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Presentation

Agenus Inc. beats earnings expectations. Reported EPS is $-2.04, expectations were $-2.36.

Operator: Good morning and welcome to Agenus Inc.’s Fourth Quarter and Year-End 2024 Earnings Conference Call. Currently all participants are in a listen-only mode. A question-and-answer session will follow the formal remarks. As a reminder, this conference is being recorded. I will now turn the call over to Zack Armen, Head of Investor Relations.

Zack Armen: Thank you, Regina. Good morning, everyone, and welcome to Agenus’ fourth quarter and year-end 2024 financial results and corporate update call. Earlier today, we issued a press release detailing our financial results and key corporate developments. A copy of the press release is available on our website at www.investors.agenusbio.com. Before we begin, I’d like to remind everyone that today’s discussion will include forward-looking statements. These statements are subject to risks and uncertainties, which may cause actual results to differ materially from expectations. Please refer to our SEC filings for further detail. Joining me today are Garo Armen, Chairman and CEO; Steven O’Day, Chief Medical Officer; Robin Taylor, Chief Commercial Officer; Christine Klaskin, VP, Finance and Principal Financial and Accounting Officer. Now I’ll turn the call over to Garo.

Garo Armen: A very good morning once again from a delightful day in Lexington, Massachusetts. Thank you very much for joining us. First, let me start by saying we are, as a company, pleased to report that we delivered on our commitment to significantly reduce the Agenus’ operational burn. By the end of 2024, we had reduced our annualized burn rate to the level that we had guided everyone. And now we are executing on our next stage of strategic cost reductions with an annualized burn to approximate $50 million by the middle of this year, and we’re very much on track for that number. Our objective is to direct every available resource towards what truly matters to our stakeholders and patients particularly, to make sure that our groundbreaking potential of BOT/BAL is realized and patients have access to it as soon as possible.

BOT/BAL continues to demonstrate unprecedented clinical activity. Recently, we presented at major oncology forums, such as AACR immuno-oncology, was the first year that AACR organized the immuno-oncology division of its annual conference. ASCO-GI in January, SITC in the fall, ESMO and ESMO-GI. And we detail the most influential peer reviewed journals, including Nature Medicine, JCO, Journal of Clinical Oncology and Cancer Discovery. All these were accomplished in the last 12 months or less. We are witnessing transformative clinical outcomes in colorectal cancer and other tumors that have been historically unresponsive to immunotherapy. This is based on the opinion of some of the most prestigious experts in the field. In a matter of example, BOT/BAL has demonstrated durable and I want to underline durable responses and prolonged survival in refractory microsatellite stable colorectal cancer.

Now, this particular kind of colorectal cancer, meaning MSS, is accounting for these days over 90% of CRCs. We’ve seen encouraging activity with the addition of BOT/BAL through FOLFOX, which is the standard of care, including beds, in first line MSS CRC. These are early indications of activity, but in terms of both efficacy and tolerability, these early signals are very encouraging. We have also either seen complete or near complete pathological responses. Very importantly in neoadjuvant MSS as well as MSI CRC. Even though the trade likes to break these into two categories, we believe based on the results that we have seen, our agents are active in both categories of colorectal cancer. This has transformative potential to enable chemo, radiation, and possibly surgery free options for patients.

Because in some cases, like rectal cancer, surgery, along with the other standards of care, can be debilitating for patients, particularly the fact that CRC and rectal cancer are now being seen more and more frequently in younger patients. I’d say these results, based on the opinion of our experts are beyond promising. They are potentially revolutionary. Also importantly, these outcomes aren’t just our internal assessment. Leading global oncology centers and experts are independently conducting investigator-sponsored trials, and in some cases, all we need to do is just provide product for them and we incur no cost. This independent validation by some of the most respected oncologists and oncology centers who are pivotal in securing approval in our breakthrough therapies significantly amplify our confidence in BOT/BAL and its potential for patients.

Several of these trials, particularly in the neoadjuvant setting, are expected to rapidly enroll in potentially organ sparing trials with BOT/BAL. These trials have gotten underway. In fact, we have a new trial that’s gotten underway this week with inquiries that had come in from patients ahead of the official opening of the trial. Additionally, we’ve strategically continued monitoring and monetizing the potential of our non-core assets. Our high value biologics manufacturing facility in Emeryville and Berkeley, our land in Vacaville to fortify our balance sheet currently, our high priority projects. We’re engaged in also late stage partnership discussions to secure funding for BOT/BAL and BOT/BAL development and registration. With an emphasis on neoadjuvant treatment of early stage, well, I shouldn’t say early stage, but intermediate stage colon and rectal cancers, where these are clear opportunities for BOT/BAL to provide significant benefit to patients.

With that, I’ll turn it over to Christine for a quick review of our financials. Christine?

Christine Klaskin: Thank you, Garo. We ended the year 2024 with a consolidated cash balance of $40.4 million. This compares to a balance of $76.1 million at December 31, 2023. Cash used in operations for the year ended December 31, 2024 was $168 million. This is reduced from $224 million for the prior year. For the year ended December 31, 2024, we recognized revenue of $103.5 million and incurred a net loss of $232.3 million or $10.59 per share. For the fourth quarter ended December 31, 2024, we recognized revenue of $26.8 million and incurred a net loss of $46.8 million or $2.04 per share. Our revenue primarily consists of a non-cash royalty revenue. I’ll now turn the call back to Garo.

Garo Armen: Thank you, Christine. In summary, while we recognize that our financial position is not reflective of the high potential on the promise of our product, and it’s a bit tighter than ideal, we are taking decisive actions to continue to and we will continue to take, very decisive actions to bolster our cash position as well as to contain costs. Now we’re very heartened by the fact that we’ve had significant external validation through numerous selected high quality centers that are doing trials, such as ISVs for us, and robust clinical activity that we have seen in BOT/BAL. These, of course, position us to advance our LEAD programs in 2025 and beyond. We remain committed and strategically aligned to deliver groundbreaking treatments for patients.

This is very important because having treated now well over 1,000 patients across nine different cancers with a heavy concentration on colon cancer and seen the benefit to patients. It’s very heartening that we have kept our eye on developing BOT/BAL as a high priority for us. With that, I will end my call, and I think we welcome questions that you may have.

Operator: [Operator Instructions] Our first question will come from the line of Emily Bodnar with H.C. Wainwright. Please go ahead.

Emily Bodnar: Hi. Good morning. Thanks for taking the question. Maybe for the first one, if you can kind of help frame the cost reductions for us, particularly which programs are being impacted the most, particularly on the R&D side, and especially into mid-2025 as you’re guiding to additional cost cuts, which programs might be impacted there. And then secondly, if you can kind of walk us through expected catalyst for 2025 and any new data updates or regulatory updates that we should be looking out for? Thank you.

Garo Armen: Okay. So, the cost reductions really center around headcount reductions, that are non-essential, meaning that given our priority being BOT/BAL development and registration, we have defined exactly which, experts we need internally and externally and we have significantly cut down on external advisers. We have limited external advisers to those that will benefit us the most in terms of advancing BOT/BAL through a line of registration. And most of the registration work that we were undertaking under accelerated approval is already completed. So should there be a window for us, and we believe there will be, we will utilize a lot of the work that has been completed, to seek potentially registration globally. So in terms of our pipeline products, we have not killed them.

We have simply shelved them for the time being, and we’ve done it in a way that we can reignite them. Because as you know, we got a significant, number of products back from our partners after they have spent in excess of $800 million collectively on those products. Not because of any product performance issues, but strictly because of the fact that IO for the time being is out of fashion. Not because we believe our products are implicated in it being out of fashion. But, you know, in the pharmaceutical industry, things go hot and cold. And right now, IO is cold and that doesn’t mean that it will remain cold three to six months from now. So we have put them on hold with an intent to reignite them quickly. In terminal catalyst for 2025 on the regulatory updates, stay tuned.

Emily Bodnar: Okay, great. Thank you.

Operator: [Operator Instructions] And our next question comes from the line of Mayank Mamtani with B. Riley Securities. Please go ahead.

Mayank Mamtani: Good morning, team. Thanks for taking our questions and appreciate the detailed update here. Maybe just a similar question as asked before on the process of monetization of non-core assets. Garo, if you could comment how further along you are and what sort of economics you could derive from that? And then I have a follow-up.

Garo Armen: Sure, Mayank. Thank you for that. And if you recall, and I’m sure that you recall, but in general, the first stage of monetization of our West Coast assets, namely Vacaville, our Berkeley facility came in the form of a mortgage that we obtained, back in November. And if you remember, prior to that, prior to the elections, it was almost impossible for us to obtain a mortgage. Impossible. But we got a $20 million mortgage at a record time of in approximately two weeks. And so that was the first stage of monetization. Now, in addition to that, for those of you who have been to our Emeryville facility, know that Emeryville is a highly desired state-of-the-art manufacturing facility that is super nuts. It starts with cell lines and it finishes with packaging, filling, finishing, and packaging of products.

Now, given the fact that there has been significant shifts in US Manufacturing interest. We have seen a similar level of interest and we are in discussions, including contract discussions, with parties or the potential consummation or monetization of our West Coast manufacturing and real estate asset.

Mayank Mamtani: Okay. No, that’s helpful. And then are you able to share your latest and greatest thoughts on what a registrational program could look like? Obviously, ASCO-GI data recently showed you know a number of different directions you could go in, late line, frontline, obviously, neoadjuvant. Any, thoughts in each of those buckets that, could be helpful for folks to understand the path to market here, Garo?

Garo Armen: Sure. So, first off, we have a mess at an enormous amount of data in the late stage setting. There’s no ambiguity about our ability to rescue patients with MSS CRC who had exhausted all other options. And these patients are now living longer, even though we haven’t done a randomized trial in late stage yet. There is no ambiguity about the fact that these patients are living much longer, orders of magnitude longer than patients who have, had standards of care. So we have more than double the response rates in these patients. And we have a, an extension of their, large batch that is based on our current data, essentially double what you would see with standards of care. And that magnitude, of course, is of great interest to the experts in the field and patients.

In fact, we have patients who are going on disease free now, pushing three years, which is almost unprecedented. Now, that’s one area where with more mature data, we will make an effort to get the interest of regulators around the world. Secondly, the data from the neoadjuvant setting is unambiguous because when I say unambiguous, it’s really black and white. These patients are treated only with BOT/BAL. So, no chemo, no radiation. And what we’re seeing is complete pathological responses in more than half patients. And this has been, by the way, there was some concern that the data was from a single center, Cornell. But now the data corroborates the Cornell data in 11 centers from Europe and in four times the patients. So that’s very encouraging.

Because of the black and white nature of the outcomes in MSS CRC and MSI High, we believe that there is a clear path for potential approval, particularly in a setting that will be organ sparing. For example, if a patient has MSS rectal cancer, their options are chemo, radiation and surgery. And for these patients, rectal surgery is debilitating. And we believe that if we can show that our products are organ sparing, that will be a significant benefit to patients. Dr. O’Day, would you like to add to that?

Steven O’Day: Mayank, thank you for the question. I would just elaborate on what Garo said. In the refractory setting that between our Phase 1 and our Phase 2 trial, we have approximately 350 patients whose data is maturing. Those trials have closed and the data is maturing. And we look forward to really watching this durability of response and treatment free interval mature and then obviously interact further with regulatory bodies around this data. And then I think what Garo said in the neoadjuvant setting is really remarkable in terms of its ability to change paradigms in both the MS Stable and obviously the MS-High colorectal setting. And rectal cancer is within our sites as a primary first neoadjuvant sort of regulatory approach.

Mayank Mamtani: It’s very helpful. Thank you, team. Looking at some of these updates in the coming months.

Garo Armen: And by the way, we have Robin Taylor here as well, who is one of the foremost commercial and beyond commercial experts in CRC. Would you like to add your thoughts?

Robin Taylor: Certainly. Quite happy to. Mayank, it’s good to hear from you again. I think the context has been explained certainly in terms of, rectal cancer, but I would also point out that both rectal and colon cancer have a significant opportunity, because we’re looking at not only, you know, in rectal cancer potential for chemo sparing, sparing radiation, and also sparing debilitating surgery, because if we improve the clinical complete response rate, those patients basically will not go into surgery. They’ll wait and the evidence that we’ve seen so far with early use of immunotherapy particularly CTLA-4 translates into a prolonged recurrence free survival, and that’s a clear benefit. So across all those measures, we expect we’re going to be able to improve the rectal cancer.

Similarly, in colon cancer, there is that opportunity to be able to improve the event free survival, overall survival in the long run. And real question about being able to reduce the amount of chemotherapy the patients are receiving, particularly on Oxaliplatin, which has, you know, the potential for permanent neuropathy in the long run. And these patients who have, had infants chemotherapy may end up with a permanent neuropathy that could be avoided, and that coupled with the ability to improve on, event free survival and overall survival really makes colon cancer a real significant opportunity as well. And, you know, finally, just to note that we have, you know, just there’s an IST that’s just initiated Memorial Sloan Kettering, with Andrea Cercek, Phase 2 in rectal cancer that, you know, they’re very excited about, patients very excited about, which should be kicking off, very shortly.

Thank you.

Operator: And that will conclude our question-and-answer session. I’ll hand the call back over to Garo Armen for any closing remarks.

Garo Armen: Once again, thank you very much for joining us. It’s always a pleasure to have you and your questions. We’re very excited about the prospects of our LEAD programs. There is more reason to be excited now with the longevity of data than even six months ago. And so we’re grateful to our investigators and patients for participating in these trials to demonstrate the kind of results that we’ve come up with so far. And we look forward to data maturing and our trials expanding. So thank you very much.

Operator: And that will conclude today’s conference call. Thank you all for joining. You may now disconnect.