Has the Time Come to Appreciate Agenus?

Incyte and Agenus Announce Global Alliance to Develop

Novel Immuno-Oncology Antibodies

Today’s news is good for Agenus (AGEN) whom we kept in our portfolio because of many reasons – all have been mentioned in our previous articles. What makes today’s news about the collaboration between Incyte (INCY) and Agenus (AGEN) more exciting is that it was not the first that demonstrate the firm is on the right track with its new promising agendas.

At the end of 2014, news announced that Agenus partner GlaxoSmithKline (GSK) reported that the ZOE-50 Phase 3 study met its primary endpoint demonstrating that its HZ/su vaccine reduced the risk of shingles by 97.2 per cent in adults aged 50 years and older compared to placebo.

We also felt the firm is on the right track when news announced that Agenus has acquired a small firm having a proprietary pipeline of checkpoint immune protein targets and a proprietary Retrocyte Display™ antibody discovery platform.that can produce therapeutic monoclonal antibodies to antagonize the checkpoint protein targets. This acquisition is what led to today agreement between Agenus and Incyte about a global license, development and commercialization of novel immuno-therapeutics using what has become Agenus’ proprietary Retrocyte Display™ antibody discovery platform.

Agenus/Incyte Alliance

The alliance between Agenus and Incyte focuses on developing checkpoint modulator antibodies directed against GITR, OX40, LAG-3 and TIM-3 checkpoint proteins. The two companies will share all costs and profits for the GITR and OX40 antibody programs on a 50:50 basis, with Agenus eligible for potential milestones; TIM-3 and LAG-3 are royalty-bearing programs to be funded by Incyte. Agenus will be eligible for potential milestones and royalties.

The first clinical trials are expected to be initiated in 2016.

Under the terms of the agreements between the parties:

– Incyte will make upfront payments to Agenus totaling $25 million and invest $35 million by purchasing approximately 7.76 million newly issued shares of Agenus common stock at a price of $4.51 per share.

– In addition to the initial four target programs in the alliance, the parties have an option to jointly nominate and pursue additional targets within the framework of the multi-year collaboration. Terms also include:

For each royalty-bearing product, Agenus will be eligible to receive up to $155 million in future contingent development, regulatory and commercialization milestones.

Agenus will be eligible to receive tiered royalties on global net sales ranging from mid-single to low-double digit rates, and has reserved the right to elect to co-fund 30% of development costs for increased royalties.

To read the complete press release click HERE

The closing of the transaction is conditioned on the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Prohost Observations

Agenus is one of the pioneer firms aiming at harnessing the immune system, enabling it to prevent and treat infectious diseases and cancer. The firm has several products in collaboration with other firms to prevent diseases and has its own proprietary pipeline drugs to treat cancer and viral infection. The partnered vaccines developed by GSK and Pfizer/Janssen use Agenus’ proprietary Qs-21 adjuvant to improve the antigenicity of the preventive vaccines. The firm’s has another pipeline of cancer immunotherapeutic vaccines based on heat shock proteins. The products are in in mid-clinical testing for Glioma, which is being tested by the NCI in one trial and by the firm in phase 2 clinical trial. Heat Shock proteins platform is also the basis of Agenus’ Genital herpes (Herp V) vaccine and of its melanoma vaccine in combination with ipilimumab.

Agenus third pipeline is about the Checkpoint antibodies targeting checkpoint proteins – the subject of today alliance with Incyte.

Agenus’ Retrocyte Display™ is a proprietary retroviral technology that enables a highly diverse library of human IgG molecules to be displayed on the surface of B-lineage cells. This innovative cell-displayed expression platform permits the rapid generation of fully human and humanized therapeutic antibodies with high affinity and target specificity.

We believe the collaborative agreement with Incyte opens the door to a great future accomplishments by both AGEN and INCY.

Our upcoming Prohost Letter #375 contains a lot of information about new biotech firms with novel approaches towards managing chronic diseases and cancer. Issue #375 presents new companies behind the novel treatments that we believe will reshape the biotech industry beginning this year. We will try our best to post the Letter at the end of this week, or on Monday next week.

Prohost Forward-Looking: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our ‘opinions’ and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.

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