Agenus (AGEN) announced recently that it entered into an immuno-oncology (I-O) partnership with Gilead Sciences (GILD). The partnership is focused on developing and commercializing up to five novel I-O therapies.
The terms of the agreement
Agenus is entitled to receive a $120 million upfront cash payment and a $30 million equity investment.
The agreement also includes approximately $1.7 billion in potential future fees and milestones.
Gilead will receive worldwide exclusive rights to AGEN1423, which has an estimated IND filing by year-end 2018
Gilead will also be granted the exclusive option to license two additional programs: AGEN1223, which Agenus has already filed an IND for, and AGEN2373, which Agenus has a planned IND filing for it in the first half of 2019.
Agenus will be responsible for developing the option programs up to the option decision points, at which time Gilead may acquire exclusive rights to the programs on option exercise.
It is important to know that for one of the option programs, Agenus will have the right to opt-in to shared development and commercialization in the U.S.. Gilead will also receive right of first negotiation for two additional, undisclosed preclinical programs.
Commenting on the news…
Commenting on the agreement, McHutchison, AO, MD, Chief Scientific Officer and Head of Research and Development, Gilead Sciences said, “Recent advances in immuno-oncology have produced unprecedented benefit to patients; however, many people with cancer still require more effective treatment options. Our collaboration with Agenus gives us access to novel and differentiated immune modulating antibodies that will complement our growing oncology portfolio and cell therapy business. We look forward to partnering with the Agenus team.”
This transaction is subject to clearance under the Hart-Scott Rodino Antitrust Improvements Act and other customary closing conditions.
AGEN1423, AGEN1223 and AGEN2373 are still investigational agents that have not yet been approved for any uses. Efficacy and safety have not been established.
Gilead is not the first to sign an agreement with Agenus. Incyte (INCY) signed a collaboration agreement long before Gilead and is already developing five of Agenus’ I-O products. Merck (MRK) is developing one of Agenus’ I-O products.
Why then do we call this agreement great for Agenus?
Because of the $120 million upfront cash payment and the $30 million equity investment that Gilead has offered Agenus.
Most of the products being developed by Agenus’ collaborators are still in early trials; hence, the scarcity of milestone payments to Agenus. There are five I-O products and three therapeutic vaccines that are wholly owned by Agenus and require development by it. At the end of the third quarter of 2018, Agenus had only $46 million in cash. There is no way that the firm could have continued to develop its products with only $46 million in its coffers.
Among Agenus’ vaccine products, one product Prophage, has reached Phase 2 trials for the treatment of new glioblastoma. Without the money, the product will remain standing in place as it has been during the past couple of years.
Agenus has a long and deep I-O pipeline. It has collaborators and products in pre-clinical and clinical trials. On the other side of the coin, the firm is short of cash and is short of investors ready to believe in the relevance of its programs. Agenus needed good news from a prestigious biotech giant; to bring back investors’ confidence in its I-O pipeline. The Gilead collaboration, and the generous upfront cash it offered Agenus, might have already boosted investors confidence in Agenus.
Indeed. In one of the worst market performance days, Agenus’ stock gained 23.3%.