Agenus(AGEN) - 2024 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for the first quarter of 2024 Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Agenus Inc. for the quarter ended March 31, 2024 Condensed Consolidated Balance Sheets Agenus reported total assets of $256.6 million, a decrease from $313.9 million, with a widening stockholders' deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $52,856 | $76,110 | | Total current assets | $60,352 | $112,416 | | Total assets | $256,559 | $313,913 | | Liabilities & Stockholders' Deficit | | | | Total current liabilities | $256,002 | $255,897 | | Total liabilities | $446,336 | $462,295 | | Total stockholders' deficit | $(190,323) | $(148,382) | Condensed Consolidated Statements of Operations and Comprehensive Loss Total revenues increased to $28.0 million, and the net loss narrowed to $61.9 million for Q1 2024 Q1 2024 vs. Q1 2023 Statement of Operations (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total revenues | $28,005 | $22,902 | | Research and development expense | $(43,925) | $(57,118) | | General and administrative expense | $(16,855) | $(18,237) | | Operating loss | $(32,882) | $(54,341) | | Net loss attributable to Agenus Inc. common stockholders | $(61,940) | $(68,307) | | Basic and diluted net loss per share | $(3.04) | $(4.31) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities improved to $38.2 million, with a $23.3 million decrease in cash balance Q1 2024 vs. Q1 2023 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(38,191) | $(58,526) | | Net cash provided by (used in) investing activities | $229 | $(11,489) | | Net cash provided by financing activities | $14,830 | $56,250 | | Net decrease in cash, cash equivalents and restricted cash | $(23,254) | $(13,855) | Notes to Unaudited Condensed Consolidated Financial Statements Key notes include going concern disclosure, a $75 million subsequent financing, and a 1-for-20 reverse stock split - The company disclosed substantial doubt about its ability to continue as a going concern for one year, despite plans to secure additional funding[23][118] - On May 6, 2024, Agenus entered a Purchase and Sale Agreement with Ligand Pharmaceuticals for $75.0 million upfront in exchange for future milestones and royalties, with an option for an additional $25.0 million investment[78][80] - A 1-for-20 reverse stock split became effective on April 12, 2024, with all share and per-share data retroactively adjusted[29][76][77] - In Q1 2024, the company received net proceeds of approximately $17.2 million from the sale of 1.2 million shares through its at-the-market (ATM) offering facility[64] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2024 performance, cost controls, and liquidity, highlighting the $75 million Ligand financing - The company is pursuing a global regulatory strategy for its lead program, botensilimab in combination with balstilimab, aiming to initiate a Biologics License Application (BLA) submission to the FDA by the end of 2024 for potential accelerated approval[89] - In August 2023, the company prioritized resources to accelerate its lead asset, postponing other programs and reducing its workforce by approximately 25% to preserve liquidity[24][119] - Agenus received a $25.0 million milestone payment from Bristol-Myers Squibb (BMS) in January 2024 for the dosing of the first patient in a Phase 2 clinical trial for AGEN1777[97] Results of Operations Revenues increased due to non-cash royalties, while R&D and G&A expenses decreased due to cost-control measures - Non-cash royalty revenue from GSK's vaccines increased by $8.7 million to $27.8 million in Q1 2024 compared to Q1 2023[105] - R&D expenses decreased by 23% year-over-year, driven by a $7.4 million decrease in third-party services, a $2.1 million decrease in personnel costs, and a $4.4 million decrease in subsidiary expenses[106] - G&A expenses decreased by 8% year-over-year, primarily due to a $1.5 million decrease in subsidiary activities[107] Liquidity and Capital Resources The company ended Q1 2024 with $52.9 million in cash, with management expecting the Ligand financing to extend liquidity into 2025 - The company had $52.9 million in cash and cash equivalents as of March 31, 2024, a decrease of $23.3 million from December 31, 2023[116] - Management believes existing cash plus the $75.0 million from the Ligand agreement and other potential funding will satisfy liquidity needs into 2025, despite the formal 'going concern' disclosure[117][118] - Net cash used in operating activities for Q1 2024 was $38.2 million, compared to $58.5 million for Q1 2023, indicating improved operational cash management[122] Item 3. Quantitative and Qualitative Disclosures About Market Risk Primary market risks include foreign currency fluctuations and interest rate changes, with no material changes reported - The company's main market risk is foreign currency exchange rate risk related to transactions denominated in British Pounds and Euros[123] - The company does not currently use derivative instruments or hedging to manage its currency or interest rate exposures[123][126] Item 4. Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control - Management concluded that disclosure controls and procedures were effective as of the end of the period covered by the report[127] - No changes in internal control over financial reporting occurred during Q1 2024 that materially affected, or are reasonably likely to materially affect, internal controls[129] PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, other information, and exhibits filed with the report Item 1. Legal Proceedings Agenus reports no material legal proceedings currently involving the company - The company is not currently involved in any material legal proceedings[132] Item 1A. Risk Factors No material changes to the previously disclosed risk factors have occurred since the 2023 Annual Report - No material changes to the risk factors previously disclosed in the 2023 Form 10-K have occurred[133] Item 5. Other Information No directors or executive officers adopted or terminated Rule 10b5-1 trading plans in Q1 2024 - During the quarter ended March 31, 2024, no directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement[134] Item 6. Exhibits The exhibits include officer certifications and XBRL data files filed with the Form 10-Q - The exhibits filed with the report include officer certifications pursuant to SEC rules and the Sarbanes-Oxley Act, along with XBRL data files[136]