On Wednesday, B.Riley adjusted its outlook on shares of Agenus Inc . (NASDAQ: NASDAQ:AGEN), reducing the price target to $18.00 from the previous $42.00 while continuing to endorse the stock with a Buy rating. This valuation update follows Agenus' recent announcement of its second-quarter financial results for 2024 on Monday and the subsequent conference call, which was the first since the company's end of Phase II meeting with the FDA.
During this meeting, the FDA indicated that an additional Phase III study would be required for Agenus' leading program, BOT/BAL, for the treatment of MSS-CRC non-liver metastasis population, effectively discouraging hopes for an accelerated approval.
Management at Agenus elaborated on the positive outcomes from the ongoing Phase II ACTIVATE study, which has shown initial top-line results mirroring the encouraging findings from the earlier Phase I study. The median follow-up period of approximately 8-9.5 months yielded overall response rates and six-month survival rates that support the promising potential of the treatment.
The company anticipates further data from a 12-month follow-up, expected to be reported in November 2024, with a focus on overall survival rates, including a likely plateau in the survival curve.
Despite the setback with the FDA, Agenus is progressing with regulatory strategies outside the United States. At least one international regulatory body has expressed interest in reviewing the maturing Phase II data, a step that has not been mirrored in communications with the FDA. This comes as Agenus experiences a pressing need to commence Phase III study enrollment by the end of 2024, spurred by strong patient demand and the absence of an accelerated approval pathway.
The company has also faced challenges with partnerships, notably with Bristol Myers (NYSE:BMY) Squibb returning the rights to the AGEN1777 bispecific antibody and Gilead Sciences (NASDAQ:GILD) opting not to license the CD137-targeted AGEN2373. These events are part of a broader industry shift away from investing in cancer immunotherapy research and development.
However, Agenus' management has indicated ongoing discussions with several large biopharmaceutical companies that have substantial gastrointestinal product portfolios, which could lead to significant synergies and help realize the full potential of the BOT/BAL program.
In other recent news, Agenus Inc. reported significant advancements in their cancer treatments botansilamab (BOT) and bostilamab (BAL) during their second-quarter earnings call of 2024. The biotechnology company announced positive Phase II trial results for BOT/BAL in treating colorectal cancer, with plans to initiate a Phase III trial and explore rapid approval pathways, particularly in Europe.
Financially, Agenus disclosed a consolidated cash balance of $93.7 million and recognized revenues of $23.5 million and $51.5 million for the three and six-month periods ending June 30, 2024, respectively. Despite these promising developments, the company reported a net loss of $54.8 million and $118.3 million for the same periods. Agenus also regained full rights to AGEN1777 and AGEN2373, and is actively evaluating new partnerships for these programs.
Tom Harrison has joined the board of directors to enhance strategic communication efforts. Looking ahead, the company plans to submit Phase II data to a major medical congress in early 2025 and will update data from melanoma and pancreas trials.
InvestingPro Insights
Following B.Riley's price target adjustment for Agenus Inc. (NASDAQ: AGEN), a closer look at the company's financial health and market performance is warranted. According to InvestingPro data, Agenus has a market capitalization of $101.6 million. Despite a strong revenue growth of 60.67% in the last twelve months as of Q2 2024, the company's gross profit margin remains negative at -25.07%. This indicates that while revenue is increasing, the cost of goods sold is disproportionately high, affecting the company's profitability.
InvestingPro Tips highlight that Agenus is quickly burning through cash and that analysts have revised their earnings downwards for the upcoming period, which suggests that investors should be cautious of the company's near-term financial outlook. Moreover, Agenus' stock has experienced high price volatility and is trading near its 52-week low, reflecting market sentiment that may be reacting to the recent developments and challenges faced by the company.
For readers interested in a deeper analysis, there are 14 additional tips available on InvestingPro (https://www.investing.com/pro/AGEN) that can provide further insights into Agenus' financial stability and market expectations. These tips, along with the latest InvestingPro Fair Value estimate of $7.25, can help investors make more informed decisions regarding their interest in Agenus' stock.
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