SEC Filing - Agenus Inc.

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agen-10q_20220331.htm

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 March 31, 2022

☐	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 May 6, 2022: 270,990,987 shares

Agenus Inc.

Three Months Ended March 31, 2022

Table of Contents

		Page
PART I
ITEM 1.	Financial Statements:	2
	Condensed Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2022 and 2021 (Unaudited)	3
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three months ended March 31, 2022 and 2021 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (Unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	21
ITEM 4.	Controls and Procedures	21

PART II
ITEM 1.	Legal Proceedings	22
ITEM 1A.	Risk Factors	22
ITEM 6.	Exhibits	72
	Signatures	73

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)

	March 31, 2022 (unaudited)			December 31, 2021
ASSETS
Cash and cash equivalents	$	247,709		$	291,931
Short-term investments		14,978			14,992
Accounts receivable		1,286			1,518
Prepaid expenses		21,730			20,362
Other current assets		4,780			3,171
Total current assets		290,483			331,974
Property, plant and equipment, net of accumulated amortization and depreciation of $51,507 and $50,539 at March 31, 2022 and December 31, 2021, respectively		75,603			60,029
Operating lease right-of-use assets		30,316			31,054
Goodwill		24,617			24,876
Acquired intangible assets, net of accumulated amortization of $14,412 and $13,955 at March 31, 2022 and December 31, 2021, respectively		7,753			8,488
Other long-term assets		12,533			9,537
Total assets	$	441,305		$	465,958
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion, long-term debt	$	14,181		$	728
Current portion, liability related to sale of future royalties and milestones		59,131			62,040
Current portion, deferred revenue		13,527			12,425
Current portion, operating lease liabilities		2,708			2,627
Accounts payable		34,544			30,486
Accrued liabilities		32,610			42,091
Other current liabilities		6,361			6,546
Total current liabilities		163,062			156,943
Long-term debt, net of current portion		—			12,823
Liability related to sale of future royalties and milestones, net of current portion		191,899			191,708
Deferred revenue, net of current portion		8,685			11,200
Operating lease liabilities, net of current portion		47,424			42,109
Contingent purchase price considerations		1,153			1,689
Other long-term liabilities		1,432			1,577
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Series A-1 convertible preferred stock; 31,620 shares designated, issued, and outstanding at March 31, 2022 and December 31, 2021; liquidation value of $33,513 at March 31, 2022		0			0
Common stock, par value $0.01 per share; 400,000,000 shares authorized; 266,740,045 and 256,897,910 shares issued at March 31, 2022 and December 31, 2021, respectively		2,667			2,569
Additional paid-in capital		1,550,239			1,520,212
Accumulated other comprehensive income		970			1,492
Accumulated deficit		(1,538,158	)		(1,489,833	)
Total stockholders’ equity attributable to Agenus Inc.		15,718			34,440
Non-controlling interest		11,932			13,469
Total stockholders’ equity		27,650			47,909
Total liabilities and stockholders’ equity	$	441,305		$	465,958

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 March 31,
	2022			2021
Revenue:
Research and development	$	6,740		$	1,571
Service revenue		1,567			1,629
Other revenue		—			35
Non-cash royalty revenue related to the sale of future royalties		17,634			8,484
Total revenues		25,941			11,719
Operating expenses:
Cost of service revenue		(543	)		(1,105	)
Research and development		(42,442	)		(36,677	)
General and administrative		(18,953	)		(16,352	)
Contingent purchase price consideration fair value adjustment		536			1,044
Operating loss		(35,461	)		(41,371	)
Other income (expense):
Non-operating income		56			2,858
Interest expense, net		(15,199	)		(15,890	)
Net loss		(50,604	)		(54,403	)
Dividends on Series A-1 convertible preferred stock		(53	)		(53	)
Less: net loss attributable to non-controlling interest		(2,279	)		(726	)
Net loss attributable to Agenus Inc. common stockholders	$	(48,378	)	$	(53,730	)
Per common share data:
Basic and diluted net loss attributable to Agenus Inc. common stockholders	$	(0.19	)	$	(0.27	)
Weighted average number of Agenus Inc. common shares outstanding:
Basic and diluted		258,310			200,331

Other comprehensive loss:
Foreign currency translation loss		(522	)	$	(3,774	)
Other comprehensive loss		(522	)		(3,774	)
Comprehensive loss	$	(48,900	)	$	(57,504	)

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 C-1				Series A-1
	Convertible				Convertible
	Preferred Stock				Preferred Stock				Common Stock									Treasury Stock
	Number of Shares		Amount		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

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 C-1				Series A-1
	Convertible				Convertible
	Preferred Stock				Preferred Stock				Common Stock						Treasury Stock
	Number of Shares		Amount		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, 2020		12	$	26,917		32	$	0		196,093	$	1,961	$	1,257,502		—	$	—	$	2,772		$	(7,826	)	$	(1,465,907	)	$	(211,498	)
Net loss		—		—		—		—		—		—		—		—		—		—			(726	)		(53,677	)		(54,403	)
Other comprehensive loss		—		—		—		—		—		—		—		—		—		(3,774	)		—			—			(3,774	)
Share-based compensation		—		—		—		—		—		—		3,669		—		—		—			263			—			3,932
Shares sold at the market		—		—		—		—		18,950		190		60,669		—		—		—			—			—			60,859
Payment of CEO payroll in shares		—		—		—		—		19		—		68		—		—		—			—			—			68
Issuance of shares for services		—		—		—		—		5		—		20		—		—		—			—			—			20