's financial position at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 (Unaudited) | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $164,819 | $178,674 | | Total current assets | $205,689 | $213,122 | | **Total assets** | **$412,854** | **$413,556** | | Total current liabilities | $190,898 | $188,952 | | Liability related to sale of future royalties and milestones | $269,386 | $271,263 | | **Total liabilities** | **$465,963** | **$468,458** | | Total stockholders' deficit | ($53,109) | ($54,902) | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This statement outlines the company's revenues, expenses, and resulting net loss for the three-month periods Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2023 | Three Months Ended Mar 31, 2022 | | :--- | :--- | :--- | | Total revenues | $22,902 | $25,941 | | Research and development expense | ($57,118) | ($42,442) | | General and administrative expense | ($18,237) | ($18,953) | | **Operating loss** | **($54,341)** | **($35,461)** | | **Net loss** | **($70,893)** | **($50,604)** | | Net loss per share (Basic & Diluted) | ($0.22) | ($0.19) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement details the cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary (in thousands) | Activity | Three Months Ended Mar 31, 2023 | Three Months Ended Mar 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($58,526) | ($52,391) | | Net cash used in investing activities | ($11,489) | ($7,533) | | Net cash provided by financing activities | $56,250 | $16,038 | | **Net decrease in cash** | **($13,855)** | **($44,222)** | | Cash at end of period | $167,488 | $250,378 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business as a clinical-stage immuno-oncology firm, its liquidity position, which management deems sufficient for over a year, and key accounting policies. Significant items include revenue recognition from collaborations like Gilead, the accounting for the HCR royalty sale which generated $19.1 million in non-cash revenue, proceeds from 'at-the-market' equity offerings, and subsequent events including further equity sales and a stock dividend of its subsidiary MiNK - The company is a clinical-stage immuno-oncology firm focused on antibodies, adoptive cell therapies (via MiNK), and vaccine adjuvants (via SaponiQx)[17](index=17&type=chunk) - As of March 31, 2023, the company had cash, cash equivalents, and short-term investments of **$189.2 million**. Management believes these resources are sufficient to fund operations for more than one year[19](index=19&type=chunk)[20](index=20&type=chunk) - In Q1 2023, the company recognized **$19.1 million** in non-cash royalty revenue and **$17.2 million** in non-cash interest expense related to the 2018 sale of future royalties to Healthcare Royalty Partners (HCR)[33](index=33&type=chunk)[34](index=34&type=chunk) - During Q1 2023, the company raised approximately **$60.6 million** in net proceeds from the sale of **33.8 million shares** through its 'at-the-market' (ATM) offering[59](index=59&type=chunk) - Subsequent to the quarter's end, from April 1 to May 5, 2023, an additional **$13.6 million** was raised through the sale of **9.2 million shares** via the ATM agreement. The company also paid a stock dividend of **5.0 million shares** of its subsidiary MiNK to Agenus stockholders[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's focus on immuno-oncology, highlighting its lead asset botensilimab and key collaborations. For Q1 2023, R&D expenses increased by 35% to $57.1 million due to advancing antibody programs, while G&A expenses decreased by 4%. The company's liquidity is supported by $189.2 million in cash and equivalents as of March 31, 2023, and ongoing 'at-the-market' equity sales, which management believes is sufficient to fund operations for over a year [Overview](index=17&type=section&id=Overview) This section provides a high-level summary of the company's strategic focus and key therapeutic programs - Agenus is a clinical-stage immuno-oncology company developing antibodies, adoptive cell therapies (via MiNK), and vaccine adjuvants (via SaponiQx)[69](index=69&type=chunk) - The lead program, botensilimab (AGEN1181), is advancing in multiple clinical trials for cancers such as colorectal, melanoma, and pancreatic cancer[70](index=70&type=chunk)[71](index=71&type=chunk) - The company maintains strategic collaborations with major pharmaceutical companies including Bristol-Myers Squibb (BMS), Gilead, Incyte, and Merck, which provide milestone payments and potential royalties[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, detailing revenue streams and expense trends for the period Revenue and Expense Comparison (in millions) | Item | Q1 2023 | Q1 2022 | Change Driver | | :--- | :--- | :--- | :--- | | R&D Revenue | $2.6 | $6.7 | Decrease due to a $5.0M milestone from Gilead in Q1 2022 not recurring | | Non-cash Royalty Revenue | $19.1 | $17.6 | Increase due to higher net sales of GSK's vaccines containing QS-21 STIMULON | | R&D Expense | $57.1 | $42.4 | 35% increase due to advancement of antibody programs | | G&A Expense | $18.2 | $19.0 | 4% decrease due to reduced professional fees | R&D Program Expenses (in thousands) | Program | Three Months Ended March 31, 2023 | | :--- | :--- | | Antibody programs | $41,835 | | Vaccine adjuvant | $4,088 | | Cell therapies | $4,326 | | Other R&D programs | $6,869 | | **Total R&D expenses** | **$57,118** | [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's cash position, funding strategies, and ability to meet its financial obligations - The company had an accumulated deficit of **$1.8 billion** as of March 31, 2023, and has historically financed operations through partnerships, royalty sales, and equity issuances[90](index=90&type=chunk) - Cash, cash equivalents, and short-term investments were **$189.2 million** at March 31, 2023. Management believes this is sufficient to satisfy liquidity needs for more than one year[95](index=95&type=chunk)[96](index=96&type=chunk) - The company actively uses an 'at-the-market' (ATM) sales agreement, raising a total of **$74.2 million** in net proceeds from January 1 through May 5, 2023[91](index=91&type=chunk)[92](index=92&type=chunk) - Net cash used in operating activities was **$58.5 million** for the three months ended March 31, 2023, compared to **$52.4 million** for the same period in 2022[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign currency exchange rate fluctuations, due to its international subsidiaries, and interest rate changes impacting its investment income. Agenus does not currently use derivative instruments for hedging. Its investment policy prioritizes principal preservation and liquidity, with investments primarily in money market funds and U.S. Treasury Bills - Primary market risk exposures are identified as foreign currency exchange rate risk and interest rate risk[101](index=101&type=chunk) - Foreign currency exposure is mainly concentrated in the British Pound, Euro, and Swiss Franc due to foreign subsidiaries. The company does not currently use hedging strategies[101](index=101&type=chunk) - The company's cash and investments of **$189.2 million** are exposed to interest rate changes. Due to the short-term nature of these investments (money market funds, U.S. Treasury Bills), the carrying value approximates fair value[102](index=102&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Principal Executive Officer and Principal Financial Officer, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2023. There were no material changes to the company's internal control over financial reporting during the quarter - Based on an evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[105](index=105&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[106](index=106&type=chunk) [PART II - OTHER INFORMATION](index=23&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides disclosures on legal proceedings, updated risk factors, and a list of filed exhibits [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is not a party to any material legal proceedings - Agenus reports that it is not party to any material legal proceedings[108](index=108&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - There have been no material changes to the risk factors described in the company's 2022 Form 10-K[109](index=109&type=chunk) [Item 6. Exhibits](index=23&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications (Exhibits 31.1, 31.2, 32.1) and XBRL data files - The report lists certifications from the Principal Executive Officer and Principal Financial Officer, as well as Inline XBRL documents, as exhibits[110](index=110&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 000-29089 Agenus Inc. (exact name of registrant as specified in its charter) Delaware 06-1562417 (State or other jurisdiction of (I.R.S. Employer i ...

Agenus Inc. (NASDAQ:AGEN) Q4 2022 Results Conference Call March 14, 2023 8:30 AM ET Company Participants Zack Armen - Head, Investor Relations Dr. Garo Armen - Chairman and Chief Executive Officer Dr. Steven O'Day - Chief Medical Officer Christine Klaskin - Vice President of Finance Conference Call Participants Matt Phillips - William Blair Mayank Mamtani - B. Riley Emily Bodnar - H.C. Wainwright Mike King - EF Hutton David Dai - SMBC Kelly Shi - Jefferies Operator Thank you for holding and welcome, everyon ...

Agenus Highlights - Agenus's Botensilimab is an Fc-enhanced anti-CTLA-4 antibody with broad franchise potential, showing unprecedented clinical responses in 9 cold and treatment-resistant cancers[6] - Agenus has a deep clinical pipeline addressing complementary mechanisms, with 12 clinical-stage antibody programs advancing in 12 unique combinations, by Agenus and through partnerships[6] - Agenus has a proven R&D engine with a track record of value creation through strategic partnerships, generating >$825 million in cash through partnerships, with potential $27 billion milestones remaining[6] Business Development and Financial Status - Agenus has received $825 million in cash from partnerships and transactions[12] - Agenus has $27 billion in potential future milestone payments, in addition to royalties[12] - Agenus had $218 million cash in hand as of September 30, 2022[24] Botensilimab Clinical Data - Botensilimab shows a 23% ORR in MSS CRC with 70 evaluable patients, versus 1-5% ORR for SOC[28] - Botensilimab shows a 26% ORR in Ovarian cancer with 19 evaluable patients, versus 3-10% ORR for SOC[28] - Botensilimab shows a 46% ORR in Sarcoma with 13 evaluable patients, versus 12-16% ORR for SOC[28] - Botensilimab shows a 60% ORR in PD-(L)1 Refractory NSCLC with 5 evaluable patients, versus 6-13% ORR for SOC[28] Partnered Programs - BMS-986442 (AGEN1777) has potential milestone payments of $134 billion and up to mid-teens royalties[12] - INCAGN1876, INCAGN2390, INCAGN2385 have potential milestone payments of $570 million and up to mid-teens royalties[12] - Zalifrelimab (local delivery in urinary tract) has potential milestone payments of $450 million and up to low double-digit royalties[12] - Balstilimab & zalifrelimab (Greater China) have potential milestone payments of $200 million and up to low-twenties royalties[12] - MK-4830 has potential milestone payments of $100 million[12]

Financial Data and Key Metrics Changes - The company ended Q3 2022 with cash, cash equivalents, and short-term investments of $218.2 million, down from $238.3 million at the end of Q2 2022 and $306.9 million at the end of 2021 [18] - Revenue for Q3 2022 was $22.8 million, with a net loss of $56.7 million or $0.19 per share. For the nine months ended September 30, 2022, revenue was $69.6 million with a net loss of $156.6 million or $0.54 per share [18] Business Line Data and Key Metrics Changes - The company is advancing multiple clinical programs, including balstilimab, AGEN1571 (ILT2 antagonist), and AGEN2373 (CD137 agonist), with significant progress reported in their Phase 1 and Phase 2 trials [6][14] - Two Phase 2 ACTIVATE trials have been initiated for balstilimab in advanced colorectal cancer and melanoma, with a third trial expected to launch in pancreatic cancer by year-end [11][12] Market Data and Key Metrics Changes - The company is focusing on difficult-to-treat cancers, including advanced colorectal cancer, melanoma, and pancreatic cancer, with promising early data suggesting higher response rates than traditional therapies [26][49] - The company is also exploring the potential of its therapies in platinum-resistant ovarian cancer, where historical response rates for PD-1 therapies are around 10% [26] Company Strategy and Development Direction - The company aims to leverage its robust pipeline of agents to create effective combinations for treating various cancers, emphasizing the unique attributes of its products [19][20] - Strategic partnerships have been highlighted as a key component of the company's funding strategy, with over $900 million raised through partnerships and royalty financing over the past decade [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential of their immuno-oncology therapies, particularly balstilimab, to transform cancer treatment [5][6] - The company is committed to advancing its clinical programs and expects to disclose more data in the first half of the following year [19] Other Important Information - The company has made significant clinical advancements in the third quarter, including the initiation of multiple Phase 2 studies and the expansion of its clinical trial programs [10][14] - Recent hires in the clinical and regulatory leadership team are expected to bolster the company's capabilities in advancing its pipeline [16] Q&A Session Summary Question: Can you share any updates from the SITC regarding balstilimab? - Management indicated that additional patient data will be presented at SITC, with a meaningful addition to the previously disclosed data [24][25] Question: What are the thoughts on moving into platinum-resistant ovarian cancer? - Management expressed excitement about the promising response rates observed in this difficult-to-treat population [26][28] Question: When can we expect updates on the AGEN1571 program? - Management noted that data from the AGEN1571 program is progressing well, with potential updates expected by the end of next year [33] Question: What is the comparator arm in the ACTIVATE-Colorectal Phase 2 study? - The comparator arm will be standard of care, which includes regular aflibercept options for patients who have failed previous therapies [55]

PART I - FINANCIAL INFORMATION This section presents Agenus Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis for specified periods [ITEM 1. Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) Agenus Inc.'s unaudited condensed consolidated financial statements for specified periods are presented [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased and stockholders' equity shifted to a deficit by September 30, 2022 Condensed Consolidated Balance Sheet Highlights | Metric | September 30, 2022 (Unaudited) (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :------------------------------- | | Total Assets | $429,019 | $465,958 | | Cash and cash equivalents | $208,354 | $291,931 | | Total Current Liabilities | $173,073 | $156,943 | | Total Stockholders' (Deficit) Equity | $(11,836) | $47,909 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Total revenues decreased substantially, resulting in a significant operating loss for the nine months ended September 30, 2022 Condensed Consolidated Statements of Operations Highlights | Metric | Nine Months Ended September 30, 2022 (in thousands) | Nine Months Ended September 30, 2021 (in thousands) | | :---------------------------------------------------- | :-------------------------------------------------- | :-------------------------------------------------- | | Total Revenues | $69,638 | $275,404 | | Operating (Loss) Income | $(121,670) | $79,774 | | Net (Loss) Income Attributable to Agenus Inc. common stockholders | $(149,140) | $41,427 | | Basic Net (Loss) Income Per Common Share | $(0.54) | $0.19 | [Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) Equity changes show a significant decline in total equity, driven by net losses and an accumulated deficit Condensed Consolidated Stockholders' Equity Highlights | Metric | September 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :---------------------------------------------------- | :-------------------------------- | :------------------------------- | | Total Stockholders' (Deficit) Equity | $(11,836) | $47,909 | | Accumulated Deficit | $(1,638,814) | $(1,489,833) | | Additional Paid-In Capital | $1,614,836 | $1,520,212 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow shifted from generation to usage for the nine months ended September 30, 2022, compared to the prior year Condensed Consolidated Cash Flow Highlights | Metric | Nine Months Ended September 30, 2022 (in thousands) | Nine Months Ended September 30, 2021 (in thousands) | | :---------------------------------------------------- | :-------------------------------------------------- | :-------------------------------------------------- | | Net cash (used in) provided by operating activities | $(128,035) | $33,072 | | Net cash used in investing activities | $(27,227) | $(29,851) | | Net cash provided by financing activities | $72,057 | $153,659 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(83,577) | $156,693 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's business, liquidity, accounting policies, and specific financial statement items [Note A - Business, Liquidity and Basis of Presentation](index=11&type=section&id=Note%20A%20-%20Business%2C%20Liquidity%20and%20Basis%20of%20Presentation) This note describes Agenus as a clinical-stage immuno-oncology company, outlining its pipeline, liquidity, funding, and financial statement basis - Agenus is a clinical-stage immuno-oncology (I-O) company advancing a pipeline of immune checkpoint antibodies, adoptive cell therapies (MiNK Therapeutics), and neoantigen vaccines (SaponiQx) to fight cancer and infections[518](index=518&type=chunk) - The lead asset, botensilimab (Fc-enhanced CTLA-4), showed significant activity in 'cold tumors' (e.g., MSS CRC) in combination with balstilimab (PD-1), with worldwide studies initiated in 2022 and a pancreatic cancer trial expected by year-end 2022[518](index=518&type=chunk) Cash, Cash Equivalents & Short-term Investments | Metric | September 30, 2022 (in millions) | December 31, 2021 (in millions) | | :---------------------------------------- | :------------------------------- | :------------------------------ | | Cash, cash equivalents & short-term investments | $218.2 | $306.9 | | Change from Dec 31, 2021 | $(88.7) | N/A | - The company had an accumulated deficit of **$1.6 billion** as of September 30, 2022[519](index=519&type=chunk) - Current cash resources of **$218.2 million** are projected to be sufficient for more than one year from the issuance date of the financial statements[520](index=520&type=chunk) - Potential future funding sources include collaborations, milestone payments, third-party agreements, asset sales, project financing, and equity sales[521](index=521&type=chunk) [Note B - Net (Loss) Income Per Share](index=12&type=section&id=Note%20B%20-%20Net%20(Loss)%20Income%20Per%20Share) This note details basic and diluted net (loss) income per common share, with diluted EPS equaling basic EPS during net loss periods Net (Loss) Income Per Common Share | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :---------------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net (loss) income attributable to Agenus Inc. common stockholders (in thousands) | $(54,275) | $178,499 | $(149,140) | $41,427 | | Basic Net (loss) income per common share | $(0.19) | $0.76 | $(0.54) | $0.19 | | Diluted Net (loss) income per common share | $(0.19) | $0.72 | $(0.54) | $0.18 | - For periods with a net loss attributable to common stockholders (e.g., nine months ended September 30, 2022), diluted loss per common share is identical to basic loss per common share, as potentially dilutive securities are anti-dilutive[527](index=527&type=chunk) Anti-Dilutive Securities | Anti-Dilutive Securities (in thousands) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :-------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Warrants | 1,980 | — | 1,980 | 1,980 | | Stock options | 36,207 | 6,661 | 36,207 | 20,852 | | Non-vested shares | 403 | 53 | 403 | 176 | | Series A-1 convertible preferred stock | 333 | — | 333 | 333 | [Note C - Investments](index=13&type=section&id=Note%20C%20-%20Investments) This note breaks down cash equivalents and short-term investments, primarily money market funds and U.S. Treasury Bills Investment Portfolio Breakdown | Investment Type | September 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Institutional money market funds | $180,167 | $219,903 | | U.S. Treasury Bills | $19,801 | $34,989 | | Total | $199,968 | $254,892 | - Minimal unrealized holding gains or losses were recorded for the three and nine months ended September 30, 2022 and 2021, due to the short-term nature of these investments[531](index=531&type=chunk) - As of September 30, 2022, **$190.1 million** was classified as cash equivalents and **$9.9 million** as short-term investments[532](index=532&type=chunk) [Note D - Goodwill and Acquired Intangible Assets](index=13&type=section&id=Note%20D%20-%20Goodwill%20and%20Acquired%20Intangible%20Assets) This note details changes in goodwill and acquired intangible assets, their amortization periods, and estimated future expense Goodwill and Acquired Intangible Assets Summary | Metric | September 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Goodwill | $23,936 | $24,876 | | Acquired Intangible Assets, Net | $6,877 | $8,488 | - Goodwill decreased by **$940 thousand** from December 31, 2021, to September 30, 2022, primarily due to foreign currency translation adjustment[43](index=43&type=chunk)[534](index=534&type=chunk) - The weighted average amortization period for finite-lived intangible assets is **9 years**[535](index=535&type=chunk) - Estimated amortization expense for acquired intangibles: **$0.6 million** for remainder of 2022, **$1.8 million** for 2023, **$0.7 million** for 2024, and **$0.6 million** for each of 2025 and 2026[535](index=535&type=chunk) [Note E - Debt](index=14&type=section&id=Note%20E%20-%20Debt) This note outlines the company's debt obligations, primarily 2015 Subordinated Debentures, with a significant portion reclassified to current Debt Obligations Summary | Debt Instrument | September 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Current Portion, Long-term Debt | $13,458 | $728 | | Long-term Debt, Net of Current Portion | $— | $12,823 | | Total Outstanding Debt Principal | $13,500 | $13,800 | - The principal amount of outstanding debt was **$13.5 million** as of September 30, 2022, primarily from the 2015 Subordinated Notes[46](index=46&type=chunk)[537](index=537&type=chunk) - A significant portion of the 2015 Subordinated Debentures was reclassified from long-term to current portion, reflecting its due date in February 2023[8](index=8&type=chunk)[46](index=46&type=chunk)[537](index=537&type=chunk) [Note F – Liability Related to the Sale of Future Royalties and Milestones](index=14&type=section&id=Note%20F%20%E2%80%93%20Liability%20Related%20to%20the%20Sale%20of%20Future%20Royalties%20and%20Milestones) This note details accounting for the sale of future GSK royalties to HCR, including non-cash royalty revenue, interest expense, and a sales milestone Future Royalties and Milestones Liability | Metric | Nine Months Ended September 30, 2022 (in thousands) | | :---------------------------------------------------- | :-------------------------------------------------- | | Liability related to sale of future royalties and milestones - beginning balance (Dec 31, 2021) | $254,105 | | Non-cash royalty revenue | $(27,001) | | Non-cash interest expense recognized | $44,469 | | Liability related to sale of future royalties and milestones - ending balance (Sept 30, 2022) | $271,573 | | Less: unamortized transaction costs | $(312) | | Liability related to sale of future royalties and milestones, net | $271,261 | - The company sold 100% of its worldwide rights to receive royalties from GSK on sales of QS-21 Stimulon adjuvant to HCR in January 2018 for **$190.0 million**, accounted for as a liability[540](index=540&type=chunk) - The final **$25.3 million** milestone under the HCR Royalty Purchase Agreement was achieved in Q2 2022, as GSK vaccine sales exceeded **$2.75 billion**, with royalty sales milestone revenue of **$7.9 million** recognized in Q3 2022[540](index=540&type=chunk)[542](index=542&type=chunk) - The estimated effective annual interest rate over the life of the HCR agreement decreased to **24.9%** (life of contract rate of **22.4%**) during the nine months ended September 30, 2022[543](index=543&type=chunk) [Note G - Accrued Liabilities](index=15&type=section&id=Note%20G%20-%20Accrued%20Liabilities) This note breaks down accrued liabilities, showing a decrease primarily due to reductions in payroll, contract manufacturing, and research services Accrued Liabilities Breakdown | Accrued Liability Type | September 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Payroll | $9,697 | $14,206 | | Professional fees | $6,429 | $6,433 | | Contract manufacturing costs | $1,302 | $5,824 | | Research services | $6,557 | $8,550 | | Other | $4,965 | $7,078 | | Total | $28,950 | $42,091 | [Note H - Fair Value Measurements](index=15&type=section&id=Note%20H%20-%20Fair%20Value%20Measurements) This note discusses fair value measurement of Level 3 contingent purchase price considerations and outstanding debt Fair Value of Contingent Purchase Price and Debt | Metric | September 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Contingent purchase price considerations | $739 | $1,689 | | Fair value of outstanding debt | $13,400 | $13,600 | | Principal amount of outstanding debt | $13,500 | $13,800 | - Contingent purchase price considerations are Level 3 liabilities, valued using a Monte Carlo simulation based on share price and credit spread[546](index=546&type=chunk) Unobservable Inputs for Contingent Purchase Price | Unobservable Input | September 30, 2022 | December 31, 2021 | | :-------------------------------- | :----------------- | :---------------- | | Period of time to achieve milestones (in years) | 2.25 | 2.50 | | Credit spread | 9.4% | 5.4% | [Note I - Revenue from Contracts with Customers](index=16&type=section&id=Note%20I%20-%20Revenue%20from%20Contracts%20with%20Customers) This note details revenue recognition from collaboration agreements, disaggregating revenue by type and region, and providing contract liability information Revenue by Type | Revenue Type | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Sep 30, 2021 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Research and development | $13,220 | $242,265 | | Royalty sales milestone | $25,250 | $— | | Non-cash royalties | $27,001 | $28,903 | | Total Revenues | $69,638 | $275,404 | - Research and development revenue for the nine months ended September 30, 2022, included a **$5.0 million** milestone and **$7.1 million** from deferred revenue recognition related to Gilead Collaboration Agreements[553](index=553&type=chunk) - Deferred research and development revenue of **$7.0 million** and **$7.7 million** is expected to be recognized for the remainder of 2022 and 2023, respectively[555](index=555&type=chunk) Contract Liabilities (Deferred Revenue) | Contract Liabilities (Deferred Revenue) | Balance at beginning of period (in thousands) | Additions (in thousands) | Deductions (in thousands) | Balance at end of period (in thousands) | | :-------------------------------------- | :------------------------------------------ | :----------------------- | :------------------------ | :------------------------------------ | | Nine months ended September 30, 2022 | $23,625 | $162 | $(7,956) | $15,831 | [Note J - Share-based Compensation Plans](index=18&type=section&id=Note%20J%20-%20Share-based%20Compensation%20Plans) This note describes the company's share-based compensation plans, including stock options and non-vested stock, and recognized expense - As of September 30, 2022, approximately **$33.0 million** of total unrecognized share-based compensation expense related to stock options and subsidiary plans is expected to be recognized over a weighted average period of **2.2 years**[566](index=566&type=chunk) Share-based Compensation Expense and Fair Values | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Weighted average grant-date fair values of stock options granted | $1.77 | $2.83 | | Total share-based compensation expense (in thousands) | $13,996 | $14,139 | Non-vested Stock Activity | Non-vested Stock Activity | Non-vested Shares (count) | Weighted Average Grant Date Fair Value | | :-------------------------------- | :------------------------ | :------------------------------------- | | Outstanding at December 31, 2021 | 1,018,051 | $2.39 | | Granted | 4,432,830 | $2.48 | | Vested | (4,316,962) | $2.58 | | Forfeited | (731,167) | $1.81 | | Outstanding at September 30, 2022 | 402,752 | $2.34 | [Note K – Restricted Cash](index=19&type=section&id=Note%20K%20%E2%80%93%20Restricted%20Cash) This note reports non-current restricted cash for facility leases and reconciles cash, cash equivalents, and restricted cash - Non-current restricted cash remained at **$2.7 million** as of both September 30, 2022, and December 31, 2021[571](index=571&type=chunk) - This restricted cash is comprised of letters of credit required under two facility leases[571](index=571&type=chunk) Reconciliation of Cash, Cash Equivalents, and Restricted Cash | Metric | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Sep 30, 2021 (in thousands) | | :---------------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cash and cash equivalents (Beginning Period) | $291,931 | $99,871 | | Restricted cash (Beginning Period) | $2,669 | $2,634 | | Cash, cash equivalents and restricted cash (Beginning Period) | $294,600 | $102,505 | | Cash and cash equivalents (End of Period) | $208,354 | $256,529 | | Restricted cash (End of Period) | $2,669 | $2,669 | | Cash, cash equivalents and restricted cash (End of Period) | $211,023 | $259,198 | [Note L – Equity](index=19&type=section&id=Note%20L%20%E2%80%93%20Equity) This note details equity activities, including net proceeds from 'at the market' offerings and increased authorized common stock - Received net proceeds of approximately **$75.2 million** from the sale of **34.6 million** common shares in 'at the market' offerings during the nine months ended September 30, 2022, at an average price of **$2.24** per share[575](index=575&type=chunk) - Stockholders approved an increase in authorized common stock from **400,000,000** to **800,000,000** shares, effective August 5, 2022[576](index=576&type=chunk) [Note M – Related Party Transactions](index=20&type=section&id=Note%20M%20%E2%80%93%20Related%20Party%20Transactions) This note discloses a clinical trial services contract with Protagenic Therapeutics, Inc., a related party with Agenus' CEO holding significant interest - A wholly-owned subsidiary of Agenus approved a **$1.3 million** contract with Protagenic Therapeutics, Inc. for clinical trial services[577](index=577&type=chunk) - Dr. Garo H. Armen, Agenus' CEO, is Executive Chairman of and holds a greater than **10%** equity interest in Protagenic[577](index=577&type=chunk) [Note N - Recent Accounting Pronouncements](index=20&type=section&id=Note%20N%20-%20Recent%20Accounting%20Pronouncements) This note discusses ASU 2017-04, simplifying goodwill impairment, and notes no other material impact from recent pronouncements - ASU 2017-04 (Intangibles – Goodwill and Other) will eliminate the requirement to calculate the implied fair value of goodwill for impairment charges, instead basing it on the excess of a reporting unit's carrying amount over its fair value[578](index=578&type=chunk) - The guidance is effective for the company in the first quarter of fiscal 2023, with no material impact anticipated absent any goodwill impairment[578](index=578&type=chunk) [Note O – Subsequent Events](index=20&type=section&id=Note%20O%20%E2%80%93%20Subsequent%20Events) This note reports net proceeds from 'at the market' offerings received after the September 30, 2022, reporting period - From October 1, 2022, through November 4, 2022, the company received net proceeds of approximately **$22.3 million** from the sale of **9.9 million** common shares under the Sales Agreement[579](index=579&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition and results, including business overview, historical performance, R&D, and liquidity [Forward Looking Statements](index=21&type=section&id=Forward%20Looking%20Statements) This subsection cautions that forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements identifiable by words such as 'expect,' 'anticipate,' 'estimate,' 'target,' 'may,' 'project,' 'guidance,' 'intend,' 'plan,' 'believe,' 'will,' 'potential,' 'opportunity,' 'future'[582](index=582&type=chunk) - These statements are based on current expectations and involve inherent risks and uncertainties that could cause actual outcomes to differ materially from current expectations[582](index=582&type=chunk) - Investors are cautioned not to place significant reliance on forward-looking statements, which should be evaluated in light of all information in the document and are not updated or revised after the document's date[583](index=583&type=chunk) [Overview](index=21&type=section&id=Overview) This section provides an overview of Agenus Inc.'s clinical-stage immuno-oncology business, detailing its pipeline, capabilities, product candidates, and collaborations - Agenus is a clinical-stage immuno-oncology (I-O) company with a pipeline of immune checkpoint antibodies, adoptive cell therapies (MiNK), and neoantigen vaccines (SaponiQx) to combat cancer and infections[585](index=585&type=chunk) - The company's I-O portfolio includes multiple antibody discovery platforms, lead candidate botensilimab (AGEN1181), the saponin-based vaccine adjuvant platform (QS-21 STIMULON™) under SaponiQx, and allogeneic iNKT cell therapies under MiNK[586](index=586&type=chunk) - Botensilimab (AGEN1181) is advancing in multiple clinical programs, with worldwide trials initiated in microsatellite stable colorectal cancer (MSS CRC) and melanoma in 2022, and a pancreatic cancer trial expected by the end of 2022[587](index=587&type=chunk) - The Biologics License Application (BLA) for balstilimab monotherapy for second-line cervical cancer was withdrawn in October 2021, following FDA recommendation due to a competitor's full approval[589](index=589&type=chunk) - Agenus has collaborations with Bristol-Myers Squibb (BMS), Betta Pharmaceuticals, Gilead Sciences, Incyte Corporation, Merck Sharpe & Dohme (Merck), and Recepta Biopharma SA for various antibody programs and potential milestone payments[590](index=590&type=chunk)[591](index=591&type=chunk)[592](index=592&type=chunk)[593](index=593&type=chunk) - SaponiQx was launched in September 2021 for novel adjuvant discovery and vaccine design, partnering with Ginkgo Bioworks, and its QS-21 Stimulon adjuvant is a key component in GSK's Shingrix vaccine, with a **$25.25 million** milestone achieved in Q2 2022[595](index=595&type=chunk) - MiNK Therapeutics completed an IPO in October 2021, raising **$40.0 million**, and is developing AGENT-797 iNKT cell therapies with data readouts planned by the end of 2022[597](index=597&type=chunk) [Historical Results of Operations](index=23&type=section&id=Historical%20Results%20of%20Operations) This section compares financial performance for the three and nine months ended September 30, 2022, versus 2021, highlighting revenue, expense, and net income shifts [Three months ended September 30, 2022 compared to the three months ended September 30, 2021](index=23&type=section&id=Three%20months%20ended%20September%2030%2C%202022%20compared%20to%20the%20three%20months%20ended%20September%2030%2C%202021) For the three months ended September 30, 2022, R&D revenue decreased substantially, a new royalty sales milestone was recognized, R&D expenses increased, and G&A expenses decreased Revenue Comparison (Three Months) | Revenue Type (in thousands) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Change | | :-------------------------------- | :------------------------------ | :------------------------------ | :----- | | Research and development | $4,573 | $238,986 | $(234,413) | | Non-cash royalty revenue | $9,224 | $12,593 | $(3,369) | | Royalty sales milestone | $7,934 | $— | $7,934 | - Research and development revenue decreased significantly due to **$220.0 million** from a BMS license and milestone in Q3 2021, compared to **$4.5 million** from Gilead deferred revenue in Q3 2022[598](index=598&type=chunk) - Research and development expense increased **7%** to **$46.0 million** (2022) from **$42.9 million** (2021), driven by a **$1.0 million** increase in personnel expenses and a **$5.1 million** increase in subsidiary activities, partially offset by a **$3.2 million** decrease in third-party services[601](index=601&type=chunk) - General and administrative expense decreased **15%** to **$18.1 million** (2022) from **$21.4 million** (2021), primarily due to a **$4.4 million** decrease in professional fees and a **$1.2 million** decrease in personnel-related expenses[602](index=602&type=chunk) - Net interest expense decreased to **$15.6 million** (2022) from **$16.6 million** (2021) due to decreased non-cash interest from the HCR Royalty Purchase Agreement[604](index=604&type=chunk) [Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021](index=24&type=section&id=Nine%20months%20ended%20September%2030%2C%202022%20compared%20to%20the%20nine%20months%20ended%20September%2030%2C%202021) For the nine months ended September 30, 2022, R&D revenue declined substantially, a new royalty sales milestone was recognized, R&D and G&A expenses moderately increased, and non-operating income rose Revenue Comparison (Nine Months) | Revenue Type (in thousands) | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Research and development | $13,220 | $242,265 | $(229,045) | | Non-cash royalty revenue | $27,001 | $28,903 | $(1,902) | | Royalty sales milestone | $25,250 | $— | $25,250 | - Research and development revenue decreased significantly, primarily due to a **$220.0 million** upfront license fee and milestone from BMS in 2021, compared to a **$5.0 million** milestone and **$7.7 million** deferred revenue from Gilead in 2022[605](index=605&type=chunk) - Research and development expense increased **7%** to **$133.4 million** (2022) from **$125.1 million** (2021), driven by a **$5.0 million** increase in personnel expenses and an **$11.9 million** increase in subsidiary activities, partially offset by a **$9.2 million** decrease in third-party services[609](index=609&type=chunk) - General and administrative expense increased **3%** to **$56.0 million** (2022) from **$54.4 million** (2021), primarily due to a **$6.5 million** increase in subsidiary activities, partially offset by a **$4.2 million** decrease in professional fees[610](index=610&type=chunk) - Non-operating income increased by **$7.6 million** to **$9.7 million** (2022) from **$2.1 million** (2021), mainly due to a **$6.6 million** gain on sale of property, plant and equipment and a **$2.8 million** gain on partial forgiveness of a liability[611](index=611&type=chunk) - Net interest expense decreased to **$44.5 million** (2022) from **$49.1 million** (2021) due to decreased non-cash interest from the HCR Royalty Purchase Agreement[612](index=612&type=chunk) [Research and Development Programs](index=26&type=section&id=Research%20and%20Development%20Programs) This section details R&D expense allocation across antibody programs, vaccine adjuvants, and cell therapies, emphasizing substantial future expenditures for development and regulatory approvals Research and Development Expenses by Program | Research and Development Program | Nine Months Ended September 30, 2022 (in thousands) | Year Ended December 31, 2021 (in thousands) | | :--------------------------------------- | :-------------------------------------------------- | :------------------------------------------ | | Antibody programs | $93,897 | $141,266 | | Vaccine adjuvant (QS-21 Stimulon) | $7,323 | $5,912 | | Cell therapies | $18,288 | $15,507 | | Other research and development programs | $13,904 | $15,923 | | Total research and development expenses | $133,412 | $178,608 | - Significant additional expenditures will be required for new clinical trials, program delays, regulatory approvals, technology development, expansion of operations, and bringing product candidates to market[615](index=615&type=chunk) - The total cost and timing for completing R&D programs and achieving market entry or partnering arrangements are uncertain due to the various stages of product candidates' development[615](index=615&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses historical operating losses, current cash position, and future financing strategies to support development and commercialization efforts - The company has incurred annual operating losses since inception, with an accumulated deficit of **$1.6 billion** as of September 30, 2022[616](index=616&type=chunk) Cash, Cash Equivalents & Short-term Investments | Metric | September 30, 2022 (in millions) | December 31, 2021 (in millions) | | :---------------------------------------- | :------------------------------- | :------------------------------ | | Cash, cash equivalents & short-term investments | $218.2 | $306.9 | | Change from Dec 31, 2021 | $(88.7) | N/A | - Current cash resources of **$218.2 million** are believed to be sufficient to satisfy liquidity requirements for more than one year from the issuance date of the financial statements[620](index=620&type=chunk) - Future funding is expected from collaborations, out-licensing, milestone payments, third-party agreements, asset sales, project financing, and equity securities sales[621](index=621&type=chunk) Cash Flow from Operating Activities | Cash Flow Metric | Nine Months Ended September 30, 2022 (in millions) | Nine Months Ended September 30, 2021 (in millions) | | :--------------------------------------- | :------------------------------------------------- | :------------------------------------------------- | | Net cash (used in) provided by operating activities | $(128.0) | $33.1 | - Future cash requirements include supporting clinical trial and regulatory efforts, and continuing other research and development programs, with estimated total payments to third-party providers of **$497.5 million** over the term of related activities[622](index=622&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section identifies foreign currency exchange rate risk in major European currencies and discusses interest rate exposure on cash and investments, noting investment policy - The primary market risk exposure is foreign currency exchange rate risk, with concentrations in the Euro, Swiss Franc, and British Pound due to foreign subsidiaries' operations[624](index=624&type=chunk) - The company does not currently employ specific strategies like derivative instruments or hedging to manage foreign currency exposures[624](index=624&type=chunk) - Cash, cash equivalents, and short-term investments (**$218.2 million** at September 30, 2022) are exposed to interest rate changes, with interest income fluctuating accordingly[625](index=625&type=chunk) - The investment policy aims to preserve principal, maintain liquidity, and maximize yields, prohibiting investments in structured investment vehicles and asset-backed commercial paper[625](index=625&type=chunk) [ITEM 4. Controls and Procedures](index=28&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls and procedures, concluding their effectiveness, and reports no material changes in internal control [Evaluation of Disclosure Controls and Procedures](index=28&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, ensuring timely and accurate reporting - Management, including the Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of disclosure controls and procedures[628](index=628&type=chunk) - It was concluded that as of September 30, 2022, the disclosure controls and procedures were effective and designed to ensure timely and appropriate communication and reporting of required information[628](index=628&type=chunk) [Changes in Internal Control Over Financial Reporting](index=28&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) No material changes occurred in internal control over financial reporting during the three months ended September 30, 2022 - No change in internal control over financial reporting occurred during the three months ended September 30, 2022, that materially affected or is reasonably likely to materially affect internal control over financial reporting[629](index=629&type=chunk) PART II - OTHER INFORMATION This section provides additional information on legal proceedings, risk factors, and exhibits [ITEM 1. Legal Proceedings](index=29&type=section&id=ITEM%201.%20Legal%20Proceedings) This section discloses two ongoing legal proceedings between Agenus and Recepta Biopharma SA regarding a 2016 collaboration agreement - Agenus is involved in two legal proceedings with Recepta Biopharma SA regarding a 2016 collaboration agreement[631](index=631&type=chunk) - Agenus filed a case in Massachusetts in January 2022, alleging material breach and breach of implied covenant of good faith and fair dealing by Recepta[631](index=631&type=chunk) - Recepta filed a counterclaim in Brazil in August 2022, obtaining an ex parte temporary injunction related to certain aspects of the agreement[631](index=631&type=chunk) - Agenus does not expect the outcome of these litigations to have a material impact on its business[631](index=631&type=chunk) [ITEM 1A. Risk Factors](index=29&type=section&id=ITEM%201A.%20Risk%20Factors) This section outlines principal risks and uncertainties that could materially affect the company's business, financial condition, and future growth, covering various operational and financial aspects [Summary of Risk Factors](index=29&type=section&id=Summary%20of%20Risk%20Factors) This summary provides a high-level overview of key risk categories impacting the company, including financial, development, commercialization, manufacturing, third-party, regulatory, IP, operational, and stock performance - Risks include historical net losses, need for additional financing, and potential dilution for stockholders[632](index=632&type=chunk) - Product development risks involve dependency on botensilimab, changes in clinical trial data, adverse events, patient enrollment difficulties, and strain on limited resources[632](index=632&type=chunk) - Commercialization risks encompass regulatory approval delays, undesirable side effects, intense competition, market acceptance challenges, unfavorable pricing/reimbursement, limited market opportunities, and lack of commercial experience[633](index=633&type=chunk) - Manufacturing and supply risks include challenges in production, high costs, and reliance on third-party manufacturers[634](index=634&type=chunk) - Reliance on third parties poses risks related to their performance in developing and commercializing antibody programs[636](index=636&type=chunk) - Government regulation risks involve uncertain approval processes, compliance with healthcare laws, impact of reform measures, and international operational complexities[636](index=636&type=chunk) - Intellectual property risks include challenges in obtaining/enforcing patents, compliance with licenses, global protection, changes in patent law, confidentiality, and potential infringement lawsuits[637](index=637&type=chunk) - Business operations risks cover managing growth, legal claims, IT security breaches, and the success of subsidiary MiNK Therapeutics[637](index=637&type=chunk) - Common stock risks include price volatility, no cash dividends, and anti-takeover provisions[638](index=638&type=chunk) [Risks Related to Our Financial Position and Need for Additional Capital](index=31&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) This section details the company's history of net losses, ongoing need for substantial additional capital for R&D and commercialization, and potential adverse effects of future financing - Agenus has incurred net losses since its inception, with a net loss of **$156.6 million** for the nine months ended September 30, 2022, and anticipates continued significant losses[642](index=642&type=chunk) - The company requires substantial additional capital to fund ongoing research and development, preclinical and clinical testing, supply chain development, regulatory approvals, and commercialization efforts[646](index=646&type=chunk)[647](index=647&type=chunk) - As of September 30, 2022, cash, cash equivalents, and short-term investments totaled **$218.2 million**, projected to be sufficient for more than one year, but additional capital will be needed to complete current clinical development programs[648](index=648&type=chunk) - Future funding may come from public/private equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements, which could lead to stockholder dilution, restrictive covenants, or relinquishing rights to technologies[649](index=649&type=chunk)[653](index=653&type=chunk) - Outstanding debt of **$13.5 million** (principal) as of September 30, 2022, including **$13.0 million** from 2015 Subordinated Notes due February 2023; default could materially and adversely affect liquidity[661](index=661&type=chunk) [Risks Related to the Development of Our Product Candidates](index=34&type=section&id=Risks%20Related%20to%20the%20Development%20of%20Our%20Product%20Candidates) This section highlights significant risks in product candidate development, including dependency on clinical-stage programs, uncertain trial outcomes, adverse events, patient enrollment, and resource strain - The business is highly dependent on the success of clinical-stage programs, particularly botensilimab and its combination therapies, which require significant additional clinical development and regulatory approval[663](index=663&type=chunk)[664](index=664&type=chunk) - Preliminary or interim clinical data may change materially in final results, and positive early results are not necessarily predictive of success in later trials or sufficient for regulatory approval[671](index=671&type=chunk)[672](index=672&type=chunk) - Clinical trials may reveal significant adverse events or a lack of sufficient efficacy, which could inhibit regulatory approval or market acceptance of product candidates[676](index=676&type=chunk)[677](index=677&type=chunk)[679](index=679&type=chunk) - Difficulties in enrolling patients in clinical trials or staffing shortages at clinical trial sites could delay or adversely affect clinical development activities[683](index=683&type=chunk)[686](index=686&type=chunk)[687](index=687&type=chunk) - Simultaneously advancing multiple product candidates (antibodies, cell therapies, vaccine adjuvants) creates a significant strain on limited human and financial resources, potentially preventing successful advancement of any candidate[688](index=688&type=chunk)[689](index=689&type=chunk) [Risks Related to the Commercialization of Our Product Candidates](index=37&type=section&id=Risks%20Related%20to%20the%20Commercialization%20of%20Our%20Product%20Candidates) This section addresses substantial hurdles in commercializing product candidates, including regulatory delays, side effects, competition, market acceptance, pricing, and reimbursement - Failure or delays in obtaining required regulatory approvals for product candidates will materially impair the ability to commercialize them and generate revenue[690](index=690&type=chunk)[691](index=691&type=chunk)[692](index=692&type=chunk) - The novel nature of product candidates creates further challenges in obtaining regulatory approval, potentially requiring additional confirmatory trials even after accelerated approval[693](index=693&type=chunk)[694](index=694&type=chunk)[696](index=696&type=chunk) - Product candidates may cause undesirable side effects, which could delay or prevent regulatory approval, limit the commercial profile of an approved label, or lead to significant negative consequences post-marketing approval[700](index=700&type=chunk)[701](index=701&type=chunk)[704](index=704&type=chunk) - The company faces significant competition from major pharmaceutical and specialized biotechnology companies with superior products, manufacturing capabilities, and resources, potentially limiting demand and pricing power[705](index=705&type=chunk)[706](index=706&type=chunk)[707](index=707&type=chunk)[709](index=709&type=chunk)[710](index=710&type=chunk)[711](index=711&type=chunk)[712](index=712&type=chunk)[713](index=713&type=chunk)[714](index=714&type=chunk)[716](index=716&type=chunk) - Even if approved, product candidates may fail to achieve sufficient market acceptance by physicians, patients, and third-party payors, hindering commercial success[720](index=720&type=chunk)[722](index=722&type=chunk) - Unfavorable pricing regulations, third-party reimbursement practices, or healthcare reform initiatives could adversely affect the business by limiting coverage and profitability[723](index=723&type=chunk)[724](index=724&type=chunk)[725](index=725&type=chunk)[726](index=726&type=chunk)[727](index=727&type=chunk)[728](index=728&type=chunk) - Market opportunities for product candidates may be limited to specific patient populations, and estimates of target populations may be inaccurate, potentially hindering profitability[729](index=729&type=chunk)[730](index=730&type=chunk) - The company has no experience in marketing, selling, and distributing products or performing commercial compliance, requiring significant capital and time to build these functions, with no assurance of success[731](index=731&type=chunk)[732](index=732&type=chunk) [Risks Related to Manufacturing and Supply](index=45&type=section&id=Risks%20Related%20to%20Manufacturing%20and%20Supply) This section details complexities and risks in manufacturing novel product candidates, including high costs, delays, defects, scale-up challenges, and reliance on third-party manufacturers - The manufacturing process for certain product candidates is complex, novel, and not yet validated for commercial production, leading to potentially higher costs and lower reliability[735](index=735&type=chunk)[736](index=736&type=chunk) - Manufacturing processes are susceptible to logistical issues, interruptions, contamination, equipment failure, and inconsistencies, which could result in reduced yields, lot failures, product defects, or recalls[737](index=737&type=chunk) - Scaling up manufacturing to commercial levels presents risks such as cost overruns, problems with process reproducibility, stability issues, and timely availability of raw materials[738](index=738&type=chunk) - The company owns and operates a clinical scale manufacturing facility, which is costly and time-consuming, and any performance failure could delay clinical development or marketing approval[742](index=742&type=chunk) - Dependence on suppliers for components and materials, with few alternative sources, creates risks of supply disruption, increased costs, and delays in meeting demand[747](index=747&type=chunk)[749](index=749&type=chunk) - Reliance on third-party manufacturers for clinical and commercial supplies increases the risk of insufficient quantities, unacceptable costs, and potential failures in regulatory compliance[750](index=750&type=chunk)[751](index=751&type=chunk)[753](index=753&type=chunk) [Risks Related to Our Reliance on Third Parties](index=48&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) This section details the company's significant dependence on collaborations with partners for antibody program development and commercialization, outlining risks of partner performance, agreement terminations, and alliance management - Agenus is dependent on collaborations with BMS, Gilead, Incyte, and Betta Pharmaceuticals to further develop and commercialize certain antibody programs[757](index=757&type=chunk) - The BMS License Agreement for AGEN1777 involves an upfront payment and potential milestones up to **$1.36 billion**, but BMS controls development, and there's no assurance milestones will be achieved or the agreement won't be terminated[758](index=758&type=chunk)[759](index=759&type=chunk) - The Gilead Collaboration Agreements saw Gilead return AGEN1423 and terminate the option for AGEN1223, while the AGEN2373 option remains, with potential milestones up to **$5.0 million** before exercise, a **$50.0 million** exercise fee, and up to **$520.0 million** in additional milestones if exercised[760](index=760&type=chunk) - The Incyte collaboration converted to royalty-bearing programs, with Incyte funding all development and Agenus eligible for up to **$500.0 million** in milestones, but risks include Incyte's control over development and potential termination[762](index=762&type=chunk)[763](index=763&type=chunk)[764](index=764&type=chunk) - Failure to enter into or maintain additional significant licensing, distribution, or collaboration agreements on favorable terms could hinder development efforts, increase timelines, and necessitate reliance on other financing mechanisms[768](index=768&type=chunk)[772](index=772&type=chunk)[773](index=773&type=chunk)[774](index=774&type=chunk)[775](index=775&type=chunk) - Reliance on third parties (CROs) to conduct clinical trials means limited control over their activities, posing risks of delays, unreliable data, and non-compliance with regulatory requirements, which could harm financial results and commercial prospects[776](index=776&type=chunk)[777](index=777&type=chunk)[779](index=779&type=chunk)[780](index=780&type=chunk) [Risks Related to Government Regulation](index=52&type=section&id=Risks%20Related%20to%20Government%20Regulation) This section details the extensive and unpredictable regulatory landscape, including approval processes, new regulations, healthcare fraud laws, pricing, reimbursement, data privacy, and international trade - The regulatory approval process for product candidates in the U.S., EU, and other jurisdictions is lengthy, time-consuming, and inherently unpredictable, with no guarantee of obtaining marketing approval[782](index=782&type=chunk)[783](index=783&type=chunk) - The novel nature of product candidates creates further challenges in obtaining regulatory approval, potentially requiring extensive clinical trials and facing disagreement from regulatory authorities on development plans or data sufficiency[783](index=783&type=chunk)[784](index=784&type=chunk)[785](index=785&type=chunk)[787](index=787&type=chunk) - Breakthrough Therapy or Fast Track Designations, even if granted, do not guarantee a faster development, regulatory review, or approval process, nor do they increase the likelihood of marketing approval[790](index=790&type=chunk)[791](index=791&type=chunk)[794](index=794&type=chunk) - The company's relationships with healthcare providers, physicians, and third-party payors are subject to extensive anti-kickback, fraud and abuse, and other healthcare laws and regulations, which could lead to investigations, litigation, criminal sanctions, and civil penalties[801](index=801&type=chunk)[803](index=803&type=chunk)[805](index=805&type=chunk)[806](index=806&type=chunk)[808](index=808&type=chunk)[809](index=809&type=chunk) - Ongoing regulatory obligations and continued review post-approval may result in significant additional expenses and potential penalties if the company fails to comply with requirements or experiences unanticipated problems with its product candidates[811](index=811&type=chunk)[812](index=812&type=chunk)[813](index=813&type=chunk)[814](index=814&type=chunk)[815](index=815&type=chunk)[816](index=816&type=chunk) - Healthcare insurance coverage and reimbursement may be limited or unavailable, and unfavorable pricing regulations or healthcare reform measures could make it difficult to sell product candidates profitably[819](index=819&type=chunk)[820](index=820&type=chunk)[821](index=821&type=chunk)[822](index=822&type=chunk)[823](index=823&type=chunk)[824](index=824&type=chunk)[825](index=825&type=chunk) - International operations are subject to complex laws and regulations, including the Foreign Corrupt Practices Act (FCPA), anti-money laundering, export control, and sanctions, requiring costly compliance programs and exposing the company to penalties for violations[843](index=843&type=chunk)[844](index=844&type=chunk)[845](index=845&type=chunk)[846](index=846&type=chunk)[848](index=848&type=chunk) - The ability to use net operating losses (NOLs) and research and development credits to offset future taxable income may be subject to limitations due to ownership changes and the need to achieve profitability[864](index=864&type=chunk)[865](index=865&type=chunk) [Risks Related to Our Intellectual Property](index=64&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section details the critical importance and challenges of protecting intellectual property, including patent enforcement, crowded landscapes, infringement risks, and safeguarding trade secrets and trademarks - Inability to obtain and enforce patent protection for product candidates and related technology could materially harm the business, as patent applications may not issue, or issued patents may be challenged, narrowed, or invalidated[866](index=866&type=chunk)[867](index=867&type=chunk)[868](index=868&type=chunk)[869](index=869&type=chunk)[871](index=871&type=chunk)[872](index=872&type=chunk)[873](index=873&type=chunk)[874](index=874&type=chunk)[875](index=875&type=chunk)[876](index=876&type=chunk)[877](index=877&type=chunk)[878](index=878&type=chunk) - The patent landscapes in antibody, vaccine, adjuvant, and adoptive cell therapy fields are crowded, increasing the risk of third-party patents impacting freedom to operate and requiring potentially costly licenses[873](index=873&type=chunk)[874](index=874&type=chunk) - Failure to comply with obligations under intellectual property licenses with third parties could result in the loss of critical license rights important to the business[889](index=889&type=chunk)[891](index=891&type=chunk) - Protecting intellectual property rights globally is expensive and challenging, as patentability requirements and enforcement vary significantly by country, potentially limiting the ability to prevent infringement[892](index=892&type=chunk)[893](index=893&type=chunk) - Changes in U.S. patent law or its interpretation could diminish the value of patents, increasing uncertainty regarding the ability to protect inventions[897](index=897&type=chunk)[898](index=898&type=chunk) - Inability to protect the confidentiality of proprietary information (trade secrets) could adversely affect the value of technology and competitive position, potentially requiring costly litigation[898](index=898&type=chunk)[899](index=899&type=chunk)[900](index=900&type=chunk)[901](index=901&type=chunk) - The company's commercial success depends on operating without infringing third-party patents and proprietary rights, and patent litigation is costly, time-consuming, and unpredictable, potentially leading to significant liabilities or market exclusion[904](index=904&type=chunk)[906](index=906&type=chunk)[907](index=907&type=chunk)[908](index=908&type=chunk)[909](index=909&type=chunk)[910](index=910&type=chunk) - Failure to obtain patent term extension and/or data exclusivity for product candidates could allow competitors to obtain earlier approval of competing products, materially harming the business[922](index=922&type=chunk)[924](index=924&type=chunk) [Risks Related to Business Operations, Employee Matters and Managing Growth](index=74&type=section&id=Risks%20Related%20to%20Business%20Operations%2C%20Employee%20Matters%20and%20Managing%20Growth) This section addresses operational risks, including managing growth, product liability, key personnel reliance, cybersecurity threats, and the disruptive impact of natural disasters or public health crises - Managing significant growth and consolidation efforts across multiple locations, including headcount changes and office closures, may lead to operational disruptions, increased expenses, and delayed timelines[930](index=930&type=chunk)[931](index=931&type=chunk)[932](index=932&type=chunk) - The company faces an inherent risk of product liability exposure from clinical trials and commercial sales, with limited insurance coverage that may be insufficient to cover future claims[933](index=933&type=chunk)[935](index=935&type=chunk) - High reliance on key management personnel (Dr. Garo H. Armen, Dr. Jennifer Buell) and intense competition for skilled personnel pose risks to achieving strategic and operational objectives if these individuals or qualified replacements cannot be retained[936](index=936&type=chunk)[937](index=937&type=chunk)[938](index=938&type=chunk)[939](index=939&type=chunk) - Internal computer systems and those of third-party partners are vulnerable to security breaches, which could result in material disruptions, delays in regulatory approval, loss of data, and potential liabilities[940](index=940&type=chunk)[941](index=941&type=chunk)[943](index=943&type=chunk)[944](index=944&type=chunk) - Natural or man-made calamities (e.g., earthquakes, fires) or public health crises (e.g., COVID-19, Russia-Ukraine war) could disrupt business operations, supply chains, and strategic partners' activities, leading to substantial expenses and delays[945](index=945&type=chunk)[946](index=946&type=chunk)[947](index=947&type=chunk)[948](index=948&type=chunk)[950](index=950&type=chunk)[951](index=951&type=chunk)[952](index=952&type=chunk) - Failure to realize the anticipated benefits of strategic acquisitions and licensing transactions due to integration difficulties, unknown liabilities, and limited resources could adversely affect business and financial condition[952](index=952&type=chunk)[953](index=953&type=chunk)[954](index=954&type=chunk) - The subsidiary MiNK Therapeutics, despite its IPO, may not attract future external funding or achieve success in advancing product candidates through clinical development[954](index=954&type=chunk)[955](index=955&type=chunk) [Risks Related to Our Common Stock](index=78&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) This section addresses risks related to common stock, including price volatility, no cash dividends, potential dilution from future stock sales, and anti-takeover provisions - The trading volume and public trading price of the common stock have been volatile, influenced by various factors including operating losses, clinical trial results, regulatory delays, and general market conditions[958](index=958&type=chunk) - The company does not intend to pay cash dividends on its common stock in the foreseeable future; thus, the return on investment depends solely on stock price appreciation[962](index=962&type=chunk) - Failure to maintain effective internal controls and comply with changing corporate governance and public disclosure regulations could adversely affect operating results and stock price[963](index=963&type=chunk)[964](index=964&type=chunk)[965](index=965&type=chunk) - The sale of a significant number of shares by the company or stockholders (e.g., through 'at the market' offerings, equity incentive plans, warrants, options, convertible preferred stock) could cause the market price of common stock to decline and dilute existing investors[966](index=966&type=chunk)[967](index=967&type=chunk)[969](index=969&type=chunk) - Anti-takeover provisions in charter documents and Delaware law could delay or prevent a change of control, potentially limiting the market price of common stock and frustrating stockholder attempts to replace management[970](index=970&type=chunk)[971](index=971&type=chunk)[972](index=972&type=chunk) - Management has broad discretion in the use of existing cash, cash equivalents, and investments, and ineffective application of these funds could harm the business and cause the stock price to decline[973](index=973&type=chunk) [ITEM 6. Exhibits](index=81&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, primarily Inline XBRL taxonomy extension documents and officer certifications - Includes Inline XBRL Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbase Documents[976](index=976&type=chunk)[977](index=977&type=chunk)[978](index=978&type=chunk) - Contains the Cover Page Interactive Data File and the XBRL Instance Document[978](index=978&type=chunk)[979](index=979&type=chunk) - Certifications of the Principal Executive Officer and Principal Financial Officer, pursuant to Rules 13a-14(a) and 15d-14(a) and 18 U.S.C. Section 1350, are filed herewith[979](index=979&type=chunk) [Signatures](index=82&type=section&id=Signatures) This section formally concludes the report, confirming its due authorization and signing by the Principal Financial and Accounting Officer - The report was duly signed on November 8, 2022, on behalf of Agenus Inc. by Christine M. Klaskin, VP, Finance, Principal Financial Officer, and Principal Accounting Officer[981](index=981&type=chunk)

Agenus Inc. (NASDAQ:AGEN) Q2 2022 Earnings Conference Call August 9, 2022 8:30 AM ET Company Participants Ethan Lovell - Chief of External Affairs & Communications Officer Garo Armen - Chairman & Chief Executive Officer Christine Klaskin - Vice President-Finance Steven O'Day - Chief Medical Officer Dhan Chand - Scientific Director, Head of Drug Discovery Conference Call Participants Mayank Mamtani - B. Riley Securities Matt Phipps - William Blair Operator Good morning. My name is Abby and I will be your con ...