Agenus' Management Presents at Roth Annual Presentation Conference (Transcript)

Mar.18.13 | About: Agenus (AGEN)


Roth Annual Presentation Conference Call

March 18, 2013 6:00 p.m. ET


Jonae Barnes – VP of IR and Corporate Communications


Joe Pantginis - Roth Capital

Joe Pantginis - Roth Capital

Okay, we're going to move on to our next presentation. Pleased to have Agenus with us. Presenting for the company is Jonae Barnes, Vice President of Investor Relations and Corporate Communications.

Agenus going on the theme of a lot of companies today in the cancer immunotherapy stage, looks to have a pretty transformational year ahead of them based on two basic investment cases, I would say. First, they have a very broad collaboration with GlaxoSmithKline with their immune adjuvant Stimulon, the two big studies that should be reading out this year are two large Phase 3 studies, and I'll just steal your milestones slide, but two large Phase 3 studies for melanoma and lung cancer, some of the largest studies ever conducted for cancer vaccines and its indications, and Agenus gets a royalty from the sales of these products as well as I'd say very quickly increasing visibility for their internal pipeline in their Prophage vaccines for glioma as well and also for HerpV.

So with that, I'll turn it over to Jonae.

Jonae Barnes

Great. Thank you, Joe. This is our forward-looking statement. I'm sure everybody is familiar with these. You can refer to our 10-K and 10-Q.

As Joe said, we're a biotechnology company focused in immunotherapic area, we've got many programs that are in late stage in different areas, oncology and toxicities in CNS. As he mentioned, we do have two platforms. The first one I'm going to talk about is QS-21 Stimulon adjuvant. This is an -- it's an adjuvant that's used in 17 different vaccine programs and developments.

And for those of you who don't know what an adjuvant is, if you can picture a bicycle with no wheels, the wheels would actually be the adjuvant. It's the extra part of the vaccine that helps you get there. It's basically a turbo booster whatever you're trying to do. And once again, we have 17 in development, many of which with our corporate partners. Three are in Phase 3, two of those read-outs will be this year and there'll be another one next year. And we are entitled to receive royalties and milestone payments.

The other platform we have is heat shock proteins. The first one we're working on is Prophage Series for glioma, this is in newly-diagnosed and recurrent. And also HerpV; this is recombinant, off-the-shelf vaccine for HSV-2 or genital herpes. It's the most clinically advanced therapeutic vaccine right now in clinical development, and our proof-of-concept tissue data is expected to report in Q4 of this year. We are located in Lexington, Massachusetts and we have somewhere around 60 employees.

These are the near-term data drivers that I think shareholders will be interested in. Once again, many of these programs are partnered specifically with GSK. We are involved in their malaria vaccine, their melanoma vaccine, non-small-cell lung cancer and shingles vaccine. We do have an agreement with Janssen for an Alzheimer's disease vaccine, that's ACC-001. And we have three programs that we're working on internally, once again the Prophage Series G-200 for glioma and genital herpes.

And as you can see, there is very big market opportunities. And total, we think the total market opportunities for all of these programs and developments is well over $17 billion.

Going into a little bit more detail about QS-21, it's a saponin extracted from the bark of a soap tree out of Chile. This is a molecule that's taken basically out of the tree. And it stimulates a strong antibody and cellular immune response, so it regulates the immune system. It's shown to be immunogenic and safe in many vaccines, and as mentioned, there are 17 different vaccines in clinical development that contains QS-21. They're both in therapeutic vaccines. These are in vaccines that are [in infected] patients or prophylactic vaccines which many of you may be, you know, kind of going back to your childhood and the childhood vaccines that you got at that time, they actually are much different than therapeutic vaccines. [There are foreign] Phase 3 studies, and as mentioned, they've been tested in over 40,000 patients, some as young as six to 12 weeks old, that was in the malaria vaccine for GSK.

We do think our annual royalty peak potential could be over $100 million with all the programs that are in development right now, and we do get royalties 10 years post launch, and there are some exceptions, there are some separate time clocks. For instance, we actually signed another agreement with GlaxoSmithKline in March of last year for an undisclosed indication, and that has its own separate time clocks.

I'm going to talk about the two big programs right now that are going to report this year. They're in melanoma and non-small cell lung cancer. These are GSK's MAGE-A3 cancer vaccines. And I want to take a step back, because a lot of actually vaccines that have been in development for cancer has failed for one reason for another, and this is a little bit different from what's been in development. For instance, they're in earlier-stage patient populations. A lot of companies develop vaccines in metastatic or stage 4 patients because, one, it's a lot quicker, not as much money, and you can get to your endpoint a lot sooner.

What Glaxo has done is they've taken earlier-stage patients, and these studies right now have been running for six to seven years. So in melanoma, they're in 3b and 3c, and in non-small-cell lung cancer, they're in 1b to 3a patients. So once again, much earlier-stage patients.

These are very large studies. In melanoma, they recruited 1,300 patients, and in non-small-cell lung cancer, 2,270. This is the largest non-small-cell lung cancer study ever run.

They do have a biomarker or they are looking at targeted patients that over-express the MAGE-A3 antigen. So in melanoma, 66% of the patients were over-expressed MAGE-A3, and in non-small-cell lung cancer 36% of the patients will. And they're using QS-21 which once again is basically a turbo charger to the vaccine.

And they are reporting this year, we're very excited about these programs. They are in patients that have had the tumors receptive. So these are technically in disease-free patients. And right now in melanoma, the only treatment that these patients have on their standard of care is interferon, and about less than 10% of the patients will go on interferon; it's highly toxic. And in non-small-cell lung cancer, about 50% of the patients will probably go on chemotherapy, depending on what site you're at.

Once again, you are technically disease-free and a lot of patients don't want to go on something like chemotherapy. So where this vaccine kind of fits into the treatment paradigm is it will be something new and something that's not offered at all right now. It basically will train your immune system to fight those cancer cells from coming back, which right now there is no treatment to do that. These will be, you know, low toxicity, and if you do over-express this antigen, we think that this would be actually a very good treatment option for you. So we'll have the Phase 3 results in the second half of this year.

The other two programs that are late stage are the malaria programs. You might have seen the Phase 3 studies being reported. They've reported on both the six to 12-week old infants and the five to 17-month children. They both hit their primary and secondary endpoints, and that was on top of bed netting and everything else that's used to protect infants from malaria.

Over 800,000 people die in Africa each year, of which most of them are children. There is going to be more booster data in the fourth quarter of this year, and then Glaxo is going to move forward and file in the different African countries, and we do believe the launch could happen as early as 2015. Once again, this is a prophylactic vaccine unlike the two therapeutic vaccines I just spoke about.

The other Phase 3 program is a vaccine for shingles. Glaxo has enrolled over 30,000 patients for this program, and the data is expected in 2014. There are other Phase 3 programs out there running right now in immune-compromised patients. They've got actually a few of them, not just one of them now underway. And once again, these programs too are worldwide programs; they're not just US-based programs. They will be filing worldwide for the indications of these programs. So the royalty here obviously would be worldwide.

The other programs that QS-21 is included in, in development are listed here. Alzheimer's will be the Janssen program. There are nine Phase 2 studies running right now. That data should be out this year or later. GSK also has QS-21 in these other programs, HIV, TB, prostate, breast, bladder, hepato carcinoma, multiple myeloma, AML, head and neck cancer. There are other vaccines too that are obviously in development, that are in Phase 1 and in preclinical studies.

So I think it's not often that you would find a small company such as ours with around $100 million market cap linked to a large pipeline of a large pharma company like GSK.

Our own proprietary programs, I'll start with HerpV. HerpV also contains QS-21. We think this is a multi-billion-dollar opportunity. It's the most clinically advanced therapeutic vaccine in development for genital herpes. It's highly covalent, it's off the shelf. It has 32 HSV-2 synthetic peptide antigens with recombinant heat shock protein 70. So the heat shock protein is the chaperone.

We're currently running a randomized, double-blind, multicenter Phase 2 proof-of-concept trial. It's fully enrolled. We announced that a few weeks ago. We have 75 patients that are in this trial. The data is expected once again in Q4. And we actually have published the Phase 1 data, which, unlike Phase 1 data being in a small -- it was in a small patient group, but it was randomized, it was four-armed, placebo-controlled, and we published that in the Journal of Vaccine. And in that study, we showed 100% of the evaluable patients receiving HerpV and QS-21 had a T cell response.

This disease affects a large number of people, over 60 million people in America, in the US. It's the most [prevalent STD] and about 80% of the patients have symptomatic recurrences. My name is on the company's website, not on the press releases, so I can tell you, we get calls all the time from patients who wanted to get in our clinical trial, who will do anything to actually participate in the clinical trial that will help them, because the antivirals are not preventing the recurrences and they basically are in a state where they -- some of them are so depressed they can't even get out of bed, or there's been different high school that have actually called us because it's so prevalent in many of the high schools and colleges in the US, and when one person gets it, they seem to give it to a lot of other people. There's been suicides in high school because of this, because they're going to have to live with this disease the rest of their lives. So, once again, it's a big unmet medical need, and the treatment options out there are only antivirals which you're going to have to take for the rest of your life.

What we're doing with this study is once again we have 32 HSV synthetic peptide antigens from 22 different viral proteins. And some of those is trying to stimulate a CD4 and CD8 response. And in our Phase 1 study, we did show a CD4 and a CD8 response, and that was the first time that a therapeutic vaccine has shown this for the treatment of genital herpes, and a lot of the key opinion leaders believe that this could actually be key.

Once again we're using the recombinant heat shock protein 70 as a chaperone and our QS-21. So this is a very interesting vaccine construct, and we do, you know, hope that once again we can provide treatment to the patient group.

This is the construct of our Phase 2 study. For 45 days, before you get the vaccination, you actually swab your genital area, even though you might not have symptoms or an outbreak that's occurring, you're still shedding the virus. And this is a problem with transmission, because people believe, since they're not having an outbreak, they're not going to infect others, and that's not true at all, and that's how this disease is passed in many cases.

So, once a day, it's 45 days before the vaccine is given. We have three injections bi-weekly. There'll be a booster at six months. And then after you get the three injections bi-weekly, you're going to swab for another 45 days. So we're measuring viral shedding. And many of the key opinion leaders believe that if you can decrease viral shedding, you can then decrease transmission, you can decrease outbreaks. And once again, the endpoint is viral shedding pre and post vaccine. And we're also looking at safety and immunogenicity. So these once again results will be in, in the fourth quarter of this year.

The other program that we're developing internally is Prophage Series G for glioma. We had our Phase 2 results at ASCO in 2011. And since then we announced, last year, that the MTI Cooperative Group, which is called the Alliance, has sponsored or agreed to sponsor a large-scale randomized study with Avastin for 222 patients. And we're going to be starting that in the first half of this year. And we're really excited about that opportunity. The MTI or the Alliance Group will basically be covering a lot of the costs for this trial. It's probably over $25 million in industry money. And what we'll be responsible for is basically the corporate overhead and supplying the vaccines.

This is a personalized vaccine, it's much different than our herpes vaccine, which is basically off the shelf. What we do is we have the surgeon -- the surgeon takes out the tumor and the tumor is sent to Agenus, and in about two weeks, we actually turn that tumor into a vaccine that will then teach the body to fight their cells that they actually grow against. And since it's personalized in nature, you're using once again your own tumor to do this. And what happens is, after the tumor is sent to the hospital and after you've recovered from surgery sometime around three weeks or so afterwards, you're given the vaccine at probably between six to 10 shots, depending on how much vaccine that we were able to make out of the tumor.

It's a very simple process. It's not like dendreons. This isn't cell-based. We've run large-scale studies before this and other indications from all over the world, so we've gotten very good at the logistics. Even our manufacturing plant has been reviewed by the European authorities. We do have approval for renal cell carcinoma in Europe or in Russia, and we'll be launching that product with NewVac with a partner in Russia during this year.

The other program that was in recurrent glioma, we also have a program running in newly-diagnosed glioma that's just a single-on study, 46 patients are enrolled. And it's with a standard of care which is chemotherapy and radiation. And we'll have some interim data this year, and going back to the recurrent data, we'll actually have an update on our program. Dr. Andy Parsa or University of San Francisco will be presenting the updated report. The last time the Phase 2 results were reported was more of an interim look at ASCO 2011. So, at the AANS meeting which will be on May 1, we'll actually have an update on this program. He has a plenary session that he's going to be giving the presentation at.

Going into the Alliance trial, once again, this is 222 patients and it will include one arm of Prophage G-200 with Avastin, Prophage G-200 alone, and then followed with Avastin at progression and Avastin alone. And we do believe that there's some good synergy between Avastin and Prophage Series and, you know, we're hoping to see that actually play out in this clinical trial. But once again, 222 patients, the primary endpoint is overall survival. The secondary endpoint is safety and progression-free survival.

This was actually what we presented at ASCO 2011. We had a median of 47.6 weeks. And if you go into how this actually compares with other programs in the same type of surgical population, once again the tumor is resected in these patients. We had 47.6 weeks Gliadel which is another agent used out there, it's basically a chemo wafer that's implanted in the area where the tumor has been resected at 39.8 weeks. Two other trials of similar populations were 31.4 weeks and 32.8 weeks.

This is once again an investigator-sponsored study out of the University of San Francisco, and Dr. Parsa has been basically the lead clinical investigator of this study. And he was the one that actually worked very hard in working with the MTI to get this Phase 2 randomized study actually put forward. There were a lot of other companies, a lot of other different clinical programs that were put before them, and we're very glad that they actually chose our program to move forward with.

Our cash balances at the end of the quarter was $21.5 million. We do have enough cash to get us into 2014.

And that’s basically the end of the presentation. So, Joe, I'm not sure if you have some questions for me or anybody in the audience has any questions.

I do want to say that we're really excited about this year. I've been at the company now for about two years, and with the major clinical study news that we're going to have this year going into next year, it's a very exciting time for the company, many big data points, many different reasons that could actually drive shareholder value. And we do think if the Glaxo MAGE-A3 do work, it's going to be really exciting for the whole immunotherapy sector. And we do think that it will be looked in a much different way and our programs -- the other programs that we're developing I think will be looked at in a different light as well.

Question-and-Answer Session

Joe Pantginis - Roth Capital

Questions from the floor?

Unidentified Audience Member

[Inaudible Question - microphone inaccessible]

Jonae Barnes

Sure. Yeah. We actually would obviously need to do a much larger Phase 3 program. We've looked at many different options for that. I think where we stand right now as a company is, you know, obviously if the data comes in good, you kind of take some time to reassess, and then design larger-scale studies. We still would probably have to do a dose-ranging study before we would go into Phase 3. But we do think that this program would be one that we would probably want to partner as well or possibly partner with a larger company.

Once again, this is a big unmet medical need in the US and in Europe. There's 60 million people that are infected with genital herpes. And with that being said, a lot of the larger companies are very interested in options or treatment options for this disease and virus. And we might look to probably partner that out then going forward.

Joe Pantginis - Roth Capital

A year or so ago, maybe a little bit more, I believe there was some confusion on the Street regarding the Glaxo collaboration and how you're going to get paid royalties, and I think there was, I don’t want to call it [of their case], but a case out there that, oh, the revenue stream wasn't going to be that long, and the understanding that -- or some people not understanding that the royalties do not start until commercialization. Do you think that concept is now rebounding?

Jonae Barnes

Yeah. Thank you for bringing that up. And I'd really like to point that out. It's just that our, you know, QS-21, some of the IT coverage is expiring and, you know, the patent coverage may be isn't as robust as it was when we did the deal at Glaxo, but the deal that we did do at Glaxo is for 10 years post launch for the first therapeutic vaccine and the first therapeutic vaccine. So the clock doesn’t start ticking until the first vaccine in that category is technically launched. So, for instance, if the MAGE-A3 programs, you know, we have the data this year, they're able to launch it in 2014, we would get 10 years post-launch on that. And same thing for them, the first prophylactic vaccine, whether that's 2015 for the malaria program, that's when the clock would start.

So, regardless of what the intellectual protection is at that point, these royalties actually are pretty well-walked-up. And once again, we did do another deal with them last year, which was part of a larger deal where they have first right to negotiate on the company, and it was for another indication that we haven't disclosed. And that is a separate clock and it goes for a separate time period regardless, once again, of what the IP is on QS-21 at that point.

Joe Pantginis - Roth Capital

And I guess, I mean when you look at the cancer immunotherapy space, obviously covering a bunch, from several what's presented here today, not only in the glioblastoma space but a lot of these companies obviously go after later-stage tumors and you have a couple of differentiating properties, whether it's Prophage in the frontline status, but even the MAGE-3 products that are in earlier-stage patients where healthier immune systems presumably would work better. Do you feel that theme is also resounding with investors that you've talked to?

Jonae Barnes

You know, I still think there's some confusion with regards to even where the MAGE-A3 program sits. These are once again in patients that had the tumor resected. So we're not trying to shrink the tumor. A lot of these other basically programs that are out there, some of them are trying to shrink the tumor. The tumor here has been resected.

And this vaccine will then be given in the adjuvant space where basically your only treatment option is chemotherapy or interferon, depending if it's melanoma or non-small-cell lung cancer. So it's not a crowded area either, which I think some people are confused on. It's not in late stage, which can be crowded depending -- depending on which area you're looking at.

So we're looking at these programs as being very unique, possibly changing the treatment paradigm once again for melanoma non-small-cell lung cancer patients in the adjuvant setting. And they're very different where Glaxo really have the resources and the forward thinking to actually start these programs around seven years ago in patients that were earlier-stage in nature. And like Joe said, they have a much better opportunity to mount an immune response just because of the fact that they're not as sick as the metastatic patients or the stage 4 patients are.

Joe Pantginis - Roth Capital

Thanks very much.

Jonae Barnes

Yes, sure. Thank you.

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