Agenus Stock: Successfully Pulled Itself Away From Disaster (NASDAQ:AGEN)

Agenus (NASDAQ:AGEN) had a disruptive 2021, when its accelerated approval BLA for balstilimab in 2nd line cervical cancer had to be withdrawn under unhappy circumstances, and its self-declared key asset, next-generation CTLA-4 agent, AGEN1181 (botensilimab), produced some promising early data in a group of solid tumors. However, the BLA withdrawal determined the stock’s price action – the company was cut to nearly half in size in terms of market valuation.

Botensilimab scored another win just last week when on June 29, the company announced positive early-stage data for botensilimab and balstilimab combination in patients with microsatellite stable or MSS colorectal cancer.

MSS CRC is a very difficult to treat form of CRC. MSS occurs in up to 85% of all CRC patients. A microsatellite is a chain of DNA repeats. When these microsatellites occur in the same number throughout the body, it is considered stable; otherwise, it is microsatellite instability or MSI. This is classified as MSI-HIGH, MSI-LOW and MSS. Research has shown that MSI-HIGH CRC patients have a much better prognosis than MSI-LOW or MSS patients. However, many drugs, for example Keytruda, are only approved for MSI-HIGH CRC patients; the more difficult to treat MSI-L/MSS CRC patients have fewer options. Tumors with the MSS phenotype “often exhibit a lower tumor mutation burden and fewer tumor-infiltrating lymphocytes than dMMR/MSI-H, leading to immune tolerance and evasion in the tumor microenvironment.” Thus, currently approved or pipeline immunotherapies often have very low ORR or disease control rates in the CRC population:

With that background in mind, it is interesting to see that Agenus’ combo therapy worked very well in the MSS population. This phase 1b study evaluated 1 or 2 mg/kg of the anti-CTLA-4 compound, botensilimab, and 3 mg/kg of anti-PD-1 molecule balstilimab in patients with microsatellite stable colorectal cancer (MSS CRC). Patients were heavily pretreated, with a median of 4 prior lines of therapy, including about a third of the patients having previously received immunotherapy. 41 patients were evaluable at data cutoff, and these demonstrated a 24% overall response rate. This is interesting because a major trial of Keytruda showed a 0% response rate in an MSS CRC patient population (n=18), and many other immunotherapies, as we saw in the table above, saw very poor ORR.

Other elements of the data were:

The disease control rate, a measure combining partial response and stable disease, stood at 73%, while 50% of objective responses were found to have more than 50% tumor reduction.

In terms of durability, 80% of objective responses were ongoing as of the data cutoff, with 30% of objective responses exceeding one year.

Botensilimab was well tolerated during the study, the company said, noting that there were no grade 4/5 treatment-related adverse events.

The discussion above shows Botensilimab’s potential. Agenus had a lot of bad luck with balstilimab, but as I discussed before, balstilimab monotherapy was something of a non-starter to begin with, and the BRAVA trial was going to cost them probably more than they could make from balstilimab monotherapy. Now they have a drug with better potential, they are planning to run a series of phase 2 trials investigating botensilimab as monotherapy and in combination with balstilimab in MSS-CRC and gynecological cancers (ovarian and MSS-endometrial cancer), and it appears from early indications that they may do very well in the trial.

Other key data from the company material:

Monotherapy activity:

• Four cases of confirmed objective response – first reported CTLA-4 monotherapy response in endometrial, pancreatic and PD1 r/r cervical

• Multiple responses in patients expressing the low-affinity FcyRIIIA receptor (F/F), who are unlikely to respond to first-generation CTLA-4

Combination activity (botensilimab + balstilimab)

• CRC: 14 of 20 pts benefited from combo; 4 PRs, 10 SDs

• Ovarian: 5 of 9 patients benefited from combo; 3 PRs, 2 SDs

• Endometrial: 3 of 3 pts benefited from monotherapy and combo; 1 CR, 2 PRs

• Durability: Responses in this Phase 1 trial have been durable, with half lasting at least 24 weeks and the majority ongoing

The company has a number of other assets besides the two already discussed. I will leave those for a future article.

Financials

AGEN has a market cap of $548mn and a cash reserve of $263mn as of the last quarter. They recently received a $5mn milestone payment from Gilead for AGEN2373, with up to $570 million in future potential option fees and milestones. The company recognized $26mn in revenues in this quarter, mainly from royalties and milestone payments. R&D spends were $42mn and G&A were $18mn, with non-cash interest payment taking up another $14mn this quarter. At that rate, the company has cash for maybe another 4 quarters. Cash position has improved vastly since November, when they had just $72mn – mainly because of a large licensing revenue they recognized in that month.

Bottom Line

AGEN has picked up nicely from its nadir last year. The stock hasn’t gained all that much because this is a terrible period for the entire industry. However, the company has managed to pull away from disaster, and they have now posted convincing early data. I believe AGEN is now looking very interesting.

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