Agenus Inc. CEO Garo Armen told BioWorld the company is "in multiple discussions right now" for more partnerships to follow the immuno-oncology (I-O) agreement with Gilead Sciences Inc. that brings $150 million at closing, which includes $120 million up front and a $30 million equity investment, and about $1.7 billion in fees and milestone payments potentially down the road.
Foster City, Calif.-based Gilead brings aboard worldwide rights to the bispecific antibody AGEN-1423, due for an IND by about the end of this year, said Agenus, of Lexington, Mass. Preclinical work suggests the compound can enhance the antitumor activity of myeloid cells, NK cells, T cells, and cancer-associated fibroblasts.
"The licensed product, which we haven't disclosed the targets of, addresses a unique pathway that is the subject of resistance for other I-O [drugs]," Armen said. Gilead also gains the option to license two other programs: AGEN-1223, a bispecific antibody designed to deplete immunosuppressive T regulatory cells from the tumor microenvironment; and CD137 agonist AGEN-2373. Agenus has filed the IND for AGEN-1223 and plans the IND filing for AGEN-2373 in the first half of next year.
Under the terms, Agenus will be responsible for developing the option-related programs up to agreed-upon decision points. SEC documents show that Agenus could bank milestone payments of up to $30 million during the option period. If Gilead exercises a license option, it would be required to pay an upfront fee of $50 million for each. Agenus would then be eligible to collect development and commercial milestone rewards of up to $520 million in the aggregate for each such option program, as well as tiered royalty payments on aggregate net sales ranging from the high single digit to mid-teen percent, subject to certain reductions under certain circumstances as described in each contract. For one of the programs, Agenus may opt into shared U.S. development and commercialization.
Terms also give Gilead the right of first negotiation for two more undisclosed preclinical efforts, Armen said. Those programs "are not high on our list of partnering" because they are significantly valued internally. But the company has vaccine, cell therapy and antibody discovery capabilities that would lend themselves nicely to collaborations. The company's platforms will have resulted in six INDs in 2018 and 13 in the first half of 2019, the company said. Agenus has collaborations already with Incyte Corp., of Wilmington, Del., and with Kenilworth, N.J.-based Merck & Co. Inc.
'Creative financing methods'
"Unlike most small biotech companies, we have capabilities from discovery all the way through manufacturing of GMP products and taking products into the clinic," Armen said, adding that the firm is preparing to add commercial infrastructure. Gilead officials proved "terrifically diligent and serious," he said. "They looked at everything." Negotiations began almost 13 months ago and "continued up until this morning," he said Thursday. "We've had a few sleepless nights on both sides."
The Agenus marriage comes a day after Gilead inked a preclinical fibrosis deal with Scholar Rock Holding Corp., of Cambridge, Mass., that includes $80 million up front – $50 million in cash and $30 million in Scholar Rock common shares – along with a one-time milestone payment of $25 million when certain preclinical studies are completed. More could come later – in all, $1.425 billion in potential payments across three programs in the form of research, development, regulatory and commercialization milestones. Scholar Rock also is eligible for high single-digit to low double-digit tiered royalties on product sales. (See BioWorld, Dec. 20, 2018.)
Agenus' chief operating officer, Jennifer Buell, said I-O has been dominated by "blunt-force tools" so far. "Even when you have a patient who responds to a PD-1, they will generally progress on that same therapy," she said. "We're identifying these escape mechanisms or components within the tumor microenvironment that allow it to be friendly to tumor growth so that tumors can thrive there," and the company is developing compounds that could be complementary to CTLA4 and PD-1 therapies. The licensed bispecific takes aim at concurrent resistance pathways that are "somewhat known, and there are some approaches that have been used." The Agenus candidate "gives you this very elegant approach to addressing a very specific problem that is common" in hard-to-attack tumors.
With regard to the other bispecific, she mentioned squamous head and neck cancer, in which patients typically get cetuximab but their disease advances anyway. By characterizing such patients, Agenus was able to find immune suppressive regulatory T cells at the site of the tumor that block fighter T cells. "This molecule takes advantage of co-expression of two antigens specifically on the regulatory T cells that show up in the tumor microenvironment, not in the periphery," thus perhaps providing a therapy option without causing toxicity, Buell said. "We've been around for 24 years and we saw firsthand what the checkpoint blockade really was" in the course of developing an autologous vaccine. "We industrialized the process; we were the first to really do that on any scale," she said, though the company "didn't have the type of benefit required to register the product."
In February 2014, Agenus completed its acquisition of Basel, Switzerland-based 4-Antibody AG, taking in-house the Retrocyte Display platform to enable fast discovery and optimization of fully human antibodies against a wide array of molecular targets. For the previous three years, 4-Antibody had been applying Retrocyte to create therapeutic antibodies to six key checkpoint targets that regulate immune response to cancers and other diseases.
"The last marketed financing we did was over three years ago," Armen said. Despite a rising burn rate, "we have been able to fund our operations through creative financing methods" and milestone payments from pre-Gilead tie-ups that provided "the means to bridge ourselves to a larger corporate partnerships like this," he said. Agenus expects to end 2018 with $200 million in the bank, and likely will collect more milestone payments in the first six months of next year, he said.
Shares of Agenus (NASDAQ:AGEN) closed Thursday at $2.48, up 47 cents, or 23.4 percent. Gilead's stock (NASDAQ:GILD) ended at $64.30, up 10 cents.