Thank you for standing by, and welcome to Agenus first quarter 2024 results conference call. [Operator instructions] Thank you. I would now like to turn the call over to Zack Armen, head of investor relations. Please go ahead.

Zack Armen — Head of Investor Relations

Thank you, Rochelle, 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, among other updates. These statements are subject to risks and uncertainties, and we refer you to our SEC filings available on our website 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. Dr.

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Robin Taylor, chief commercial officer; and Dr. Todd Yancey, chief strategic advisor, will be participating in the Q&A session. Now I’d like to turn the call over to Garo to highlight our progress in the first quarter. Garo?

Garo Armen — Chairman and Chief Executive Officer

Good morning, everyone. Thank you for joining us on today’s call. Three decades ago, Agenus was founded with a profound commitment to transform the landscape of cancer treatment. Ever since, we have been relentlessly pursuing this mission, leveraging the power of the immune system to develop groundbreaking therapies that could dramatically change the lives of those battling cancer.

Today, as we edge closer to realizing our goals with our leading BOT/BAL program, I’m thrilled to share a significant milestone that will propel us into the next phase of our journey. This morning, we announced that we entered into $100 million royalty financing agreement with Ligand Pharmaceuticals. It’s very important to realize that this agreement allows us to keep BOT/BAL in its entirety and also open up our options to bring in partners for this program. This pivotal minimally dilutive capital infusion will support key development initiatives in the BOT/BAL program, including our planned confirmatory Phase 3 study in relapsed/refractory MSS CRC, which stands for colorectal cancer, and our commercialization readiness activities which are currently underway.

Ligand’s initial commitment is for $75 million with an option to add $25 million more. And importantly, in addition to this, we can add $100 million more in a syndicated transaction from other parties, several of whom we are already in negotiations, making the total as much as $200 million. This agreement strengthens our financial position and reinforces our commitment to bringing BOT/BAL to patients. Our cash balance as of the end of the first quarter was $52 million.

With the additional cash received from this transaction, we are positioned to ensure the progress of our mission-critical work to bring BOT/BAL to patients in need. We’re also in discussions for additional capital infusion mechanisms to further strengthen our balance sheet as we enter a critical phase of our effort across our BOT/BAL program. Also very importantly, over the last few quarters, we have successfully reduced our cash burn rate and will continue to do so, even with our strengthened cash position. Our detailed financial scenario planning includes various partnership outcomes and potential regulatory timelines, ensuring we are well prepared for the challenges and opportunities ahead.

Our reverse stock split during Q1 was implemented to achieve three key objectives, one, to satisfy the eligibility criteria for the Russell Indices; two, to regain compliance with NASDAQ listing requirements; and three, to maintain a stock price about $5 a share, enabling investments by certain institutional investors that require a minimum share price. We’ve confirmed regaining compliance with NASDAQ listing requirements last week. And based on our market cap as of the close of the trading on April 30th, which is the Russell rank day, we are more confident in our continued inclusion in the Russell 2000. Our strategic initiatives are expected to broaden our investor base and to lower our cost of capital, benefiting both our shareholders and optimizing our ability to bring valuable medicines to patients.

I will now turn the call to Dr. Steven O’Day, our chief medical officer, who will provide an update on the latest developments in our BOT/BAL program. Steven will focus particularly on our progress on colorectal cancer. This focus is, in part, our potential accelerated filing pathway in advanced stages of disease, and also this focus is vital as we expand treatment options in earlier lines of therapy through externally funded and global investigator-sponsored trials.

I might add that we have had requests for an unprecedented number of investigator-sponsored trials in our queue. The results from both Agenus-sponsored studies and those ISTs continue to reinforce our confidence in BOT/BAL’s potential to address significant unmet needs across various solid tumor cancers. Thank you again for your continued support and commitment to Agenus. We’re excited about the future and look forward to sharing more updates on our progress in the near future.

Thank you, Garo. Botensilimab, in combination with balstilimab, has demonstrated deep and durable responses across a wide variety of poorly immunogenic or I-O refractory solid tumors. These poorly immunogenic tumors represent the majority of adults with cancer, and this large group of patients have not previously benefited from the success of established I-O therapies. Currently, our BOT/BAL program is focused on our lead indication, relapsed refractory colorectal cancer, which is not MSI high or DMMR and is without active liver metastases.

We continue to make substantial progress. As provided in our press release of April 12, we’ve seen this data set from our expanded Phase 1b cohort mature. In the 77 patients in this indication treated with the combination of botensilimab and balstilimab, there is now almost 14 months of median follow-up. The confirmed overall response rate in all patients treated is 23% with a median overall survival of 21.2 months, a 12-month overall survival estimate of 71%, and an 18-month overall survival estimate of 62%.

The most common safety observations are immune-related diarrhea and colitis, which is managed in accordance with standard therapies. Grade 3 or greater treatment-related diarrhea colitis occurred in approximately 16% of patients. These data, which continue to mature, stand in stark contrast to standard-of-care therapies in this treatment setting with overall response rates of 1% to 6% and a median overall survival of 12 months or less. In November 2023, we completed enrollment in a large randomized global Phase 2 trial with 234 metastatic colorectal cancer patients whose tumors were not MSI high or DMMR and were without active liver metastases.

This trial was designed to evaluate dose and contribution of components for the BOT/BAL regimen in this indication. Importantly, it also included a contemporaneous standard-of-care arm. Results from a March data cut from this top trial demonstrates consistency with our Phase 1 results at a similar stage of follow-up. We look forward to submitting more mature results from this trial to a scientific meeting in the second half of 2024.

Data from this Phase 2 trial, along with data from the expanded Phase 1 cohort and a real-world evidence data set, support our anticipated BLA filing by the end of the year. We plan to gain alignment with the FDA on the filing and the design of the confirmatory Phase 3 trial in an upcoming meeting anticipated in July 2024. So the Phase 3 trial will commence this year and enroll in time to support an accelerated approval. We will also discuss our obligations, which include our Phase 3 dose and regimen, and the structure and cadence of submission.

In the earlier lines of therapy for colorectal cancer, we have important investigator-sponsored trials ongoing, as Garo has referred to. These include the NEST trial with Dr. Tasi at Cornell, which showed major pathologic responses in six out of nine MS-stable colorectal patients treated in a neoadjuvant setting, including two pathologic complete responses and three out of three complete or near-complete responses in MSI-high patients. None of these patients had surge or delay due to treatment with BOT and BAL.

This NEST trial is continuing to rapidly expand and enroll. Longer follow-up data from the original 12 NEST patients will be presented at an upcoming medical meeting. The second important early line metastatic colorectal trial I want to highlight is the FOLFOX 3B regimen with Dr. Malon Fakim at City of Hope.

He is investigating BOT and BAL, combined with standard-of-care FOLFOX, plus bevacizumab, in first-line metastatic or FOLFOX-rechallenged metastatic patients. To date, the regimen has been well tolerated and continues to actively enroll patients. Going forward, FOLFOX 3B could serve as an active regimen across several different malignancies, including colorectal cancer in early line metastatic settings, for example, upper GI malignancies. Our goal is to improve outcomes in both late-stage and earlier-stage colorectal cancer, a disease growing in prevalence and impacting younger patients.

Additionally, we continue to follow maturing Agenus-sponsored Phase 2 trials with BOT or BOT/BAL in several important areas. The first is a refractory melanoma Phase 2 trial with BOT alone or BOT/BAL combination, and the second is a refractory second-line metastatic PANCREAZE study, comparing BOT gemabranze to gemabraxane alone. We hope to provide updates on these data in the second half of 2024. Now I’ll turn the call over to Robin Taylor, who will provide more insight into our commercial strategy and operations.

Thank you, Steven. In parallel with our planned BLA submission, all of us at Agenus are focused on preparing for the launch of BOT and BAL. Our Emeryville-based CMC team is well prepared to supply BOT and BAL, both through our third-party CMO partners and subsequently at our wholly owned and operated GMP-grade commercial facility. With respect to commercial preparations, I have hired a highly experienced and passionate leadership team across sales and marketing, market access, and commercial operations.

Together, the members of the commercial leadership team have successfully led or participated in over 20 launches of novel therapeutics or label expansions in colorectal cancer and other solid tumors. We are partnering closely with our global medical affairs and clinical teams to gather insights from the world’s experts in GI oncology. And we’ve conducted market research with over 150 U.S.-based GI oncologists across academic and community settings. From both the market research and our direct discussions with GI oncologists, it is clear that there is significant anticipation for BOT and BAL, which underscores the urgency we feel to deliver this important treatment option to patients.

Now I’ll turn the call over to Christine to discuss financials.

Christine Klaskin — Vice President, Finance, and Chief Accounting Officer

Thank you, Robin. As Garo mentioned, we ended our first quarter of 2024 with a cash and cash equivalent balance of $52.9 million. This compares to $76.1 million at year end. Also, as Garo mentioned, this morning, we announced a $100 million agreement with Ligand Pharmaceuticals, consisting of an initial investment of $75 million with an option to invest an additional $25 million, thus strengthening our cash position.

Our cash used in operations for this first quarter was $38 million, compared to $40 million during the fourth quarter ended December 31, 2023. For the first quarter ended March 31, 2024, we recognized revenue of $28 million and incurred a net loss of $63.5 million, which includes noncash expenses of $38 million. This compares to a net loss of $70.9 million, which includes noncash expenses of $25 million for the same period in 2023. Our net loss per share for this first quarter is $3.04, which compares to $4.31 per share for the first quarter of 2023.

Thank you very much, Steven, Robin, and Christine. As we conclude today’s earnings call, I want to recap the pivotal developments we anticipate in the coming months of Agenus. We are on track to secure a significant cash infusion of up to $200 million by midyear which will strengthen our cash position and support our critical research and development activities, our registration efforts, and our commercialization efforts. Another key milestone will be our meeting with the FDA and important before we have their concordance in initiating our biologics license application.

Additionally, we will present our Phase 2 data for colorectal cancer, along with additional data in this indication from investigator-sponsored trials, which we believe will further strengthen the strong rationale of our therapies. And these data presentations are expected to be happening at major conferences. Furthermore, we expect to release, as Steven said, a promising Phase 1 and 2 data in melanoma, lung cancer, sarcoma, and pancreatic cancer in the second half of this year. We’re very encouraged with the outcomes of these trials.

These all represent cancers where there is a critical need for effective therapies. These developments underscore our dedication through innovation in oncology and also highlight our potential to make a meaningful impact on patients’ lives by offering potentially chemo-free, durable benefit for patients who have limited or no treatment options left. Thank you very much once again to our shareholders for your continued support and trust in Agenus. We look forward to sharing more about our progress in these exciting endeavors as the year unfolds.

Now I believe we’re ready for any questions you may have.

[Operator instructions] Your first question comes from the line of Emily Bodnar of H.C. Wainright. Your line is open.

Emily Bodnar — H.C. Wainwright and Company — Analyst

Hi. Good morning. Thanks for taking the questions, and congrats on the progress. First question, could you confirm how many patients you’ve treated with BOT/BAL at the recommended Phase 2 dose across the Phase 1b and Phase 2 studies specifically for MS CRC patients without and your confidence, I guess, that you have enough efficacy data to support an accelerated approval? And then second question, if you can kind of discuss how you’re thinking about strategy for BOT/BAL in melanoma and pancreatic cancer and if you feel like these are indications that you may also seek regulatory approval for if the Phase 2 data are positive or if your kind of near-term commercial focus is just on CRC.

Garo Armen — Chairman and Chief Executive Officer

Certainly. Emily, thank you very much for your question. I will give you some top-line answer to your questions, and then I’ll ask Dr. O’Day get into some depth.

First of all, as you may know, for the last almost six months, we have been intensively involved in pulling together the data from all the trials, including tracking the maturity of the data, as Steven alluded to, to see how we can make a compelling package in an upcoming meeting with the FDA. And our conviction based on the data from all three cohorts, including the Phase 2 randomized study, as well as the durability and maturity of the data, is stronger today than it’s ever before that we will maybe take compelling case. Of course, we cannot make a definitive statement until the outcome of the FDA meeting, and we need to get their concordance on our ambition. But we are in an optimal state of preparedness with where we are right now and more developments and the progress on this will be coming forward in the next several weeks.

Now in terms of the numbers of patients from each cohort and other questions about whether melanoma, pancreatic, and lung cancer can lead to approval, those are, of course, very important questions that we are actively considering in collaboration with key opinion leaders in these fields. And we will be alluding on the potential of this in coming months. But we — I understand that we are absolutely fixated on CRC right now because that is our focus for our first potential approval, so everything else is a little less of a priority. But with the additional financial resources that we expect to put into place between now and the end of the year, those other programs will come to the focus as well.

But, Steven, if you can address some of the more specific questions that Emily asked.

Steven O’Day — Chief Medical Officer

Thanks, Garo. So we’re not going to get into the absolute specific numbers, but we can — what I can say is with the Phase 1 and the Phase 2 trial, we have two active doses and a significant number of patients on the combination of BOT/BAL in both the Phase 1 and the Phase 2 randomized trial that we think are supported with safety, efficacy, and clinical pharmacology to discuss with an accelerated pathway given the unmet need in this setting.

Your next question comes from the line of Mayank Mamtani of B. Riley Securities. Your line is now open.

Mayank Mamtani — B. Riley Financial — Analyst

Good morning, team. Thanks for taking our questions, and congrats on the updates noted earlier. So in prior press release, team, you’ve mentioned that your emerging data in Phase 2 is encouraging. And today, I think you said it’s comparable to what you noted in Phase 1 at a similar stage.

Are you able to give a little bit more detail on what parameters we are talking about and its comparable to your expectation at the outset and especially given you’re enrolling slightly earlier-stage patients there? And then secondly, on the — if you are able to clarify the FDA meeting has been scheduled and if there’s a minimum follow-up from the Phase 2 cohort that you’re trying to accomplish before you’re able to submit a package that would go alongside that FDA meeting. And I have a couple of follow-ups.

Garo Armen — Chairman and Chief Executive Officer

OK. On the first question, Mayank, we have said repeatedly that we will not discuss the details of this study, and please understand, everybody, that we’re not trying to be cute here. It is just a courtesy call that we will not discuss the data and ensure we have an opportunity to present it to the FDA. And subsequent to that, our preference is, of course, to present the data which we consider a very important set of data that will address the selection of the dose, contribution of the elements, and the efficacy to support the data that we have seen in earlier trials at a major conference.

That would be our preference to do it, so you will get no further details on this until these steps are underway. In terms of FDA meeting, the FDA meeting request is going in as we speak. And we expect that based on the timelines, we will be granted a meeting sometime in the second half of July. And this is data that we have not released before, so we re not making it public.

And as soon as the meeting is scheduled, of course, depending on the circumstances, we may make certain statements about it. But I believe that the outcome of this meeting will be one of the most important milestones for the company as we potentially gear up accelerated approval filing in the next months following the meeting. But be rest assured that we are going on all full cylinders, as they say, on all modules or are getting ready in a state of readiness for all modules that could potentially be submitted post the FDA meeting.

Mayank Mamtani — B. Riley Financial — Analyst

I appreciate that color. Thank you. On the follow-up from the Phase 2, you are at, I think, 14 months follow-up in the — from the Phase 1. Is there a particular requirement or best practices in terms of how much follow-up you need to have from Phase 2? Or is that sort of subject to discussion?

Garo Armen — Chairman and Chief Executive Officer

OK. So on this, of course, the FDA has guidance that is based on historical precedents on the minimum follow-up, but we have had significant input from our regulatory advisors on what that minimum should be. Of course, ideally, we can wait five years, but we’re not going to do that. But the minimum enrollment in the Phase 2 ended in October 2023.

And based on that, you can sort of extrapolate what the follow-up period will be between now and the potential FDA meeting and then beyond the FDA meeting from that point to the filing of a BLA with the clinical module.

Mayank Mamtani — B. Riley Financial — Analyst

Makes sense. Thank you. And then on the number of ISTs that have come up on, are you able to comment on what sort of BOT dose level you’re using in most of these ISTs? And also, about CRC specifically, I believe you have one IST data that you expect in the relative near term in the earlier-line setting if you’re able to comment on the implications of that data set in informing what the Phase 3 trial could look like. And then I have one last financial question after that.

Garo Armen — Chairman and Chief Executive Officer

So thank you, Mayank, for that question. We have been confronted with an unprecedented number of ISTs. Now what is that number? It’s well over 50 IST requests. Clearly, given our resources, and I don’t mean just financial resources, because a number of the ISTs do not require my financial resource from the company, but people, human resources, we cannot satisfy all of these IST requests.

So we have zeroed in on a handful of them, and these handful of ISTs are selected based on potential data generation for approval of our agents in subsequent trials and also, of course, the rationale of generating significant clinical data that will be supporting the rationale of pursuing BOT/BAL in several different indicators that are important to us. So these will be reviewed or are in the process of being reviewed on an ongoing basis, and we’ll make prudent decisions, in collaboration with some of our advisors and colleagues. But also be rest assured that during the time of our regulatory discussions, we are particularly sensitive to not expanding our IST programs so that we do not get caught in generating data that cannot be tabulated, cleaned up in time to be provided to the FDA for the potential BLA consideration. So all these considerations are a critical part of our total process.

Now in addition to that, I think you had another question on ISTs that whether or not it’s specific to CRC. Not — of course, a great number of the ISTs are not specific to CRC. They are in pancreatic, melanoma, lung, sarcomas. There’s a great deal of interest in sarcoma because of the efficacy that we’ve seen or, I should say, significant clinical activity that we see — the reason I’m saying I shouldn’t say efficacy is because that’s a term that the FDA has to bless.

So until that happens, we have to be careful how we use the terms of activity. But because of the significant activity that we have seen in the sarcoma patients that failed everything else and they’re not responding to any other treatments, there is, of course, a lot of interest in pursuing, not just ISTs, but also approval strategies. But as I said earlier, we are very, very cognizant to the focus that we need to have on CRC right now.

Mayank Mamtani — B. Riley Financial — Analyst

Got it. Thank you. And then lastly, in the nondilutive financing, the total of $200 million, if you include some of the expected syndicated offering, just — if you’re able to comment on how much contribution BOT/BAL versus the other partner programs in this broader deal concept, that would be helpful, just a rough range, Garo.

Garo Armen — Chairman and Chief Executive Officer

So I mean, there is — the relative contribution is articulated in our press release or the Ligand press release that was put out this morning at 7:30. So — but other than that, we cannot discuss any additional details. Suffice it to say that this financing completely provides us with the freedom to pursue BOT/BAL on our own and pursue BOT/BAL in connection with partners worldwide. So this particular transaction has absolutely no bearing or puts any restrictions on our ability to advance BOT/BAL to — in collaboration with partners and by ourselves.

In other words, the economics of this transaction are defined, and that was in the press release. And beyond that, I believe that we are in a superb position to exploit our commercial opportunity with BOT/BAL. And that will be, of course, for the benefit of both the company, our future potential partners, and for the benefit of Ligand.

Your next question comes from the line of Kelly Shi of Jefferies. Your line is open.

Dev Prasad — Jefferies — Analyst

Hi. This is Dev on for Kelly Shi. My question is about the catalyst in the second half. You said there will be a number of data in melanoma, lung, pancreatic in the second half.

Can you provide expectation, what kind of data we should expect, and number of patients, and those details? Thank you.

Garo Armen — Chairman and Chief Executive Officer

OK. So clearly, if the data was expected to be not hazardous, we wouldn’t be talking about it. But can I provide you with specifics on the data that will compromise our ability to present it in conferences? The answer is no, so we’ll have to see as the data matures. We’re very encouraged with what we’re seeing across a number of indications.

As we said before, that includes melanoma, lung cancer, sarcoma, pancreatic cancer, and even others. So please be patient and allow us to make the appropriate disclosures and have an opportunity to present the data to review conferences and also in publications.

Your next question comes from the line of Matthew Phipps of William Blair. Your line is now open.

Matt Phipps — William Blair and Company — Analyst

Congrats on the Ligand financing. Just wondering, the additional $25 million that can come from Ligand, is that purely based on Ligand’s decision? Or is there anything that can trigger that decision?

Great. And then maybe for Dr. O’Day. The melanoma on the slide that’s on the front-line trial and front-line registrational trial versus standard of care, wondering if you consider that to be PD-1 monotherapy, PD-1 — a different PD-1 CTLA4, or PD-1 LAG-3 at this point?

Garo Armen — Chairman and Chief Executive Officer

Perfect question for one of the world’s foremost experts on melanoma, that is our Dr. Steven O’Day.

Steven O’Day — Chief Medical Officer

So, Matt, can you clarify the question? Again, I didn’t quite get the first line piece of it.

Matt Phipps — William Blair and Company — Analyst

Yes. So there’s a slide you guys — in your news deck that says first-line melanoma registrational study versus first-line standard of care. Just kind of curious what you consider to be that standard of care right now because there’s maybe three different I-O regimens out there.

Steven O’Day — Chief Medical Officer

Yes. Well, as you know, the front-line treatment is split sort of between PD-1 monotherapy, PD-1 LAG-3, or PD-1 CTLA 4. I think what we’re discussing going forward and presenting later this year is a refractory setting. And obviously, we need to see what that data as it fully matures in the coming weeks and months.

This is a refractory PD-1 and PD-1 CTLA-4 and BRAF refractory setting. So depending on the strength of this data and sort of the further discussions, obviously, if there is an accelerated path, it would likely lead to a first-line confirmatory trial. Again, the FDA would have to advise on the best comparator arm in that setting.

[Operator instructions] Your next question comes from the line — I think we lost — all right. So we have the next question from Gabriel Kim. Your line is open.

Unknown speaker

Hi. Congratulations on the Ligand financing. Could you just say when is the anticipated closing date? And then I had a follow-up.

I think we mentioned that we expect to close the transaction this month.

Unknown speaker

OK, wonderful. And then in terms of share count, are you able to provide an end-of-quarter or current share count?

Garo Armen — Chairman and Chief Executive Officer

I don’t have the share count with me, but I believe going into all of this, it was 20 million, something like that. Christine, do you have the exact share count?

Christine Klaskin — Vice President, Finance, and Chief Accounting Officer

Yes. It’s just over 20 million. And we did file our 10-Q this morning, so you can see that on our filing.

Unknown speaker

OK. And is that also — OK, wonderful. So that’s the current share count as well.

Christine Klaskin — Vice President, Finance, and Chief Accounting Officer

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

Garo Armen — Chairman and Chief Executive Officer

Thank you very much. Thank you very much for your attention and your patience. As you know, a number of our shareholders were concerned about how we would be able to get our financial conditions strengthened, our balance sheet strengthened. And what I expect is that today’s announcement is the very first step in this process.

And so throughout the next weeks, months, we will see additional activities that I expect will strengthen our balance sheet and allow us to be able to pursue our very important mission of getting BOT/BAL to the finish line. Thank you very much.

Christine Klaskin — Vice President, Finance, and Chief Accounting Officer

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