Agenus Inc Q1 FY2023 Earnings Call

Good day, and welcome to the Agenus First Quarter 2023 Financial Results Conference Call. All lines have been muted to minimize background noise. After the speakers' remarks, there will be a question-and-answer session. I would also like to inform all participants that this call is being recorded. Now, I would like to welcome Mr. Zach Arman to begin the conference. Zach, the floor is yours.

Thank you, operator, 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 for our first quarter 2023 update. Today, we'll primarily focus on the significant progress we've made with our groundbreaking botensilimab program and its potential to transform cancer treatment across nine different solid tumor types that we've reported on so far. Over the past 10 months, we've presented data at the plenary or late-breaking sections of five major conferences, including ESMO-GI, SITC, ASCO-GI, SGO, and CTOS. We look forward to sharing further insights at upcoming conferences such as ASCO in June and ESMO-GI in July. Botensilimab, our innovative and multi-functional CTLA-4 antibody, aims to revolutionize cancer treatment by extending clinical benefit to cold tumors, which have historically been unresponsive to standard-of-care and other immunotherapy agents, including other CTLA-4 antibodies. Impressively, botensilimab has demonstrated clinical responses in both cold and hot tumors. In a diverse patient population of nearly 400 individuals across nine solid tumor types, all of whom had exhausted prior treatment options, botensilimab has made significant strides in eliciting responses, offering renewed hope for those who have failed all other available treatments. Let's take a closer look at the response rates achieved with botensilimab. Across all nine solid tumors, we've observed remarkable response rates of up to 50% in highly refractory cancers. This is truly an impressive accomplishment considering the patient population involved. Notably, many of these responses have proven to be durable responses. This is a critical factor in evaluating a treatment's potential to transform patients' lives in a meaningful way. But the story doesn't end there; preliminary data suggest that botensilimab may be exceptionally effective in colorectal cancer patients with cold tumors that have historically been unresponsive to immunotherapy. Even in hot tumors that have failed standard-of-care, including immunotherapy, with or without chemotherapy, we are witnessing unprecedented responses. Similarly, deep responses are being observed in melanoma patients who have failed PD-1 therapies as well as ipilimumab/nivolumab. For such patients who have exhausted all available therapies, botensilimab holds the potential to be a game changer. Moreover, early clinical data indicate that important responses may be achievable in the neoadjuvant setting, possibly introducing an entirely new treatment approach and enhancing patient outcomes. The clinical data generated with botensilimab is truly inspiring. And we're thrilled with the progress we've made thus far. We firmly believe that botensilimab has the potential to reshape how we approach treating solid tumors and we eagerly look forward to further advancements in this crucial program. With our more advanced programs, as well as on our regulatory front, we're also making significant strides. Our Phase 2 activate studies in colorectal, melanoma, and pancreatic cancers are set to conclude enrollment in 2023. We are expediting enrollment into our refractory non-small cell lung cancer cohorts where we have previously reported 50% response rates in patients who have failed prior PD-1 and chemotherapy. We plan to launch a randomized Phase 3 study if the observed response rates persist in the extended cohort in non-small cell lung cancer. We're also proud to announce that the balstilimab combination has been granted Fast Track Designation by the FDA for treating non-MSI high colorectal patients without active liver metastasis. This acknowledgment of our potential to fulfill a significant unmet medical need could accelerate the development and review of our application for approval. In conclusion, our unwavering commitment to advancing our clinical pipeline and delivering innovative treatment for cancer patients remains stronger than ever. We are enthusiastic about potential progress and its impact on the lives of patients with solid tumors. I will now hand it over to Dr. Steven O'Day, who will provide further details on the latest data, and then I will return with my concluding remarks after that. Steven?

Thank you, Garo. Together with our investigators, we presented updates from the bot/bal development program at two major medical meetings last quarter, including a late-breaking oral session at the American Society of Clinical Oncology Gastrointestinal Cancer Symposium in January in San Francisco and an oral plenary session at the Society of Gynecologic Oncology Annual Meeting in Tampa in March. I'll now briefly describe these data updates beginning with colorectal cancer. As Garo said, metastatic non-MSI colorectal cancer patients treated with standard-of-care have a reported 12-month survival rate of only 25% and an overall reported response rate to third-line treatments of 1% to 2%. Immunotherapy treatments of combinations PD-1 and CTLA-4 have similarly reported poor response rates of only 1% to 5% in comparable populations. Dr. Anthony El-Khoueiry, Associate Director for Clinical Research at USC Norris Comprehensive Cancer Center and the Keck School of Medicine at USC, presented our latest update of the botensilimab program in colorectal cancer at ASCO-GI. The cohort of 70 evaluable patients had a median of four prior lines of therapy, and a third of the patients had already failed immunotherapy. Patients who received the bot/bal combination showed a 12-month overall survival rate of 63%, more than twice the reported rate of 25% for standard-of-care. In the subgroup without active liver metastasis, the 12-month overall survival was 81%. This is the targeted population for our Phase 2 study where we recently received Fast Track Designation from the FDA. Even in patients with active liver metastasis, the 12-month overall survival was 40%, indicating a survival advantage over standard-of-care for all patients, regardless of the presence of liver metastasis. The overall response rate for the 70 patients was 23%, with 69% of the objective responses ongoing at the time of the data cut. The disease control rate, which is inclusive of complete responses, partial responses, and stable disease, was 76%. We will share updated data from this cohort at an oral presentation at ESMO-GI Conference on June 30, in Barcelona, Spain. Next, moving on to ovarian cancer, the reported response rate for standard-of-care in recurrent platinum-resistant/refractory ovarian cancer with chemotherapy is only approximately 10%. PD-1 and CTLA-4 combinations have reported response rates of 3% to 10% in comparable patient populations. Dr. Bruno Bockorny, Assistant Professor at Harvard Medical School, presented the update of the botensilimab program in ovarian cancer at SGO's Annual Meeting in Tampa in March. Twenty-four evaluable patients were presented, who had a median of four prior lines of therapy, and 21% had already failed immunotherapy. The majority of patients, almost 80%, were high-grade serous histology, which is the most common and most aggressive form of advanced ovarian cancer. The overall response rate was 33% in this group, and the disease control rate was 67%. Responses were durable like colorectal cancer, with median duration of response not reached. This cohort continues to expand and enroll in our Phase 1b study. While our primary focus remains on advancing the clinical development of bot/bal, we also continue to progress a focused number of additional programs in combinations to further expand the therapeutic potential of botensilimab and to unlock the full potential of our portfolio. Several of these programs have been selected for presentations at the upcoming ASCO Conference in June, in Chicago. AGEN2373 is our CD137 agonist designed to stimulate the activation of both cytotoxic T cells and NK cells while mitigating the liver toxicities common to the first-generation target class. Complete results from the first-in-human dose escalation study of AGEN2373 monotherapy in patients with advanced solid tumors will be presented during an ASCO poster discussion session on Saturday, June 3. We expect to complete enrollment of the Phase 1b study of AGEN2373 in combination with botensilimab in PD-1 relapsed/refractory melanoma in the first half of 2023. Dr. Breelyn Wilky, Director of the Sarcoma Medical Oncology at the University of Colorado School, will deliver an oral presentation on a single-arm open-label Phase 2 study of balstilimab with zalifrelimab, our first-generation CTLA-4 antibody, plus doxorubicin in patients with advanced sarcomas at ASCO on Monday, June 5. Finally, INSIGhT will be presenting three poster presentations of our clinical partnered programs during the ASCO conference. Now, I'll turn the call over to Christine for the financial update.

Thank you, Steven. We ended our first quarter 2023 with a cash, cash equivalents and short-term investment balance of $189.2 million; this compares to $193.4 million as of December 31, 2022. Since quarter end, we have raised $13.6 million through sales under our aftermarket issuance sales agreement. For the first quarter ended March 31, 2023, we recognized revenue of $22.9 million and incurred a net loss of $70.9 million, which includes non-cash expenses of $24.9 million. I now turn the call back to Garo.

Thank you, both Steven and Christine. In conclusion, we're very excited about the progress that we've made in our clinical programs, as demonstrated by the updates that Steven and I shared with you earlier. Our bot/bal combination therapy has shown remarkable potential in improving response rates, which indicate deeper benefits for patients. At the ASCO-GI conference, we reported that this benefit has translated into improved survival in our metastatic colorectal patients. And we're very encouraged that it will also translate to improved survival in many of the cancers that we've studied so far. Our continued innovations and progress highlight our unwavering commitment to advancing cancer care. As Steven reported earlier, this progress also includes our ongoing exploration of our diverse portfolio, including a very exciting molecule, our anti-CD137 molecule. This is an agonistic antibody. ILT2, on the other hand, is now in clinical combinations, and of course, the combinations of our checkpoint antibodies with MiNK's, our generic iNKT cell therapies. A moment about MiNK. MiNK's latest update at the AACR conference reported clinical responses in solid tumor cancers with their lead candidate, agent-797, and off-the-shelf iNKT cell therapy. These data underscore the launch of a clinical trial in metastatic gastric cancer, led by Dr. Yelena Janjigian, who is the Chief of GI Cancer at Memorial Sloan Kettering. This is externally funded by non-dilutive grant financing. MiNK will supply the trial with its in-house manufacturing capability, which today can produce 5,000 doses per year with rapidly expanding capacity. To enable access to this exciting portfolio, we've issued a dividend of MiNK shares to our Agenus shareholders in order for them to have the opportunity to participate in the upside of MiNK directly. As we recognize our first quarter achievements, we're grateful for the incredible support and momentum we've built with clinical experts and patients. Our determination to bring innovative treatments for cancer patients remains steadfast. We eagerly anticipate pushing the boundaries of what's possible in cancer care. We're actively exploring discussions with potential partners and collaborators to maximize the potential of botensilimab and the rest of our pipeline. Our focus is not only on managing these assets prudently but also on building our internal capabilities. In conclusion, as an organization, we're deeply committed to revolutionizing cancer treatments by making access to high-quality medicines our very top priority. We aim to create a simple progressive model that ensures patients receive the best possible treatments available to them. Strong inspiration from value-based care, patient-centric care, and integrated care systems, we focus on delivering efficient, personalized, and top-notch care for everyone who can benefit from it. Together, we strive to transform the cancer treatment landscape by putting patients first and making state-of-the-art medicines accessible to all who need it. You will be hearing more about these strategies and how our initiatives will integrate into these strategies in upcoming communications. With that, we'd like to now open the call for any questions you may have, and thank you, everybody, for joining us today once again. Anna?

Thank you, everyone. Our first question comes from Emily Bodnar of Wainwright. Emily, please go ahead.

Hi. Good morning, and thanks for taking the questions. Maybe could you expand a bit more on what we should be expecting you to present on at ASCO for AGEN2373? And how you think about what would be positive data in that study considering its monotherapy? And then maybe can you just discuss if there's any other Phase 2 or Phase 3 studies that you think you could initiate this year besides the lung and colorectal cancer studies? Thanks.

Let me make a couple more comments and then I'll turn it over to Steven. As you know, Emily, 2373 is a very important product. Very important product because it adds some very complementary attributes to patient care and treatment. For example, we're activating T-cells while also generating memory and depleting regulatory T-cells, but activating T-cells better than the first generation CTLA-4. What 2373 does is an addition; there is really a concentration on the memory component of the immune system, which becomes critically important in the durability of immune response and the durability of patients' benefits. So that's one bucket, and I think Steven can expand on it. But secondly, you asked about other Phase 2 trials. Now we haven't publicly announced any of our plans regarding additional Phase 2 trials or data from other programs. But just as we do very properly until, for example, we get the abstract accepted at major conferences, we won't talk about it because it jeopardizes the acceptability of an abstract if we publicly discuss these things. So that's what we do. But what's very encouraging to us is that since late June of last year, we have presented data at oral plenary opening sessions at so many major conferences, which is really unprecedented for a single product, if you look at it. So we are encouraged, but stay tuned for the rest of it. Steven, would you like to add any comments about 2373 and other plans that we may have?

Yes. Thank you for the question. So our CD137, we're incredibly excited about, and as you said, we will be updating the Phase I monotherapy trial at ASCO in a poster discussion session in the coming weeks. The Iowa has been focused on inhibitory checkpoints for good reason for a long time with CTLA-4, PD-1, and others. The agonists have struggled mightily with toxicity issues, particularly around liver toxicity with first generation. There was great promise that by pushing the accelerator in addition to blocking the brake of the T-cell, more extraordinary things could happen. So we've designed a next-gen CD137 that hopefully will be an important combination partner in our arsenal and obviously for patients. So what we're looking for, just from my perspective, is, of course, we want to see safety with this new drug design. And obviously, single-agent activity would be great and is very important, I think, in any IO asset, and we'll be updating our data in a few weeks, so stay tuned.

Great. Thank you very much.

Our next question comes from the line of Mike King of EF Hutton. Please go ahead.

Hi, guys. Good morning, and thanks for taking the questions. Congrats on the progress. Just real quick, two things: Garo, you had said you made a comment about your inclination to move forward with a randomized trial in non-small cell lung cancer based on the results of the single-arm study, but I didn't catch what you had said and if you had said some criteria that would motivate you to move into a randomized trial in non-small cell.

Sure. Very good question, Mike. Thank you. Lung cancer is a relatively hot cancer. While botensilimab has shown profound activity in cold tumors like colorectal, warm tumors are also targets. In lung cancer, we've shown that in PD-1 resistant as well as PD-1 plus chemo unresponsive tumors, we're showing with a small denominator admittedly, but we're seeing about 50% response rates, which is a very major improvement for depletion. Now, as I said, the denominator is small as well, and so what we're doing is really expanding the cohort of lung cancer patients so that in a relatively short period of time, we can move the denominator up to 40 or 50 patients. Of course, if we can maintain the kind of response rates we've seen in about 10 patients prior, in 40 or 50, you will see a huge level of game-changer interest in this. With the early data, a few outside groups have shown significant interest in doing randomized trials with botensilimab. These will be multiple arm trials with standard-of-care in the earlier stage setting, so stay tuned. We have not yet announced specific plans, but these plans are well underway for a randomized Phase 3 trial that will include both botensilimab plus current standard-of-care versus other arms that we haven't disclosed yet. That trial should be initiated sometime this year.

Sometime this year, okay. All right. Super. I mean, I got a ton of questions, but I guess, on ASCO, I'm sorry, the ESMO-GI, the last time you showed data at ASCO-GI in colorectal was 70 patients. You had the one-year response at 53%. Are we going to get those updated? Is the end going to change maybe qualitatively? Can you tell us what the data is going to look like, what the complexion will be at the ESMO-GI meeting?

I'll turn this to Steven.

Thanks again for the question. Yeah. We reported 70 patients at ASCO-GI, and obviously that trial was continue to enroll at the time; it has since completed enrollment as we've launched our Phase 2 pivotal trial. You can expect more patients and longer follow-up with the next update at ESMO-GI.

Our next question comes from the line of Mayank Mamtani of B. Riley. Please go ahead.

Good morning, team. Thanks for taking our questions and congrats on the progress. Just a couple of quick follow ups, two questions that have been asked before, and then I have a couple more. So it was curious to see your Fast Track Designation come in line with how this CRC data is maturing. Could you comment or specify that this updated data was submitted as part of requesting the agency for Fast Track, and if there are any other mechanisms like breakthrough therapy or others that are being explored as you get close to getting randomized controlled data from the Phase 2 study?

Mayank, I think I will exercise caution in elaborating your question because of the sensitivities on many levels. But suffice it to say that we are keeping not just the FDA, but other agencies abreast of developments with CRC and some of the other indications as well. One thing that is sure and needs to be stressed again and again: When we treat patients who are not just metastatic patients, for example, in CRC, but also other indications, these patients are typically third, fourth, fifth-line patients. They have been treated with pretty much everything that's available and either haven't responded or failed after they have responded to these other treatments. So these are pretty sick patients. The kinds of responses that we're seeing, which are in the neighborhood of 20% to 50%, depending on the indication, are really very meaningful for the patient. Of course, from a regulatory perspective, you may say, well, response is not enough, but please explain that to the patient that the response is not a good thing. So we are diligently pursuing, of course, the next steps. Response is a very important criterion for a patient that has exhausted all options, particularly for the kind of durable responses we're seeing of the magnitude I just talked about. They are very meaningful, but we're also diligently pursuing that these responses will translate to longer-term benefit for patients. The data we showed at ASCO-GI with survival curves indicates this, and of course, mind you, this is not a randomized trial, but the differentiation in this patient population in terms of overall survival is such that we are confident that the responses will translate to longer-term benefits, including survival. I may add that with CTLA-4s, typically, you do see response rates correlate very well with other benefits. The same is not necessarily true with other higher treatments or other cancer treatments. But with CTLA-4 targeting agents, it would be impossible to think about a trial where response rates would not now translate to survival. Steven, would you like to talk about your experience with that?

Sure, Garo. Obviously, yes, I would agree, CTLA-4 as a target. Because of the durability of responses and the fact that RECIST 1.1 underestimates clinical benefit because minor responses and stable disease could be significantly durable has correlated well with overall survival. Just look at the initial ipilimumab study in melanoma, which only had a classic RECIST 1.1 response of about 10% or 15%, and yet the survival curve showed a hazard ratio of 0.67. So about one in three melanoma patients were having significant clinical benefit, which is double what the response rate was, and it mimicked the plateau of the survival curve at 20% to 25%. I think in general, CTLA-4 based therapies, whether alone or in combination with PD-1s, correlate well with survival, and we are based on our duration of response across botensilimab very hopeful it will continue to do that as we look at survival curves in our different solid tumor clinical trials.

Very helpful. Thank you. And secondly, on the non-small cell lung cancer cohort, interesting to hear you're thinking of a randomized Phase 3 there. Could you talk to what sample size you need to see here to confirm this 50% response rate over time, and we got a lot of questions about confirmed, unconfirmed responses. So could you just clarify there was one unconfirmed PR when you last reported; has that been confirmed with the recent scans?

Right. So I'll just give you a little bit of factual information. As you know, that's a factual that you only approved therapy for patients in non-small cell lung cancer who have failed chemotherapy and PD-1. This is a low bar with a 9% response rate right now. The early indications of responses that we're seeing are far in excess. The only risk here is, are we preferentially putting patients that are best prognosis? The answer is categorically no. The 50% response rates, if continued in a larger denominator, will demonstrate a significant benefit for patients who have failed chemotherapy plus PD-1 and who otherwise would be treated with standard-of-care, which as I said shows a variable bar of 9% response so far. Those 9% responses are likely not to show a major benefit for patients. That’s the bottom line. Of course, we haven't released all details on this, but we are seeing responses in the worst patients with low TMB and low PDL-1 expression, which gives you a sense of what mechanism botensilimab is in terms of lighting up tumors, making tumors harder. If you can take more TMB patients and treat them with botensilimab to make them harder, which we seem to be doing in our trial, and you’re dealing with patients that typically don't respond to PD-1 with low PDL-1 expressions, those are two very important indicators as to the status of the patients being very poor prognosis. So we're very encouraged with this outcome actually. Clearly, outside groups we're working with who would at least partially or entirely sponsor the trial are also very encouraged with the data, and that's why we're proceeding in this direction.

Did you say what denominator you might be targeting here? And then just my final—sorry, go ahead.

We haven't disclosed those numbers yet, Mayank. I think we're in the process of going back and forth and trying to finalize these details. But rest assured, it's not going to be 1,000 patients.

Understood. Thank you. And my final question on the 2373 bot combination study that is approaching enrollment completion in melanoma, PD-L1 refractory. Could you comment on what appropriate benchmarks are, Dr. O'Day, since this is blinding? What might you be looking to deliver? And if I heard you right, the timeline for that data is within the first half of 2023, or is it just the enrollment completion you said?

The accrual to the cohort will—we expect to complete in the first half of the year. We won't have data till later in the year at the earliest. But in terms of that cohort, obviously these are very extensively treated melanoma patients who are very refractory to IO and BRAF if they are mutant. Any responses in this group would be of note, and we look forward to observing this data as it evolves. So heavily pretreated melanoma patients have had most have had both CTLA-4 and PD-1 therapies and in BRAF mutants have already exhausted BRAF mutant therapy.

Okay. That's very helpful. Thanks for taking our questions.

Our next question comes from the line of Matt Phillips from William Blair. Please go ahead.

Thanks for taking my question. I know the Phase 2 in CRC has done a good job of showing contribution to components through different arms, but I'm wondering, as you move into more indications such as if you launched a Phase 3 in non-small cell lung cancer, would you have to show contribution of components in those additional arms with the—until that monotherapy arm?

The answer is no; we do not have to show that all over again in each and every indication method.

All right. Great. Thanks, Garo. Can you remind us on the timing of any Gilead opt-in decision? Is it completion of this Phase 1 or does it also include the next study in combo with botensilimab and melanoma?

Okay. So I think there are a couple of things here. One is whether our interests and Gilead's interests converge here. We don’t know the answer to that question from their perspective. We regard 2373 as a pretty green post program for us. We also believe that we need to have freedom to operate with 2373 for the interest of Agenus’ portfolio. So it will be a question of negotiation, and stay tuned; towards the end of the year, there will be more clarity as to how and if this option will proceed.

Great. Thanks, Garo. And last one, I know we're going to get the bot/bal sarcoma data at ASCO. Are there any steps forward for that combination? I know the focus is rightly switched to botensilimab, but just curious.

Matt, obviously our focus is on the next generation CTLA-4. Having said that, we think we have an excellent first generation CTLA-4 that's been in combination in cervical, and now this will be the first real data in sarcoma. So again, let's watch the data as it gets presented, and obviously we'll make decisions, but we certainly won't distract from our primary focus, which is botensilimab and getting it to market.

There are no further questions at this time. I turn the call back over to Mr. Garo Armen for closing remarks.

Thank you very much, everybody. Thanks again for joining us today. Clearly, there’s a lot going on, and we are very eager to communicate things to all of our constituencies, which include certainly our shareholders, but also importantly, investigators and KOLs who are major stakeholders in this because of their interest with their patients to either participate in these trials or have these products available to them, with the allowances that are there prior to approval and certainly post-approval as well. We're very grateful for all of your support. The biotech market has been challenging in the last year or so, but we're proceeding in a way that really supersedes any of these challenges because what we've got in our portfolio is something very important for the benefit of these patients and certainly patients who have exhausted all options but even for patients who are in the earlier stages of disease and can benefit from our compounds in ways that will provide them with an option that is typically not being addressed properly with current treatments. Thank you again, and stay tuned. We'll see you at these upcoming conferences, as well as in our next earnings conference call. Thank you.

This concludes today's conference call. You may now disconnect.