アジェナスの四半期報告

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-29089

Agenus Inc.

(exact name of registrant as specified in its charter)

Delaware

06-1562417

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

3 Forbes Road, Lexington, Massachusetts 02421

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code:

(781) 674-4400

Securities registered or to be registered pursuant to Section 12(b) of the Act.


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01	AGEN	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares outstanding of the issuer’s Common Stock as of November 3, 2023: 381,495,471 shares.

Agenus Inc.

Nine Months Ended September 30, 2023

Table of Contents


		Page
PART I
ITEM 1.	Financial Statements:	2
	Condensed Consolidated Balance Sheets as of September 30, 2023 (Unaudited) and December 31, 2022	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022 (Unaudited)	3
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2023 and 2022 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (Unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	24
ITEM 4.	Controls and Procedures	24

PART II
ITEM 1.	Legal Proceedings	26
ITEM 1A.	Risk Factors	26
ITEM 5.	Other Information	27
ITEM 6.	Exhibits	27
	Signatures	28

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share amounts)


	September 30, 2023 (unaudited)			December 31, 2022
ASSETS
Cash and cash equivalents	$	106,305		$	178,674
Short-term investments		—			14,684
Accounts receivable		1,030			2,741
Prepaid expenses		15,886			13,829
Other current assets		2,329			3,194
Total current assets		125,550			213,122
Property, plant and equipment, net of accumulated amortization and depreciation of $60,750 and $54,075 at September 30, 2023 and December 31, 2022, respectively		139,679			133,017
Operating lease right-of-use assets		30,018			31,269
Goodwill		24,666			25,467
Acquired intangible assets, net of accumulated amortization of $17,444 and $16,148 at September 30, 2023 and December 31, 2022, respectively		4,497			6,228
Other long-term assets		11,062			4,453
Total assets	$	335,472		$	413,556
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current portion, long-term debt	$	387		$	575
Current portion, liability related to sale of future royalties and milestones		98,500			83,510
Current portion, deferred revenue		4,994			12,269
Current portion, operating lease liabilities		2,559			1,943
Accounts payable		40,871			40,939
Accrued liabilities		37,629			38,259
Other current liabilities		13,416			11,457
Total current liabilities		198,356			188,952
Long-term debt, net of current portion		12,720			12,584
Liability related to sale of future royalties and milestones, net of current portion		167,070			187,753
Deferred revenue, net of current portion		1,143			1,143
Operating lease liabilities, net of current portion		63,166			63,326
Other long-term liabilities		8,309			14,700
Commitments and contingencies
STOCKHOLDERS’ DEFICIT
Series A-1 convertible preferred stock; 31,620 shares designated, issued, and outstanding at September 30, 2023 and December 31, 2022; liquidation value of $33,833 at September 30, 2023		0			0
Common stock, par value $0.01 per share; 800,000,000 shares authorized; 381,381,803 and 305,573,397 shares issued at September 30, 2023 and December 31, 2022, respectively		3,814			3,056
Additional paid-in capital		1,777,480			1,644,658
Accumulated other comprehensive income (loss)		(1,028	)		915
Accumulated deficit		(1,909,378	)		(1,709,907	)
Total stockholders’ deficit attributable to Agenus Inc.		(129,112	)		(61,278	)
Non-controlling interest		13,820			6,376
Total stockholders’ deficit		(115,292	)		(54,902	)
Total liabilities and stockholders’ deficit	$	335,472		$	413,556

See accompanying notes to unaudited condensed consolidated financial statements.

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(Amounts in thousands, except per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenue:
Research and development	$	3,414		$	4,573		$	8,515		$	13,220
Royalty sales milestone		—			7,934			—			25,250
Service revenue		540			1,041			2,464			4,167
Non-cash royalty revenue related to the sale of future royalties		20,360			9,224			61,534			27,001
Total revenues		24,314			22,772			72,513			69,638
Operating expenses:
Cost of service revenue		(303	)		(308	)		(2,851	)		(2,875	)
Research and development		(51,443	)		(46,011	)		(167,846	)		(133,412	)
General and administrative		(18,909	)		(18,105	)		(57,562	)		(55,971	)
Contingent purchase price consideration fair value adjustment		—			7			398			950
Operating loss		(46,341	)		(41,645	)		(155,348	)		(121,670	)
Other income (expense):
Non-operating income		442			537			238			9,654
Interest expense, net		(18,633	)		(15,607	)		(53,745	)		(44,538	)
Net loss		(64,532	)		(56,715	)		(208,855	)		(156,554	)
Dividends on Series A-1 convertible preferred stock		(53	)		(53	)		(160	)		(159	)
Less: net loss attributable to non-controlling interest		(2,331	)		(2,493	)		(9,384	)		(7,573	)
Net loss attributable to Agenus Inc. common stockholders	$	(62,254	)	$	(54,275	)	$	(199,631	)	$	(149,140	)
Per common share data:
Basic and diluted net loss attributable to Agenus Inc. common stockholders	$	(0.16	)	$	(0.19	)	$	(0.57	)	$	(0.54	)
Weighted average number of Agenus Inc. common shares outstanding:
Basic and diluted		378,152			286,854			349,167			274,170

Other comprehensive loss:
Foreign currency translation loss	$	(311	)	$	(1,505	)	$	(1,943	)	$	(848	)
Other comprehensive loss		(311	)		(1,505	)		(1,943	)		(848	)
Comprehensive loss	$	(62,565	)	$	(55,780	)	$	(201,574	)	$	(149,988	)

See accompanying notes to unaudited condensed consolidated financial statements.

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

(Amounts in thousands)


	Series A-1
	Convertible
	Preferred Stock				Common Stock									Treasury Stock
	Number of Shares		Par Value		Number of Shares			Par Value			Additional Paid-In Capital			Number of Shares			Amount			Accumulated Other Comprehensive Income (Loss)			Non-controlling Interest			Accumulated Deficit			Total
Balance at December 31, 2022		32	$	0		305,574		$	3,056		$	1,644,658			—		$	—		$	915		$	6,376		$	(1,709,907	)	$	(54,902	)
Net loss		—		—		—			—			—			—			—			—			(2,639	)		(68,254	)		(70,893	)
Other comprehensive income		—		—		—			—			—			—			—			2			—			—			2
Share-based compensation		—		—		—			—			4,566			—			—			—			919			—			5,485
Shares sold at the market		—		—		33,785			338			60,245			—			—			—			—			—			60,583
Issuance of director deferred shares		—		—		250			3			980			—			—			—			—			—			983
Issuance of shares for services		—		—		132			1			317			—			—			—			—			—			318
Vesting of nonvested shares		—		—		5			—			—			—			—			—			—			—			—
Exercise of stock options and employee share purchases		—		—		197			2			327			—			—			—			45			—			374
Issuance of subsidiary shares for employee bonus		—		—		—			—			—			—			—			—			726			—			726
Issuance of shares for employee bonus		—		—		2,716			27			4,198			(10	)		(2,429	)		—			—			—			1,796
Retirement of treasury shares		—		—		(996	)		(10	)		—			10			2,429			—			—			—			2,419
Balance at March 31, 2023		32	$	0		341,663		$	3,417		$	1,715,291			—		$	—		$	917		$	5,427		$	(1,778,161	)	$	(53,109	)
Net loss		—		—		—			—			—			—			—			—			(4,414	)		(69,016	)		(73,430	)
Other comprehensive loss		—		—		—			—			—			—			—			(1,634	)		—			—			(1,634	)
Share-based compensation		—		—		—			—			5,154			—			—			—			888			—			6,042
Shares sold at the market		—		—		24,557			246			42,001			—			—			—			—			—			42,247
Vesting of nonvested shares		—		—		17			—			—			—			—			—			—			—			—
MiNK stock dividend		—		—		—			—			(14,888	)		—			—			—			14,888			—			—
MiNK stock purchases		—		—		—			—			405			—			—			—			(640	)		—			(235	)
Issuance of subsidiary shares for employee bonus		—		—		—			—			—			—			—			—			285			—			285
Issuance of shares for employee bonus		—		—		1,928			19			3,061			(7	)		(1,642	)		—			—			—			1,438
Retirement of treasury shares		—		—		(673	)		(7	)		—			7			1,642			—			—			—			1,635
Balance at June 30, 2023		32	$	0		367,492		$	3,675		$	1,751,024			—		$	—		$	(717	)	$	16,434		$	(1,847,177	)	$	(76,761	)
Net loss		—		—		—			—			—			—			—			—			(2,331	)		(62,201	)		(64,532	)
Other comprehensive loss		—		—		—			—			—			—			—			(311	)		—			—			(311	)
Share-based compensation		—		—		—			—			4,601			—			—			—			935			—			5,536
Shares sold at the market		—		—		13,304			133			20,217			—			—			—			—			—			20,350
Payment of CEO payroll in shares		—		—		27			—			32			—			—			—			—			—			32
MiNK stock purchases		—		—		—			—			893			—			—			—			(1,221	)		—			(328	)
Issuance of shares for services		—		—		198			2			310			—			—			—			—			—			312
Vesting of nonvested shares		—		—		63			1			(1	)		—			—			—			—			—			—
Employee share purchases		—		—		299			3			404			—			—			—			3			—			410
Balance at September 30, 2023		32	$	0		381,383		$	3,814		$	1,777,480			—		$	—		$	(1,028	)	$	13,820		$	(1,909,378	)	$	(115,292	)

See accompanying notes to unaudited condensed consolidated financial statements.

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

(Amounts in thousands)


	Series A-1
	Convertible
	Preferred Stock				Common Stock									Treasury Stock
	Number of Shares		Par Value		Number of Shares			Par Value			Additional Paid-In Capital			Number of Shares			Amount			Accumulated Other Comprehensive Income (Loss)			Non-controlling Interest			Accumulated Deficit			Total
Balance at December 31, 2021		32	$	0		256,899		$	2,569		$	1,520,212			—		$	—		$	1,492		$	13,469		$	(1,489,833	)	$	47,909
Net loss		—		—		—			—			—			—			—			—			(2,279	)		(48,325	)		(50,604	)
Other comprehensive loss		—		—		—			—			—			—			—			(522	)		—			—			(522	)
Share-based compensation		—		—		—			—			4,205			—			—			—			742			—			4,947
Shares sold at the market		—		—		7,039			70			19,112			—			—			—			—			—			19,182
Issuance of director deferred shares		—		—		5			—			19			—			—			—			—			—			19
Issuance of shares for services		—		—		21			1			80			—			—			—			—			—			81
Vesting of nonvested shares		—		—		143			1			(1	)		—			—			—			—			—			—
Exercise of stock options and employee share purchases		—		—		136			1			367			—			—			—			—			—			368
Issuance of shares for employee bonus		—		—		3,845			38			6,245			(1,347	)		(3,380	)		—			—			—			2,903
Retirement of treasury shares		—		—		(1,347	)		(13	)		—			1,347			3,380			—			—			—			3,367
Balance at March 31, 2022		32	$	0		266,741		$	2,667		$	1,550,239			—		$	—		$	970		$	11,932		$	(1,538,158	)	$	27,650
Net loss		—		—		—			—			—			—			—			—			(2,801	)		(46,434	)		(49,235	)
Other comprehensive income		—		—		—			—			—			—			—			1,179			—			—			1,179
Share-based compensation		—		—		—			—			3,818			—			—			—			797			—			4,615
Shares sold at the market		—		—		15,782			158			28,079			—			—			—			—			—			28,237
Issuance of shares for milestone achievement		—		—		180			2			498			—			—			—			—			—			500
Issuance of shares for services		—		—		7			1			19			—			—			—			—			—			20
Exercise of stock options		—		—		6			—			14			—			—			—			—			—			14
Issuance of subsidiary shares for employee bonus		—		—		—			—			—			—			—			—			294			—			294
Issuance of shares for employee bonus		—		—		246			2			363			(100	)		(251	)		—			—			—			114
Retirement of treasury shares		—		—		(100	)		(1	)		—			100			251			—			—			—			250
Balance at June 30, 2022		32	$	0		282,862		$	2,829		$	1,583,030			—		$	—		$	2,149		$	10,222		$	(1,584,592	)	$	13,638
Net loss		—		—		—			—			—			—			—			—			(2,493	)		(54,222	)		(56,715	)
Other comprehensive loss		—		—		—			—			—			—			—			(1,505	)		—			—			(1,505	)
Share-based compensation		—		—		—			—			3,614			—			—			—			820			—			4,434
Shares sold at the market		—		—		11,753			117			27,713			—			—			—			—			—			27,830
Issuance of shares for services		—		—		10			—			19			—			—			—			—			—			19
Vesting of nonvested shares		—		—		67			—			—			—			—			—			—			—			—
Exercise of stock options and employee share purchases		—		—		259			3			460			—			—			—			—			—			463
Balance at September 30, 2022		32	$	0		294,951		$	2,949		$	1,614,836			—		$	—		$	644		$	8,549		$	(1,638,814	)	$	(11,836	)

See accompanying notes to unaudited condensed consolidated financial statements.

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Amounts in thousands, except per share amounts)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(208,855	)	$	(156,554	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		8,387			5,057
Share-based compensation		17,408			14,078
Non-cash royalty revenue		(61,534	)		(27,001	)
Non-cash interest expense		55,977			44,629
Loss (gain) on sale of assets		49			(6,601	)
Gain on partial forgiveness of liability		—			(2,791	)
Change in fair value of contingent obligations		(398	)		(950	)
Other, net		581			—
Changes in operating assets and liabilities:
Accounts receivable		1,308			(7,079	)
Prepaid expenses		(1,765	)		3,659
Accounts payable		915			1,339
Deferred revenue		(7,269	)		(7,855	)
Accrued liabilities and other current liabilities		12,518			(2,524	)
Other operating assets and liabilities		(1,122	)		14,558
Net cash used in operating activities		(183,800	)		(128,035	)
Cash flows from investing activities:
Purchases of plant and equipment		(9,731	)		(38,716	)
Proceeds from sale of property, plant and equipment		350			10,002
Purchase of long-term investment		(5,396	)		—
Cash paid for business acquisition		—			(3,652	)
Purchases of available-for-sale securities		(14,647	)		(14,861	)
Proceeds from sale of available-for-sale securities		30,000			20,000
Net cash provided by (used in) investing activities		576			(27,227	)
Cash flows from financing activities:
Net proceeds from sale of equity		123,179			75,249
Proceeds from employee stock purchases and option exercises		807			845
Purchase of treasury shares to satisfy tax withholdings		(4,566	)		(3,789	)
Purchase of subsidiary shares		(564	)		—
Payment of finance lease obligation		(6,305	)		(248	)
Net cash provided by financing activities		112,551			72,057
Effect of exchange rate changes on cash		(696	)		(372	)
Net decrease in cash, cash equivalents and restricted cash		(71,369	)		(83,577	)
Cash, cash equivalents and restricted cash, beginning of period		181,343			294,600
Cash, cash equivalents and restricted cash, end of period	$	109,974		$	211,023
Supplemental cash flow information:
Cash paid for interest	$	2,532		$	847
Supplemental disclosures - non-cash activities:
Purchases of plant and equipment in accounts payable and accrued liabilities	$	—		$	8,546
Issuance of common stock, $0.01 par value, in connection with payment for services		630			120
Insurance financing agreement		707			933
Issuance of common stock, $0.01 par value, for payment of certain employee bonuses		7,288			6,634
Issuance of common stock, $0.01 par value, for milestone achievement		—			500
Issuance of subsidiary shares for employee bonus		1,011			294
Lease right-of-use assets obtained in exchange for new operating lease liabilities		318			9,148
Lease right-of-use assets obtained in exchange for new finance lease liabilities		4,812			648

See accompanying notes to unaudited condensed consolidated financial statements.

AGENUS INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

Note A - Business, Liquidity and Basis of Presentation

Agenus Inc. (including its subsidiaries, collectively referred to as “Agenus,” the “Company,” “we,” “us,” and “our”) is a leading clinical-stage biotechnology company developing therapies targeting cancer with a robust pipeline of immunological agents. Our mission is to expand patient populations benefiting from cancer immunotherapy through combination approaches, using a broad repertoire of antibody therapeutics, adoptive cell therapies (through our subsidiary MiNK Therapeutics, Inc. (“MiNK”)), and vaccine adjuvants (through our subsidiary SaponiQx, Inc. (“SaponiQx”)). We believe that combination therapies and a deep understanding of each patient’s cancer will significantly expand the patient population benefiting from immuno-oncology (“I-O”) treatments.

In addition to our diverse pipeline, we have established fully integrated capabilities encompassing novel target discovery, antibody generation, cell line development, and good manufacturing practice (GMP) manufacturing. We believe these integrated capabilities enable us to develop and, if approved, commercialize novel candidates on accelerated timelines compared to industry standards. Through independent development and strategic partnerships, we leverage our scientific expertise and capabilities to drive innovation in the I-O field.

Our I-O portfolio is driven by several platforms and programs, which we plan to utilize individually and in combination:

•

Multiple antibody discovery platforms, including proprietary display technologies, to identify future antibody candidates.

•

Antibody candidate programs, including our lead asset, botensilimab, an Fc-enhanced CTLA-4 antibody. At a corporate update at the European Society for Medical Oncology in October 2023, we presented updated data based on a total of 70 efficacy evaluable refractory microsatellite stable metastatic colorectal cancer patients with no active liver metastases from the Phase 1 study. These patients received the combination of botensilimab (either 1 or 2 mg/kg every 6 weeks) and balstilimab (3 mg/kg every 2 weeks). The results showed a survival and efficacy benefit compared to what has been reported for standard of care in a comparable patient population. The 12-month overall survival (“OS”) was 74% with a median OS not yet reached, after a median follow up of 12.3 months, compared to a median OS of 12.9 months reported for standard of care. The confirmed overall response rate based on RECIST 1.1 was 24% compared to 2.8% reported with standard of care.

•

Our saponin-based vaccine adjuvant platform, primarily centered around our STIMULON cultured plant cell (“cpc”) QS-21 adjuvant (“STIMULON cpc QS-21”).

•

A pipeline of novel allogeneic invariant natural killer T cell therapies for treating cancer and other immune-mediated diseases, controlled by MiNK.

Our business activities encompass various areas such as product research, preclinical and clinical development, intellectual property prosecution, manufacturing, regulatory and clinical affairs, corporate finance and development activities, and support of collaborations. Our strategy includes developing and commercializing product candidates through existing and new collaborations.

Our cash, cash equivalents and short-term investments at September 30, 2023 were $106.3 million, a decrease of $87.1 million from December 31, 2022. Cash and cash equivalents of our subsidiary, MiNK, at June 30, 2023, were $10.6 million. MiNK cash can only be accessed by Agenus through a declaration of a dividend by the MiNK Board of Directors or through settlement of intercompany balances.

We have incurred losses since our inception. As of September 30, 2023, we had an accumulated deficit of $1.9 billion.

We have financed our operations through income and revenues generated from corporate partnerships, advance royalty sales and proceeds from equity issuances. Based on our current plans and projections, we believe that our cash resources of $106.3 million at September 30, 2023, plus additional funding we anticipate from the achievement of a milestone under an existing partnership, will be sufficient to satisfy our liquidity requirements for at least one year from when these financial statements were issued. This milestone will be triggered upon dosing the first patient in a clinical trial which is currently screening patients and is expected to occur by end of 2023. However, until this event occurs, in accordance with the relevant accounting guidance we are required to disclose that substantial doubt exists about our ability to continue as a going concern for a period of one year after the date of filing of this Quarterly Report on Form 10-Q.

In addition to the expected milestone payment by end of 2023, we are in active discussions to sell two non-strategic assets expected to close in the first half of 2024 with an estimated aggregate value of approximately $65.0 million. These transactions could extend our cash resources well beyond 2024. We are also in advanced discussions for a potential structured financing for botensilimab/balstilimab, as well as a potential corporate collaboration with a large pharma or biotech company.

None of these sources of cash involve equity or debt issuance.

Management continues to address the Company’s liquidity position and has the flexibility to adjust spending as needed in order to preserve liquidity. In August 2023, we prioritized and focused our resources to accelerate the development, registration, and commercialization of our lead asset postponing all preclinical and other clinical programs and reducing our workforce by approximately 25%. Our CEO, Dr. Garo Armen has elected to receive his base salary and any potential bonus payments in stock rather than cash. We continuously evaluate the likelihood of success of our programs. As such, our decisions to continue to fund or eliminate funding of each of our programs are predicated on these determinations, on an ongoing basis. We expect our sources of funding to include payments from current collaborations which include milestones and royalty payments from companies, including Bristol-Myers Squibb Company, UroGen Pharma Ltd., Gilead Sciences, Inc., Incyte Corporation, and Merck Sharpe & Dohme; out-licensing and/or partnering opportunities for our portfolio programs and product candidates with multiple parties; additional third-party agreements; asset sales; royalty monetization; project financing, and/or sales of equity securities.

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete annual consolidated financial statements. In the opinion of our management, the condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of our financial position and operating results. All significant intercompany transactions and accounts have been eliminated in consolidation. Operating results for the nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. For further information, refer to our consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”).

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

For our foreign subsidiaries, the local currency is the functional currency. Assets and liabilities of our foreign subsidiaries are translated into U.S. dollars using rates in effect at the balance sheet date while revenues and expenses are translated into U.S. dollars using average exchange rates during the period. The cumulative translation adjustment resulting from changes in exchange rates are included in the consolidated balance sheets as a component of accumulated other comprehensive income in total stockholders’ equity (deficit).

In 2023, we deconsolidated certain foreign subsidiaries and recognized a gain of $132,000, included in "Other income (expense)" on our condensed consolidated statements of operations and comprehensive loss.

Note B - Net Loss Per Share

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding (including common shares issuable under our Amended and Restated Directors’ Deferred Compensation Plan, or “DDCP”). Diluted loss per common share is calculated by dividing loss attributable to common stockholders by the weighted average number of common shares outstanding (including common shares issuable under our DDCP) plus the dilutive effect of outstanding instruments such as warrants, stock options, non-vested shares and convertible preferred stock. Because we reported a net loss attributable to common stockholders for all periods presented, diluted loss per common share is the same as basic loss per common share, as the effect of utilizing the fully diluted share count would have reduced the net loss per common share. The following securities (listed on an as-if-converted-to-Common-Stock basis) have been excluded from the computation of diluted weighted average shares outstanding as of September 30, 2023 and 2022, as they would be anti-dilutive (in thousands):


	Three and Nine Months Ended September 30,
	2023		2022
Warrants		1,980		1,980
Stock options		44,034		36,207
Non-vested shares		697		403
Series A-1 convertible preferred stock		333		333

Note C - Investments

Cash equivalents and short-term investments consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	September 30, 2023				December 31, 2022
	Cost		Estimated Fair Value		Cost		Estimated Fair Value
Institutional money market funds	$	71,605	$	71,605	$	149,856	$	149,856
U.S. Treasury Bills		24,877		24,877		29,522		29,522
Total	$	96,482	$	96,482	$	179,378	$	179,378

As a result of the short-term nature of these investments, there were minimal unrealized holding gains or losses for the three and nine months ended September 30, 2023 and 2022.

Of the investments listed above, all were classified as cash equivalents on our condensed consolidated balance sheets as of September 30, 2023. As of December 31, 2022, $164.7 million were classified as cash equivalents and $14.7 million as short-term investments on our condensed consolidated balance sheets.

Note D - Goodwill and Acquired Intangible Assets

The following table sets forth the changes in the carrying amount of goodwill for the nine months ended September 30, 2023 (in thousands):


Balance, December 31, 2022	$	25,467
Disposals		(805	)
Foreign currency translation adjustment		4
Balance, September 30, 2023	$	24,666

Acquired intangible assets consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	As of September 30, 2023
	Amortization period (years)	Gross carrying amount		Accumulated amortization			Net carrying amount
Intellectual property	7-15 years	$	16,841	$	(15,099	)	$	1,742
Trademarks	4-4.5 years		1,182		(1,139	)		43
Other	2-7 years		1,860		(1,206	)		654
In-process research and development	Indefinite		2,058		—			2,058
Total		$	21,941	$	(17,444	)	$	4,497


	As of December 31, 2022
	Amortization period (years)	Gross carrying amount		Accumulated amortization			Net carrying amount
Intellectual property	7-15 years	$	16,790	$	(13,782	)	$	3,008
Trademarks	4-4.5 years		1,272		(1,139	)		133
Other	2-6 years		2,278		(1,227	)		1,051
In-process research and development	Indefinite		2,036		—			2,036
Total		$	22,376	$	(16,148	)	$	6,228

The weighted average amortization period of our finite-lived intangible assets is 9 years. Amortization expense related to acquired intangibles is estimated at $0.1 million for the remainder of 2023, $0.5 million for the years ending December 31, 2024, 2025 and 2026 and $0.4 million for the year ending December 31, 2027.

Note E - Debt

Debt obligations consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


Debt instrument	Balance at September 30, 2023
Current Portion:
Debentures	$	146
Other		241
Long-term Portion:
2015 Subordinated Notes		12,720
Total	$	13,107


Debt instrument	Balance at December 31, 2022
Current Portion:
Debentures	$	146
Other		429
Long-term Portion:
2015 Subordinated Notes		12,584
Total	$	13,159

As of September 30, 2023 and December 31, 2022, the principal amount of our outstanding debt balance was $13.4 million and $13.6 million, respectively.

Note F – Liability Related to the Sale of Future Royalties and Milestones

The following table shows the activity within the liability account in the nine months ended September 30, 2023 (in thousands):


	Period from December 31, 2022 to September 30, 2023
Liability related to sale of future royalties and milestones - beginning balance	$	271,560
Non-cash royalty revenue		(61,534	)
Non-cash interest expense recognized		55,797
Liability related to sale of future royalties and milestones - ending balance		265,823
Less: unamortized transaction costs		(253	)
Liability related to sale of future royalties and milestones, net	$	265,570

Healthcare Royalty Partners

In January 2018, we, through our wholly-owned subsidiary Antigenics, LLC (“Antigenics”), entered into a Royalty Purchase Agreement (the “HCR Royalty Purchase Agreement”) with Healthcare Royalty Partners III, L.P. and certain of its affiliates (collectively, “HCR”). Pursuant to the terms of the HCR Royalty Purchase Agreement, we sold to HCR 100% of Antigenics’ worldwide rights to receive royalties from GlaxoSmithKline (“GSK”) on sales of GSK’s vaccines containing our QS-21 STIMULON adjuvant. At closing, we received gross proceeds of $190.0 million from HCR. Although we sold all of our rights to receive royalties on sales of GSK’s vaccines containing QS-21, as a result of our obligation to HCR, we are required to account for the $190.0 million in proceeds from this transaction as a liability on our condensed consolidated balance sheet that will be recognized into revenue in proportion to the royalty payments from GSK to HCR over the estimated life of the HCR Royalty Purchase Agreement. The liability is classified between the current and non-current portion of liability related to sale of future royalties and milestones in the condensed consolidated balance sheets based on the estimated royalty payments to be received by HCR in the next 12 months from the financial statement reporting date.

During the nine months ended September 30, 2023, we recognized $61.5 million of non-cash royalty revenue, and we recorded $55.8 million of related non-cash interest expense related to the HCR Royalty Purchase Agreement.

As royalties are remitted to HCR from GSK, the balance of the recorded liability will be effectively repaid over the life of the HCR Royalty Purchase Agreement. To determine the amortization of the recorded liability, we are required to estimate the total amount of future royalty payments to be received by HCR. The sum of these amounts less the $190.0 million proceeds we received will be recorded as interest expense over the life of the HCR Royalty Purchase Agreement. Periodically, we assess the estimated royalty payments to be paid to HCR from GSK, and to the extent the amount or timing of the payments is materially different from our original estimates, we will prospectively adjust the amortization of the liability, and the related recognition of interest expense. During the nine months ended September 30, 2023, our estimate of the effective annual interest rate over the life of the agreement increased to 29.4%, which results in a life of contract interest rate of 23.4%.

Note G - Accrued and Other Current Liabilities

Accrued liabilities consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	September 30, 2023		December 31, 2022
Payroll	$	10,853	$	15,872
Professional fees		6,250		6,946
Contract manufacturing costs		3,822		1,848
Research services		11,387		7,074
Other		5,317		6,519
Total	$	37,629	$	38,259

Other current liabilities consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	September 30, 2023		December 31, 2022
Finance lease liabilities	$	10,190	$	7,952
Other		3,226		3,505
Total	$	13,416	$	11,457

Note H - Fair Value Measurements

Assets and liabilities measured at fair value are summarized below (in thousands):


Description	September 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents (Note C)	$	96,482	$	96,482	$	—	$	—
Long-term investments		4,682		4,682		—		—
Total	$	101,164	$	101,164	$	—	$	—
Liabilities:
Contingent purchase price considerations	$	476	$	—	$	—	$	476
Total	$	476	$	—	$	—	$	476

Description	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents (Note C)	$	164,694	$	—	$	—	$	—
Short-term investments (Note C)		14,689		—		—		—
Total	$	179,383	$	—	$	—	$	—
Liabilities:
Contingent purchase price consideration	$	874	$	—	$	—	$	874
Total	$	874	$	—	$	—	$	874

Long-term investments are included in "Other long-term assets" in our condensed consolidated balance sheets.

We measure our contingent purchase price considerations at fair value. The fair values of our contingent purchase price considerations at September 30, 2023 and December 31, 2022, of $0.5 million and $0.9 million, respectively, included in "Other long-term liabilities" in our condensed consolidated balance sheets, are based on significant inputs not observable in the market, which require them to be reported as Level 3 liabilities within the fair value hierarchy. The valuation of these liabilities use assumptions we believe would be made by a market participant and are mainly based on estimates from a Monte Carlo simulation of our share price, as well as other factors impacting the probability of triggering the milestone payments. Share price was evolved using a geometric Brownian motion, calculated daily for the life of the contingent purchase price considerations.

The fair value of our outstanding debt balance at September 30, 2023 and December 31, 2022 was $13.1 million and $13.2 million, respectively, based on the Level 2 valuation hierarchy of the fair value measurements standard using a present value methodology that was derived by evaluating the nature and terms of each note and considering the prevailing economic and market conditions at the balance sheet date. The principal amount of our outstanding debt balance at September 30, 2023 and December 31, 2022 was $13.4 million and $13.6 million, respectively.

Note I - Revenue from Contracts with Customers

Gilead Collaboration Agreement

On December 20, 2018, we entered into a series of agreements with Gilead Sciences, Inc. (“Gilead”) focused on the development and commercialization of up to five novel immuno-oncology therapies. Pursuant to the terms of the license agreement, the option and license agreements and the stock purchase agreement we entered into with Gilead (collectively, the “Gilead Collaboration Agreements”), at the closing of the transaction on January 23, 2019, we received an upfront cash payment from Gilead of $120.0 million and Gilead made a $30.0 million equity investment in Agenus. On November 6, 2020, we received notice from Gilead that it was returning AGEN1423 to us and voluntarily terminating the applicable license agreement. The termination was effective as of February 4, 2021. In the third quarter of 2021 we ceased development of AGEN1223 and in October 2021 the AGEN1223 option and license agreement was formally terminated. The AGEN2373 option and license agreement and the stock purchase agreement remain in full force and effect. We remain eligible to receive a $50.0 million exercise fee and, if exercised, up to $520.0 million in aggregate potential milestones.

Collaboration Revenue

For the three months ended September 30, 2023 and 2022, we recognized approximately $2.9 million and $4.5 million, respectively, of research and development revenue based on the partial satisfaction of the over time performance obligations as of quarter end.

For the nine months ended September 30, 2023, we recognized approximately $7.2 million of research and development revenue based on the partial satisfaction of the over time performance obligations as of period end. For the nine months ended September 30, 2022, we recognized research and development revenue of $5.0 million related to the achievement of a milestone and $7.1 million based on the partial satisfaction of the over time performance obligations as of period end.

We expect to recognize deferred research and development revenue of $5.0 million for the remainder of 2023 related to performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2023.

Disaggregation of Revenue

The following table presents revenue (in thousands) for the three and nine months ended September 30, 2023 and 2022, disaggregated by geographic region and revenue type. Revenue by geographic region is allocated based on the domicile of our respective business operations.


	Three months ended September 30, 2023
	United States		Rest of World		Total
Revenue Type
Research and development services	$	447	$	—	$	447
Other services		—		540		540
Clinical product revenue		116		—		116
Recognition of deferred revenue		2,851		—		2,851
Non-cash royalties		20,360		—		20,360
	$	23,774	$	540	$	24,314

	Three months ended September 30, 2022
Revenue Type
Royalty sales milestone	$	7,934	$	—	$	7,934
Research and development services		121		—		121
Other services		—		1,041		1,041
Recognition of deferred revenue		4,452		—		4,452
Non-cash royalties		9,224		—		9,224
	$	21,731	$	1,041	$	22,772


	Nine months ended September 30, 2023
	United States		Rest of World		Total
Revenue Type
Research and development services	$	1,158	$	—	$	1,158
Other services		—		2,464		2,464
Clinical product revenue		116		—		116
Recognition of deferred revenue		7,241		—		7,241
Non-cash royalties		61,534		—		61,534
	$	70,049	$	2,464	$	72,513

	Nine months ended September 30, 2022
Revenue Type
License fees and milestones	$	5,000	$	—	$	5,000
Royalty sales milestone		25,250		—		25,250
Research and development services		1,154		—		1,154
Other services		—		4,167		4,167
Recognition of deferred revenue		7,066		—		7,066
Non-cash royalties		27,001		—		27,001
	$	65,471	$	4,167	$	69,638

Contract Balances

Contract assets primarily relate to our rights to consideration for work completed in relation to our research and development services performed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. Currently, we do not have any contract assets which have not transferred to a receivable. We had no asset impairment charges related to contract assets in the period. Contract liabilities primarily relate to contracts where we received payments but have not yet satisfied the related performance obligations. The advance consideration received from customers for research and development services or licenses bundled with other promises is a contract liability until the underlying performance obligations are transferred to the customer.

The following table provides information about contract liabilities from contracts with customers (in thousands):


Nine months ended September 30, 2023	Balance at beginning of period		Additions		Deductions			Balance at end of period
Contract liabilities:
Deferred revenue	$	13,412	$	22	$	(7,297	)	$	6,137

The change in contract liabilities is primarily related to the recognition of $7.2 million of revenue related to the Gilead Collaboration Agreements during the nine months ended September 30, 2023. Deferred revenue related to the Gilead Collaboration Agreements of $5.0 million as of September 30, 2023, which was comprised of the $142.5 million initial transaction price, less $137.5 million of license and collaboration revenue recognized from the effective date of the contract, will be recognized as the combined performance obligation is satisfied.

We also recorded a $1.0 million receivable as of September 30, 2023, for research and development and other services provided.

During the nine months ended September 30, 2023, we did not recognize any revenue from amounts included in the contract asset or the contract liability balances from performance obligations satisfied in previous periods. None of the costs to obtain or fulfill a contract were capitalized.

Note J - Share-based Compensation Plans

We primarily use the Black-Scholes option pricing model to value stock options granted to employees and non-employees, including stock options granted to members of our Board of Directors. However, the fair value of stock option market-based awards is calculated based on a Monte Carlo simulation as of the date of issuance. All stock options have 10-year terms and generally vest ratably over a 3 or 4-year period.

A summary of option activity for the nine months ended September 30, 2023 is presented below:


	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2022		35,984,967		$	3.51
Granted		10,440,674			2.26
Exercised		(46,750	)		1.68
Forfeited		(1,438,712	)		2.50
Expired		(906,590	)		3.50
Outstanding at September 30, 2023		44,033,589		$	3.25		6.76	$	—
Vested or expected to vest at September 30, 2023		44,033,589		$	3.25		6.76	$	—
Exercisable at September 30, 2023		27,981,624		$	3.59		5.84	$	—

The weighted average grant-date fair values of stock options granted during the nine months ended September 30, 2023 and 2022 were $1.44 and $1.77, respectively.

As of September 30, 2023, there was approximately $27.3 million of total unrecognized share-based compensation expense related to these stock options and stock options granted under subsidiary plans which, if all milestones are achieved, will be recognized over a weighted average period of 1.9 years.

Certain employees and consultants have been granted non-vested stock. The fair value of non-vested market-based awards is calculated based on a Monte Carlo simulation as of the date of issuance. The fair value of other non-vested stock is calculated based on the closing sale price of our common stock on the date of issuance.

A summary of non-vested stock activity for the nine months ended September 30, 2023 is presented below:


	Non-vested Shares			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2022		355,802		$	2.50
Granted		5,304,201			2.35
Vested		(4,728,222	)		2.45
Forfeited		(235,000	)		2.11
Outstanding at September 30, 2023		696,781		$	1.85

As of September 30, 2023, there was approximately $1.1 million of unrecognized share-based compensation expense related to these non-vested shares and non-vested shares granted under subsidiary plans which will be recognized over a period of 2.3 years.

During the nine months ended September 30, 2023, 449,391 shares were issued under the 2019 Employee Stock Purchase Plan, 46,750 shares were issued as a result of stock option exercises and 84,414 shares were issued as a result of the vesting of non-vested stock. Additionally, 4,643,808 shares were issued as payment for certain employee bonuses, with 1,668,767 of those shares being withheld to cover taxes, resulting in a net share issuance of 2,975,041.

The impact on our results of operations from share-based compensation for the three and nine months ended September 30, 2023 and 2022, was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Research and development	$	1,464	$	1,200	$	4,853	$	3,731
General and administrative		4,072		3,234		12,210		10,265
Total share-based compensation expense	$	5,536	$	4,434	$	17,063	$	13,996

Note K – Restricted Cash

As of September 30, 2023, and December 31, 2022, we maintained non-current restricted cash of $3.7 million and $2.7 million, respectively. This amount is included within “Other long-term assets” in our condensed consolidated balance sheets and is comprised of letters of credit required under our facility leases.

The following table provides a reconciliation of cash, cash equivalents and restricted cash that sums to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands):


	Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
	Beginning of Period		End of Period		Beginning of Period		End of Period
Cash and cash equivalents	$	178,674	$	106,305	$	291,931	$	208,354
Restricted cash		2,669		3,669		2,669		2,669
Cash, cash equivalents and restricted cash	$	181,343	$	109,974	$	294,600	$	211,023

Note L – Equity

On June 23, 2023, we filed an Automatic Shelf Registration Statement on Form S-3ASR (file no. 333-272911) (the “Registration Statement”). The Registration Statement included both a base prospectus that covered the potential offering, issuance and sale from time to time of common stock, preferred stock, warrants, debt securities and units of Agenus and a prospectus supplement for the potential offer and sale of up to 184,638,269 shares of common stock (the “Placement Shares”) in “at the market” offerings pursuant to an At Market Issuance Sales Agreement by and between Agenus and B. Riley Securities, Inc. (the “Sales Agent”), dated as of July 22, 2020 (the “Sales Agreement”). Sales pursuant to the Sales Agreement will be made only upon our instruction to the Sales Agent, and we cannot provide assurances that we will issue any additional Placement Shares pursuant to the Sales Agreement.

During the three and nine months ended September 30, 2023, we received net proceeds of approximately $20.4 million and $123.2 million from the sale of approximately 13.3 million and 71.6 million shares of our common stock, respectively, in at-the-market offerings under the Sales Agreement.

Note M – Non-controlling Interest

Non-controlling interest recorded in our condensed consolidated financial statements as of September 30, 2023 and December 31, 2022, relates to the following approximate interests in certain consolidated subsidiaries, which we do not own.


	September 30, 2023			December 31, 2022
MiNK Therapeutics, Inc.		37	%		22	%
SaponiQx, Inc.		30	%		30	%

Changes in non-controlling interest for the periods ended September 30, 2023 and December 31, 2022, were as follows (in thousands):


	September 30, 2023			December 31, 2022
Beginning balance	$	6,376		$	13,469

Net loss attributable to non-controlling interest		(9,384	)		(10,582	)

Other items:
Distribution of subsidiary shares to Agenus stockholders		14,888			—
Purchase of subsidiary shares		(1,861	)		—
Issuance of subsidiary shares for employee bonus		1,011			294
Issuance of subsidiary shares under employee stock purchase plan		48			—
Subsidiary share-based compensation		2,742			3,195
Total other items		16,828			3,489

Ending balance	$	13,820		$	6,376

Distribution of subsidiary shares to Agenus stockholders

On March 29, 2023, our Board of Directors declared a stock dividend (the "Dividend") consisting of an aggregate of 5.0 million shares (the "Dividend Stock") of common stock, par value $0.00001 per share, of MiNK held by Agenus to record holders of Agenus' common stock, par value $0.01 per share as of the close of business on April 17, 2023 (the "Record Date").

On May 1, 2023, we paid the Dividend and distributed 0.0146 of a share of the Dividend Stock for each share of Agenus Common Stock outstanding as of the close of business on the Record Date. No fractional shares were issued in connection with the Dividend and the shareholders of Agenus who were entitled to receive fractional shares of the Dividend Stock received cash (without interest) in lieu of such fractional shares. Subsequent to the distribution of the Dividend Stock, we maintained a controlling voting interest in MiNK.

Purchase of subsidiary shares

During the nine months ended September 30, 2023, we purchased 408,518 shares of MiNK common stock in multiple open market transactions.

Note N – Related Party Transactions

In 2023, our Audit and Finance Committee approved a contract between Avillion Life Sciences LTD ("Avillion") and Agenus for the performance of up to $450,000 of clinical consulting services. Allison Jeynes, a member of our Board of Directors, is chief executive officer of Avillion. For the nine months ended September 30, 2023, approximately $450,000 related to these services is included in “Research and development” expense in our condensed consolidated statements of operations.

During the nine months ended September 30, 2023, our Audit and Finance Committee approved, and we performed research and development manufacturing services totaling $256,000 for Protagenic Therapeutics, Inc ("Protagenic"). We will be reimbursed for these services on an actual time and materials basis. Dr. Garo H. Armen, our CEO, is Executive Chairman of and has a greater than 10% equity interest in Protagenic.

Note O - Recent Accounting Pronouncements

Recently Issued and Adopted

In January 2017, the Financial Accounting Standards Board issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) that will eliminate the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, an impairment charge will be based on the excess of a reporting unit’s carrying amount over its fair value. We adopted the standard on January 1, 2023. The adoption did not have a material impact on our consolidated financial statements.

No other new accounting pronouncement issued or effective during the nine months ended September 30, 2023 had or is expected to have a material impact on our consolidated financial statements or disclosures.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This Quarterly Report on Form 10-Q and other written and oral statements we make from time to time contain certain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). You can identify these forward-looking statements by the fact they use words such as “could,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe,” “will,” “potential,” “opportunity,” “future” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. You can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. These statements relate to, among other things, our business strategy, our research and development, our product development efforts, our ability to commercialize our product candidates, the activities of our licensees, our prospects for initiating partnerships or collaborations, the timing of the introduction of products, the effect of new accounting pronouncements, uncertainty regarding our future operating results and our profitability, anticipated sources of funds as well as our plans, objectives, expectations, and intentions.

More detailed descriptions of these risks and uncertainties and other risks and uncertainties applicable to our business that we believe could cause actual results to differ materially from any forward-looking statements are included in in Part I-Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in Part II-Item 1A within this Form 10-Q. We encourage you to read those descriptions carefully. Although we believe we have been prudent in our plans and assumptions, no assurance can be given that any goal or plan set forth in forward-looking statements can be achieved. We caution investors not to place significant reliance on forward-looking statements contained in this document; such statements need to be evaluated in light of all the information contained in this document. Furthermore, the statements speak only as of the date of this document, and we undertake no obligation to update or revise these statements.

Overview

We are a leading clinical-stage biotechnology company developing therapies targeting cancer with a robust pipeline of immunological agents. Our mission is to expand patient populations benefiting from cancer immunotherapy through combination approaches, using a broad repertoire of antibody therapeutics, adoptive cell therapies (through our subsidiary MiNK Therapeutics, Inc. (“MiNK”)), and vaccine adjuvants (through our subsidiary SaponiQx, Inc. (“SaponiQx”)). We believe that combination therapies and a deep understanding of each patient’s cancer will significantly expand the patient population benefiting from immuno-oncology (“I-O”) treatments.

Our I-O portfolio is driven by several platforms and programs, which we plan to utilize individually and in combination:

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Multiple antibody discovery platforms, including proprietary display technologies, to identify future antibody candidates.

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Our saponin-based vaccine adjuvant platform, primarily centered around our STIMULON cultured plant cell (“cpc”) QS-21 adjuvant (“STIMULON cpc QS-21”).

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A pipeline of novel allogeneic invariant natural killer T cell (“iNKT”) therapies for treating cancer and other immune-mediated diseases, controlled by MiNK.

We regularly evaluate development, commercialization, and partnering strategies for each product candidate based on various factors, including pre-clinical and clinical trial results, competitive positioning, funding requirements, and available resources. Our lead program, botensilimab (AGEN1181), is progressing through multiple clinical programs designed to support accelerated development as a monotherapy and in combination with balstilimab. In 2022, we initiated global Phase 2 trials for botensilimab in microsatellite stable colorectal cancer, melanoma, and pancreatic cancer. In October 2023, we completed enrollment of the Phase 2 microsatellite stable colorectal cancer trial. In April 2023, the botensilimab/balstilimab combination received Fast Track designation from the United States Food and Drug Administration (“FDA”) for the treatment of non-MSI-H/deficient mismatch repair (dMMR) metastatic colorectal cancer patients without active liver involvement. We intend to file our first biologics license application for the botensilimab/balstilimab combination in colorectal cancer in midyear 2024.

We have established collaborations with several companies, including Bristol-Myers Squibb Company (“BMS”), Betta Pharmaceuticals Co., Ltd. (“Betta”), UroGen Pharma Ltd. ("UroGen"), Gilead Sciences, Inc. (“Gilead”), Incyte Corporation (“Incyte”), and Merck Sharpe & Dohme (“Merck”). These collaborations, along with our internal programs, have resulted in over a dozen antibody programs currently in pre-clinical or clinical development.

Our collaboration agreement with Incyte grants Incyte exclusive licenses for monospecific antibodies targeting GITR, OX40, TIM-3, LAG-3, and an undisclosed target. Incyte has been advancing these antibodies in clinical trials. Incyte has terminated the OX40 program, effective October 2023, and has notified us of their intent to terminate both the GITR program and undisclosed program, effective May 2024. Upon termination, the rights to the OX40, GITR, and undisclosed programs revert back to us. Incyte is responsible for all future development expenses for the remaining programs, and we are eligible to receive up to an additional $315.0 million in potential milestone payments, along with royalties on future sales.

Under our collaboration and license agreement with Merck, we have exclusively licensed a monospecific antibody targeting ILT4 to them, which is currently being advanced in a Phase 2 clinical trial. Merck is responsible for all future development expenses, and we are eligible to receive up to an additional $85.0 million in potential milestone payments, as well as royalties on future sales.

In September 2018, through our subsidiary Agenus Royalty Fund, LLC, we entered into a royalty purchase agreement (the “XOMA Royalty Purchase Agreement”) with XOMA (US) LLC ("XOMA"). Pursuant to the agreement, XOMA purchased 33% of all future royalties and 10% of all future milestone payments that we are entitled to receive from Incyte and Merck, after satisfying our obligations to a third party. As of September 30, 2023, we remain eligible to receive up to $283.5 million and $76.5 million in potential development, regulatory, and commercial milestones from Incyte and Merck, respectively, after accounting for our obligations under the XOMA Royalty Purchase Agreement.

In December 2018, we entered into collaboration agreements with Gilead for the development and commercialization of up to five novel I-O therapies (the “Gilead Collaboration Agreements”). Gilead received worldwide exclusive rights to our bispecific antibody, AGEN1423, and the exclusive option to license AGEN1223, a bispecific antibody, and AGEN2373, a monospecific antibody. All three assets are currently in clinical development. Gilead elected to return AGEN1423 to us in November 2020 and terminated the license agreement. We ceased development of AGEN1223 in the third quarter of 2021, and the option and license agreement for AGEN1223 were formally terminated in October 2021. The AGEN2373 option agreement remains in place, and we are responsible for developing the program until the option decision point. If Gilead exercises the option, we may opt-in to share development and commercialization costs in the United States in exchange for a 50:50 profit (loss) share and revised milestone payments. In March 2022, we received a $5.0 million clinical milestone under the AGEN2373 option agreement. Pursuant to the terms of the AGEN2373 option agreement, we remain eligible to receive a $50.0 million option exercise fee and up to an additional $520.0 million in aggregate milestone payments, as well as royalties on future sales.

In November 2019, we entered into a license agreement with UroGen, granting them an exclusive, worldwide license (not including Argentina, Brazil, Chile, Colombia, Peru, Venezuela and their respective territories and possessions) to develop, manufacture, and commercialize zalifrelimab for the treatment of cancers of the urinary tract via intravesical delivery. We received an upfront payment of $10.0 million and are eligible to receive up to $200.0 million in milestone payments, as well as royalties on future sales.

In June 2020, we entered into a license and collaboration agreement (the “Betta License Agreement”) with Betta, pursuant to which we granted Betta an exclusive license to develop, manufacture and commercialize balstilimab and zalifrelimab in Republic of China, Hong Kong, Macau and Taiwan (“Greater China”). Under the terms of the Betta License Agreement, we received $15.0 million upfront and are eligible to receive up to $100.0 million in milestone payments plus royalties on any future sales in Greater China.

In May 2021, we entered into a License, Development, and Commercialization Agreement with BMS for our pre-clinical anti-TIGIT bispecific antibody program, AGEN1777. BMS received an exclusive worldwide license to develop, manufacture, and commercialize AGEN1777 and its derivatives. We retained an option to access the licensed antibodies for use in clinical studies in combination with certain pipeline assets. We received a non-refundable upfront cash payment of $200.0 million and are eligible to receive up to $1.36 billion in development, regulatory, and commercial milestone payments, along with tiered royalties. BMS is responsible for all associated costs, and we have the option to co-fund a minority of global development costs in exchange for increased tiered royalties. We also have the option to co-promote AGEN1777 in the U.S. In October 2021, we achieved a $20.0 million milestone upon the dosing of the first patient in the AGEN1777 Phase 1 clinical trial.

In September 2021, we launched SaponiQx to lead innovation in novel adjuvant discovery and vaccine design, focusing on our saponin-based adjuvants. We are particularly dedicated to the development of the next-generation cultured plant cell QS-21. To support this initiative, we partnered with Ginkgo Bioworks, Inc. to develop SaponiQx’s saponin products from sustainably sourced raw materials. Our goal is to meet the demands of the vaccine industry, especially for pandemic vaccines.

Our bark extract QS-21 adjuvant is partnered with GlaxoSmithKline (“GSK”) and plays a vital role in multiple GSK vaccine programs. These programs are at various stages, including GSK’s approved shingles vaccine, SHINGRIX, which received FDA approval in the United States in October 2017.

In January 2018, we entered into a Royalty Purchase Agreement with Healthcare Royalty Partners III, L.P. and its affiliates (“HCR”). HCR purchased our worldwide rights to receive royalties from GSK on GSK’s sales of vaccines containing our QS-21 adjuvant. We do not incur clinical development costs for products partnered with GSK.

Under the agreement with HCR, we were entitled to receive milestone payments based on GSK’s vaccine sales. These milestones include $15.1 million upon GSK reaching $2.0 billion in last-twelve-months net sales prior to 2024 (the “First HCR Milestone”) and $25.25 million upon GSK reaching $2.75 billion in last-twelve-months net sales prior to 2026 (the “Second HCR Milestone”). We received the First HCR Milestone after GSK’s net sales of SHINGRIX for the twelve months ended December 31, 2019, exceeded $2.0 billion, and we received the Second HCR Milestone after GSK’s net sales of SHINGRIX for the twelve months ended June 30, 2022, exceeded $2.75 billion.

Agenus' subsidiary MiNK completed an initial public offering in October 2021 and is publicly traded on Nasdaq under the symbol INKT. MiNK is a clinical-stage precision oncology company developing unmodified and engineered INKT cell therapies for cancer and other immune-mediated diseases. Their lead product candidate, agenT-797, is an off-the-shelf, allogeneic, native iNKT cell therapy. A Phase 1 clinical trial for the treatment of solid tumors as a monotherapy and in combination with approved checkpoint inhibitors (KEYTRUDA® and OPDIVO®) has been initiated and enrolled, and data was presented in April at the American Association for Cancer Research Annual Meeting. The presentation showcased the activity of agenT-797 alone and in combination with anti-PD-1, with a 42% tumor reduction in a patient with metastatic gastric cancer who had no response to prior anti-PD-1 therapy or standard chemotherapy. Benefit was seen in additional solid tumor types, including durable disease stabilization and biomarker responses in NSCLC, testicular, and appendiceal cancers, that were refractory to anti-PD-1. MiNK is also evaluating agenT-797 as a variant-agnostic therapy for patients with viral acute respiratory distress syndrome, and top-line data from a Phase 1 clinical trial demonstrated a 77% survival rate in older, mechanically ventilated patients with COVID-19 respiratory failure. Through an assignment and license agreement with Agenus, MiNK owns the INKT technology and has the rights to develop a proprietary pipeline of engineered CAR-INKTs, TCRs, and INKT bispecific engagers.

Historical Results of Operations

Three months ended September 30, 2023 compared to the three months ended September 30, 2022

Research and development revenue

We recognized research and development revenue of approximately $3.4 million and $4.6 million during the three months ended September 30, 2023 and 2022, respectively. Research and development revenues in the third quarter of 2023 primarily consisted of $2.9 million related to the recognition of deferred revenue earned under our Gilead Collaboration Agreements. Research and development revenues in the third quarter of 2022 primarily consisted of $4.5 million related to the recognition of deferred revenue earned under our Gilead Collaboration Agreements.

Non-cash royalty revenue related to the sale of future royalties

In January 2018, we sold 100% of our worldwide rights to receive royalties from GSK on sales of GSK’s vaccines containing our QS-21 STIMULON adjuvant to HCR. As described in Note F to our Condensed Consolidated Financial Statements, this transaction has been recorded as a liability that amortizes over the estimated life of our Royalty Purchase Agreement with HCR. As a result of this liability accounting, even though the royalties are remitted directly to HCR, we record these royalties from GSK as revenue. Non-cash royalty revenue related to our agreement with GSK increased $11.1 million, to approximately $20.4 million for the three months ended September 30, 2023, from $9.2 million for the three months ended September 30, 2022, due to increased net sales of GSK’s vaccines containing our QS-21 STIMULON adjuvant and the achievement of the final sales milestone under the HCR agreement and the recognition of $7.9 million of these royalties as royalty milestone revenue in the three months ended September 30, 2022.

Research and development expense

Research and development expense includes the costs associated with our internal research and development activities, including compensation and benefits, occupancy costs, manufacturing costs, costs of consultants, and administrative costs. Research and development expense increased 12% to $51.4 million for the three months ended September 30, 2023 from $46.0 million for the three months ended September 30, 2022. Increased expenses in the three months ended September 30, 2023 primarily relate to a $5.8 million increase in third-party services and other expenses, largely due to the timing of expenses related to the advancement of our antibody programs, a $1.7 million increase in personnel related expenses, and a $1.4 million increase in other research and development expenses. These increases were partially offset by a $3.5 million decrease in expenses attributable to the activities of our subsidiaries.

General and administrative expense

General and administrative expense consists primarily of personnel costs, facility expenses, and professional fees. General and administrative expenses increased 4% to $18.9 million for the three months ended September 30, 2023 from $18.1 million for the three months ended September 30, 2022. Increased expenses in the three months ended September 30, 2023 primarily relate to a $1.8 million increase in personnel related expenses, and a $0.4 million increase in other general and administrative expenses. These increases were partially offset by a $0.8 million decrease in professional fees and a $0.7 million decrease in expenses attributable to the activities of our subsidiaries.

Interest expense, net

Interest expense, net increased to approximately $18.6 million for the three months ended September 30, 2023 from $15.6 million for the three months ended September 30, 2022, mainly due to increased non-cash interest recorded in connection with our Royalty Purchase Agreement with HCR and increased interest expense recorded in connection with our finance leases, partially offset by increased interest income earned on our cash equivalents and short-term investments.

Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022

Research and development revenue

We recognized research and development revenue of approximately $8.5 million and $13.2 million during the nine months ended September 30, 2023 and 2022, respectively. Research and development revenues in the first nine months of 2023 primarily consisted of $7.2 million related to the recognition of deferred revenue earned under our Gilead Collaboration Agreements. Research and development revenues in the first nine months of 2022 primarily consisted of a $5.0 million milestone and $7.1 million related to the recognition of deferred revenue, both earned under our Gilead Collaboration Agreements.

Non-cash royalty revenue related to the sale of future royalties

In January 2018, we sold 100% of our worldwide rights to receive royalties from GSK on sales of GSK’s vaccines containing our QS-21 STIMULON adjuvant to HCR. As described in Note F to our Condensed Consolidated Financial Statements, this transaction has been recorded as a liability that amortizes over the estimated life of our Royalty Purchase Agreement with HCR. As a result of this liability accounting, even though the royalties are remitted directly to HCR, we record these royalties from GSK as revenue. Non-cash royalty revenue related to our agreement with GSK increased $34.5 million, to approximately $61.5 million for the nine months ended September 30, 2023, from $27.0 million for the nine months ended September 30, 2022, due to increased net sales of GSK’s vaccines containing our QS-21 STIMULON adjuvant and the achievement of the final sales milestone under the HCR agreement and the recognition of approximately $25.3 million of these royalties as royalty milestone revenue in the nine months ended September 30, 2022.

Research and development expense

Increased expenses in the nine months ended September 30, 2023 primarily relate to a $27.6 million increase in third-party services and other expenses, largely due to the timing of expenses related to the advancement of our antibody programs, a $5.3 million increase in personnel related expenses, primarily due to increased headcount, and a $2.4 million increase in other research and development expenses. These increases were partially offset by a $0.9 million decrease in expenses attributable to the activities of our subsidiaries.

General and administrative expense

General and administrative expense consists primarily of personnel costs, facility expenses, and professional fees. General and administrative expenses increased 3% to $57.6 million for the nine months ended September 30, 2023 from $56.0 million for the nine months ended September 30, 2022. Increased expenses in the nine months ended September 30, 2023 primarily relate to a $3.8 million increase in personnel related expenses, largely due to increased headcount, and a $1.2 million increase in other general and administrative expenses. These increases were partially offset by a $2.0 million decrease in professional fees, primarily due to reduced consulting and external legal costs, and a $1.5 million decrease in expenses attributable to the activities of our subsidiaries.

Non-operating income (expense)

Non-operating income (expense) includes our foreign currency translation adjustment and other income or expense. Non-operating income decreased $9.4 million for the nine months ended September 30, 2023, from income of $9.7 million for the nine months ended September 30, 2022 to income of $0.2 million for the nine months ended September 30, 2023, primarily due to de minimis activity in the nine months ended September 30, 2023, compared to the recognition of a $6.6 million gain on the sale of property, plant and equipment and a $2.8 million gain on the partial forgiveness of a liability in the nine months ended September 30, 2022.

Interest expense, net

Interest expense, net increased to approximately $53.7 million for the nine months ended September 30, 2023 from $44.5 million for the nine months ended September 30, 2022, mainly due to increased non-cash interest recorded in connection with our Royalty Purchase Agreement with HCR and increased interest expense recorded in connection with our finance leases, partially offset by increased interest income earned on our cash equivalents and short-term investments.

Research and Development Programs

For the nine months ended September 30, 2023, our research and development programs consisted largely of our antibody programs as indicated in the following table (in thousands).


		Nine Months Ended September 30,		Year Ended December 31,
Research and Development Program	Product	2023		2022		2021		2020
Antibody programs	Various	$	122,981	$	133,108	$	141,266	$	118,200
Vaccine adjuvant	STIMULON cpc QS-21		9,269		10,789		5,912		304
Cell therapies	Various		12,853		24,300		15,507		11,022
Other research and development programs	Various		22,743		18,494		15,923		13,091
Total research and development expenses		$	167,846	$	186,691	$	178,608	$	142,617

Research and development program costs include compensation and other direct costs plus an allocation of indirect costs, based on certain assumptions and our review of the status of each program. Our product candidates are in various stages of development and significant additional expenditures will be required if we start new clinical trials, encounter delays in our programs, apply for regulatory approvals, continue development of our technologies, expand our operations, and/or bring our product candidates to market. The total cost of any particular clinical trial is dependent on a number of factors such as trial design, length of the trial, number of clinical sites, number of patients, and trial sponsorship. The process of obtaining and maintaining regulatory approvals for new therapeutic products is lengthy, expensive, and uncertain. Because of the current stage of our product candidates, among other factors, we are unable to reliably estimate the cost of completing our research and development programs or the timing for bringing such programs to various markets or substantial partnering or out-licensing arrangements, and, therefore, when, if ever, material cash inflows are likely to commence.

Liquidity and Capital Resources

We have incurred annual operating losses since inception, and we had an accumulated deficit of $1.9 billion as of September 30, 2023. We expect to incur significant losses over the next several years as we continue development of our technologies and product candidates, manage our regulatory processes, initiate and continue clinical trials, and prepare for potential commercialization of products.

To date, we have financed our operations primarily through corporate partnerships, advance royalty sales and the issuance of equity. From our inception through September 30, 2023, we have raised aggregate net proceeds of approximately $1.9 billion through the sale of common and preferred stock, the exercise of stock options and warrants, proceeds from our Employee Stock Purchase Plan, royalty monetization transactions, and the issuance of convertible and other notes.

We maintain an effective registration statement (the “Registration Statement”), covering common stock, preferred stock, warrants, debt securities and units. The Registration Statement includes prospectuses covering the offer, issuance and sale of up to 184.6 million shares of our common stock from time to time in “at-the-market offerings” pursuant to an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. as our sales agent. We sold approximately 71.6 million shares of our common stock pursuant to the Sales Agreement during the nine months ended September 30, 2023, for aggregate net proceeds totaling $123.2 million. As of September 30, 2023, approximately 171.3 million shares remained available for sale under the Sales Agreement.

We have funded our operations largely from cash received from partners, royalty financing transactions and equity offerings. We transact at-the-market sales from time to time in order to manage our cash balances to make sure cash balances do not drop below a certain level based on our anticipated uses of cash. We execute at-the-market offerings based on market conditions and our stock price. We do not have in place a program whereby at-the-market offerings are executed automatically based on our trading volume.

As of September 30, 2023, we had debt outstanding of $13.4 million in principal. In November 2022, we amended all of the outstanding 2015 Subordinated Notes, extending the due date by two years to February 2025.

Based on our current plans and projections, we believe that our cash resources of $106.3 million as of September 30, 2023, plus additional funding we anticipate from the achievement of a milestone under an existing partnership, will be sufficient to satisfy our liquidity requirements for at least one year from when these financial statements were issued. This milestone will be triggered upon dosing the first patient in a clinical trial which is currently screening patients and is expected to occur by end of 2023. However, until this event occurs, in accordance with the relevant accounting guidance we are required to disclose that substantial doubt exists about our ability to continue as a going concern for a period of one year after the date of filing of this Quarterly Report on Form 10-Q.

Management continues to address the Company’s liquidity position and has the flexibility to adjust spending as needed in order to preserve liquidity. In August 2023, we prioritized and focused our resources to accelerate the development, registration, and commercialization of our lead asset postponing all preclinical and other clinical programs and reducing our workforce by approximately 25%. Our CEO, Dr. Garo Armen has elected to receive his base salary and any potential bonus payments in stock rather than cash. We continuously evaluate the likelihood of success of our programs. As such, our decisions to continue to fund or eliminate funding of each of our programs are predicated on these determinations, on an ongoing basis. We expect our sources of funding to include payments from current collaborations which include milestones and royalty payments from companies, including BMS, UroGen, Gilead, Incyte, and Merck; out-licensing and/or partnering opportunities for our portfolio programs and product candidates with multiple parties; additional third-party agreements; asset sales; royalty monetization; project financing, and/or sales of equity securities.

Our future cash requirements include, but are not limited to, supporting clinical trial and regulatory efforts and continuing our other research and development programs. Since inception, we have entered into various agreements with contract manufacturers, institutions, and clinical research organizations (collectively “third party providers”) to perform pre-clinical activities and to conduct and monitor our clinical studies and trials. Under these agreements, subject to the enrollment of patients and performance by the applicable third-party provider, we have estimated our total payments to be $601.3 million over the term of the related activities. Through September 30, 2023, we have expensed $519.8 million as research and development expenses and $500.7 million has been paid under these agreements. The timing of expense recognition and future payments related to these agreements is subject to the enrollment of patients and performance by the applicable third-party provider.

We plan to enter into additional agreements with third party providers and we anticipate significant additional expenditures will be required to initiate and advance our various programs.

Part of our strategy is to develop and commercialize some of our product candidates by continuing our existing collaboration arrangements with academic and collaboration partners and licensees and by entering into new collaborations. As a result of our collaboration agreements, we will not completely control the efforts to attempt to bring those product candidates to market. For example, our collaboration with Incyte for the development, manufacture and commercialization of CPM antibodies against certain targets is managed by a joint steering committee, which is controlled by Incyte.

Net cash used in operating activities for the nine months ended September 30, 2023 and 2022 was $183.8 million and $128.0 million, respectively. Our future ability to generate cash from operations will depend on achieving regulatory approval and market acceptance of our product candidates, achieving benchmarks as defined in existing collaboration agreements, and our ability to enter into new collaborations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Forward Looking Statements” in Part I, Item 2 of this Quarterly Report on Form 10-Q and the risks highlighted in Part I, Item 1A "Risk Factors" of our 2022 Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our primary market risk exposure is foreign currency exchange rate risk. International revenues and expenses are generally transacted by our foreign subsidiaries and are denominated in local currency. Approximately 0.9% and 1.7% of our cash used in operations for the nine months ended September 30, 2023 and the year ended December 31, 2022, respectively, was from our foreign subsidiaries. We are exposed to foreign currency exchange rate fluctuation risk related to our transactions denominated in foreign currencies. We do not currently employ specific strategies, such as the use of derivative instruments or hedging, to manage these exposures. Our currency exposures vary but are primarily concentrated in the British Pound, Euro, and Swiss Franc, in large part due to our subsidiaries, Agenus UK Limited and AgenTus Therapeutics Limited, both with operations in England, AgenTus Therapeutics SA, a company formerly with operations in Belgium, and Agenus Switzerland a company formerly with operations in Switzerland.

We had cash, cash equivalents and short-term investments at September 30, 2023 of $106.3 million, which are exposed to the impact of interest rate changes, and our interest income fluctuates as interest rates change. Additionally, in the normal course of business, we are exposed to fluctuations in interest rates as we seek debt financing and invest excess cash. Due to the short-term nature of our investments in money market funds and U.S. Treasury Bills, our carrying value approximates the fair value of these investments at September 30, 2023.

There has been no material change to our interest rate exposure and our approach toward interest rate and foreign currency exchange rate exposures, as described in our Annual Report on Form 10-K for the year ended December 31, 2022.

We invest our cash and cash equivalents in accordance with our investment policy. The primary objectives of our investment policy are to preserve principal, maintain proper liquidity to meet operating needs, and maximize yields. We review our investment policy periodically and amend it as deemed necessary. Currently, the investment policy prohibits investing in any structured investment vehicles and asset-backed commercial paper. Although our investments are subject to credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure from any single issue, issuer, or type of investment. We do not invest in derivative financial instruments. Accordingly, we do not believe that there is currently any material market risk exposure with respect to derivatives or other financial instruments that would require disclosure under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act. Based on this evaluation, our Principal Executive Officer and our Principal Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective and were designed to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. It should be noted that any system of controls is designed to provide reasonable, but not absolute, assurances that the system will achieve its stated goals under all reasonably foreseeable circumstances. Our Principal Executive Officer and Principal Financial Officer have each concluded that our disclosure controls and procedures as of the end of the period covered by this report are effective at a level that provides such reasonable assurances.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not party to any material legal proceedings.

Item 1A. Risk Factors

Our results of operations and financial condition are subject to numerous risks and uncertainties described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. In addition to the risk factors described in Part I, Item 1A "Risk Factors" of our 2022 Form 10-K, please note the additional Risk Factor included below.

Substantial doubt exists as to our ability to continue as a going concern

We have financed our operations through income and revenues generated from corporate partnerships, advance royalty sales and proceeds from equity issuances. Based on our current plans and projections, we believe that our cash resources of $106.3 million at September 30, 2023, plus additional funding we anticipate from the achievement of a milestone under an existing partnership, will be sufficient to satisfy our liquidity requirements for at least one year from when these financial statements were issued. This milestone will be triggered upon dosing the first patient in a clinical trial which is currently screening patients and is expected to occur by end of 2023. However, until this event occurs, in accordance with relevant accounting guidance we are required to disclose that substantial doubt exists about our ability to continue as a going concern for a period of one year after the date of filing of this Quarterly Report on Form 10-Q.

Item 5. Other Information

Trading Plans of Our Directors and Officers

During the quarter ended September 30, 2023, none of our directors or executive officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each item is defined in Item 408 of Regulation S-K.

Item 6. Exhibits


Exhibit No.		Description

31.1		Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. Filed herewith.

31.2		Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. Filed herewith.

32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Submitted herewith.

101.INS		XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)

AGENUS INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date:	November 9, 2023	AGENUS INC.

		/s/ CHRISTINE M. KLASKIN
		Christine M. Klaskin VP, Finance, Principal Financial Officer, Principal Accounting Officer

EX-31.1 2 agen-ex31_1.htm EX-31.1 EX-31.1

Exhibit 31.1

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended

I, Garo H. Armen, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Agenus Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles;

evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent function):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.


Date: November 9, 2023			/s/ GARO H. ARMEN, PH.D.
			Garo H. Armen, Ph.D.
			Chief Executive Officer and Principal Executive Officer

EX-31.2 3 agen-ex31_2.htm EX-31.2 EX-31.2

Exhibit 31.2

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended

I, Christine M. Klaskin, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Agenus Inc.;

any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.


Date: November 9, 2023			/s/ CHRISTINE M. KLASKIN
			Christine M. Klaskin
			VP, Finance and Principal Financial Officer

EX-32.1 4 agen-ex32_1.htm EX-32.1 EX-32.1

Exhibit 32.1

Certification

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Agenus Inc. (the “Company”) for the quarterly period ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned to his/her knowledge hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(i)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


	/s/ GARO H. ARMEN, PH.D.
	Garo H. Armen, Ph.D.
	Chief Executive Officer and Principal Executive Officer

	/s/ CHRISTINE M. KLASKIN
	Christine M. Klaskin
	VP, Finance and Principal Financial Officer

Date: November 9, 2023

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Report and should not be considered filed as part of the Report.