Agenus: Advancement Of Botensilimab Could Create A Great Pivot Point (NASDAQ:AGEN)

Agenus (NASDAQ:AGEN) is a great speculative biotech play to look into. The reason why I state that is because it has great potential on its pivot more towards advancing an anti-CLTA-4 therapy known as botensilimab. It has not completely abandoned its advancement of an established PD-L1 drug known as balstilimab. Instead, it is looking to use its next generation botensilimab either alone or in combination with balstilimab to target patients with advanced cancers. It has gone on to initiate a few phase 2 studies under the ACTIVATE program. These two first studies are using botensilimab alone or in combination for the treatment of patients with microsatellite stable colorectal cancer and melanoma. A third study, which is expected to begin by the end of 2022, will use botensilimab alone or in combination with balstilimab for the treatment of patients with pancreatic cancer. The reason for starting the ACTIVATE program was because of the impressive data that had been achieved in prior study cohorts. In essence, it was already established by proof of concept that botensilimab in combination with balstilimab demonstrated robust durable responses in 9 different treatment-resistant cancers. The beauty of Agenus is its extended pipeline. What do I mean by that? Well, it is not reliant on botensilimab or balstilimab for a successful company. They are testing out other combinations using their own drugs together with their partners’ drugs. The partnerships established by Agenus thus far are with Bristol Myers Squibb (BMY), Merck (MRK) and Incyte (INCY).

Advancement Of Botensilimab Brings Forth An Enhanced Drug

As I stated above, Agenus decided to advance Botensilimab forward into clinical testing. The reason why it chose to do so is first because it had withdrawn its Accelerated Approval application from the FDA of balstilimab for the treatment of patients with cervical cancer. It was to run a phase 3 study for this program, but it decided to end that. I think it was a wise decision for several reasons. The first reason is competition because of Merck having received approval for this indication with Keytruda. Secondly, without Agenus having Accelerated Approval off the table, it would have to spend $100 million or more to run such a phase 3 study. Lastly, I believe it was a wise decision because instead of it seeking only approval of balstilimab, it now holds the potential to advance a next generation anti-CTLA-4 therapy alone or in combination with balstilimab. The point here is that balstilimab is not being abandoned at all. Instead, Agenus is taking a combination approach to treating advanced cancers, which could ultimately yield superior data. While this remains to be seen in phase 2 clinical testing, what has been observed thus far is very good. Out of 250 patients, 125 were evaluable for efficacy in taking botensilimab in combination with balstilimab. It was observed in several of these heavily pre-treated cancer population, that such a combination performed very well. Especially, considering that these patients had at least received 3 prior lines of therapy without success. This was observed in several advanced cancer types as follows:

• Microsatellite stable colorectal cancer – (59 evaluable patients) – 22% overall response rate (ORR) for those who took botensilimab combination, compared to only 1-5% response rates for other PD-L1 plus CTLA-4 combinations
• Ovarian cancer – (19 evaluable patients) – 26% overall response rate (ORR) for those who took botensilimab combination, compared to only 3 – 10% response rates for other PD-L1 plus CTLA-4 combinations
• Sarcoma – (12 evaluable patients) – 42% overall response rate (ORR) for those who took botensilimab combination, compared to only 12 – 16% response rates for other PD-L1 plus CTLA-4 combinations
• Anti-PD-(L)1 Relapsed/Refractory NSCLC – (5 evaluable patients) – 60% response rates for those who took botensilimab combination, compared to only 6 – 13% response rates for those who took other PD-L1 plus CTLA-4 combinations

In light of the data above, this is why Agenus decided to move the phase 2 ACTIVATE program forward. Again, I think the biotech holds better potential with balstilimab being combined with botensilimab, rather than running a phase 3 program with balstilimab alone. While not starting a phase 3 program right away did set the biotech back, the ability to use both botensilimab together with balstilimab should yield superior data in my opinion, compared to only using the PD-L1 drug alone to treat advanced cancers. It initiated two phase 2 studies, with one going after patients with microsatellite stable colorectal cancer (MSS CRC) and patients with advanced melanoma. These studies are known as ACTIVATE-Colorectal and ACTIVATE-Melanoma respectively. One key thing to note is that in the ACTIVATE-Colorectal study, botensilimab will be used either alone as a monotherapy or in combination with balstilimab. Whereas, the ACTIVATE-Melanoma study is only going to use botensilimab alone as a monotherapy. There is a third study, which is expected to start before the end of 2022. This is going to be a phase 2 study using botensilimab either alone or in combination with balstilimab for the treatment of patients with advanced pancreatic cancer.

Financials

According to the 10-Q SEC filing, Agenus had cash, cash equivalents and short-term investments of $218.2 million as of September 30, 2022. It believes that it has enough cash on hand to fund its operations for at least one-year from the date of this 10-Q SEC filing, which was filed on November 8, 2022. I would not expect it to wait to raise additional cash towards the latter part of the period. However, it does have a financial instrument in place if it chooses to use it. That is, it has a “Registration Statement” where it could offer from time to time the issuance and sale of up to 200 million shares of its common stock with B. Riley Securities as its sales agent. During the nine-months ending September 30, 2022 it sold 34.6 million shares its common stock with this agreement. Then, between October 1, 2022 through November 4, 2022 it sold 9.9 million shares using this very same agreement. In total, between both of these issuance/sales of shares of common stock, it raised approximately $97.6 million. The thing is that I expect it to continue to use this financial instrument to raise cash in 2023 as well. Matter in fact, as of November 4, 2022, it still has about 93.7 million shares available under this Sales Agreement.

Risks To Business

There are several risks that traders/investors should be aware of before investing in this company. The first risk to consider is the entire ACTIVATE program with respect to botensilimab. That’s because while the biotech did show some pretty good response rates, it was in a basket study whereby multiple cohorts were being tested out as proof of concept. In addition, the response rates noted above are compared to what current PD-L1/CTLA-4 therapy combinations achieve to date. It will be important to see if botensilimab in combination with balstilimab can perform better than current PD-L1/CTLA-4 drug combinations with the advanced cancers that are being targeted specifically. A second risk to consider would be with respect to the ongoing partnerships, in which Agenus has been able to establish. It has worked with big pharmaceutical companies to develop several in-house drugs which can be combined with other immunotherapies to treat patients with advanced cancers. There is no assurance that these partnerships will continue to advance. If such combinations do not perform well or do not produce desired results, then the big pharma companies could terminate the partnerships immediately.

Conclusion

The final conclusion is that Agenus is a great speculative biotech play to look into. The first reason why I state that is because it has been able to produce some substantial partnerships with big pharmaceutical companies. As I stated in the beginning, Agenus has been able to generate in-house therapies of its own for these big pharma companies, which could then be used to combine with their market immunotherapy drugs. Such partnerships and combinations include:

• Phase 1/2 study using BMS-986442 (a TIGIT bispecific discovered by Agenus, also known as AGEN1777) in combination with nivolumab +/- chemotherapy in patients with advanced solid tumors and non-small cell lung cancer (NSCLC) – partnership with Bristol-Myers Squibb
• Phase 2 study using MK-4830 (ILT4 candidate discovered by Agenus) in combination with Keytruda and chemotherapy for the treatment of patients with Ovarian cancer – several other studies in non-small cell lung cancer, small-cell lung cancer, esophageal cancer, MSI-H colorectal cancer, kidney cancer, and melanoma – partnership with Merck
• Phase 2 study using INCAGN02385 (LAG-3 drug) and INCAGN02390 (TIM-3 drug) both founded by Agenus, in combination with other anti-PD-1 drugs for the treatment of patients with squamous cell carcinoma of the head and neck – Additional studies for the treatment of patients with melanoma, endometrial cancer and urothelial carcinoma – Partnership with Incyte

The second reason why I state that is because it has been able to move on from not receiving Accelerated Approval from the FDA for balstilimab. However, I believe that it could end up working out in its favor. Why is that? Well, that’s because now it gets the ability to advance balstilimab in combination with its next-generation anti-CTLA-4 drug known as botensilimab. A combination of Agenus’ two drugs (PD-L1 and CTLA-4) have been able to achieve some good overall response rates (ORR) in patients with advanced cancers. Especially, patients who have failed to achieve responses on prior PD-L1/CTLA-4 combination therapies currently available. The final reason has to do with other drugs it has developed in the pipeline to be used alone or in combination with botensilimab and/or balstilimab. These other drugs being advanced in the pipeline are: AGEN1571 (ILT2 antagonist), AGEN2373 (CD137 agonist) and AGEN1423 (anti-CD73-TGFB-trap bifunctional antibody). With a continued advancement of botensilimab/balstilimab in the phase 2 ACTVIATE program, plus a pipeline full of many other in-house developed drugs, these are the reasons why I believe that Agenus is a great speculative biotech play to look into.