Agenus Inc Q4 FY2022 Earnings Call

Thank you for holding and welcome, everyone, to the Agenus Fourth Quarter and Full Year 2022 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I will now turn the call over to Zack, Head of Investor Relations. Zack, please go ahead.

Thank you, Jack, and thank you all for joining us today. Today's call is being webcast and will be available on our website for replay. I'd like to remind you that this call will include forward-looking statements, including statements regarding our clinical development, regulatory and commercial plans and timelines, as well as timelines for data release and partnership opportunities. These statements are subject to risks and uncertainties, and we refer you to our SEC filings for more details on these risks. Joining me today are Dr. Garo Armen, Chairman and Chief Executive Officer; Dr. Steven O'Day, Chief Medical Officer; and Christine Klaskin, Vice President of Finance. Now, I'd like to turn the call over to Garo to highlight our progress and speak to our outlook for the remainder of the year. Garo?

Good morning, everyone, and thank you for joining us this morning. We are absolutely thrilled to share the progress we've made at Agenus in advancing our deep immuno-oncology pipeline. Our portfolio is designed to address areas of high patient need and to unlock the large untapped market opportunity in cold and treatment-resistant cancers. And on top of that, to provide benefits beyond what is currently available with immuno-oncology treatments in other tumors, including hot tumors. At the forefront of our pipeline is botensilimab, a clinical stage multifunctional Fc-enhanced CTLA-4 antibody with potentially blockbuster capabilities. Over the last 12 months, we've made substantive progress addressing the ongoing botensilimab development program, including having dosed over 300 heavily pretreated patients with advanced solid tumors as part of our Phase 1b trial. That's a very large trial in account. And we've done this as monotherapy and in combination with our PD-1 antibody balstilimab. Botensilimab has produced durable objective responses in nine cold and/or treatment-resistant cancers, including MSS colorectal cancer, MSS endometrial cancer, platinum-resistant refractory ovarian cancer, PD-1 resistant refractory non-small cell lung cancer, PD-1 and CTLA-4 resistant refractory melanoma, PD-1 resistant refractory hepatocellular carcinoma, PD-1 resistant refractory cervical cancer, angiosarcoma, and liposarcoma. This is a very extensive list of difficult-to-treat cancers that had been treated and failed prior treatments. Based on the unprecedented clinical responses in these patients, we have initiated three global randomized Phase 2 trials, evaluating the efficacy and safety of botensilimab monotherapy or combination therapy with balstilimab in MSS colorectal cancer, melanoma, and pancreatic cancer. We aim to initiate a Phase 3 study in MSS colorectal cancer later on this year in the hope that the cumulative data that we've generated between Phase 1, the Phase 2 randomized trials, and the initiation of our Phase 3 trials will lead to a rapid approval path for the benefit of the patients. We are thrilled by the clinical results we have seen with botensilimab and are excited about its potential to positively impact the treatment landscape for patients suffering from all kinds of cancers. We remain committed to advancing our pipeline of innovative therapeutics and believe that our portfolio of programs in the immuno-oncology space is robust, with multiple programs in development. This includes, very importantly, our ILT2 program, which is codenamed AGEN1571 and our CD137 program, otherwise also known as 41BB agonist antibody, which is codenamed AGEN2373. Both of these molecules are progressing in the clinic. We look forward to sharing more updates on our progress during various conferences throughout this year. Thank you for your attention. And now I will turn the call over to Steven O'Day to highlight the recent clinical data presented on botensilimab. Dr. O'Day has a very extensive section today because there's a lot to talk about, and we'll ask him to go through it very, very orderly and slowly because I think the content is something that is not to be rushed.

Thank you, Garo. Together with our investigators, we were pleased to have had the opportunity to present data updates from the botensilimab and balstilimab development program at five medical meetings over a nine-month period, including plenary sessions at ESMO World Congress on Gastrointestinal Cancer, the Society for Immunotherapy of Cancer, known as SITC, the Connective Tissue Oncology Society, known as CTOS, along with a late-breaking oral session at the American Society of Clinical Oncology Gastrointestinal Cancer Symposium this past January, and finally, an oral plenary session at the upcoming Society of Gynecologic Oncology Annual Meeting. These presentations highlighted the durable responses and meaningful clinical benefits of the botensilimab and balstilimab combination compared to what has been reported with standard of care and other investigational therapies in patients with microsatellite stable colorectal cancer, non-small cell lung cancer, ovarian cancer, and sarcoma. I'll now briefly describe these data updates, beginning with our microsatellite stable colorectal cancer program. In metastatic microsatellite stable colorectal cancer after failure of first and second line therapies, the current standard of care has an overall survival rate of approximately 25% and an overall response rate of only 1% to 2%. Other PD-1 or PD-L1 CTLA-4 combinations evaluated in this comparable patient population supported response rates of only 1% to 5%. Our latest update of the botensilimab program in metastatic microsatellite stable colorectal cancer was from an expanded cohort of 70 evaluable patients presented at ASCO GI by Dr. Anthony El-Khoueiry, Associate Director for Clinical Research at USC Norris Comprehensive Cancer Center. This presentation showed that treatment with botensilimab and balstilimab combination resulted in a 12-month survival rate of 63%, including a 12-month survival rate of 81% in patients with no active liver metastasis, and a 40% 12-month survival rate in patients with active liver metastasis. The median overall survival in the overall population and the subset without active liver metastasis has not yet been reached. The overall response rate of the 70 evaluable patients was 23%, and 69% of these objective responses were ongoing at the time of the data cut. The disease control rate, which includes complete responses, partial responses, and stable disease, was 76%. These patients had a median number of four prior lines of therapy. Turning to anti-PD-1 PD-L1 relapsed refractory non-small cell lung cancer, at SITC, we reported our first four evaluable patients with two objective responses or a 50% response rate, and three out of the four responses had disease control for a 75% disease control rate. Since SITC, we have four responders out of a total of eight patients now with four additional patients treated, confirming the response rate reported at SITC in a larger patient population. Other PD-1 or PD-1 CTLA-4 combinations in the second or third-line PD-1 refractory non-small cell lung cancer population have reported response rates of 6% to 13%. Based on these early clinical signals, we are aggressively expanding enrollment in this non-small cell lung cancer cohort and plan additional studies. In 19 evaluable patients with platinum relapsed refractory ovarian cancer, we observed high responses for an overall response rate of 26% and a disease control rate of 63%. Other PD-1 or PD-L1 CTLA-4 combinations have reported response rates of 3% to 10% in comparable patient populations. An update of this cohort will be presented at an oral plenary session at the Society of Gynecologic Oncology Annual Meeting in Women's Cancer on March 27. At CTOS last November, data was presented on a cohort of heavily pretreated metastatic sarcoma patients of mixed histology, presented by Dr. Bree Wilky at the University of Colorado. Of the 13 evaluable patients, the 12-month overall survival rate was 77%, and the median overall survival had not yet been reached. The overall response rate was 46%, with 67% of the objective responses still ongoing at the time of the data cutoff. Other PD-1 or PD-L1 CTLA-4 combinations have reported response rates of 12% to 16% in comparable patient populations. Reflecting the high unmet patient need in each of these cancer types, we have been encouraged by the consistently positive feedback we have received on these data from key opinion leaders across diseases, often describing the results we've observed in these cold or PD-1 refractory settings as unprecedented. Now I'll summarize our plans for ongoing clinical activities, starting with microsatellite stable colorectal cancer. We have launched a randomized Phase 2 trial of botensilimab and the botensilimab and balstilimab combination therapy in patients without active liver metastasis who have received one or two prior lines of standard of care therapy. This study is actively enrolling at sites around the world. Importantly, we have designed this study to satisfy key regulatory requirements, including exploration of two known active fixed doses of botensilimab. In addition, we are evaluating botensilimab as monotherapy and in combination with balstilimab to establish the contribution of each component of the study. Finally, we have randomized a fifth control arm that is a standard of care, either regorafenib or long serve at their approved doses and schedules. We intend to submit a regulatory review of microsatellite stable colorectal cancer in 2024, a data package with this randomized Phase 2 study, along with data for more than 300 patients in the Phase 1b study. This package will include overall response rate, duration of response, progression-free survival, and overall survival. We also expect to launch a Phase 3 confirmatory study in microsatellite stable colorectal cancer in 2023 that will be powered to demonstrate statistically significant and clinically meaningful overall survival. We expect this study to be considerably or fully enrolled by the time of our potential regulatory submission in 2024.

Now, let's turn to melanoma. In melanoma, as part of the Phase 1b expansion, we reported responses with botensilimab monotherapy in patients who are refractory to PD-1 and patients refractory to both PD-1 and CTLA-4. This is an area of significant unmet need. We currently have an active Phase 2 study evaluating botensilimab monotherapy in these cohorts of PD-1 refractory and PD-1 CTLA-4 refractory disease and plan to explore a rapid registration path, if the observed signal remains robust. In metastatic pancreatic cancer, we are evaluating second line patients in a Phase 2 randomized study comparing standard of care gem-abraxane to gem-abraxane in combination with botensilimab therapy. We continue to enroll patients in our ongoing Phase 1b expansion cohorts with a focus on PD-1 or PD-L1 refractory non-small cell lung cancer patients. Like our approach with melanoma, we plan to explore a rapid registration path in non-small cell lung cancer if the observed signal continues to remain robust. Botensilimab clinical activity in late-stage refractory cancers has generated substantial interest from leaders in the field worldwide, including requests for cooperative and investigator-sponsored trials. As we progress trials to support potential registration in colorectal cancer, melanoma, and lung cancer, we plan to leverage these important partnerships to expand development in indications such as sarcoma and ovarian cancer as well as other areas where botensilimab has already demonstrated promising potential clinical benefit. While advancing the clinical development of botensilimab and balstilimab remains our top priority, we also continue to progress a focused number of additional programs combining botensilimab with other agents in our pipeline to further expand the therapeutic potential of botensilimab and unlock the full potential of our portfolio. Let me tell you a little bit about those programs. We expect to complete enrollment of our Phase 1 study of botensilimab in combination with AGEN2373, a CD137 agonist in PD-1 relapsed refractory melanoma in the first half of 2023. AGEN2373 is a conditionally active CD137 agonist designed to stimulate the activation of cytotoxic T and NK cells while mitigating the liver toxicities common to this target class. The advancement of this study triggered a $5 million payment from our partner Gilead last year. We also dosed the first patient in the Phase 1 study of AGEN1571 at the end of last year as a monotherapy and continued dose escalation of monotherapy this year. In addition, we will be combining AGEN1571 in combination with botensilimab and balstilimab in advanced solid tumors this year. AGEN-1571 is an ILT2 agonist antibody designed to modulate tumor-associated macrophages, T cells, NK cells, and NKT cells to overcome resistance to checkpoint blockade. This clinical study was initiated based on preclinical data we reported at the 2022 American Association for Cancer Research Annual Meeting that showed superior potency and functional activity of AGEN1571 compared to the only otherwise known clinical stage asset, as well as enhanced immune cell activation when combined with botensilimab or balstilimab. Now, I'll turn the call back over to Garo to discuss our strategic partnerships. Thank you, Stephen. As you can see, it has been a very busy year with a lot of impressive data generated and the validation we have received in making presentations, podium presentations, plenary presentations, four of them within a six-month window at major conferences, and a substantial number of KOLs engaged in discussions about the data and about our next steps for expansion of our trials and a potential registrational pathway. So progress with our truly differentiated R&D engine and strategic partnerships has been impressive by all accounts. And as you know, we have generated $825 million in cash already received through our partnerships, with the potential to deliver an additional $2.7 billion in future milestone payments, and royalties when these products are commercialized. This is on top of us advancing our own portfolio, which may result in significant financial upside for the Company. And of course, this is a testament to the strength of our pipeline and the innovative capabilities of our R&D platforms. In 2022 alone, our partnership with Merck, BMS, Incyte, and UroGen has resulted in the launch of nine new additional clinical trials of our partnered assets. What's even more impressive is that these trials are all evaluating molecules discovered here by Agenus, including some exciting ones like MK-4830, an ILT4 antagonist, now led by Merck, and BMS-986442, an antigen bispecific antibody, now with BMS. We're also seeing great progress with molecules targeting GITR, LAG-3, and TIM-3 now led by Incyte. Looking ahead at 2023, we have some major clinical milestones inside, as Dr. O'Day mentioned. We're expecting to complete enrollment of our global randomized Phase 2 active studies of botensilimab in MSS colorectal cancer, melanoma, and pancreatic cancer, plus we expect to initiate a Phase 3 study of botensilimab with balstilimab in MSS colorectal cancer, and complete enrollment of our Phase 1b study of botensilimab and AGEN2373 in melanoma, and initiate botensilimab and balstilimab combination cohorts in a Phase 1 study of AGEN1571, a very exciting molecule that targets the myeloid arm of the immune system. We're also advancing seven clinical collaborations evaluating combinations of external agents with our PD-1 and CTLA-4 antibodies, sponsored and executed by our partners. All in all, we are incredibly excited about the future potential of our pipeline and our partnerships. We're thrilled, of course, to share these updates with you all. With that, I'll turn the call over to Christine for a financial update, and I'll come back for closing remarks. Christine?

Thank you, Garo. As we head into 2023, we remain financially strong and well positioned for continued growth and success. We ended the year with a cash, cash equivalent and short-term investment balance of $193 million, demonstrating our ability to manage our resources effectively and efficiently. In the fourth quarter of 2022, we recognized revenue of $28 million, bringing our total revenue for the year to $98 million. We incurred a net loss of $74 million in the fourth quarter and $231 million for the full year 2022. This includes noncash expenses of $33 million and $96 million, respectively. It is important to note that we have made significant investments in our pipeline, which we believe will drive our future success. We remain committed to our mission of discovering and developing innovative therapies for patients, and we are confident that our investments will yield great benefits for patients in the long run. Overall, we are pleased with our financial position and remain optimistic about the future. As we continue to make progress across our pipeline and with our strategic partnerships, we look forward to the continued progress towards our goal of improving patient outcomes. I'll now turn the call back to Garo.

Thank you very much, Christine and Dr. O'Day for that wonderful summary. It's been quite a year for us. The clinical data generated in 2022 has been robust, and the results of botensilimab and balstilimab combination therapy have shown superior benefits compared to what's been reported so far for standard of care and other investigational therapies. This demonstrates the potential of this combination therapy and it's a proxy potentially for our future combinations to provide significant benefits to patients and address the large medical need that exists in cold and treatment-resistant cancers and added to that improved benefit provided by other immuno-oncology therapies in hot tumors. Looking ahead to 2023, we anticipate achieving important clinical milestones on top of a year that has already demonstrated very impressive outcomes. That will set the foundation for a potential regulatory filing for botensilimab plus balstilimab within a timeframe that will be in the best interest of patients based on robust data that can be justified. This is the promising next step for our combination therapies. Of course, none of these progress would be possible without the hard work and dedication of Agenus team members, the support of our physicians, caregivers, participants in our clinical development programs, and our partners. We're committed to our mission of bringing curative therapies to cancer patients and are excited to continue our dedication to this mission with our partners and stakeholders. Curative is very important, and Agenus is well positioned, we believe, to be able to accomplish this because we have a very unique, strong armamentarium of compounds that we have the flexibility to combine for the best outcome for patients with a curative therapy. So let's open up the call for questions and continue the conversation. Please feel free to come up with any questions you'd like. Yes, Jack, back to you.

Matt Phillips with William Blair. Your line is open.

Congrats on the update on the non-small cell lung cancer cohort. I was wondering how many patients you want to enroll in that cohort before deciding on a Phase 2 trial? And also, would you still need both from the monotherapy arm, or could the kind of monotherapy data from colorectal and other indications satisfy any contribution of components?

So, I'll answer the first question. With regard to non-small cell lung cancer, when we observe the kind of sustainable, robust patient outcomes in the form of response rates, we made a decision just about a month ago to expand that cohort significantly, so that we can justify starting perhaps a very large, even a Phase 3 trial or a Phase 2 trial, randomized Phase 2 trial that will be expandable. So in the interest of that, we made a decision to expand our cohort to at least 30 patients, perhaps more, to at least 30 patients. And we expect that this will be accomplished within the next several months. With that information, we will take it to the next step. If we can sustain the kind of impressive results we've seen in this very small patient population, if that could be sustainable, then it will justify our next steps for an expanded trial. Lung cancer is a very large indication, and while there are some patients with lung cancer that have already been treated and have relapsed, there are a number of patients that fail current therapies, including immuno-oncology regimens combined with other agents. That's the patient population we are targeting in our Phase 1 trial and that will be our registration strategy. But Dr. O'Day, if you want to answer the colorectal question.

Yes. Thanks, Matt. For the colorectal question, the monotherapy arms in the colorectal trial will evaluate the contribution of components. We don't feel that PD-1 monotherapy is required for contribution given its lack of essentially zero response rate in this setting, and so we will be looking at the contribution of botensilimab. It wouldn't be ethical to treat with a PD-1-only arm in that disease setting.

Just another follow-up. Do you expect any milestones this year from your numerous collaborations? And just how much of a priority is additional business development for you this year?

Yes. There is the potential of several milestones this year. I don't want to quantify or identify the source of them. But when they come through, they will be significant milestones, not $5 million or $10 million.

I appreciate the level of detail. Regarding the two Phase 3 trials you plan to initiate in 2023, could you explain the differences in your objectives? For instance, how does the CRC confirmatory study differ from the ongoing randomized safety data, particularly in terms of target patient population and your goals? And for the Phase 3 lung cancer study you mentioned, what are the primary objectives? Are you focusing on late-line patients, or are you aiming to replace immuno-oncology chemotherapy regimens in specific scenarios? Additionally, are you considering combining bot with bal in lung cancer, or might you look into using an external PD-1 or PD-L1?

The Phase 3 colorectal cancer population that we're targeting will be aligned with our Phase 2 population so that we can show the kind of robust responses we've already seen, which will be repeated in a randomized setting as validated in the Phase 2 randomized trial. The plan for using bal in non-small cell lung cancer is right now. However, it's also a function of potential partnerships that we may engage in because there are companies out there with their own PD-1 or PD-L1 agents that are eager to become competitive with something that will offer superior performance. With those partnerships, we may engage in some creative structures that may allow them to also have a head start with their own PD-1 that may have had exposure in lung cancer. So that remains to be determined.

Got it. And then just specifically to the data that is sort of coming up on the lung cancer cohort, did you say how you might be tracking on things like duration of response and overall survival? And then for the PROC data at SGO, it would be great to hear what sort of incremental updates you may look to present relative to SITC. As you know, in ovarian, there are a few ways you segment your population, BRCA, FR alpha status. So is there sort of a biomarker-driven development where in your thinking of the next step?

To clarify, with an I-O agent, like, for example, CTLA-4 targeting antibody, our own CTLA-4 targeting antibody, is not just the CTLA-4 binders, but it does four additional things. That’s why we call it a multifunctional CTLA-4. The attributes of this molecule are responsible for a number of things beyond just achieving response rates: duration of responses driven by this molecule, the engineered portion has impacted a number of other capacities, including recruiting immune cells and the downregulation of regulatory T cells, stimulation of memory T cells. These are all very important elements for the extension of responses or achieving curative treatments combined with agents like our AGEN2373. To summarize, our aim is overall responses that align with overall survival that may translate potentially to cures for these patients. Curing cancer was previously a taboo notion in this field. However, using botensilimab has opened that possibility, and our ambition is to broaden the application beyond melanoma to further types of cancers. Our firm belief is that our comprehensive portfolio provides a high level of confidence that by combining these agents, we may be able to achieve remarkable outcomes for patients.

Great. And maybe just my final question, Garo, about the portfolio. Are you able to comment on your perception of how big pharma strategies are starting to evaluate next-gen I-O programs? As you know, PBCs and ADCs are gaining popularity. I’m curious if you see your pipeline going in that direction. Then as big companies assess value at a program level, can you comment on what happens at the indication level, and if there are one or more tumor types that get more value?

I don't want to comment on behalf of what large pharma is doing because they've been very successful lately. Particularly, since COVID, a number of large pharma companies have been generating considerable profits. Those profits need to be invested, and they’ve tended to acquire companies with immediate sales and cash flow. That strategy, while practical, emphasizes short-term gain. While we think highly of ADCs, that's not our core business model. Our focus remains to harness the immune system's power to overcome cancer. We believe it's our calling, and we are dedicated to that pursuit. Would I rule out the possibility for immuno-oncology agents to be used alongside targeted therapies and ADCs? No, but we primarily consider them as adjunctive agents that might enhance our mission of achieving cures.

Emily Bodnar with H.C. Wainwright. Your line is open.

Is there anything that you can share about the two new patients who responded in the lung cancer cohort in terms of background characteristics? And maybe if you could just comment on what level of response rate that you'd want to see in the Phase 1b in order to be confident in moving to Phase 3?

Yes. Thank you for the question. All four of the responses have been in a PD-1 refractory resistant setting. The response rate has been historically between 10% and 15% with other treatments, which have been short-lived. We believe we need to have meaningful differentiation from that to move forward.

Makes sense. In your Phase 2 study for MSS CRC, since you're focusing on patients without liver metastasis, could you comment on how you expect the control arm to perform in the setting, since most of these studies have been more broadly evaluated?

Right now, we've reported a 23% response rate for all patients, and we've shown survival data in those without active liver metastasis. This subgroup is significant in colorectal cancer and will drive our earliest path to registration. We are focusing the Phase 2 and the Phase 3 trials on this patient population for response, duration of response, progression-free survival, and importantly, overall survival.

You asked about the control group responses. In second and third-line stable colorectal cancer, other treatments have had response rates in the single digits. Their major impact, if you can call it that, is really in overall survival and progression-free survival, not their response rate.

So first question is just around the first active trial MSS CRC. Since you will be looking at submitting BLA in 2024, if you assume that we'll see some top line data in 2024. Also, can you confirm that you will not be enrolling liver metastasis patients in that trial?

The Phase 2 trial is only for patients who either never had liver metastasis or had liver metastasis that has been treated and is not active at the time of the trial opening.

Got it. Just to confirm, will we see the top line data in early 2024?

That is our expectation, but we'll have to follow the data and the accrual.

Got it. That's helpful. So another question around the expectations for the upcoming Society of Gynecology Oncology annual meeting. So how many should we be expecting? And what's the follow-up length for the patients with the ovarian cancer patients?

We're not providing details, but stay tuned for the oral plenary presentation on the 27th. We've had multiple conferences where we presented colorectal data, and this is our first opportunity to share ovarian data with the GYN community. We feel that this is very important data that will be presented in a couple of weeks.

Got it. And then just one last question around the safety side of the botensilimab and balstilimab combo. We do see some incidence of grade 3 diarrhea and colitis in CRC. What are the latest thoughts around mitigation strategies for that? And how has discourse been from physicians with respect to balancing efficacy and safety?

Toxicity-related immune-related toxicity correlates with clinical benefit. Early intervention is crucial, and it's highly reversible with effective treatments. We've come a long way in managing these adverse reactions. In terms of diarrhea and colitis, it's dose and schedule dependent. The important thing is that it is manageable with early intervention using steroids and TNF inhibitors. We have a targeted program in our Phase 2 trials for the early recognition of this toxicity and early intervention has proven effective.

There are no further questions at this time. I would now like to turn the call back over to our presenters for final comments.

Thank you very much, everyone. It's been a long conference call, and we're excited about engaging in expanded cohorts and additional announced trials. There may be some surprise trials that will be announced both in the form of investigator-sponsored trials that may focus on toxicity issues. Stay tuned and we will keep you updated on clinical data and potential discussions with prospective partners. Thank you very much.

This concludes today's conference call. We thank you for your participation. You may now disconnect.