Agenus Inc Q2 FY2020 Earnings Call

Good morning, ladies and gentlemen. Thank you for standing by and welcome to the Agenus Second Quarter 2020 Conference Call and Webcast. At this time, all participants are in a listen-only mode. Please note, this event is being recorded. I would now like to turn the conference over to Dr. Jennifer Buell, President and Chief Operating Officer of Agenus. Dr. Buell, please go ahead.

Thank you very much. Thanks for joining us. Today's call is being webcast and will be available on our website with our accompanying slide material for replay. Before we start, we'd like to remind you that this call will include forward-looking statements including statements regarding our clinical development, regulatory plan and timeline, as well as timelines for data release and partnership opportunities. These statements are subject to risks and uncertainties and we refer you to our SEC filings for more details on these risks. As a reminder, this call is being recorded for audio broadcast. I'm Jennifer Buell, President and Chief Operating Officer of Agenus and we are delighted to provide an update today on our business. Joining me are Dr. Garo Armen, Chairman and Chief Executive Officer; Dr. Dhan Chand, Head of Drug Discovery; Julie DeSander, Vice President and Head of Business Development; and special guests, Dr. Bree Wilky, Director of Sarcoma Translational Research Program at University of Colorado Cancer Center; and Dr. Chuck Drake, Professor and Co-Director of the Cancer Immunotherapy Programs at New York-Presbyterian and Columbia University. Dr. Wilky is one of the foremost experts in sarcoma and the first clinical investigator to dose patients with zalifrelimab, our anti-CTLA-4 antibody in a Phase 1 clinical trial, and she's a Senior Author on a 2019 publication reporting on the curative benefits of zalifrelimab in patients with aggressive NGS sarcoma. Dr. Drake is an internationally renowned expert in immune therapy, immune-modulating antibodies, and tumor microenvironment conditioning agents. I'm thrilled to have them with us today. Now, I will turn the call over to Garo to highlight our key achievements in the first half of 2020.

Thank you, Jen, and thank you all for your interest in Agenus and for joining us this morning. Our special thanks, as Jen mentioned, to our experts, Dr. Drake and Dr. Wilky for taking the time from their busy practice to review and interpret the latest data from our trials. Both Bree and Chuck have been extremely helpful with their guidance for rapid clinical development paths of our potentially lifesaving medicines. This year, we have advanced our extensive clinical as well as near-clinical pipeline of agents. We have generated important data updates, some of which we will share with you today. You can also expect additional updates on up to five of our programs in upcoming presentations at major conferences between now and year-end. Before we go into some details, please keep in mind that Agenus should be considered fundamentally a technology and biology company. This has allowed us to design our broad portfolio to address one simple thing: how to overcome the challenges posed by cancer, which is constantly trying to evade the body's immune system. This is cancer's big trick, by the way. The disability for the virus is what makes our company special and our portfolio of innovative products very exciting. Using this intrinsic understanding of the immune system and our portfolio of agents, we expect to transform Agenus into a U.S. commercial biotechnology company with a recurrent pipeline of innovative immune-oncology agents. We expect our first commercial products to be our anti-PD-1, which we call Bali, and our anti-CTLA-4, Zali antibodies. In addition to investing in innovation, early on, we made a strategic decision to develop our own PD-1, Balstilimab. We consider PD-1 as an essential component for use in cocktails with our pipeline of innovative agents. Although there are several commercially available PD-1s and others in development, there are significant advantages to having your own PD-1. The first of these is affordability and flexibility of developing combinations. I'm going to list for you our pipeline: our I/O pipeline, which is synergistic with PD-1 and they are extensive. They include our other late-stage agent Zali, the Agenus first-generation CTLA-4, AGEN1181, our multifunctional CTLA-4, which you'll hear about with some data later on from Chuck. Our Fc enhanced TIGIT monospecific antibody, AGEN1327, with an IND expected to be filed within the next six months. Also our Fc enhanced bispecific TIGIT antibody, AGEN1777, also expected IND filing in the next six months. Next, AGEN1223, a very exciting bispecific antibody in the clinic, which we have not disclosed the details on the bispecific composition of it yet. And AGEN2373, our CD137 4-1BB molecule, which is in the clinic and you'll hear about some data from that molecule in a bit. Lastly, our generic iNKT cell therapy for cancer with an IND, which has been cleared already. So, all the compounds I talked about are absolutely synergistic with our PD-1 molecule. Another huge advantage of having a PD-1 in-house is control over pricing for these combinations, which is critical because based on our meetings with over a dozen payer groups so far, there is implied price dealing if several novel I/O combinations are required to effectively treat cancer. By the way, that conclusion is a foregone conclusion: combinations will be required for effective treatment and control of cancer. In addition to the advantages offered by having our own PD-1 for our portfolio, it is also becoming clear that other companies will need a PD-1 to combine with their own pipeline of agents or their own commercial products and may prefer to use our PD-1 versus others for the same reasons that I have cited, which benefit us. Let me now reflect on a couple of other things. Firstly, in order to move quickly and effectively in the rapidly moving and highly competitive field of immuno-oncology, we need to have in-house downstream capabilities. These capabilities include development and manufacturing. Manufacturing, as many of you know, is becoming a bigger bottleneck for other companies as a result of the demands, particularly lately imposed on the system, due to a substantial number of COVID-19 products and development programs. Having our own CMC and manufacturing capabilities allows us to bypass these systemic bottlenecks. For example, we have already proactively produced commercial-grade Bali and Zali required for our CMC module expected to be submitted to the FDA in this quarter as part of our expected BLA filing this year. Second, PD-1 antibodies have already generated significant value for several companies. We believe there will also be a significant opportunity for us in a market that today exceeds $22 billion in annual revenues, with projections that double those numbers in the next five years. It has become exceedingly clear and also very important, as I mentioned earlier, that in order to penetrate this large market in a meaningful fashion, with a new PD-1 such as ours, one needs to offer a value proposition with combinations which can provide superior patient benefit. By the way, for those of you who have visual capabilities, we have a series of slides as you could see on the screen, which are position appropriate — talk appropriate as I go to these comments. In our clinical and near-clinical pipeline, we have several molecules with the potential to offer superior benefit to patients when combined with our PD-1, as I discussed a little bit ago. Hence, having our own PD-1 is critically important for our own overall commercial success, including, very importantly, the optimization of the revenue potential of our own PD-1, Bali. Today, there is only one commercially available PD-1 for a CTLA-4 combination. It is approved in six cancer indications with expected combined revenues of about $13 billion this year. Based on data available to date, the cancer target for PD-1 and CTLA-4 combinations are in their commercial infancy. As emerging data on this slide suggests curative benefit to patients in potentially more than 20 different types of cancer. We're advancing our PD-1 antibody, Balstilimab, as a monotherapy in combination with Zalifrelimab, our anti-CTLA-4 antibody. As you know, our first target is patients with relapsed/refractory cervical cancer who have failed first and second-line treatments. As you can see on this slide, cervical cancer afflicts about 10,000 women in the U.S. every year. Currently approved therapies have limited activity with response rates of 10% to 15% and with limited durability of responses. Based on the data we have seen so far in cervical cancer, our anti-PD-1 antibody may provide improved clinical benefit compared to other PD-1 antibodies. These results are expected to be presented shortly at an upcoming conference this year. When combined with Zalifrelimab, we see improved and longer-term responses in cervical cancer patients. When we look at clinical data in squamous cell carcinoma of the cervix, which accounts for about 70% of total cervical cancers, we see a doubling of these responses without product combination. Agenus' commercial plans include providing access, which is a very important point for us, to all patients with cervical cancer, regardless of their health coverage and affordability. I am confident we can reach this goal while simultaneously creating significant value for your company. The next slide shows the clinical facts of PD-1 beyond cervical cancer. The combination of anti-CTLA-4 and anti-PD-1 has improved response rates and, very importantly, durable responses in more than 14 tumor types so far. While our first indication being pursued is cervical cancer with our combination, we are contemplating the development of our PD-1 CTLA-4 combos in indications like non-small cell lung cancer, melanoma, renal cell carcinoma, hepatocellular carcinoma, and a number of others. Today I will be providing you with an update on our Phase 1/2 trial with Zali — Zalifrelimab — I know I'm switching between Zali and Zalifrelimab, I don't want to confuse you, but Zali is the short name for Zalifrelimab. So, today we will be providing you with an update on our Phase 1/2 trial of Zali as a monotherapy in patients refractory to PD-1. This is an important and growing population of cancer patients. We have enrolled 39 patients into our Phase 2 study of Zalifrelimab in patients who have failed anti-PD-1 therapy. In this trial, we have achieved three partial responses in patients with angiosarcoma, squamous carcinoma of the head and neck, and neuroendocrine cancer. Additionally, however, we have achieved durable disease stabilization that means beyond six months in 13 patients so far, which represents a 40% clinical benefit rate with our first-generation anti-CTLA-4 antibody for patients for whom there really is no treatment at all. These data build on a growing body of evidence that the additional CTLA-4 alone in PD-1 failures may provide us with a rapid registration opportunity for Zalifrelimab, as well as we can extrapolate this to our multifunctional next-generation CTLA-4 antibody AGEN1181 in patients who have no treatment options today at all. Also importantly, we continue to see complete and partial responses with Zalifrelimab in angiosarcoma, a rare tumor for which there are no approved therapies. We have invited Dr. Bree Wilky, who is an absolutely world-renowned sarcoma expert, who has led the clinical trial initiative at Colorado University to discuss our data. Bree was the first physician to treat a patient with our Phase 1 study with Zalifrelimab and to report an early observation of the curative potential of Zalifrelimab with or without Balstilimab in patients with angiosarcoma. Thank you for being with us today, Bree, and I'll turn it over to you. Thank you.

Thank you so much, Garo and Jen, for inviting me to speak today, and it's wonderful to have the opportunity to speak with all of you about the work that has come out of these amazing molecules and our partnership with Agenus. So, I'm Bree Wilky. I am the Deputy Associate Director for Clinical Research at the University of Colorado and the Director of the Sarcoma program here. For those of you who may not know, sarcomas are a collectively rare group of over 100 different cancers of bone and soft tissues. What they all have in common is that they're quite devastating in the metastatic setting. There are essentially no curative therapies and they tend to be refractory to treatment, with overall less than 20% of patients surviving more than five years with metastatic disease. Immunotherapy for sarcomas is really the next frontier and we've just begun to explore the activity of immune-oncology in these sarcomas. During my early years in Miami, I was part of the Zalifrelimab Phase 1 trial and I was able to observe for the first time some absolutely unbelievable responses with CTLA-4, as well as PD-1 antibodies in this disease group. This actually was so influential that it made me completely change my career and focus on how we can use immuno-oncology to create these amazing responses for all patients with sarcomas. This led me to the University of Colorado where we now have both a laboratory completely focused on sarcoma microenvironment and immuno-oncology. I want to tell you a little bit about angiosarcomas, and I think we have some pictures to go along with this. But angiosarcoma is a blood vessel cancer and the typical story is that these tend to be elderly patients who notice a purplish bruise or lesion often on their scalp or their head and neck. They see their dermatologist, get biopsies, and it comes back as this disease. The problem with angiosarcoma is that these tumors are often extremely infiltrative. There are disease deposits well away from the primary lesion. Therefore, these patients undergo huge, highly morbid and disfiguring surgeries in an attempt to remove the disease. Unfortunately, the relapse rate is extremely high, probably 70% to 80% for larger tumors, and chemotherapies can provide some benefit but are definitely not curative, and patients wind up ultimately succumbing to this disease fairly regularly. My 62-year-old patient with angiosarcoma that was treated on Zalifrelimab in 2015 was one of these patients. She had angiosarcoma on her nose and went through surgeries, radiations, and about a dozen different types of chemotherapies, targeted therapies, and was really completely out of options. With a very disfiguring and aggressive disease, we enrolled her on the very first dose level of Zalifrelimab at 0.1 mg per kg, and within 10 to 12 days, her tumor exploded. It was unbelievable to see the obvious immune infiltration, and she went on to have an improvement in her disease and ultimately achieved a complete response, not just radiographically, but pathologically by biopsy. I'm thrilled to say that now, four years later, this woman is essentially cured of her angiosarcoma because of Zalifrelimab. This was one of the moments I knew we were onto something big, and I continued to treat angiosarcomas with ongoing immuno-oncology studies or potentially off-label for patients with no other options. We published a case series of about seven patients at the University of Miami treated with either CTLA-4, PD-1, or the combination. In this paper, we showed that at 12 weeks, five of those seven patients had either clinical or radiographic partial responses of their tumors with immune-oncology. We were also able to delve into some of the biologic mechanisms of our super responder and are happy to make those data available to you. Because of this amazing response, this has changed my clinical practice where I now encourage, as opposed to upfront aggressive surgeries and radiation for angiosarcoma patients, to actually get these patients on early immunotherapy trials because of this amazing ability to downstage the tumors and potentially give these folks a better outcome. The common question is okay, well this is great, but angiosarcoma is really rare. There's probably only about 200 to 300 cases per year in the United States. But what's important to know is that in other countries, this incidence can be very different, particularly in Asia. Remember, there are no available treatment options for these patients. We're super excited in partnership with Agenus that we will be launching a Phase 2 clinical trial of Zalifrelimab with or without Balstilimab for patients with angiosarcoma, and this will be in partnership with my colleague, John Trent at the University of Miami, as well as here at the University of Colorado, and across the world. This is really the first angiosarcoma-specific clinical trial that will be done for immunotherapy, and I'm incredibly excited about the potential for this. This could potentially lead towards an opportunity for an accelerated approval and really change clinical practice and the available treatment options for these desperate patients. So where are we heading in the future? I've told you that angiosarcoma appears to be incredibly sensitive, but what about the rest of these sarcomas out there? We've learned that like many other cancers, it's really only a fraction of these diseases and a fraction of patients that benefit from PD-1 or CTLA-4 monotherapy. The resistance mechanisms that we're encountering suggest that one of the critical components for sarcomas to respond to immuno-oncology agents is that you have to have a robust initial immune response to generate tumor-specific T cells that can then be perpetuated and activated with checkpoint inhibitors. One of the best ways to stimulate that initial tumor immunogenicity is with chemotherapy, with doxorubicin, which has been the standard-of-care for 40 years. Doxorubicin has been well described in the literature to have potent effects on early immune responses by inducing type 1 interferon responses and helping to release danger factors that stimulate that initial antigen recognition. I'm really excited to combine chemotherapy along with checkpoint inhibitors, thinking that in sarcoma, this may expand our response rates and potentially the durability of the response. We have also, with Agenus, launched an investigator-initiated clinical trial that is ongoing now combining doxorubicin plus Zali and Bali for metastatic soft tissue sarcomas in the first or second line of therapy. While today I cannot report any official data, I'll simply leave it to say that I'm extremely optimistic about this study's potential. Doxorubicin is the standard-of-care; this initial investigation could have the potential to completely change how we treat many types of soft tissue sarcomas. While it is a big dream, Agenus has never been afraid to think bigger and aim higher with me. I'm incredibly excited about the future moving forward. Thank you all for your passion for these rare cancers and for our work to help all patients with cancer.

Thank you very much, Bree. We congratulate you on your work for your patients, which is quite remarkable. Now, building value for our lead molecules, we will expand the benefit of CTLA-4 and PD-1 combinations across different tumors, but also, very importantly, across different geographies as well. While we do not have today the capacity to be all over the world from a commercial perspective, it is critical for us to make sure that we have the right partners to be able to expand globally. A few weeks ago, we announced a partnership with Betta Pharmaceuticals, a national level, high-tech pharmaceutical company based in China. Betta has a strong track record of advancing innovative products in China and a growing portfolio of complementary oncology therapies. They are an ideal partner to enable us to address significant patient needs in China, which is a rapidly growing market while also advancing global development of Balstilimab and Zalifrelimab. I will turn the call over to Julie DeSander, the head of all of our business development efforts to highlight the strategic value of this partnership. Julie?

Thank you, Garo. As Garo mentioned, a few weeks ago, we announced a new partnership with Betta Pharmaceuticals, granting rights to Balstilimab and Zalifrelimab in Greater China in exchange for $35 million upfront in cash and equity, $100 million in milestones, and tiered royalties up to the low 20s. We're still expanding the benefit of Balstilimab and Zalifrelimab to patients in this region. China represents an important geography for Agenus. The PD-1 market in China alone is projected to grow to over $14 billion over the next 10 years, and the addition of CTLA-4 will meaningfully improve the efficacy of PD-1 therapy. We expect Balstilimab and Zalifrelimab to be the first approved PD-1/CTLA-4 combination in cervical cancer. It was important for us to enter China with a strong local partner who has deep knowledge of the market, regulatory processes and clinical footprint in the region. We selected Betta as our ideal partner based on their success in launching the first innovative oncology product in China in lung cancer, their commercial footprint and their broad clinical portfolio that may benefit from combinations with PD-1 or CTLA-4. Together, we look forward to bringing the benefit of Balstilimab and Zalifrelimab to cervical cancer patients in China, which has ten-times the incidence compared to the U.S. We will also explore label expansion opportunities with Betta in areas of high unmet need, potentially in indications such as lung, gastric or liver cancer. These indications account for nearly half of all cancer-related deaths in China. Here, our indications, with the addition of CTLA-4, significantly improve the efficacy of PD-1 therapy. Finally, we look forward to pursuing new synergistic combinations of these agents with both Agenus and Betta’s other pipeline programs. I will now turn the call over to Jennifer to provide an update on the progress of our novel programs and upcoming catalysts.

Thank you very much, Julie. And thank you again, Dr. Wilky, that was an outstanding presentation. We're thrilled to be in a partnership with you, and it's very exciting to see the maturity of the data from our current trial, our Phase 2 trial of Zalifrelimab in refractory patients, patients refractory to PD-1 trials. It's very early days, so we have already seen three responses. We have a clinical benefit rate of over 40% with 13 patients with durable disease stabilization, and we're looking forward to the continued maturity of that data. We're thrilled to launch a trial specifically in angiosarcoma. Those are really great results. We are excited about what the future can hold for these patients with such a rare tumor. I also want to highlight that angiosarcoma is relatively rare, but it's more prevalent in Asians living in the U.S., and also in China. We see a much higher prevalence of angiosarcoma. So we're looking forward to seeing what we can do for patients globally within our own hands and through our partnerships. Now when you focus on value creation, value is created. In 2015, we set out on a plan to become a commercial company set up for success. Today, we outlined our path to becoming a commercial company. Garo touched on our clinically validated assets. You've heard some data here, you've seen data on these programs earlier this year, and you will see more data at upcoming medical conferences later this year. We presented the opportunity that Agenus has to drive differentiated value through combinations. At our core, we are technologists and biologists, and we've designed the most innovative and productive research engine in our industry, with more than 21 assets advancing in preclinical and clinical development. Thirteen are already in the clinic being pursued by Agenus and some are with our collaborators. As Julie mentioned, we have our most recent collaboration with Betta, but on slide 13, what you'll see is that we also have very productive collaborations with Gilead, UroGen, Incyte, Merck, and of course, GSK. Eight molecules are in preclinical development, some of which you will see moving into the clinic this year. As Garo mentioned, our allogeneic iNKT cell therapy has been cleared to enter the clinic to treat patients with COVID-19, as well as patients with cancer, and I'll go over our plans for those cells soon. Additionally, Dr. Dan Chan will talk with you about our TIGIT molecules, our Fc-enhanced TIGIT monospecific, as well as our FC-engineered to device specific program. I want to take a minute to talk a little bit about GSK before I go into our innovative pipelines. GSK has been our longest strategic partner. They launched one of the most successful vaccines in recent times. This is the QS-21 saponin containing Shingrix vaccine, which registered revenues of over $2 billion last year. This vaccine clinically has demonstrated to be the most effective vaccine with over 90% efficacy, which is enhanced as individuals age, which is not the case with Zostavax, the competing vaccine, which is only 60% efficacious. And the benefit wanes with age. We think a lot about QS-21 when we look at the requirements for addressing a pandemic, and when we hear that some of our regulators may be looking at efficacy of about 50%, we know that vaccines can be more efficacious. We believe that QS-21 could be a critical part of that. Overall, through our financial transactions with our partners, we've generated more than $575 million in cash since 2015. Our efforts to finance the company with an eye to minimize dilution, while we support the accelerated delivery of multiple discoveries into and through the clinic. Tumors have sophisticated escape pathways. You've seen some illustrations from Dr. Wilky's presentation, and the gravity these tumors have when they effectively collapse systems. These escape pathways are designed to avoid immune detection and thrive. Our discovery engine is designed to keep ahead of cancer's pace and deliver high-impact therapies for patients with cancer. We're focusing on delivering antibodies, cell therapies and vaccine combinations designed to elicit immune recognition of tumors so that the immune system can see the tumor, detects the tumor, and enables tumor destruction by immune cells while blocking tumor escape pathways. These include assets designed to target myeloid cells, T and NK cells, and a pipeline of molecules that I'm going to go into in just a moment. Our strategy to eradicate cancer is fourfold. We would advance foundational molecules like CTLA-4 and PD-1 designed for optimal combination approaches, develop molecules to improve upon validated targets like our Fc-engineered next-generation CTLA-4 molecule, which is a significant enhancement over currently available anti-CTLA-4 molecules. We seek to block escape mechanisms through innovative molecules in combination approaches and modulate or condition the tumor microenvironment to eliminate tumor growth. Agenus has all of these components in our pipeline: checkpoint antibodies, bispecifics, allogeneic cell therapy, QS-21 adjuvants. This gives your company a significant advantage for independence in clinical development, as well as in the commercial marketplace, where we will not be vulnerable or limited by established pricing for combination. We plan to develop, register and launch our lead programs in the U.S. and seek ex-U.S. partners in the near term to fully appreciate the value of our late-stage pipeline while we continue to innovate. Our first-generation CTLA-4 and PD-1 are poised to be first-to-market in refractory cervical cancer and potential second-to-market in larger market opportunities in validated indications such as non-small cell lung cancer, melanoma, RCC, and hepatocellular carcinoma, and others such as our sarcoma. Our next-generation pipeline showcases the features of our technology and innovation, and this is where I believe the genius of Agenus really shines through. This year we presented data on AGEN1181. We also presented data on Balstilimab and Zalifrelimab. Today, I'm going to provide you an update on clinical data from our AGEN1181 trial, as well as our early phase data from AGEN2373, our differentiated anti-CD137 antibody, and AGEN1223, our intratumoral Treg depleting agent. In addition, I'll discuss our plans to expeditiously launch combinations with these novel agents in the clinic. I will conclude with a summary of data to be presented at upcoming conferences this year. First, AGEN1181 is a multi-T cell engaging antibody that binds anti-CTLA-4; it's an Fc-engineered antibody. It's designed to overcome the shortcomings of Bristol's Yervoy and other in-class anti-CTLA-4 antibodies through Fc engineering and enhanced binding to Fc gamma receptor 3A variants, enabling anti-tumor activity in a larger proportion of patients. We expect to expand benefit to nearly three times the proportion of patients responding to first-generation CTLA-4. This is through enhanced immunogenicity as well as Treg depletion. We've previously reported on a complete responder at one mg per kg monotherapy, AGEN1181. We also reported to you a patient with microsatellite-stable endometrial cancer PD-L1 negative, who demonstrated an 80% reduction in their target lesions, and a complete response in their non-target lesions. These data were presented by Dr. Steven O'Day at ASCO. Today, I'm thrilled to report that this patient, this previously partial responder, has now been determined to be a complete responder by PET scan technology. These responders, both of these complete responders have microsatellite-stable endometrial cancer, their tumors are PD-L1 negative, and they both have genetic polymorphisms in their CD16 allele, which renders them unlikely to respond to first-generation CTLA-4. These data are highlighted on slide 16. We also have data on two patients with ovarian cancer, with durable disease stabilization beyond 15 months for one and beyond 18 months for the other. Overall in the trial, we've demonstrated a clinical benefit rate, which includes complete responses, partial responses, and disease stabilization, and over 60% of patients in this early Phase 1 study. We currently have nine patients who are pending scans out of a total of 36 patients treated to date, first accrual continues, and the trial is now being expanded to targeted indication. We are really excited about the activity of our first-generation CTLA-4, as well as AGEN1181, one of our next-generation CTLA-4. As Bree mentioned, we've already reported on two responders in patients with angiosarcoma. Garo shared the Phase 2 data of Zalifrelimab in patients who failed PD-1 with three response responders and 13 patients, with durable disease stabilization as the trial is quite early in its development. We see opportunities for strategic development of these agents through selective enrichment of our patients, potentially by CD16 allele stratification. We have invited Dr. Chuck Drake to share his thoughts on CTLA-4 in general and specifically the differentiation of AGEN1181, and the possibilities for this molecule in the landscape of IO, as well as his interpretation of single-agent activity of AGEN1181 in advanced refractory cancers. Dr. Drake?

Hi, Jen. Thank you. I'm very happy to be here. I've been working on immunotherapy since around 2000, and really kind of with not much success until about 2007 when I was fortunate to treat the first kidney cancer patient in the world ever with anti-PD-1 that was on a Phase 1 trial, and that patient had a complete response, and remains in complete response to this day. Seeing complete responses in Phase 1 trials is incredibly rare. So, seeing a PET CR in this setting is really quite interesting and unusual, actually. As you know, Phase 1 trials are not designed to test activity; they're designed to test safety. So far, the data for 1181 points to a very reasonable safety profile with really no or severe unexpected immune-related adverse events reported. The other thing that I think wasn't quite highlighted from this trial is that sometimes the immune system doesn't quite eliminate the tumor but enters into long-term disease stabilization, and Garo mentioned that on this trial, there were a large number of patients with stable disease. When people say stable disease, they usually specify. Garo said it perfectly; these patients had stable disease for more than six months. Six months is not usually seen in Phase 1 trials, and that reflects early evidence of clinical activity for 1181. As you've listened to this call, the word synergistic has popped up. I'm usually in a position on that word, but I can tell you because people won't do that math and prove it. I can tell you that in kidney cancer, anti-PD-1 and anti-CTLA-4 are indeed synergistic in terms of complete responses. In the Phase 3 trial using anti-PD-1 in kidney cancer, there were no complete responders. However, when that was combined with anti-CTLA-4, the complete response rate ranges between 12% and 15%. Nizer Tener of MD Anderson has been presenting follow-ups on this data, showing that these complete responses, many of them are durable beyond three years. Garo pointed out there is a phenomenon described called Adaptive Treg Resistance, which is seen when you do something to the tumor, it fights back by increasing Tregs. We published papers showing this with radiation and vaccination. This is also happening in prostate cancer with hormonal therapy. If you do something to the tumor, it fights back by upregulating Tregs, and the idea would be to deplete those Tregs using a reagent like 1181. 1181 is an interesting molecule. If you're scientifically interested, I urge you to read the cancer cell paper published in 2018 by Wade. Basically, what this molecule is, it's an Fc modified CTLA-4 that has a DLE mutation in the Fc portion, which enabled us to bind more strongly to Fc gamma RIII, and it doesn't care about the different alleles patients have. The idea is that this reagent is a much better depleter of Tregs than other agents on the market. There is competition; BMS has had an anti-CTLA-4 non-fucosylated molecule in clinic for some time. Clinical activity on that molecule hasn't been presented publicly yet, so we don't really have those data. There are also other versions of CTLA-4 in development, but this DLE mutation is unique and the data shown in that paper and these early clinical data support moving forward. I would slightly add to or perhaps differ that the application for a depleting anti-CTLA-4, like this molecule, is far beyond IO combinations. I think that combining this agent with chemotherapy, as Bree spoke about, and combining with monotherapy in prostate cancer and combining with radiation really leads to some opportunities. We're hoping to work with our friends at Agenus to start some of those trials moving forward. With that, I'll turn it back over to Jen. Thanks for this opportunity.

Dr. Drake, thank you so much. You can certainly count on that, and we're looking forward to expanding your collaboration without question. Thank you. Thank you again very much. We've got exciting plans for AGEN1181. We plan to commercialize this molecule in the U.S. and potentially will consider licensing ex-U.S. rights on this. In terms of our path to market and breadth of development programs, we're going to prioritize indications that are relatively large and are eligible for accelerated approval in the U.S., a fast-track approach to get the molecule into the market for patients. This will be through a few different prioritized indications that include but are not limited to PD-1 refractory melanoma. This could be a single arm study that could form the basis for a first approval, and the design of the study could include a monotherapy, as well as a combination, as Chuck mentioned: the criticality of combinations here for durable curative responses is important, and we have the molecules within our own portfolio to do so. We'll also further pursue combination approvals with PD-1 and cold tumors. These include microsatellite-stable diseases, like you've seen responding with endometrial cancer as well as colorectal cancer, and of course, large tumors like non-small cell lung cancer and prostate cancer. Our expectation is Bali in combination with AGEN1181 will offer significantly enhanced durability. Now turning to AGEN2373. This is our novel anti-CD137 molecule. This molecule is designed with important safety and efficacy features compared to competitor molecules. We've presented some of this publicly. AGEN2373 is a fully human monoclonal antibody that boosts the immune response to cancer cells by enhancing CD137 costimulatory signaling and activated immune cells, both adaptive T cells and innate cells. Dual targeting of both innate and adaptive immunity makes this molecule a highly attractive target for cancer immune therapy. Today, I am very happy to report that AGEN2373 has dosed through the 1 mg per kg dose cohort with no observed liver toxicity, which is noteworthy as previously liver toxicity has hampered or killed one of the competitor molecules. Furthermore, we've observed durable disease stabilization in patients with ovarian cancer, sarcoma, and non-small cell lung cancer on this early trial. We're advancing the combination as we're moving the molecule into higher dose cohorts and in combination with Balstilimab, while contemplating additional opportunistic combinations with complementary therapies such as anti-CTLA-4 combinations. I will turn the call over to Dr. Dhan Chand. Dhan will summarize important findings that illustrate the opportunity of novel combination approaches to drive durable and curative responses to cancer specifically, in PD-1 refractory cancers. I'll also ask Dhan to provide a brief update on our TIGIT molecules and the next steps for our allogeneic iNKT cell therapy program. Dhan?

Thank you, Jen. While PD-1 and PD-L1 antibodies have been an incredible commercial success, only a small portion of patients have had sustainable long-term benefits. Therefore, there is a considerable need for therapies for patients who relapse or do not respond to PD-1 monotherapy. We have presented data on patients responding to our first and next-generation CTLA-4 antibodies. We are also advancing some important new therapeutics that may also deliver benefit in selected patient populations. The first decision is, as you all know, TIGIT is shaping up to be a powerful combination partner with PD-1 antibodies, especially in tumors expressing TIGIT. We have designed two different approaches to ultimately target TIGIT that incorporate our technology innovations through Fc engineering. You may have seen at AACR data from genetics suggesting that they have no monotherapy as Fc silence is a liability and Fc competence is essential. TIGIT is overexpressed in multiple tumors and is known to be a key player in driving resistance to anti-PD-1, resulting in tumor growth. Blocking TIGIT with antibodies like our monospecific TIGIT antibody AGEN1327 or our TIGIT bispecific AGEN1777 unleashes important immune cells like T-cells and NK cells to kill many types of cancer. Agenus was the first to discover and report in Cancer Cell and at ACR in 2019 that TIGIT antibodies require Fc co-engagement to promote optimal T-cell activity against tumors. Our AGEN1327 is engineered with this Fc enhancement and has outperformed all tested competitor antibodies, showing superior T-cell activation when combined with PD-1, LAG-3 antagonists, OX40, or CD137 agonists. Our TIGIT is an ideal combination partner for addressing non-resistance mechanisms to current checkpoint therapy and has the potential to provide deeper responses. In addition to superior function demonstrated against tested competitors, our molecule is designed to improve antitumor activity, similar to the robust activity with our Fc-engineered AGEN1181, which has shown remarkable activity in early clinical trials. Our preclinical data with our TIGIT also showed superior tumor killing compared to competitor molecules. This gives the potential to expand the patient population benefiting from TIGIT by targeting all genetic polymorphic variants of this particular Fc receptor. TIGIT has also been implicated as an important target for overcoming resistance to anti-PD-1 therapy. Our bispecific TIGIT AGEN1777 is designed as a monotherapy for tumors that are unresponsive to PD-1 antibody. AGEN1777 is our first-in-class TIGIT bispecific that co-targets another inhibitor receptor not yet disclosed, but also expressed on T-cells and NK cells. We discovered that co-targeting TIGIT using our bispecific provides superior immune activation. Our preclinical data demonstrates that AGEN1777 can be an important therapy in PD-1 relapsed/refractory tumors. Our pipeline is uniquely designed to broaden the therapeutic reach of immunotherapy and enable curative combinations. Our most recent data presented at AACR this year validated our rationale for a complementary pipeline of therapies utilizing clinically relevant models that are refractory to current PD-1 and CTLA-4 agents. We've demonstrated that next-generation CTLA-4 like AGEN1181 promotes superior single-agent efficacy and more effective combination activity than current approaches. Notably, we reported curative responses in difficult-to-treat tumors with next-generation CTLA-4 in combination with PD-1 and our activated T-cell therapy or QS-21 containing neoantigen vaccine. These data highlight the attributes of AGEN1181 specifically: enhanced T-cell timing, intratumoral Treg depletion, and superior T-cell memory responses. We further demonstrated, as consistent with our clinical data presented at AACR, superior responses in populations that respond poorly to first-generation CTLA-4 because of genetic predisposition in FC gamma receptor 3-8, or the CD16 allele. We revealed for the first time the potential of combination activity of next-generation CTLA-4 and PD-1 with iNKT activating therapy. Here, in a highly checkpoint refractory lung metastasis model, we showed that combinations with iNKT activation therapy result in robust and effective clearance of tumors in the lung. As you are aware, the efficacy of cell therapy has primarily been active in liquid cancers. We show that iNKT therapy in combination with our checkpoint portfolio can significantly broaden the therapeutic benefit and suitability beyond our competitors. These exciting findings demonstrate the power of our portfolio and further validate our unique position in the field when it comes to pursuing curative combination therapy. As Jennifer highlighted, we've already commenced combination trials with AGEN1181 and are already seeing early signs of clinical benefits. I will now turn the call over to Jennifer to provide an update on the progress of our iNKT programs.

Thank you very much, Dhan. Very soon, we hope to announce the initiation of a clinical trial using our allogeneic iNKT cells to treat patients with moderate to severe COVID-19. This trial will be conducted to start at New York-Presbyterian Hospital. We've already cleared the IND and are working with the institution now to launch the trial within the very near term. iNKT cells, or invariant natural killer T-cells, are a unique cells type that combines the features of both arms of the immune system: the T cells and NK cells, connecting both adaptive and innate immunity. Data in animal models of similar to SARS-CoV-2 infection show that increasing the frequency of iNKT cells reduces viral shedding, prevents inflammation-driven lung injury, and demonstrates viral clearance. These are all particularly important attributes in our attempt to overcome COVID-19. Beyond COVID-19, these cells have great potential in mitigating cancer, and Agenus is advancing clinical trials for patients with cancer planned for later this year. Again, those trials are also FDA cleared to launch, and now we're just working with the hospital on readiness and resource availability during the pandemic. We expect that trial will start very quickly, certainly in the second half of this year. Importantly, scientists from Agenus presented data most recently that Dhan highlighted, suggesting that Agenus' iNKT can penetrate tissues, they target the important tissues where the action is necessary, giving them a critical advantage to target solid tumors not served by available cell therapies. iNKTs can kill cancer without requiring genetic manipulation. This is vital as we can eliminate significant costs and capacity constraints associated with modifying typical cell therapies through genetic modification. We don't have that unmodified iNKT cells target a specific liquid antigen CD1D on tumors and tumor-supporting cells, and iNKT cell activity can be augmented by a lipid ligand known as alpha Galacto Ceramide. The combination of checkpoint antibodies and activated iNKT cell triggering therapy shows curative potential in PD-1 refractory models, as Dan just reported to you now. That supports our clinical plans going forward to go beyond T-cell therapies into solid tumors, specifically in conjunction with checkpoint-modulating antibodies. Agenus has the benefit of a very well-designed portfolio of checkpoint antibodies, cell therapy, and vaccines which gives us enormous flexibility to develop these novel combinations with curative potential for patients with cancer and infectious disease at a significant cost advantage. I'm really excited to share with you as these trials continue to mature in the clinic. I'll now turn the call back over to Garo to summarize our near-term catalysts.

Thank you, everyone. All the speakers did a phenomenal job outlining what we have ongoing. I know that at times, the enormity of what we have can get a little confusing—there's a lot. Nevertheless, don't be intimidated by the enormity of the immune system and the complexity of cancer. It requires you to battle this disease properly. It requires an enormous army of capabilities and military capabilities, if you will, to hold this properly. For those interested in digging into it a little more, we have an excellent, well-written book by Lorne Samporia that we inventory here. If you contact Amber Henson, you will receive a copy of it. It will be a gift from us to you. Particularly the first chapter of that book outlines how the immune system works beautifully. Getting back now, all of what you've heard so far today and what you have yet to hear sets us up for an exciting second half of this year and beyond. Among critical path items for us is to initiate our BLA filing for Balstilimab and conclude our discussions with the FDA on the confirmatory trial design, which is our obligation to achieve full approval down the road for cervical cancer in an earlier disease setting. For Balstilimab alone and for Balstilimab plus Zalifrelimab, I know that based on the outcome of the FDA discussions, we will be prepared for filing not just one, but for the combination of Balstilimab and Zalifrelimab in patients with refractory cervical cancer. In addition to these exciting plans, we will also present data, as Jen spoke about, at upcoming medical conferences and scientific conferences this year on Balstilimab alone, Balstilimab in combination with Zalifrelimab, and we will present further updated data on AGEN1181, our multi-purpose next-generation CTLA-4 molecules. We also plan to advance trials for expanded development with Bali and Zali in indications beyond cervical. That's geographically not just in the U.S. but beyond. We will also initiate combination trials of AGEN-2373, bispecific antibody, and AGEN-1223, bispecific Tregs that Dr. Drake talked about. This particular molecule is an intratumoral Treg depleter, which is where you want Treg depletion to occur; if it's systemically depleted, you may face counter autoimmunity issues associated with it and with Balstilimab and others in our portfolio. We will advance our proprietary process development for a sustainable supply of QS-21, as Jen mentioned. Finally, we will launch clinical trials of allergenic iNKT cells in patients with COVID-19, and separately for cancer. Taken together, we're excited about the trajectory of our company, your company in the second half of this year and beyond. All of our hard work and your patients should position Agenus as one of the most innovative, progressive growth companies in our industry. That concludes our formal remarks, and I'll turn it over to Jason now. I think we have a process for incoming questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Mayank Mamtani from B Riley FBR.

Good morning. Thanks team for taking my question. Congrats on the progress across what seems like several modalities you have in your portfolio. Just quickly on the 1181 way to see the partial response convert into PR. Jen, could you maybe talk about these nine pending scans? What — just qualitative color on what tumor types? And is this going to be some data presented at ESMO in October?

Hi Mayank. Thanks very much for the question. Regarding independent scans, patients are scanned every six weeks. Therefore, we get a sense of what's happening with their tumor dynamics over that period of time. Our clinical team, including Dr. Anna Wijatyk, will present a series of these waterfall plots that allow us to watch the tumors. We see that in the case of this patient with durable ovarian cancer, the tumor's dynamics continuously show shrinking or negative findings in radiology. We are watching these scans of these patients to see where they are with respect to tumor dynamics and conversion to responses. As for upcoming medical conferences, yes, we plan to present data on our cervical cancer program, as well as on 1181 at upcoming medical conferences. Of course, we cannot disclose the conferences yet; abstracts are in review, so we will inform you as soon as we can where that data will be presented. But yes, you can expect clinical updates on our lead programs, including 1181.

Great, thanks. Thanks for that clarification. And then on Garo's comment about a lot going on, and especially with Zali and 1181, how do you strategically think about it? So just taking a step back? Is it stratification by a allele? Is it matter versus broader tumor types? How are you thinking about the two given both are now demonstrating good clinical activity?

Thanks very much, Mayank. Very important question here. We are seeing responses. And just to reiterate for AGEN1181, we have a complete response reported and now a PET complete response. Two of those patients have responses here, as well as the long-term durable stable disease stabilization we've observed. We see that those patients have the mutation on the CD-16 allele, and data presented from us as well as others have shown those patients are unlikely to respond to first-generation therapy. This allows us to leverage this particular genetic biomarker for stratification considerations. There are tumors, of course, with Bali and Zali being mature assets there in preparation for BLA filing. We have generated considerable data with these molecules, which provides significant opportunities to continue expanding the development of these molecules in tumors known where there is activity with CTLA-4 and PD-1. Furthermore, these approaches expand development in a timely manner and allow us to generate data for larger market opportunities that support inclusion into NCCN guidelines, which will provide access to our agents for physicians. We leverage opportunities for those patients most likely to respond and include them in therapy that they are most likely to respond to. The low-hanging fruit for us, of course, are patients with the CD-16 allele, which is opportunistic, and allows lifecycle management of our first generation, as well as our next-generation therapies.

Very helpful. If I can just squeeze in the final question around your partnered programs, and it's a two-part question around, you know, 2373, which has the collaboration with Gilead. Also, if you could comment on QS-21, including some comments around the AH-01 that GSK has been talking about the adjuvant, which I think QS-21 has saponin in it. Just remind us of the kind of work that is going on and what terms you have with your partners as you progress this in terms of putting out more data?

Sure, I mean, with our partnerships, and as you said, Mayank, we have Gilead among others, you will be hearing some near-term developments, I think milestones that we may reach with our existing partners. That's ongoing. Going forward, as our portfolio crystallizes in terms of generating data — for example, data we are seeing on AGEN1181, our next gen multi-purpose CTLA-4 makes this molecule very valuable. In the last five years, we believe Fc AGEN1181 is one of the most important breakthroughs in I/O, and we believe, of course, that will be followed with our TIGIT, 2373 and so on. All these molecules that share important engineering design components based on our knowledge of the field, cancer biology, and the immune system make our molecules one that has not come about by chance, but been specifically designed to do certain things. It's exciting for us. Since we do not have a global reach, we will concentrate our commercialization efforts in the U.S. Going forward, you can expect a higher proportion of our portfolio retained for U.S. rights and license fees for ex-U.S. purposes. That's the path forward for us. In discussions with companies, everybody generally wants rights to the U.S. birth, it's also clear, as you know, that the ex-U.S. cancer market is growing - led by China and other geographies. Thus, the ex-U.S. market in terms of the future value generated for our collaborators will become much more significant. Regarding QS-21, again, this is another complex subject, and people have asked me why GSK made one of their adjuvant systems available upwards of about a billion doses for COVID vaccines, and the question was whether it contains QS-21, and if not, why not? The answer is, it does not contain QS-21. The simple reason is that you cannot produce enough QS-21 a day to meet that need. QS-21 is in over 10 million individuals. There is no other source, I know that has that many treated people. For example, QS-21 has been in well over 10 million people. We want to explore renewable sources of materials for QS-21 saponin. It's vital to realize QS-21 saponin has been in well over 10 million people; there is no QS-21 from any other source I know that has that many treated or vaccinated individuals. This is why QS-21 has proprietary saponin in terms of manufacturing, which is known to us and known to GSK and no one else. We've gone through scientific validation, so we know that the QS-21 from that process is the same profile as the traditional QS-21 we've made from the natural tree part. The next step is simple engineering scale-up from our engineering perspective. However, plants take time to grow; that means that scaling up requires time as well. Nevertheless, we are committed to meeting the goal; we will do this. Should the vaccines out there reverse five leads of COVID-19 vaccines have been advertised, what happens should the four fail to perform? If vaccines like Zostavax, which has around 50% efficacy, need help, we’d like to ensure for this and all future pandemics we will be ready. That's the purpose of what we do. Does that answer your question, Mayank?

Yes, and what I learned earlier this week indicates adjuvant vaccines are performing relatively better. I'm absolutely looking forward to more updates from you on that, and I appreciate the broader color. Thank you for taking my question.

Thank you.

[Operator Instructions] The next question is from Matt Phipps from William Blair. Please go ahead.

Hi. This is Hunter on for Matt. Thanks for taking my question. First, I wondered on 2373. You mentioned that there is no liver toxicity observed. I was wondering if you could provide some color on sort of any other adverse events and the tolerability there?

Thanks very much for your question. The molecule is really quite tolerable. So we have not seen any other deleterious adverse events; no unexpected events have emerged beyond mild to moderate immune mediators.

Anna, thank you. I was also wondering about the doxorubicin Bali and Zali study. What is the tolerability looking like there? I know there's only five patients, but what is the theory?

I’d like to see if Dr. Bree Wilky is still on the line. I know she had a clinic starting up. Bree, are you still there?

Yes, I'm still here. Could you repeat the question though?

Yes. Asking what the tolerability — tolerability of the doxorubicin Bali and Zali study was looking like?

So again, it's a little early. We're actually in the safety lead-in period with the six patients. But I will say that at least today, we haven't seen any prohibitive DLTs that are limiting the combination.

Perfect. Thank you very much.

Sure.

There are no more questions in the queue. This concludes our question-and-answer session. I'd like to turn the conference back over to Dr. Garo Armen for any closing remarks.

Thank you very much, Jason. Thank you for joining us today. We look forward to further updates and will keep you informed so everyone may be as excited as we are. Thank you.

Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.