Agenus Extends Cash Runway In GSK Partnership Expansion
This article was originally published in The Pink Sheet Daily
Executive Summary
Agenus will have sufficient cash to last through 2013 as it focuses on furthering its immunotherapeutics, including HerpV for genital herpes and Prophage Series G vaccines for glioma.
Agenus Inc.has strengthened its cash position to operate through 2013, giving the immunotherapeutics developer more time to advance its proprietary pipeline and partnered adjuvant QS-21 Stimulon. The company announced it had significantly increased its cash balance March 5 through several measures, including an amended partnership agreement with GlaxoSmithKline PLC.
The company raised $9 million through the expanded agreement with GSK, $6.25 million through a license of “noncore technologies” to an undisclosed partner and $2.8 million in equity issuance since Dec. 31, 2011, the company announced in its year-end financial results. Those activities increased the company’s cash position by $18 million from a year-end 2011 cash position of $10.7 million.
Agenus, which changed its name from Antigenics last year, has been a longtime partner of GSK. The original partnership between the two for QS-21 Stimulon, an adjuvant incorporated into several of GSK’s investigational vaccines, dates back to 1992 and SmithKline Beecham.[See Deal]. The QS-21 Stimulon adjuvant, designed to increase the efficacy of a vaccine by strengthening the body’s immune response to a vaccine’s antigen, is also partnered with Johnson & Johnson’s [Janssen Pharmaceutical Ltd.] and Integrated BioTherapeutics Inc.
In the expanded agreement with GSK, the big pharma gains additional rights to use the adjuvant in an undisclosed indication and the first right to negotiate for the purchase of Agenus or certain assets. The option to negotiate will expire in five years. In exchange, GSK will pay Agenus $9 million, of which $2.5 million is creditable against future manufacturing technology transfer royalty payments.
QS-21 is being studied in clinical trials of 15 vaccine candidates of which four are in Phase III studies. All four Phase III programs are being conducted by GSK, which uses QS-21 in its proprietary adjuvant system AS01B. All four of the GSK trials are due to report pivotal data over the next year or so, CEO Garo Armen said during a same-day conference call.
The Phase III vaccines from GSK that include QS-21 are RTS,S for malaria, MAGE-A3 CI for resected melanoma and resected non-small cell lung cancer, and a herpes zoster vaccine for shingles. Agenus stands to receive milestone payments as the programs advance and royalties on sales of any products.
“Clearly, QS-21 is a very important asset for Glaxo,” Armen said, noting the company’s interest in the right to first negotiate. “We believe as a company there is a very significant disparity between our intrinsic value and our value in the marketplace. If we were to look at who is most capable of valuing the intrinsic value of Agenus it would be GlaxoSmithKline since they know the programs, they know their potential.”
The Lexington, Mass.-based company has been struggling financially for years, particularly after the company pulled a regulatory application for its late-stage cancer vaccine Oncophage (GP96; vitespen) for renal cell carcinoma in Europe in 2009 after learning the Committee for Medicinal Products for Human Use planned to hand down a negative opinion on approval (Also see "Antigenics Pulls Oncophage Application Following CHMP Negative Opinion" - Pink Sheet, 20 Nov, 2009.). Oncophage was approved in Russia in 2008, but that is the only market in which it has been approved. Agenus just recently signed a commercialization deal with Russia’s NewVac LLC, a subsidiary of ChemRar High Tech Center, in December to commercialize the cancer vaccine in Russia (Also see "Agenus Teams Up With NewVac On Russian Deal" - Pink Sheet, 19 Dec, 2011.).
The company’s stock price has been trading below $1 for much of 2010 and 2011. The stock went above $3 for the first time since June 2009 in February. The stock closed March 5 at $3.20.
Cancer vaccines, however, remain the company’s primary R&D focus. The company is looking for development and commercialization partners for its portfolio, which it refers to as “the Prophage Series.” They include the R-series in renal cell carcinoma, M-Series in melanoma, G-series in glioma and NP-series in pediatric neurological tumors. Oncophage is the first product in the R-Series. Each contains the heat shock protein gp96 and associated peptides purified from a patient’s own tumor tissue.
The company’s next opportunity is in the deadly brain cancer glioma. The Series G vaccines (HSPPC-96; vitespen) are being studied in newly diagnosed patients and those with recurrent disease. Positive data from the vaccine, G-200, in recurrent glioma were presented last year, data Agenus says supports advancement into a randomized trial. A Phase II test of the vaccine G-100 in patients with newly diagnosed glioma is actively enrolling patients.
Agenus is also developing HerpV, a potential vaccine for genital herpes. The company plans to initiate a Phase II trial evaluating HerpV in the second half of 2012 that will measure the effect of vaccinations on viral shedding in people infected with herpes simplex virus-2. It is believed a reduction in viral shedding could translate into a reduction in recurrent outbreaks.
“If shown to be safe and effective, this therapeutic vaccine is a true blockbuster,” Armen said. HerpV is the latest-stage HSV-2 vaccine in development. Initial results from the Phase II trial could be available at the end of 2013.