On Friday, H.C. Wainwright maintained a Neutral rating and a $7.00 price target on Agenus Inc . (NASDAQ:AGEN), a biotechnology company currently valued at approximately $82 million.
According to InvestingPro data, the stock has experienced significant pressure, declining nearly 79% year-to-date. The firm's recent commentary highlighted Agenus's announcement on November 27 about a strategic operational realignment. The biotechnology company is honing its focus on the development of botensilimab/balstilimab (bot/bal) for the treatment of microsatellite stable colorectal cancer (MSS-CRC) and is also planning to significantly cut operating costs.
Agenus has projected a 60% reduction in annual external expenditures and is transitioning its CMC capabilities into a fee-for-service biologics manufacturing business. These changes follow the company's previous disclosures during its third-quarter 2024 earnings report and conference call.
InvestingPro analysis reveals the company is quickly burning through cash, with a concerning current ratio of 0.19, indicating potential liquidity challenges. Get access to 10+ additional ProTips and comprehensive financial metrics with InvestingPro. The strategic adjustments, combined with ongoing optimization efforts, are expected to lower the company's 2025 cash burn to $100 million, although H.C. Wainwright estimates a slightly higher burn of approximately $127 million.
The company has shown notable clinical activity with bot/bal and, following discussions with the FDA and EMA, plans to start a Phase 3 trial for MSS-CRC treatment in the first half of 2025. This will be based on more mature Phase 2 data expected to be released in the same timeframe. Currently, there are three Investigator-Sponsored Trials (ISTs) assessing bot/bal in the neoadjuvant setting for CRC treatment, with additional data anticipated early in 2025.
Moreover, Agenus is conducting studies on bot/bal for other indications, including melanoma and pancreatic cancer, with results expected in the first half of 2025, which have been delayed from the second half of 2024. Despite these developments, the company does not plan to move these programs into Phase 3 trials soon, focusing instead on CRC. The firm reiterated its stance to maintain a Neutral rating and a $7 price target on Agenus's stock.
Based on InvestingPro's Fair Value analysis, the stock appears to be trading below its intrinsic value. Analyst targets range from $6 to $11, with the current price showing potential upside. For detailed insights into Agenus's valuation and growth prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Agenus Inc. has secured a $22 million mortgage for its biologics facilities in California, as part of its Strategic Operational Realignment Plan. This move is expected to reduce the company's cash burn to around $100 million by FY 2025, contingent on finalizing additional strategic deals. Agenus has also seen its share target cut to $7 from $8 by H.C. Wainwright, reflecting concerns over increased expenses as the company progresses with its clinical programs.
The company is advancing its BOT/BAL cancer treatment therapy, which shows promise for microsatellite stable colorectal cancer. Agenus has completed a meeting with the FDA regarding this treatment and is planning to present more mature Phase 2 data in 2025. The European Medicines Agency has agreed on the dose selection and trial design for the upcoming Phase 3 trial.
Despite a decrease in cash balance from the previous year, standing at $44.8 million, Agenus raised an additional $7.1 million post-quarter and is actively pursuing asset monetization and strategic transactions. The initiation of the Phase 3 trial, expected in 2025, is contingent on securing financing through these means.
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