0001564590-20-052512 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2020	Nov. 05, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Entity Registrant Name	AGENUS INC
Entity Central Index Key	0001098972
Entity Current Reporting Status	Yes
Trading Symbol	AGEN
Security Exchange Name	NASDAQ
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common stock, par value $0.01
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding		190,149,301
Entity File Number	000-29089
Entity Tax Identification Number	06-1562417
Entity Address, Address Line One	3 Forbes Road
Entity Address, City or Town	Lexington
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02421
City Area Code	781
Local Phone Number	674-4400
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	DE

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
ASSETS
Cash and cash equivalents	$ 114,144	$ 61,808
Accounts receivable	1,414	16,293
Prepaid expenses	8,232	7,420
Other current assets	1,661	1,015
Total current assets	125,451	86,536
Property, plant and equipment, net of accumulated amortization and depreciation of $46,065 and $42,861 at September 30, 2020 and December 31, 2019, respectively	27,106	26,326
Operating lease right-of-use assets	14,596	7,364
Goodwill	24,694	23,188
Acquired intangible assets, net of accumulated amortization of $11,138 and $9,431 at September 30, 2020 and December 31, 2019, respectively	11,146	10,504
Other long-term assets	1,490	1,417
Total assets	204,483	155,335
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current portion, long-term debt	1,182	646
Current portion, liability related to sale of future royalties and milestones	60,661	45,961
Current portion, deferred revenue	40,118	29,174
Current portion, operating lease liabilities	1,813	1,347
Accounts payable	20,543	13,564
Accrued liabilities	21,804	31,332
Other current liabilities	774	185
Total current liabilities	146,895	122,209
Long-term debt, net of current portion	18,845	13,380
Liability related to sale of future royalties and milestones, net of current portion	174,673	175,408
Deferred revenue, net of current portion	8,069	27,705
Operating lease liabilities, net of current portion	14,913	8,020
Contingent purchase price considerations	13,639	8,843
Other long-term liabilities	6,855	4,190
Commitments and contingencies
STOCKHOLDERS’ DEFICIT
Common stock, par value $0.01 per share; 400,000,000 shares authorized; 189,156,970 and 137,818,068 shares issued at September 30, 2020 and December 31, 2019, respectively	1,892	1,378
Additional paid-in capital	1,226,687	1,059,583
Accumulated other comprehensive income (loss)	1,233	(1,324)
Accumulated deficit	(1,428,300)	(1,284,993)
Total stockholders’ deficit attributable to Agenus Inc.	(198,488)	(225,356)
Non-controlling interest	(7,835)	(5,981)
Total stockholders’ deficit	(206,323)	(231,337)
Total liabilities, convertible preferred stock and stockholders’ deficit	204,483	155,335
Series C-1 Convertible Preferred Stock [Member]
CONVERTIBLE PREFERRED STOCK
Series C-1 convertible preferred stock; 12,459 shares designated, issued, and outstanding at September 30, 2020 and December 31, 2019	26,917	26,917
Series A-1 convertible preferred stock [Member]
STOCKHOLDERS’ DEFICIT
Series A-1 convertible preferred stock; 31,620 shares designated, issued, and outstanding at September 30, 2020 and December 31, 2019; liquidation value of $33,197 at September 30, 2020	0	0
Total stockholders’ deficit	$ 0	$ 0

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Property plant and equipment, accumulated amortization and depreciation	$ 46,065	$ 42,861
Acquired intangible assets, accumulated amortization	$ 11,138	$ 9,431
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	189,156,970	137,818,068
Series C-1 Convertible Preferred Stock [Member]
Series C-1 convertible preferred stock, shares designated	12,459	12,459
Series C-1 convertible preferred stock, shares issued	12,459	12,459
Series C-1 convertible preferred stock, shares outstanding	12,459	12,459
Series A-1 convertible preferred stock [Member]
Series A-1 convertible preferred stock, shares designated	31,620	31,620
Series A-1 convertible preferred stock, shares issued	31,620	31,620
Series A-1 convertible preferred stock, shares outstanding	31,620	31,620
Series A-1 convertible preferred stock, liquidation value	$ 33,197

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue:
Total revenues	$ 14,832	$ 19,940	$ 56,906	$ 115,548
Operating expenses:
Cost of service revenue	(911)		(1,545)
Research and development	(32,134)	(46,132)	(107,048)	(131,506)
General and administrative	(14,380)	(11,512)	(39,188)	(33,723)
Contingent purchase price consideration fair value adjustment	(2,196)	1,781	(4,652)	(1,180)
Operating loss	(34,789)	(35,923)	(95,527)	(50,861)
Other expense:
Loss on modification of debt			(2,720)
Non-operating income (expense)	(648)	304	(2,040)	(250)
Interest expense, net	(16,209)	(10,658)	(44,874)	(29,598)
Net loss	(51,646)	(46,277)	(145,161)	(80,709)
Dividends on Series A-1 convertible preferred stock	(52)	(52)	(157)	(156)
Less: net loss attributable to non-controlling interest	(493)	(803)	(1,854)	(3,107)
Net loss attributable to Agenus Inc. common stockholders	$ (51,205)	$ (45,526)	$ (143,464)	$ (77,758)
Per common share data:
Basic and diluted net loss attributable to Agenus Inc. common stockholders	$ (0.28)	$ (0.33)	$ (0.87)	$ (0.58)
Weighted average number of Agenus Inc. common shares outstanding:
Basic and diluted	182,667	137,619	165,682	134,014
Other comprehensive income (loss):
Foreign currency translation gain (loss)	$ 864	$ (204)	$ 2,557	$ 257
Other comprehensive income (loss)	864	(204)	2,557	257
Comprehensive loss	(50,341)	(45,730)	(140,907)	(77,501)
Research and Development [Member]
Revenue:
Total revenues	4,286	5,751	24,283	81,022
Service Revenue [Member]
Revenue:
Total revenues	1,599		2,621
Other Revenue [Member]
Revenue:
Total revenues		1,985	52	4,453
Non-Cash Royalty Revenue Related to the Sale of Future Royalties [Member]
Revenue:
Total revenues	$ 8,947	$ 12,204	$ 29,950	$ 30,073

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Deficit (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Non-controlling Interest [Member]	Accumulated Deficit [Member]	Series C-1 Convertible Preferred Stock [Member]	Series A-1 convertible preferred stock [Member]
Stockholders' Equity, Beginning Balance at Dec. 31, 2018	$ (174,545)	$ 1,200	$ 1,005,183	$ (1,539)	$ (2,078)	$ (1,177,311)		$ 0
Temporary Equity, shares at Dec. 31, 2018							18,000
Temporary Equity, Beginning Balance at Dec. 31, 2018							$ 39,879
Balance, shares at Dec. 31, 2018		119,996,000						32,000
Net income (loss)	17,435				(1,071)	18,506
Other comprehensive income	(682)			(682)
Adoption of ASC \| ASC 842 [Member]	(25)					(25)
Share-based compensation	1,843		1,843
Shares sold under Stock Purchase Agreement, values	30,000	$ 111	29,889
Shares sold under Stock Purchase Agreement, shares		11,111,000
Conversion of Series C-1 convertible preferred stock	6,481	$ 30	6,451				$ (6,481)
Conversion of Series C-1 convertible preferred stock, shares		3,000,000					(3,000)
Payment of consultant in shares	37	$ 0	37
Payment of consultant in shares, shares		14,000
Exercise of stock options and employee share purchases	173	$ 1	172
Exercise of stock options and employee share purchases, shares		85,000
Stockholders' Equity, Ending Balance at Mar. 31, 2019	(119,283)	$ 1,342	1,043,575	(2,221)	(3,149)	(1,158,830)		$ 0
Temporary Equity, shares at Mar. 31, 2019							15,000
Temporary Equity, Ending Balance at Mar. 31, 2019							$ 33,398
Balance, shares at Mar. 31, 2019		134,206,000						32,000
Stockholders' Equity, Beginning Balance at Dec. 31, 2018	(174,545)	$ 1,200	1,005,183	(1,539)	(2,078)	(1,177,311)		$ 0
Temporary Equity, shares at Dec. 31, 2018							18,000
Temporary Equity, Beginning Balance at Dec. 31, 2018							$ 39,879
Balance, shares at Dec. 31, 2018		119,996,000						32,000
Net income (loss)	(80,709)
Other comprehensive income	257
Stockholders' Equity, Ending Balance at Sep. 30, 2019	(204,872)	$ 1,374	1,055,159	(1,282)	(5,185)	(1,254,938)		$ 0
Temporary Equity, shares at Sep. 30, 2019							12,000
Temporary Equity, Ending Balance at Sep. 30, 2019							$ 26,917
Balance, shares at Sep. 30, 2019		137,358,000						32,000
Stockholders' Equity, Beginning Balance at Mar. 31, 2019	(119,283)	$ 1,342	1,043,575	(2,221)	(3,149)	(1,158,830)		$ 0
Temporary Equity, shares at Mar. 31, 2019							15,000
Temporary Equity, Beginning Balance at Mar. 31, 2019							$ 33,398
Balance, shares at Mar. 31, 2019		134,206,000						32,000
Net income (loss)	(51,867)				(1,233)	(50,634)
Other comprehensive income	1,143			1,143
Share-based compensation	1,917		1,917
Conversion of Series C-1 convertible preferred stock	6,481	$ 30	6,451				$ (6,481)
Conversion of Series C-1 convertible preferred stock, shares		3,000,000					(3,000)
Vesting of nonvested shares		$ 1	(1)
Vesting of nonvested shares, shares		53,000
Stockholders' Equity, Ending Balance at Jun. 30, 2019	(161,609)	$ 1,373	1,051,942	(1,078)	(4,382)	(1,209,464)		$ 0
Temporary Equity, shares at Jun. 30, 2019							12,000
Temporary Equity, Ending Balance at Jun. 30, 2019							$ 26,917
Balance, shares at Jun. 30, 2019		137,259,000						32,000
Net income (loss)	(46,277)				(803)	(45,474)
Other comprehensive income	(204)			(204)
Share-based compensation	3,084		3,084
Payment of consultant in shares	19	$ 0	19
Payment of consultant in shares, shares		7,000
Exercise of stock options and employee share purchases	115	$ 0	115
Exercise of stock options and employee share purchases, shares		44,000
Vesting of nonvested shares		$ 1	(1)
Vesting of nonvested shares, shares		48,000
Stockholders' Equity, Ending Balance at Sep. 30, 2019	(204,872)	$ 1,374	1,055,159	(1,282)	(5,185)	(1,254,938)		$ 0
Temporary Equity, shares at Sep. 30, 2019							12,000
Temporary Equity, Ending Balance at Sep. 30, 2019							$ 26,917
Balance, shares at Sep. 30, 2019		137,358,000						32,000
Stockholders' Equity, Beginning Balance at Dec. 31, 2019	(231,337)	$ 1,378	1,059,583	(1,324)	(5,981)	(1,284,993)		$ 0
Temporary Equity, shares at Dec. 31, 2019							12,459
Temporary Equity, Beginning Balance at Dec. 31, 2019							$ 26,917
Balance, shares at Dec. 31, 2019		137,819,000						32,000
Net income (loss)	(45,271)				(597)	(44,674)
Other comprehensive income	1,227			1,227
Share-based compensation	2,397		2,397
Shares sold at the market	65,123	$ 247	64,876
Shares sold at the market, shares		24,716,000
Amendment of 2015 warrants and issuance of 2020 warrants	3,145		3,145
Payment of consultant in shares	12	$ 0	12
Payment of consultant in shares, shares		4,000
Exercise of stock options and employee share purchases	2,204	$ 8	2,196
Exercise of stock options and employee share purchases, shares		765,000
Stockholders' Equity, Ending Balance at Mar. 31, 2020	(202,500)	$ 1,633	1,132,209	(97)	(6,578)	(1,329,667)		$ 0
Temporary Equity, shares at Mar. 31, 2020							12,000
Temporary Equity, Ending Balance at Mar. 31, 2020							$ 26,917
Balance, shares at Mar. 31, 2020		163,304,000						32,000
Stockholders' Equity, Beginning Balance at Dec. 31, 2019	(231,337)	$ 1,378	1,059,583	(1,324)	(5,981)	(1,284,993)		$ 0
Temporary Equity, shares at Dec. 31, 2019							12,459
Temporary Equity, Beginning Balance at Dec. 31, 2019							$ 26,917
Balance, shares at Dec. 31, 2019		137,819,000						32,000
Stockholders' Equity, Ending Balance at Jun. 30, 2020	(225,964)	$ 1,714	1,156,442	369	(7,342)	(1,377,147)		$ 0
Temporary Equity, shares at Jun. 30, 2020							12,000
Temporary Equity, Ending Balance at Jun. 30, 2020							$ 26,917
Balance, shares at Jun. 30, 2020		171,418,000						32,000
Stockholders' Equity, Beginning Balance at Dec. 31, 2019	(231,337)	$ 1,378	1,059,583	(1,324)	(5,981)	(1,284,993)		$ 0
Temporary Equity, shares at Dec. 31, 2019							12,459
Temporary Equity, Beginning Balance at Dec. 31, 2019							$ 26,917
Balance, shares at Dec. 31, 2019		137,819,000						32,000
Net income (loss)	(145,161)
Other comprehensive income	$ 2,557
Exercise of stock options, shares	1,140,417
Stockholders' Equity, Ending Balance at Sep. 30, 2020	$ (206,323)	$ 1,892	1,226,687	1,233	(7,835)	(1,428,300)		$ 0
Temporary Equity, shares at Sep. 30, 2020							12,459
Temporary Equity, Ending Balance at Sep. 30, 2020							$ 26,917
Balance, shares at Sep. 30, 2020		189,157,000						32,000
Stockholders' Equity, Beginning Balance at Mar. 31, 2020	(202,500)	$ 1,633	1,132,209	(97)	(6,578)	(1,329,667)		$ 0
Temporary Equity, shares at Mar. 31, 2020							12,000
Temporary Equity, Beginning Balance at Mar. 31, 2020							$ 26,917
Balance, shares at Mar. 31, 2020		163,304,000						32,000
Net income (loss)	(48,244)				(764)	(47,480)
Other comprehensive income	466			466
Share-based compensation	2,464		2,464
Shares sold at the market	19,907	$ 73	19,834
Shares sold at the market, shares		7,290,000
Issuance of shares for business acquisition	900	$ 4	896
Issuance of shares for business acquisition, shares		405,000
Payment of payroll in shares	88	$ 0	88
Payment of payroll in shares, shares		31,000
Payment of consultant in shares	31	$ 0	31
Payment of consultant in shares, shares		10,000
Exercise of stock options	924	$ 3	921
Exercise of stock options, shares		290,000
Vesting of nonvested shares		$ 1	(1)
Vesting of nonvested shares, shares		88,000
Stockholders' Equity, Ending Balance at Jun. 30, 2020	(225,964)	$ 1,714	1,156,442	369	(7,342)	(1,377,147)		$ 0
Temporary Equity, shares at Jun. 30, 2020							12,000
Temporary Equity, Ending Balance at Jun. 30, 2020							$ 26,917
Balance, shares at Jun. 30, 2020		171,418,000						32,000
Net income (loss)	(51,646)				(493)	(51,153)
Other comprehensive income	864			864
Share-based compensation	2,620		2,620
Shares sold under Stock Purchase Agreement, values	20,000	$ 50	19,950
Shares sold under Stock Purchase Agreement, shares		4,963,000
Shares sold at the market	46,401	$ 123	46,278
Shares sold at the market, shares		12,281,000
Payment of payroll in shares	103	$ 0	103
Payment of payroll in shares, shares		27,000
Payment of consultant in shares	19	$ 0	19
Payment of consultant in shares, shares		5,000
Exercise of stock options and employee share purchases	1,280	$ 4	1,276
Exercise of stock options and employee share purchases, shares		423,000
Vesting of nonvested shares		$ 1	(1)
Vesting of nonvested shares, shares		40,000
Stockholders' Equity, Ending Balance at Sep. 30, 2020	$ (206,323)	$ 1,892	$ 1,226,687	$ 1,233	$ (7,835)	$ (1,428,300)		$ 0
Temporary Equity, shares at Sep. 30, 2020							12,459
Temporary Equity, Ending Balance at Sep. 30, 2020							$ 26,917
Balance, shares at Sep. 30, 2020		189,157,000						32,000

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net income (loss)	$ (145,161)	$ (80,709)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,341	5,001
Share-based compensation	7,673	6,844
Non-cash royalty revenue	(29,950)	(30,073)
Non-cash interest expense	44,109	30,400
Donation of assets	622
Loss on disposal of assets	14
Change in fair value of contingent obligations	4,652	1,180
Loss on modification of debt	2,720
Changes in operating assets and liabilities:
Accounts receivable	15,883	(1,390)
Prepaid expenses	(822)	8,780
Accounts payable	6,291	3,100
Deferred revenue	(8,741)	62,551
Accrued liabilities and other current liabilities	(8,748)	5,406
Other operating assets and liabilities	2,611	2,008
Net cash (used in) provided by operating activities	(103,506)	13,098
Cash flows from investing activities:
Purchases of plant and equipment	(2,632)	(3,601)
Cash paid for business acquisition, net	(975)
Net cash used in investing activities	(3,607)	(3,601)
Cash flows from financing activities:
Net proceeds from sale of equity	151,431	30,000
Proceeds from employee stock purchases and option exercises	4,408	287
Proceeds from issuance of long-term debt	6,197
Repayments of debt	(1,231)
Payment of finance lease obligation	(1,597)	(232)
Net cash provided by financing activities	159,208	30,055
Effect of exchange rate changes on cash	241	668
Net increase in cash and cash equivalents	52,336	40,220
Cash and cash equivalents, beginning of period	61,808	53,054
Cash and cash equivalents, end of period	114,144	93,274
Supplemental cash flow information:
Cash paid for interest	892	925
Supplemental disclosures - non-cash activities:
Purchases of plant and equipment in accounts payable and accrued liabilities	166
Issuance of common stock	900
Contingent purchase price consideration in connection with business acquisition	144
Lease right-of-use assets obtained in exchange for new operating lease liabilities	8,600	3,017
Lease right-of-use assets obtained in exchange for new finance lease liabilities	2,434
Payment to Consultant [Member]
Supplemental disclosures - non-cash activities:
Issuance of common stock	$ 62	$ 56

Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical)	Sep. 30, 2020 $ / shares
Supplemental disclosures - non-cash activities:
Common stock, par value	$ 0.01
Payment to Consultant [Member]
Supplemental disclosures - non-cash activities:
Common stock, par value	$ 0.01

Business, Liquidity and Basis of Presentation

9 Months Ended

Sep. 30, 2020

Description Of Business [Abstract]

Business, Liquidity And Basis of Presentation

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 clinical-stage immuno-oncology (“I-O”) company advancing an extensive pipeline of immune checkpoint antibodies, adoptive cell therapies and neoantigen vaccines, to fight cancer and infections. Our business is designed to drive success in I-O through speed, innovation and effective combination therapies. We believe that combination therapies and a deep understanding of each patient’s cancer will drive substantial expansion of the patient population benefiting from current I-O therapies. In addition to a diverse pipeline, we have assembled fully integrated end-to-end capabilities including novel target discovery, antibody generation, cell line development and good manufacturing practice manufacturing. We believe that these fully integrated capabilities enable us to produce novel candidates on timelines that are shorter than the industry standard. Leveraging our science and capabilities, we have forged important partnerships to advance our innovation.

We are developing a comprehensive I-O portfolio driven by the following platforms and programs, which we intend to utilize individually and in combination:

•

our multiple antibody discovery platforms, including our proprietary display technologies, designed to drive the discovery of future CPM antibody candidates;

•

our antibody candidate programs, including our CPM programs;

•

our vaccine programs, including Prophage™, AutoSynVax™ and PhosPhoSynVax™;

•

our saponin-based vaccine adjuvants, principally our QS-21 Stimulon™ adjuvant, or QS-21 Stimulon; and

•

our cell therapy subsidiary, AgenTus Therapeutics, Inc., which is designed to drive the discovery of future adoptive cell therapy, or “living drugs” programs.

Our business activities include product research and development, intellectual property prosecution, manufacturing, regulatory and clinical affairs, corporate finance and development activities, and support of our collaborations. Our product candidates require clinical trials and approvals from regulatory agencies, as well as acceptance in the marketplace. Part of our strategy is to develop and commercialize some of our product candidates by continuing our existing arrangements with academic and corporate collaborators and licensees and by entering into new collaborations.

Our cash and cash equivalents at September 30, 2020 were $114.1 million, an increase of $52.3 million from December 31, 2019.

We have incurred losses since our inception. As of September 30, 2020, we had an accumulated deficit of $1.4 billion. Although we plan to launch our first commercial product in 2021, if approved, we do not expect to be profitable in 2021.

During the past five years, we have successfully financed our operations through the sale of equity, notes, corporate partnerships and advance royalty sales. Based on our current plans and projections, we believe that our cash resources of $114.1 million as of September 30, 2020, will be sufficient to satisfy our liquidity requirements into the third quarter of 2021; we are presently in financing, partnership, and out licensing discussions which, if consummated, could extend our cash resources further into and beyond next year. Until we are successful in our efforts for capital infusion through these transactions or other financing options, and because the completion of such transactions is not entirely within our control, in accordance with 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.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the financial statements have been prepared on a basis that assumes we will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Management continues to address the Company’s liquidity position and will adjust spending as needed in order to preserve liquidity. In March 2020, in response to the COVID-19 pandemic, we streamlined our organization, which included a headcount reduction, and our CEO, Dr. Garo Armen, elected to receive his base salary in stock rather than cash for the remainder of 2020. 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 potential sources of funding to include: (1) collaborations, out-licensing and/or partnering opportunities for our portfolio programs and product candidates with

multiple parties (2) renegotiating third party agreements, (3) selling assets, (4) securing additional debt financing and/or (5) selling 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, 2020, are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. 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, 2019 filed with the Securities and Exchange Commission on March 16, 2020.

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 loss in total stockholders’ deficit.

Net Loss Per Share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Net Loss Per Share

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, 2020 and 2019, as they would be anti-dilutive (in thousands):

	Three and Nine Months Ended September 30,
	2020		2019
Warrants		1,950		1,400
Stock options		24,813		24,890
Non-vested shares		844		2,117
Series A-1 convertible preferred stock		333		333
Series C-1 convertible preferred stock		12,459		12,459

Investments

9 Months Ended

Sep. 30, 2020

Cash And Cash Equivalents [Abstract]

Investments

Note C - Investments

Cash equivalents consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020				December 31, 2019
	Cost		Estimated Fair Value		Cost		Estimated Fair Value
Institutional money market funds	$	84,329	$	84,329	$	55,258	$	55,258
U.S. Treasury Bills		14,999		14,999		—		—
Total	$	99,328	$	99,328	$	55,258	$	55,258

As a result of the short-term nature of our investments, there were minimal unrealized holding gains or losses for the three and nine months ended September 30, 2020 and 2019.

Goodwill and Acquired Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Acquired Intangible Assets

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, 2020 (in thousands):

Balance, December 31, 2019	$	23,188
Foreign currency translation adjustment		712
Addition of goodwill related to business acquisition		794
Balance, September 30, 2020	$	24,694

Acquired intangible assets consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):

	As of September 30, 2020
	Amortization period (years)	Gross carrying amount		Accumulated amortization			Net carrying amount
Intellectual property	7-15 years	$	16,808	$	(9,547	)	$	7,261
Trademarks	4-4.5 years		1,252		(915	)		337
Other	2-7 years		2,181		(676	)		1,505
In-process research and development	Indefinite		2,043		—			2,043
Total		$	22,284	$	(11,138	)	$	11,146

	As of December 31, 2019
	Amortization period (years)	Gross carrying amount		Accumulated amortization			Net carrying amount
Intellectual property	7-15 years	$	16,584	$	(8,044	)	$	8,540
Trademarks	4.5 years		834		(834	)		—
Other	2-6 years		572		(553	)		19
In-process research and development	Indefinite		1,945		—			1,945
Total		$	19,935	$	(9,431	)	$	10,504

The weighted average amortization period of our finite-lived intangible assets is 9 years. Amortization expense related to acquired intangibles is estimated at $0.6 million for the remainder of 2020, $2.2 million for each of the years ending December 31, 2021 and 2022, $1.7 million for the year ending December 31, 2023 and $0.6 million for the year ending December 31, 2024.

Debt

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Debt

Note E - Debt

Debt obligations consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):

Debt instrument	Balance at September 30, 2020
Current Portion:
Debentures	$	146
Other		1,036
Long-term Portion:
2015 Subordinated Notes		12,648
Other		6,197
Total	$	20,027

Debt instrument	Principal at December 31, 2019		Unamortized Debt Discount			Balance at December 31, 2019
Current Portion:
Debentures	$	146	$	—		$	146
2015 Subordinated Notes		500		—			500
Long-term Portion:
2015 Subordinated Notes		13,500		(120	)		13,380
Total	$	14,146	$	(120	)	$	14,026

On February 18, 2020, we entered into an amendment to the 2015 Subordinated Notes (the “Amendment”) pursuant to which we:

•

extended the maturity date of $13.5 million of the 2015 Subordinated Notes by three years from February 20, 2020 to February 20, 2023;

•

repaid $0.5 million of the 2015 Subordinated Notes;

•

extended the exercise period of the warrants to purchase 1,350,000 shares of the Company’s common stock previously issued in 2015 by three years from February 20, 2020 to February 20, 2023; and

•

issued new warrants to purchase 675,000 shares of the Company’s common stock with a term of five years and an exercise price of $4.48 per share, which represented a 20% premium over the 30-day average trailing closing price of the Company’s common stock as of the date of the Amendment.

The Amendment was accounted for as a debt extinguishment under the guidance of ASU 470: Debt. For the nine months ended September 30, 2020, we recorded a loss of approximately $2.7 million in other expense in our condensed consolidated statements of operations and comprehensive loss, which primarily represents the fair value of the new and extended warrants. The amended 2015 Subordinated Notes were recorded at fair value. In April 2020, we repaid $0.5 million of the outstanding amended 2015 Subordinated Notes and cancelled related warrants. As of September 30, 2020, the principal amount of our outstanding debt balance was $20.4 million.

Payroll Protection Program

In May 2020, we entered into promissory notes with Bank of America, NA for aggregate loan proceeds of approximately $6.2 million (collectively, the “Loan”) under the Small Business Administration (the “SBA”) Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security Act of 2020 (the “CARES Act”). We intend to use at least 60% of the Loan proceeds for covered payroll costs and no more than 40% of the Loan proceeds for rent and utilities in accordance with the relevant terms and conditions of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act. Each Loan has a two-year term and bears interest at a rate of 1.00% per annum.

The Loan may be forgiven partially or fully if the Loan proceeds are used for covered payroll costs, rent and utilities, provided that such amounts are incurred during the twenty-four week period commencing on receipt of the Loan proceeds, and at least 60% of any forgiven amount has been used for covered payroll costs. Any forgiveness of the Loan will be subject to approval by the SBA and will require us to apply for such treatment in the future.

As we cannot yet determine if the Loan will be partially or fully forgiven, we have classified the Loan proceeds as debt in our condensed consolidated balance sheet.

Liability Related to the Sale of Future Royalties and Milestones

9 Months Ended

Sep. 30, 2020

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, 2020 (in thousands):

	Period from December 31, 2019 to September 30, 2020
Liability related to sale of future royalties and milestones - beginning balance	$	221,845
Non-cash royalty revenue		(29,950	)
Non-cash interest expense recognized		43,870
Liability related to sale of future royalties and milestones - ending balance		235,765
Less: unamortized transaction costs		(431	)
Liability related to sale of future royalties and milestones, net	$	235,334

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 these royalties as revenue when earned, and we recorded the $190.0 million in proceeds from this transaction as a liability on our condensed consolidated balance sheet that will be amortized using the interest method 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 recognition of the 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, 2020, we recognized $30.0 million of non-cash royalty revenue, and we recorded $43.9 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. During the nine months ended September 30, 2020, our estimate of the effective annual interest rate over the life of the agreement increased to 29.0%, which results in a retrospective interest rate of 23.8%.

Accrued Liabilities

9 Months Ended

Sep. 30, 2020

Other Liabilities Disclosure [Abstract]

Accrued Liabilities

Note G - Accrued Liabilities

Accrued liabilities consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Payroll	$	7,472	$	9,575
Professional fees		3,430		4,314
Contract manufacturing costs		6,287		8,768
Research services		3,554		6,675
Other		1,061		2,000
Total	$	21,804	$	31,332

Fair Value Measurements

9 Months Ended

Sep. 30, 2020

Fair Value Measurements [Abstract]

Fair Value Measurements

Note H - Fair Value Measurements

We measure our contingent purchase price considerations at fair value.

The fair values of our contingent purchase price considerations, $13.6 million, 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 market capitalization and share price, as well as other factors impacting the probability of triggering the milestone payments. Market capitalization and share price were evolved using a geometric Brownian motion, calculated daily for the life of the contingent purchase price considerations.

The significant unobservable inputs include the anticipated timelines to achieve the contingent purchase milestones and our estimated credit spread, the weighted average values of which (weighted based on the value of each contingent liability), as of September 30, 2020, are shown in the table below.

Unobservable

Input

Period of time to achieve milestones (in years)

1.1

Credit spread

8.4

Liabilities measured at fair value are summarized below (in thousands):

Description	September 30, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities:
Contingent purchase price considerations	$	13,639	$	—	$	—	$	13,639
Total	$	13,639	$	—	$	—	$	13,639

Description	December 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities:
Contingent purchase price consideration	$	8,843	$	—	$	—	$	8,843
Total	$	8,843	$	—	$	—	$	8,843

The following table presents our liabilities measured at fair value using significant unobservable inputs (Level 3), as of September 30, 2020 (in thousands):

Balance, December 31, 2019	$	8,843
Change in fair value of contingent purchase price considerations during the period		4,652
Addition of contingent purchase price consideration related to business acquisition		144
Balance, September 30, 2020	$	13,639

The fair value of our outstanding debt balance at September 30, 2020 and December 31, 2019 was $20.2 million and $14.2 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, 2020 and December 31, 2019 was $20.4 and $14.1 million, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2020

Collaboration [Abstract]

Revenue from Contracts with Customers

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 (the “Effective Date”), we received an upfront cash payment from Gilead of $120.0 million and Gilead made a $30.0 million equity investment in Agenus. We are also eligible to receive up to $1.1 billion in aggregate potential milestones.

Collaboration Revenue

For the three months ended September 30, 2020, we recognized $4.1 million of research and development revenue related to the Gilead Collaboration Agreements based on the partial satisfaction of the over time performance obligations as of quarter end. For the three months ended September 30, 2019, we recognized $3.6 million 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, 2020, we recognized $9.9 million of license and collaboration revenue related to the Gilead Collaboration Agreements based on the partial satisfaction of the over time performance obligations as of period end. For the nine months ended September 30, 2019, we recognized $77.7 million of license and collaboration revenue related to the Gilead Collaboration Agreements. This amount included $12.2 million of the transaction price recognized 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 $18.8 million and $27.7 million for the remainder of 2020 and 2021, respectively, related to performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2020.

Incyte Collaboration Agreement

For the three months ended September 30, 2020, we recognized approximately $0.2 million of research and development revenue for research and development services provided. For the three months ended September 30, 2019, we recognized approximately $2.1 million of research and development revenue. This amount included $1.7 million of the transaction price recognized based on the partial satisfaction of the over time performance obligations as of quarter end and $0.4 million for research and development services.

For the nine months ended September 30, 2020, we recognized approximately $0.5 million of research and development revenue for research and development services provided. For the nine months ended September 30, 2019, we recognized approximately $3.3 million of research and development revenue. This amount included $2.0 million of the transaction price for the Incyte Collaboration Agreement recognized based on the partial satisfaction of the over time performance obligations as of period end and $1.3 million for research and development services.

Betta License Agreement

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

We also entered into a stock purchase agreement with Betta and a wholly-owned subsidiary of Betta (“Betta HK”). Refer to Note L – Equity for additional detail.

We identified the following performance obligations under the Betta License Agreement: (1) the license of balstilimab and zalifrelimab, (2) our obligation to complete manufacturing technology transfer activities to Betta (the “Technology Transfer”) for balistilimab and zalifrelimab and (3) the supply of balistilimab and zalifrelimab.

We determined that the license of balstilimab and zalifrelimab was both capable of being distinct and distinct within the context of the contract as the license has significant stand-alone functionality as of contract inception based on the advanced development

stage of balstilimab and zalifrelimab. Betta can begin deriving benefit from the license prior to the Technology Transfer being completed. The Technology Transfer is completed over time and is separate from the transfer of the balstilimab and zalifrelimab license, which occurred at contract inception. As a result, we concluded that the balstilimab and zalifrelimab license and Technology Transfer are separate performance obligations. We also determined that the supply of balstilimab and zalifrelimab was both capable of being distinct and distinct within the context of the contract as it was considered a readily available resource in the market.

We determined that there were no significant financing components, noncash consideration, or amounts that may be refunded to the customer, and as such the total upfront fixed consideration of $15.0 million would be included in the total transaction price and be allocated to the identified performance obligations using the relative standalone selling price method.

We determined the estimated standalone selling price of the balstilimab and zalifrelimab license by applying a risk adjusted, net present value, estimate of future cash flow approach. We determined the estimated standalone selling price of the Technology Transfer by using the estimated costs of satisfying the performance obligation, plus an appropriate margin for such services. We did not estimate the standalone selling price of the balstilimab and zalifrelimab supply due to the “as invoiced” practical expedient.

Revenue attributable to the balstilimab and zalifrelimab license was recognized at a point-in-time, upon delivery of the license to Betta at contract inception. The Technology Transfer is satisfied over time and revenue attributable to this performance obligation will be recognized as the related services are being performed using the input of costs incurred over total costs expected to be incurred. We believe this is the best measure of progress because other measures do not reflect how we transfer the performance obligation to Betta.

For the three and nine months ended September 30, 2020, we recognized $13.9 million of license and collaboration revenue related to the Betta License Agreement.

Disaggregation of Revenue

The following tables present revenue (in thousands) for the three and nine months ended September 30, 2020 and 2019, 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, 2020
	United States		Rest of World		Total
Revenue Type
Research and development services	$	175	$	—	$	175
Other services		—		1,489		1,489
Recognition of deferred revenue		4,111		110		4,221
Non-cash royalty revenue		8,947		—		8,947
	$	13,233	$	1,599	$	14,832

	Three months ended September 30, 2019
Revenue Type
Research and development services	$	441	$	—	$	441
Recognition of deferred revenue		5,310		—		5,310
Recognition of deferred grant revenue		6		445		451
Manufacturing services		1,534		—		1,534
Non-cash royalty revenue		12,204		—		12,204
	$	19,495	$	445	$	19,940

	Nine months ended September 30, 2020
	United States		Rest of World		Total
Revenue Type
Research and development services	$	510	$	—	$	510
License fee revenue		13,857		—