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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, 2022

or

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 4, 2022: 304,811,685 shares

 

 


 

Agenus Inc.

Nine Months Ended September 30, 2022

Table of Contents

 

 

 

 

 

Page

PART I

 

 

ITEM 1.

 

Financial Statements:

 

2

 

 

Condensed Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021

 

2

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021 (Unaudited)

 

3

 

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2022 and 2021 (Unaudited)

 

4

 

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (Unaudited)

 

8

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

10

ITEM 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

20

ITEM 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

26

ITEM 4.

 

Controls and Procedures

 

27

 

 

 

PART II

 

 

ITEM 1.

 

Legal Proceedings

 

28

ITEM 1A.

 

Risk Factors

 

28

ITEM 6.

 

Exhibits

 

80

 

 

Signatures

 

81

 

 

 

 


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, 2022
(unaudited)

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

208,354

 

 

$

291,931

 

Short-term investments

 

 

9,876

 

 

 

14,992

 

Accounts receivable

 

 

8,823

 

 

 

1,518

 

Prepaid expenses

 

 

21,989

 

 

 

20,362

 

Other current assets

 

 

2,390

 

 

 

3,171

 

Total current assets

 

 

251,432

 

 

 

331,974

 

Property, plant and equipment, net of accumulated amortization and depreciation of
   $
53,158 and $50,539 at September 30, 2022 and December 31, 2021, respectively

 

 

101,030

 

 

 

60,029

 

Operating lease right-of-use assets

 

 

37,824

 

 

 

31,054

 

Goodwill

 

 

23,936

 

 

 

24,876

 

Acquired intangible assets, net of accumulated amortization of $15,587 and
   $
13,955 at September 30, 2022 and December 31, 2021, respectively

 

 

6,877

 

 

 

8,488

 

Other long-term assets

 

 

7,920

 

 

 

9,537

 

Total assets

 

$

429,019

 

 

$

465,958

 

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

 

 

 

 

 

 

Current portion, long-term debt

 

$

13,458

 

 

$

728

 

Current portion, liability related to sale of future royalties and milestones

 

 

72,569

 

 

 

62,040

 

Current portion, deferred revenue

 

 

12,762

 

 

 

12,425

 

Current portion, operating lease liabilities

 

 

1,898

 

 

 

2,627

 

Accounts payable

 

 

39,711

 

 

 

30,486

 

Accrued liabilities

 

 

28,950

 

 

 

42,091

 

Other current liabilities

 

 

3,725

 

 

 

6,546

 

Total current liabilities

 

 

173,073

 

 

 

156,943

 

Long-term debt, net of current portion

 

 

 

 

 

12,823

 

Liability related to sale of future royalties and milestones, net of current portion

 

 

198,692

 

 

 

191,708

 

Deferred revenue, net of current portion

 

 

3,069

 

 

 

11,200

 

Operating lease liabilities, net of current portion

 

 

63,817

 

 

 

42,109

 

Contingent purchase price considerations

 

 

739

 

 

 

1,689

 

Other long-term liabilities

 

 

1,465

 

 

 

1,577

 

Commitments and contingencies

 

 

 

 

 

 

STOCKHOLDERS’ (DEFICIT) EQUITY

 

 

 

 

 

 

Series A-1 convertible preferred stock; 31,620 shares designated, issued, and
   outstanding at September 30, 2022 and December 31, 2021; liquidation value
   of $
33,619 at September 30, 2022

 

 

0

 

 

 

0

 

Common stock, par value $0.01 per share; 800,000,000 and 400,000,000 shares
   authorized at September 30, 2022 and December 31, 2021, respectively;
   
294,948,117 and 256,897,910 shares issued at September 30, 2022
   and December 31, 2021, respectively

 

 

2,949

 

 

 

2,569

 

Additional paid-in capital

 

 

1,614,836

 

 

 

1,520,212

 

Accumulated other comprehensive income

 

 

644

 

 

 

1,492

 

Accumulated deficit

 

 

(1,638,814

)

 

 

(1,489,833

)

Total stockholders’ (deficit) equity attributable to Agenus Inc.

 

 

(20,385

)

 

 

34,440

 

Non-controlling interest

 

 

8,549

 

 

 

13,469

 

Total stockholders’ (deficit) equity

 

 

(11,836

)

 

 

47,909

 

Total liabilities and stockholders’ (deficit) equity

 

$

429,019

 

 

$

465,958

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

2


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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

4,573

 

 

$

238,986

 

 

$

13,220

 

 

$

242,265

 

Royalty sales milestone

 

 

7,934

 

 

 

 

 

 

25,250

 

 

 

 

Service revenue

 

 

1,041

 

 

 

1,375

 

 

 

4,167

 

 

 

4,201

 

Other revenue

 

 

 

 

 

 

 

 

 

 

 

35

 

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

 

 

9,224

 

 

 

12,593

 

 

 

27,001

 

 

 

28,903

 

Total revenues

 

 

22,772

 

 

 

252,954

 

 

 

69,638

 

 

 

275,404

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of service revenue

 

 

(308

)

 

 

(817

)

 

 

(2,875

)

 

 

(2,589

)

Research and development

 

 

(46,011

)

 

 

(42,937

)

 

 

(133,412

)

 

 

(125,122

)

General and administrative

 

 

(18,105

)

 

 

(21,385

)

 

 

(55,971

)

 

 

(54,388

)

Contingent purchase price consideration fair value adjustment

 

 

7

 

 

 

(275

)

 

 

950

 

 

 

(13,531

)

Operating (loss) income

 

 

(41,645

)

 

 

187,540

 

 

 

(121,670

)

 

 

79,774

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Gain on extinguishment of debt

 

 

 

 

 

6,197

 

 

 

 

 

 

6,197

 

Non-operating income

 

 

537

 

 

 

121

 

 

 

9,654

 

 

 

2,059

 

Interest expense, net

 

 

(15,607

)

 

 

(16,581

)

 

 

(44,538

)

 

 

(49,147

)

Net (loss) income

 

 

(56,715

)

 

 

177,277

 

 

 

(156,554

)

 

 

38,883

 

Dividends on Series A-1 convertible preferred stock

 

 

(53

)

 

 

(53

)

 

 

(159

)

 

 

(158

)

Less: net loss attributable to non-controlling interest

 

 

(2,493

)

 

 

(1,275

)

 

 

(7,573

)

 

 

(2,702

)

Net (loss) income attributable to Agenus Inc. common stockholders

 

$

(54,275

)

 

$

178,499

 

 

$

(149,140

)

 

$

41,427

 

Per common share data:

 

 

 

 

 

 

 

 

 

 

 

 

Basic net (loss) income attributable to Agenus Inc. common stockholders

 

$

(0.19

)

 

$

0.76

 

 

$

(0.54

)

 

$

0.19

 

Diluted net (loss) income attributable to Agenus Inc. common stockholders

 

$

(0.19

)

 

$

0.72

 

 

$

(0.54

)

 

$

0.18

 

Weighted average number of Agenus Inc. common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

286,854

 

 

 

235,407

 

 

 

274,170

 

 

 

219,677

 

Diluted

 

 

286,854

 

 

 

246,726

 

 

 

274,170

 

 

 

232,512

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation loss

 

$

(1,505

)

 

$

(83

)

 

$

(848

)

 

$

(2,595

)

Other comprehensive loss

 

 

(1,505

)

 

 

(83

)

 

 

(848

)

 

 

(2,595

)

Comprehensive (loss) income

 

$

(55,780

)

 

$

178,416

 

 

$

(149,988

)

 

$

38,832

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

3


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