PART I - FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for Agenus Inc., along with disclosures on market risk and internal controls [ITEM 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents Agenus Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows, with detailed explanatory notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202024%20%28Unaudited%29%20and%20December%2031%2C%202023) Total assets decreased while total liabilities and stockholders' deficit increased from December 2023 to June 2024, driven by current assets and royalty liabilities | Metric | June 30, 2024 (thousands) | December 31, 2023 (thousands) | | :----------------------------------- | :-------------------------- | :---------------------------- | | Total current assets | $100,004 | $112,416 | | Total assets | $292,415 | $313,913 | | Total current liabilities | $270,666 | $255,897 | | Total liabilities and stockholders' deficit | $292,415 | $313,913 | | Total stockholders' deficit | $(220,839) | $(148,382) | - Cash and cash equivalents increased to **$93.7 million** at June 30, 2024, from $76.1 million at December 31, 2023[10](index=10&type=chunk) - Accounts receivable significantly decreased from **$25.8 million to $0.7 million**[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202024%20and%202023%20%28Unaudited%29) Net loss decreased for both three and six months ended June 30, 2024, due to lower operating expenses and higher non-operating income | Metric (thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $23,509 | $25,296 | $51,514 | $48,198 | | Operating loss | $(30,193) | $(54,666) | $(63,076) | $(109,007) | | Net loss | $(54,797) | $(73,430) | $(118,251) | $(144,323) | | Net loss attributable to Agenus Inc. common stockholders | $(53,135) | $(69,069) | $(115,074) | $(137,377) | | Basic and diluted net loss per common share | $(2.52) | $(3.93) | $(5.56) | $(8.22) | - Research and development expenses decreased significantly by **38% for the three months** and **31% for the six months** ended June 30, 2024, compared to the prior year[11](index=11&type=chunk) - Non-cash royalty revenue increased for both periods, reaching **$22.6 million (3 months)** and **$50.3 million (6 months)** in 2024[11](index=11&type=chunk) [Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Deficit](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders%27%20Deficit%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202024%20and%202023%20%28Unaudited%29) Total stockholders' deficit significantly increased from December 2023 to June 2024, primarily due to net losses, partially offset by equity sales | Metric (thousands) | December 31, 2023 | June 30, 2024 | | :----------------------------------- | :---------------- | :------------ | | Common stock, par value $0.01 per share (shares) | 19,718,662 | 21,126,226 | | Additional paid-in capital | $1,796,095 | $1,830,114 | | Accumulated deficit | $(1,955,668) | $(2,070,635) | | Total stockholders' deficit | $(148,382) | $(220,839) | - Net loss for the six months ended June 30, 2024, was **$(118,251) thousand**, contributing to the accumulated deficit[12](index=12&type=chunk) - Additional paid-in capital increased by **$34.0 million**, reflecting proceeds from shares sold at market and share-based compensation[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202024%20and%202023%20%28Unaudited%29) Cash used in operating activities decreased, leading to a net increase in cash, cash equivalents, and restricted cash due to financing activities | Metric (thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(76,371) | $(118,569) |\n| Net cash provided by (used in) investing activities | $(8) | $(10,972) |\n| Net cash provided by financing activities | $93,913 | $94,513 |\n| Net increase (decrease) in cash, cash equivalents and restricted cash | $17,578 | $(35,469) |\n| Cash, cash equivalents and restricted cash, end of period | $97,357 | $145,874 | - Operating cash outflow decreased by **$42.2 million**, largely due to adjustments for non-cash royalty revenue and non-cash interest expense, and favorable changes in accounts receivable and prepaid expenses[16](index=16&type=chunk) - Financing activities provided **$93.9 million**, including proceeds from the Ligand Purchase Agreement ($73.9 million) and sale of equity ($19.2 million)[16](index=16&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain Agenus's business, liquidity, accounting policies, and specific financial items including debt, royalties, and equity [Note A – Business, Liquidity and Basis of Presentation](index=12&type=section&id=Note%20A%20%E2%80%93%20Business%2C%20Liquidity%20and%20Basis%20of%20Presentation) Agenus, a clinical-stage biotech, faces going concern doubt despite cash reserves, relying on future funding for its cancer immunotherapy programs - Agenus is a clinical-stage biotechnology company developing cancer immunotherapies through antibody therapeutics, adoptive cell therapies (MiNK Therapeutics), and vaccine adjuvants (SaponiQx)[19](index=19&type=chunk) | Metric | June 30, 2024 (millions) | | :------------------- | :----------------------- | | Cash and cash equivalents | $93.7 | | Accumulated deficit | $2,100 | | Subordinated notes maturing Feb 2025 | $13.0 | - The company has implemented cost-saving measures, including prioritizing its lead asset (botensilimab), postponing other programs, and reducing its workforce by approximately **25% in August 2023**. The CEO has elected to receive salary and bonuses in stock[24](index=24&type=chunk) [Note B – Net Loss Per Share](index=14&type=section&id=Note%20B%20%E2%80%93%20Net%20Loss%20Per%20Share) Basic and diluted net loss per share are identical due to net loss, rendering potentially dilutive securities anti-dilutive - Basic and diluted net loss per common share are identical because the company reported a net loss, rendering potentially dilutive securities anti-dilutive[31](index=31&type=chunk) | Anti-Dilutive Securities (thousands) | Three and Six Months Ended June 30, 2024 | Three and Six Months Ended June 30, 2023 | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | Warrants | 965 | 99 | | Stock options | 3,367 | 2,220 | | Non-vested shares | 38 | 27 | | Series A-1 convertible preferred stock | 17 | 17 | [Note C – Investments](index=15&type=section&id=Note%20C%20%E2%80%93%20Investments) Cash equivalents and short-term investments primarily consist of institutional money market funds, classified as cash equivalents | Investment Type (thousands) | June 30, 2024 (Fair Value) | December 31, 2023 (Fair Value) | | :-------------------------- | :------------------------- | :----------------------------- | | Institutional money market funds | $92,243 | $70,485 | | Total | $92,243 | $70,485 | - All listed investments are classified as cash equivalents on the condensed consolidated balance sheets[33](index=33&type=chunk) [Note D – Goodwill and Acquired Intangible Assets](index=15&type=section&id=Note%20D%20%E2%80%93%20Goodwill%20and%20Acquired%20Intangible%20Assets) Goodwill remained stable, while acquired intangible assets decreased due to amortization of intellectual property and finite-lived assets | Asset (thousands) | June 30, 2024 (Net Carrying Amount) | December 31, 2023 (Net Carrying Amount) | | :-------------------------- | :---------------------------------- | :-------------------------------------- | | Goodwill | $24,748 | $24,723 | | Acquired intangible assets, net | $4,136 | $4,411 | - The weighted average amortization period for finite-lived intangible assets is **9 years**[34](index=34&type=chunk) - Amortization expense for acquired intangibles is estimated at **$0.3 million** for the remainder of 2024[34](index=34&type=chunk) [Note E – Debt](index=16&type=section&id=Note%20E%20%E2%80%93%20Debt) Total outstanding debt increased slightly, with a significant portion of 2015 Subordinated Notes classified as current due to near-term maturity | Debt Instrument (thousands) | June 30, 2024 (Current Portion) | December 31, 2023 (Current Portion) | | :-------------------------- | :------------------------------ | :---------------------------------- | | Debentures | $146 | $146 | | 2015 Subordinated Notes | $12,866 | $0 (long-term portion: $12,768) | | Other | $413 | $0 | | Total Current Portion | $13,425 | $146 | - The principal amount of outstanding debt was **$13.6 million** at June 30, 2024, and **$13.1 million** at December 31, 2023[36](index=36&type=chunk) [Note F – Liability Related to the Sale of Future Royalties and Milestones](index=16&type=section&id=Note%20F%20%E2%80%93%20Liability%20Related%20to%20the%20Sale%20of%20Future%20Royalties%20and%20Milestones) Liability for future royalties and milestones significantly increased due to new Ligand proceeds and non-cash interest, partially offset by royalty revenue | Metric (thousands) | Period from December 31, 2023 to June 30, 2024 | | :------------------------------------------------- | :--------------------------------------------- | | Beginning balance | $257,296 | | Proceeds from sale of future royalties and milestones | $63,879 | | Non-cash royalty revenue | $(50,349) | | Non-cash interest expense recognized | $61,134 | | Ending balance, net | $330,718 | [Healthcare Royalty Partners (HCR)](index=16&type=section&id=Healthcare%20Royalty%20Partners) Agenus sold GSK royalty rights to HCR for $190 million, recognizing non-cash royalty revenue and interest expense, with an effective annual interest rate of 48.6% - Agenus sold **100% of its worldwide rights** to receive royalties from GSK on sales of vaccines containing STIMULON QS-21 adjuvant to HCR for **$190.0 million** in January 2018[38](index=38&type=chunk) | Metric (thousands) | Six Months Ended June 30, 2024 | | :------------------------- | :----------------------------- | | Non-cash royalty revenue | $50,300 | | Non-cash interest expense | $59,600 | | Effective annual interest rate | 48.6% | [Ligand Pharmaceuticals](index=18&type=section&id=Ligand%20Pharmaceuticals) Agenus received $75 million from Ligand for future milestones and royalties, recognizing $63.9 million as a liability and $1.6 million in non-cash interest expense - Agenus sold portions of future milestone payments, royalties from Covered License Agreements, and a synthetic royalty on botensilimab and balstilimab to Ligand for **$75.0 million gross proceeds** in May 2024[41](index=41&type=chunk)[43](index=43&type=chunk) | Component (thousands) | Allocation of Gross Proceeds | | :-------------------------- | :--------------------------- | | Liability related to sale of future royalties and milestones | $63,879 | | Ligand Warrant | $7,098 | | Purchaser Upsize Option | $4,023 | | Total | $75,000 | - Non-cash interest expense of **$1.6 million** was recorded related to the Ligand Purchase Agreement for the three and six months ended June 30, 2024, with an estimated effective annual interest rate of **27.9%**[48](index=48&type=chunk)[50](index=50&type=chunk) [Note G – Accrued and Other Current Liabilities](index=20&type=section&id=Note%20G%20%E2%80%93%20Accrued%20and%20Other%20Current%20Liabilities) Accrued liabilities decreased due to reduced payroll and professional fees, while other current liabilities increased, driven by 'Other' liabilities | Accrued Liabilities (thousands) | June 30, 2024 | December 31, 2023 | | :------------------------------ | :------------ | :---------------- | | Payroll | $12,685 | $14,512 | | Professional fees | $5,818 | $7,101 | | Research services | $8,037 | $10,807 | | Total Accrued Liabilities | $41,208 | $45,283 | | Other Current Liabilities (thousands) | June 30, 2024 | December 31, 2023 | | :------------------------------------ | :------------ | :---------------- | | Finance lease liabilities | $9,367 | $10,457 | | Other | $6,969 | $3,458 | | Total Other Current Liabilities | $16,336 | $13,915 | [Note H – Fair Value Measurements](index=20&type=section&id=Note%20H%20%E2%80%93%20Fair%20Value%20Measurements) Assets and liabilities are measured at fair value across Level 1, 2, and 3, with cash equivalents as Level 1 and Ligand option as Level 3 | Asset/Liability (thousands) | June 30, 2024 (Fair Value) | Level 1 | Level 2 | Level 3 | | :---------------------------------- | :------------------------- | :------ | :------ | :------ | | Cash equivalents | $92,243 | $92,243 | $— | $— | | Long-term investments | $1,493 | $1,493 | $— | $— | | Ligand purchaser upsize option | $4,023 | $— | $— | $4,023 | | Contingent purchase price considerations | $318 | $— | $— | $318 | - The Ligand purchaser upsize option is a **Level 3 liability**, valued based on scenario analysis and market participant assumptions[53](index=53&type=chunk)[54](index=54&type=chunk) - Contingent purchase price considerations are **Level 3 liabilities**, valued using Monte Carlo simulations of share price and other factors[55](index=55&type=chunk) [Note I – Revenue from Contracts with Customers](index=22&type=section&id=Note%20I%20%E2%80%93%20Revenue%20from%20Contracts%20with%20Customers) Total revenues increased due to higher non-cash royalty revenue, despite a significant decrease in research and development revenue | Revenue Type (thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $267 | $2,489 | $267 | $5,101 | | Service revenue | $660 | $739 | $898 | $1,923 | | Non-cash royalty revenue | $22,582 | $22,068 | $50,349 | $41,174 | | Total revenues | $23,509 | $25,296 | $51,514 | $48,198 | - Non-cash royalty revenue increased due to higher net sales of GSK's vaccines containing STIMULON QS-21 adjuvant, including AREXVY[125](index=125&type=chunk)[131](index=131&type=chunk) - No revenue was recognized from the Gilead Collaboration Agreement for the three and six months ended June 30, 2024, compared to **$2.0 million and $4.4 million**, respectively, in 2023[58](index=58&type=chunk)[124](index=124&type=chunk)[130](index=130&type=chunk) [Note J – Share-based Compensation Plans](index=24&type=section&id=Note%20J%20%E2%80%93%20Share-based%20Compensation%20Plans) Stockholders approved more shares for the 2019 EIP, with total share-based compensation expense increasing to $13.5 million - Stockholders approved an amendment to the 2019 EIP, increasing available shares by **3.0 million**[64](index=64&type=chunk) | Stock Option Activity (six months ended June 30, 2024) | Number of Options | Weighted Average Exercise Price | | :----------------------------------------------------- | :---------------- | :------------------------------ | | Outstanding at December 31, 2023 | 2,141,360 | $65.00 | | Granted | 1,344,896 | $12.87 | | Outstanding at June 30, 2024 | 3,367,291 | $44.17 | | Share-based Compensation Expense (thousands) | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :------------------------------------------- | :------------------------------- | :----------------------------- | | Research and development | $4,722 | $6,036 | | General and administrative | $4,568 | $7,450 | | Total | $9,290 | $13,486 | [Note K – Restricted Cash](index=26&type=section&id=Note%20K%20%E2%80%93%20Restricted%20Cash) Non-current restricted cash of $3.6 million is held for facility lease letters of credit, included in other long-term assets | Metric (thousands) | June 30, 2024 | December 31, 2023 | | :----------------- | :------------ | :---------------- | | Restricted cash | $3,634 | $3,669 | - Restricted cash is primarily comprised of deposits under letters of credit required under facility leases[72](index=72&type=chunk) [Note L – Equity](index=26&type=section&id=Note%20L%20%E2%80%93%20Equity) Agenus completed a 1-for-20 reverse stock split, issued a warrant to Ligand, and raised $19.2 million from at-the-market offerings - A **1-for-20 reverse stock split** became effective on April 12, 2024, retroactively adjusting all common share and per share data[29](index=29&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - Net proceeds of approximately **$19.2 million** were received from the sale of 1.4 million common shares in at-the-market offerings during the six months ended June 30, 2024[75](index=75&type=chunk) - A warrant to purchase **867,052 shares of common stock** at an exercise price of $17.30 per share was issued to Ligand Pharmaceuticals on May 6, 2024[44](index=44&type=chunk)[77](index=77&type=chunk) [Note M – Non-controlling Interest](index=28&type=section&id=Note%20M%20%E2%80%93%20Non-controlling%20Interest) Non-controlling interest increased to $20.5 million, driven by subsidiary share sales and share-based compensation, partially offset by net loss | Metric (thousands) | June 30, 2024 | December 31, 2023 | | :----------------------------------- | :------------ | :---------------- | | Beginning balance | $11,949 | $6,376 | | Net loss attributable to non-controlling interest | $(3,284) | $(11,676) | | Sale of subsidiary shares in private placement | $10,234 | $0 | | Subsidiary share-based compensation | $1,560 | $3,825 | | Ending balance | $20,472 | $11,949 | - MiNK Therapeutics, Inc. and SaponiQx, Inc. represent **45% and 30% non-controlling interests**, respectively, as of June 30, 2024[79](index=79&type=chunk) [Sale of subsidiary shares in private placement](index=28&type=section&id=Sale%20of%20subsidiary%20shares%20in%20private%20placement) MiNK Therapeutics, a subsidiary, sold 4.64 million common shares in a private placement, generating approximately $5.8 million net proceeds - MiNK Therapeutics sold **4,640,000 shares** of its Common Stock at $1.25 per share in a private placement, generating approximately **$5.8 million net proceeds**[81](index=81&type=chunk) [Distribution of subsidiary shares to Agenus stockholders](index=28&type=section&id=Distribution%20of%20subsidiary%20shares%20to%20Agenus%20stockholders) Agenus distributed 5.0 million MiNK common shares as a stock dividend to its shareholders on May 1, 2023 - Agenus distributed **5.0 million shares of MiNK common stock** as a stock dividend on May 1, 2023, at a ratio of **0.292 MiNK shares per Agenus common share**[82](index=82&type=chunk)[83](index=83&type=chunk) [Purchase of subsidiary shares](index=28&type=section&id=Purchase%20of%20subsidiary%20shares) Agenus purchased 446,494 MiNK common shares through open market transactions during 2023 - Agenus purchased **446,494 shares of MiNK common stock** in open market transactions during the year ended December 31, 2023[84](index=84&type=chunk) [Note N – Related Party Transactions](index=28&type=section&id=Note%20N%20%E2%80%93%20Related%20Party%20Transactions) No related party transaction expenses were incurred in Q2 2024, contrasting with $450,000 for clinical consulting in the prior year - No expenses were incurred in related party transactions for the three and six months ended June 30, 2024[86](index=86&type=chunk) - For the three and six months ended June 30, 2023, **$222,000 and $450,000**, respectively, were incurred for clinical consulting services from Avillion Life Sciences LTD, a company led by a former Agenus Board member[86](index=86&type=chunk) [Note O – Recent Accounting Pronouncements](index=30&type=section&id=Note%20O%20%E2%80%93%20Recent%20Accounting%20Pronouncements) New FASB ASUs on Segment Reporting and Income Taxes will require incremental disclosures, with Agenus currently evaluating their impact - ASU 2023-07 (Segment Reporting) requires incremental annual and quarterly disclosures about segment profit/loss and expenditures, and all segment disclosures for single reportable segments, effective for fiscal years beginning after **December 15, 2024**[87](index=87&type=chunk) - ASU 2023-09 (Income Taxes) requires incremental annual disclosures for income tax rate reconciliations and taxes paid, effective for fiscal years beginning after **December 15, 2024**[88](index=88&type=chunk) [Note P – Subsequent Events](index=30&type=section&id=Note%20P%20%E2%80%93%20Subsequent%20Events) Agenus sold $6.2 million in common stock and received termination notices for key collaboration agreements with BMS and Gilead - From July 1, 2024, to August 5, 2024, Agenus sold approximately **405,000 shares of common stock**, generating **$6.2 million in net proceeds**[90](index=90&type=chunk) - BMS notified Agenus on July 30, 2024, of its voluntary termination of the AGEN1777 license agreement, effective **January 26, 2025**, with rights reverting to Agenus[92](index=92&type=chunk)[93](index=93&type=chunk) - Gilead elected not to exercise its option to license AGEN2373 on August 5, 2024, formally terminating the agreement[98](index=98&type=chunk) - Incyte announced on July 30, 2024, that it would discontinue further development of LAG-3 and TIM-3 monoclonal antibodies[96](index=96&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results for Q2 2024, covering revenue, expenses, R&D programs, liquidity, and going concern [Overview](index=33&type=section&id=Overview) Agenus, a clinical-stage biotech, focuses on cancer immunotherapies with botensilimab as its lead program, despite recent collaboration terminations - Agenus is a clinical-stage biotechnology company developing cancer immunotherapies, with integrated capabilities from target discovery to manufacturing[103](index=103&type=chunk)[104](index=104&type=chunk) - The lead program, botensilimab, in combination with balstilimab, received **Fast Track designation** from the FDA for metastatic colorectal cancer and is progressing towards a Phase 3 study[106](index=106&type=chunk) - Recent terminations include BMS License Agreement for AGEN1777 (effective Jan 2025), Gilead's option for AGEN2373 (Aug 2024), and Incyte's discontinuation of LAG-3 and TIM-3 monoclonal antibodies[108](index=108&type=chunk)[109](index=109&type=chunk)[111](index=111&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) [Historical Results of Operations](index=39&type=section&id=Historical%20Results%20of%20Operations) Details financial performance for Q2 2024 vs. 2023, showing decreased R&D/G&A expenses, increased non-cash royalty revenue, and higher interest expense [Three months ended June 30, 2024 compared to the three months ended June 30, 2023](index=39&type=section&id=Three%20months%20ended%20June%2030%2C%202024%20compared%20to%20the%20three%20months%20ended%20June%2030%2C%202023) Q2 2024 saw decreased R&D revenue, increased non-cash royalty revenue, reduced operating expenses, higher non-operating income, and sharply rising interest expense | Metric (thousands) | Q2 2024 | Q2 2023 | Change ($) | Change (%) | | :------------------------- | :------ | :------ | :--------- | :--------- | | Research and development revenue | $267 | $2,489 | $(2,222) | -89.3% | | Non-cash royalty revenue | $22,582 | $22,068 | $514 | 2.3% | | Research and development expense | $36,771 | $59,285 | $(22,514) | -38.0% | | General and administrative expense | $16,816 | $20,415 | $(3,599) | -17.6% | | Non-operating income (expense) | $7,141 | $(244) | $7,385 | >100% | | Interest expense, net | $31,745 | $18,520 | $13,225 | 71.4% | - R&D expense decrease was primarily due to a **$14.3 million reduction** in third-party services, a **$3.8 million decrease** in personnel, and a **$6.1 million decrease** in subsidiary activities[126](index=126&type=chunk) - Non-operating income benefited from a **$5.5 million gain** on early termination of two operating leases and UK R&D tax credits[128](index=128&type=chunk) [Six months ended June 30, 2024 compared to the six months ended June 30, 2023](index=41&type=section&id=Six%20months%20ended%20June%2030%2C%202024%20compared%20to%20the%20six%20months%20ended%20June%2030%2C%202023) H1 2024 saw significant R&D revenue decline, increased non-cash royalty revenue, decreased R&D/G&A expenses, and doubled interest expense | Metric (thousands) | H1 2024 | H1 2023 | Change ($) | Change (%) | | :------------------------- | :------ | :------ | :--------- | :--------- | | Research and development revenue | $267 | $5,101 | $(4,834) | -94.8% | | Non-cash royalty revenue | $50,349 | $41,174 | $9,175 | 22.3% | | Research and development expense | $80,696 | $116,402 | $(35,706) | -30.7% | | General and administrative expense | $33,672 | $38,653 | $(4,981) | -12.9% | | Non-operating income (expense) | $6,036 | $(204) | $6,240 | >100% | | Interest expense, net | $61,211 | $35,112 | $26,099 | 74.3% | - R&D expense decrease was primarily due to a **$21.7 million reduction** in third-party services, a **$5.9 million decrease** in personnel, and a **$10.5 million decrease** in subsidiary activities[132](index=132&type=chunk) - Non-operating income increased due to a **$5.5 million gain** on early lease terminations and UK R&D tax credits[134](index=134&type=chunk) [Research and Development Programs](index=41&type=section&id=Research%20and%20Development%20Programs) R&D expenses decreased to $80.7 million due to reduced antibody program costs, with substantial future expenditures anticipated for clinical trials | Program (thousands) | Six Months Ended June 30, 2024 | Year Ended December 31, 2023 | | :-------------------------- | :----------------------------- | :--------------------------- | | Antibody programs | $54,807 | $178,445 | | Vaccine adjuvant | $1,373 | $10,296 | | Cell therapies | $4,638 | $16,283 | | Other research and development programs | $19,878 | $29,545 | | Total research and development expenses | $80,696 | $234,569 | - The total cost of any particular clinical trial is dependent on factors such as trial design, length, number of sites, number of patients, and sponsorship[138](index=138&type=chunk) - The company cannot reliably estimate the cost or timing of completing R&D programs or bringing products to market due to the lengthy, expensive, and uncertain regulatory approval process[138](index=138&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and cash equivalents increased to $93.7 million, but Agenus faces going concern doubt due to accumulated deficit and reliance on future funding | Metric | June 30, 2024 (millions) | December 31, 2023 (millions) | | :------------------------ | :----------------------- | :--------------------------- | | Cash and cash equivalents | $93.7 | $76.1 | | Accumulated deficit | $2,100 | $1,955.7 | | Debt outstanding | $13.6 | $13.1 | - Net cash used in operating activities decreased to **$76.4 million** for the six months ended June 30, 2024, from $118.6 million in 2023[147](index=147&type=chunk) - The company relies on corporate partnerships, advance royalty sales, and equity issuances for funding and is actively pursuing additional funding through out-licensing, partnering, asset sales, and further royalty monetization[143](index=143&type=chunk)[144](index=144&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is foreign currency exchange rate exposure in GBP and EUR, with interest rate risk on cash equivalents mitigated by short-term investments - Primary market risk exposure is foreign currency exchange rate risk, concentrated in the British Pound and Euro[148](index=148&type=chunk) - The company does not currently employ specific strategies like derivative instruments or hedging to manage foreign currency exposures[148](index=148&type=chunk) - Cash and cash equivalents of **$93.7 million** are exposed to interest rate changes, but due to the short-term nature of money market fund investments, carrying value approximates fair value[149](index=149&type=chunk) [ITEM 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2024, with no material changes in internal control over financial reporting - Disclosure controls and procedures were effective as of June 30, 2024, ensuring timely and accurate reporting of information[152](index=152&type=chunk)[153](index=153&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2024[154](index=154&type=chunk) PART II - OTHER INFORMATION This section covers legal proceedings, updated risk factors, other information including trading plans and agreement terminations, and a list of exhibits and signatures [ITEM 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) Agenus is not a party to any material legal proceedings, but ordinary course claims could still have adverse effects - Agenus is not currently a party to any material legal proceedings[157](index=157&type=chunk) - Litigation, even if not material, can adversely affect the company due to defense/settlement costs and diversion of management resources[157](index=157&type=chunk) [ITEM 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors highlight high dependence on clinical-stage programs like botensilimab and the adverse impact of recent collaboration terminations - The business is highly dependent on the success of clinical-stage programs, particularly botensilimab and related combination therapies, which require significant additional clinical development and regulatory approval[159](index=159&type=chunk)[160](index=160&type=chunk) - Positive clinical results to date may not be predictive of final trial results or sufficient for regulatory approval, and the FDA has expressed concerns regarding accelerated approval for botensilimab[161](index=161&type=chunk)[162](index=162&type=chunk) - The termination of collaboration agreements with BMS (AGEN1777) and Gilead (AGEN2373) will delay or terminate clinical development, manufacturing, regulatory approval, and commercialization efforts for these assets, eliminating future milestone payments or royalties from these partners[164](index=164&type=chunk) [ITEM 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated trading plans, and the Gilead Option and License Agreement for AGEN2373 was terminated [Trading Plans of Our Directors and Officers](index=49&type=section&id=Trading%20Plans%20of%20Our%20Directors%20and%20Of%20icers) No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q2 2024 - No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2024[165](index=165&type=chunk) [Gilead Option and License Agreement Termination](index=49&type=section&id=Gilead%20Option%20and%20License%20Agreement%20Termination) Gilead terminated its option to license AGEN2373 on August 5, 2024, following previous terminations for AGEN1423 and AGEN1223 - Gilead elected not to exercise the option to license AGEN2373 on August 5, 2024, formally terminating the agreement[167](index=167&type=chunk) - This termination follows Gilead's previous decisions to return AGEN1423 (November 2020) and terminate the option for AGEN1223 (October 2021)[166](index=166&type=chunk) [ITEM 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with Form 10-Q, including corporate amendments, the Ligand agreement, and executive officer certifications - Includes Certificate of Eighth Amendment to the Amended and Restated Certificate of Incorporation of Agenus Inc. filed on **April 5, 2024**[170](index=170&type=chunk) - Lists the Purchase and Sale Agreement with Ligand Pharmaceuticals Incorporated, dated **May 6, 2024**[170](index=170&type=chunk) - Contains certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002[170](index=170&type=chunk) [Signatures](index=54&type=section&id=Signatures) The report is signed by Christine M. Klaskin, VP, Finance, Principal Financial Officer, and Principal Accounting Officer, on August 8, 2024 - The report was signed by Christine M. Klaskin, VP, Finance, Principal Financial Officer, and Principal Accounting Officer, on **August 8, 2024**[175](index=175&type=chunk)[176](index=176&type=chunk)

Agenus Inc. (NASDAQ:AGEN) Q1 2024 Earnings Conference Call May 7, 2024 8:30 AM ET Company Participants Zack Armen - Head of Investor Relations Garo Armen - Chairman & Chief Executive Officer Steven O’Day - Chief Medical Officer Robin Taylor - Chief Commercial Officer Christine Klaskin - Vice President of Finance & Principal Financial and Accounting Officer Conference Call Participants Emily Bodnar - H.C. Wainright Mayank Mamtani - B. Riley Securities Matthew Phipps - William Blair Operator Thank you for sta ...

[Form 8-K Current Report](index=1&type=section&id=Form%208-K%20Current%20Report) This report details Agenus Inc.'s recent financial announcement and the accompanying exhibit [Results of Operations and Financial Condition](index=3&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) Agenus Inc. announced its first quarter 2024 financial results on May 7, 2024, via a press release furnished as Exhibit 99.1, which is not considered 'filed' under Section 18 of the Securities Exchange Act - Agenus Inc. announced its financial results for the quarter ended March 31, 2024[7](index=7&type=chunk) - The announcement was made on May 7, 2024, through a press release furnished as Exhibit 99.1[7](index=7&type=chunk) - The information is explicitly stated as "furnished" and not "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, which limits its legal liability in certain contexts[7](index=7&type=chunk) [Financial Statements and Exhibits](index=3&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the sole exhibit furnished with the Form 8-K report, which is the May 7, 2024 press release containing the company's financial results - The report includes one furnished exhibit: 99.1 Press Release dated May 7, 2024[7](index=7&type=chunk)

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) 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](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Agenus Inc. for the quarter ended March 31, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) 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](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) 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](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) 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](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) 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](index=23&type=chunk)[118](index=118&type=chunk) - 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](index=78&type=chunk)[80](index=80&type=chunk) - A **1-for-20 reverse stock split** became effective on April 12, 2024, with all share and per-share data retroactively adjusted[29](index=29&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - 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](index=64&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) 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](index=89&type=chunk) - 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](index=24&type=chunk)[119](index=119&type=chunk) - 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](index=97&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) 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](index=105&type=chunk) - 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](index=106&type=chunk) - G&A expenses decreased by **8%** year-over-year, primarily due to a **$1.5 million** decrease in subsidiary activities[107](index=107&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) 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](index=116&type=chunk) - 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](index=117&type=chunk)[118](index=118&type=chunk) - 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](index=122&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) 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](index=123&type=chunk) - The company does not currently use derivative instruments or hedging to manage its currency or interest rate exposures[123](index=123&type=chunk)[126](index=126&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) 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](index=127&type=chunk) - 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](index=129&type=chunk) [PART II - OTHER INFORMATION](index=40&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, other information, and exhibits filed with the report [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) Agenus reports no material legal proceedings currently involving the company - The company is not currently involved in any material legal proceedings[132](index=132&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) 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](index=133&type=chunk) [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information) 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](index=134&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) 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](index=136&type=chunk)

Agenus Inc. (NASDAQ:AGEN) Q4 2023 Results Conference Call March 14, 2024 8:30 AM ET Company Participants Zack Armen - Head of Investor Relations Garo Armen - Chairman and Chief Executive Officer Steven O'Day - Chief Medical Officer Christine Klaskin - VP, Finance and Principal Financial and Accounting Officer Todd Yancy - Chief Strategic Advisor Conference Call Participants Emily Bodnar - H.C. Wainright Mayank Mamtani - B. Riley Securities Colleen Kusy - Baird Matthew Phipps - William Blair Operator Good mo ...

Financial Performance - Research and development revenue increased to approximately $38.8 million in 2023 from $17.0 million in 2022, primarily due to a $25.0 million milestone under the BMS License Agreement[410]. - Non-cash royalty revenue related to GSK increased by $69.3 million to approximately $114.6 million in 2023, driven by increased net sales of GSK's vaccines containing the QS-21 STIMULON adjuvant[411]. - The accumulated deficit as of December 31, 2023, reached $1.96 billion, indicating significant losses since inception[408]. - Non-operating income decreased by $12.5 million to $37,000 for the year ended December 31, 2023, compared to $12.6 million in 2022, primarily due to minimal activity in 2023[415]. - Interest expense, net increased to $97.9 million for the year ended December 31, 2023, from $61.9 million in 2022, mainly due to increased non-cash interest related to the Royalty Purchase Agreement[416]. - The accumulated deficit reached $1.96 billion as of December 31, 2023, with expectations of significant losses continuing over the next several years[426]. - Cash, cash equivalents, and short-term investments decreased to $76.1 million as of December 31, 2023, down by $117.2 million from the previous year[431]. - Net cash used in operating activities was $224.2 million for the year ended December 31, 2023, compared to $175.4 million in 2022[437]. Research and Development - The company’s research and development expenses for 2023 were $234.6 million, up from $186.7 million in 2022[408]. - R&D expenses increased by 26% to $234.6 million for the year ended December 31, 2023, up from $186.7 million in 2022, primarily due to a $44.6 million increase in third-party services and other expenses[413]. - Total research and development expenses for 2023 amounted to $234.6 million, with significant costs associated with antibody programs[419]. - The company launched SaponiQx to innovate in adjuvant discovery and vaccine design, focusing on the next-generation QS-21 STIMULON[404]. - Botensilimab, the lead program, received Fast Track designation from the FDA for treating patients with dMMR metastatic colorectal cancer, with plans to submit a BLA by the end of 2024[395]. - The company completed enrollment of approximately 150 patients in a Phase 1 trial and 230 patients in a randomized Phase 2 trial for botensilimab by October 2023[395]. - The company is pursuing a global regulatory strategy for botensilimab, aiming for accelerated approval in the U.S. and Europe[395]. Collaborations and Agreements - The company has established collaborations with several firms, including BMS and Merck, resulting in potential milestone payments exceeding $1.32 billion from BMS alone[403][396]. - The Gilead Collaboration Agreements could yield up to $520.0 million in milestone payments and royalties on future sales[400]. - The company plans to enter into additional agreements with third-party providers, estimating total payments of $645.4 million over the term of related activities[435]. Financial Obligations and Risks - Long-term debt totals $14.384 billion, with less than $1.242 billion due in the next year[439]. - Operating leases amount to $119.297 million, with payments due between 2025 and 2036[439]. - Finance leases total $16.559 million, with $11.669 million due in the next year[439]. - The company is in discussions for potential structured financing and corporate collaborations to extend cash resources[433]. - The company is exposed to fluctuations in interest rates as it seeks debt financing and invests excess cash[448]. - Approximately 1.0% of cash used in operations for 2023 was from foreign subsidiaries, indicating exposure to foreign currency exchange rate fluctuations[447]. - The company does not currently employ hedging strategies to manage foreign currency exchange rate risks[447]. - The investment policy prohibits investing in structured investment vehicles and asset-backed commercial paper, focusing on preserving principal and maximizing yields[449]. - Non-cash interest expense related to the HCR Royalty Purchase Agreement is recorded based on estimated royalty payments from GSK, which could vary significantly[443]. - The company periodically reviews and amends its investment policy as necessary to manage credit risk and maintain liquidity[449].

Agenus Reports Fourth Quarter and Full Year 2023 Results FDA Grants Fast Track designation for BOT/BAL in metastatic, refractory colorectal cancer (CRC) patients who have failed 1st and 2nd line standard of care treatments Data from Phase 1 of BOT/BAL in refractory CRC showed durable ORR of 24% in patients with non-active liver metastases (NLM); Completed enrollment of randomized Phase 2 trial (n=230) Clinical data sets path for expansion opportunities in pancreas, lung, neoadjuvant CRC, and melanoma LEXING ...

Financial Performance - Research and development revenue for Q3 2023 was approximately $3.4 million, down from $4.6 million in Q3 2022, primarily due to deferred revenue recognition under Gilead Collaboration Agreements[98] - Non-cash royalty revenue from GSK increased by $11.1 million to approximately $20.4 million for Q3 2023, compared to $9.2 million in Q3 2022, driven by higher vaccine sales and milestone achievements[100] - Research and development expenses rose 12% to $51.4 million for Q3 2023, up from $46.0 million in Q3 2022, primarily due to increased third-party services and personnel costs[101] - General and administrative expenses increased by 4% to $18.9 million for Q3 2023, compared to $18.1 million in Q3 2022, mainly due to higher personnel costs[102] - Interest expense, net increased to approximately $18.6 million for Q3 2023 from $15.6 million in Q3 2022, attributed to higher non-cash interest and finance lease expenses[103] - Non-cash royalty revenue for the nine months ended September 30, 2023, increased by $34.5 million to approximately $61.5 million, compared to $27.0 million for the same period in 2022[105] - Research and development expenses for the nine months ended September 30, 2023, increased by 26% to $167.8 million from $133.4 million in the same period of 2022[106] - General and administrative expenses for the nine months ended September 30, 2023, rose by 3% to $57.6 million, compared to $56.0 million in the same period of 2022[108] - Interest expense, net for the nine months ended September 30, 2023, increased to approximately $53.7 million from $44.5 million in the same period of 2022[110] - Net cash used in operating activities for the nine months ended September 30, 2023, was $183.8 million, compared to $128.0 million for the same period in 2022[125] Assets and Funding - As of September 30, 2023, the company had an accumulated deficit of $1.9 billion and cash, cash equivalents, and short-term investments of $106.3 million[113][118] - The company anticipates additional funding from a milestone payment expected by the end of 2023 and is in discussions to sell non-strategic assets valued at approximately $65.0 million[120] - Cash, cash equivalents, and short-term investments at September 30, 2023, totaled $106.3 million, which are subject to interest rate fluctuations[127] Research and Development - The lead asset, botensilimab, showed a 12-month overall survival rate of 74% in a Phase 1 study of 70 patients with refractory microsatellite stable metastatic colorectal cancer, compared to a median overall survival of 12.9 months for standard care[82] - The botensilimab/balstilimab combination received Fast Track designation from the FDA for treating non-MSI-H/dMMR metastatic colorectal cancer patients without active liver involvement[83] - The company aims to file its first biologics license application for the botensilimab/balstilimab combination in colorectal cancer by mid-2024[83] - MiNK Therapeutics, a subsidiary, is developing unmodified and engineered iNKT cell therapies, with a Phase 1 trial showing a 42% tumor reduction in a patient with metastatic gastric cancer[97] - The company has a pipeline of novel allogeneic iNKT therapies for treating cancer and other immune-mediated diseases[83] - The company has established collaborations with several firms, resulting in over a dozen antibody programs currently in pre-clinical or clinical development[84] Collaborations and Milestones - The company is eligible to receive up to $315 million in potential milestone payments from Incyte, along with royalties on future sales, following the termination of certain programs[85] - Under the collaboration with Merck, the company is eligible for up to $85 million in potential milestone payments and royalties on future sales for a monospecific antibody targeting ILT4[86] Investment and Risk Management - The investment policy prohibits investing in structured investment vehicles and asset-backed commercial paper, focusing on preserving principal and maintaining liquidity[129] - The investment policy specifies credit quality standards and limits credit exposure from any single issue or issuer[129] - The company does not invest in derivative financial instruments, indicating no material market risk exposure related to derivatives[129] - The company does not currently employ specific strategies to manage foreign currency exchange rate risks, which are primarily concentrated in the British Pound, Euro, and Swiss Franc[126] - There has been no material change to the company's interest rate exposure since the last annual report[128] - The company’s interest income fluctuates with changes in interest rates due to the nature of its investments[127] - Approximately 0.9% of cash used in operations for the nine months ended September 30, 2023, was from foreign subsidiaries, down from 1.7% for the year ended December 31, 2022[126] Future Outlook - Future cash generation will depend on achieving regulatory approval and market acceptance of product candidates[125]

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