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2022-08-04

 

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 June 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 August 4, 2022: 283,162,902 shares

 

 

 

 


 

 

Agenus Inc.

Six Months Ended June 30, 2022

Table of Contents

 

 

 

 

 

Page

PART I

 

 

ITEM 1.

 

Financial Statements:

 

2

 

 

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

 

2

 

 

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

 

3

 

 

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

 

4

 

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 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

 

17

ITEM 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

23

ITEM 4.

 

Controls and Procedures

 

23

 

 

 

PART II

 

 

ITEM 1.

 

Legal Proceedings

 

25

ITEM 1A.

 

Risk Factors

 

25

ITEM 6.

 

Exhibits

 

75

 

 

Signatures

 

76

 

 

 

 


 

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)

 

 

 

June 30, 2022

(unaudited)

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

228,385

 

 

$

291,931

 

Short-term investments

 

 

9,945

 

 

 

14,992

 

Accounts receivable

 

 

18,994

 

 

 

1,518

 

Prepaid expenses

 

 

28,622

 

 

 

20,362

 

Other current assets

 

 

2,988

 

 

 

3,171

 

Total current assets

 

 

288,934

 

 

 

331,974

 

Property, plant and equipment, net of accumulated amortization and depreciation of

   $52,389 and $50,539 at June 30, 2022 and December 31, 2021, respectively

 

 

88,611

 

 

 

60,029

 

Operating lease right-of-use assets

 

 

38,547

 

 

 

31,054

 

Goodwill

 

 

24,438

 

 

 

24,876

 

Acquired intangible assets, net of accumulated amortization of $15,197 and

   $13,955 at June 30, 2022 and December 31, 2021, respectively

 

 

7,722

 

 

 

8,488

 

Other long-term assets

 

 

7,922

 

 

 

9,537

 

Total assets

 

$

456,174

 

 

$

465,958

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current portion, long-term debt

 

$

13,699

 

 

$

728

 

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

 

 

54,955

 

 

 

62,040

 

Current portion, deferred revenue

 

 

14,195

 

 

 

12,425

 

Current portion, operating lease liabilities

 

 

1,916

 

 

 

2,627

 

Accounts payable

 

 

41,002

 

 

 

30,486

 

Accrued liabilities

 

 

30,148

 

 

 

42,091

 

Other current liabilities

 

 

3,808

 

 

 

6,546

 

Total current liabilities

 

 

159,723

 

 

 

156,943

 

Long-term debt, net of current portion

 

 

 

 

 

12,823

 

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

 

 

209,528

 

 

 

191,708

 

Deferred revenue, net of current portion

 

 

6,171

 

 

 

11,200

 

Operating lease liabilities, net of current portion

 

 

64,572

 

 

 

42,109

 

Contingent purchase price considerations

 

 

746

 

 

 

1,689

 

Other long-term liabilities

 

 

1,796

 

 

 

1,577

 

Commitments and contingencies

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Series A-1 convertible preferred stock; 31,620 shares designated, issued, and

   outstanding at June 30, 2022 and December 31, 2021; liquidation value

   of $33,566 at June 30, 2022

 

 

0

 

 

 

0

 

Common stock, par value $0.01 per share; 400,000,000 shares authorized;

   282,859,723 and 256,897,910 shares issued at June 30, 2022 and

   December 31, 2021, respectively

 

 

2,829

 

 

 

2,569

 

Additional paid-in capital

 

 

1,583,030

 

 

 

1,520,212

 

Accumulated other comprehensive income

 

 

2,149

 

 

 

1,492

 

Accumulated deficit

 

 

(1,584,592

)

 

 

(1,489,833

)

Total stockholders’ equity attributable to Agenus Inc.

 

 

3,416

 

 

 

34,440

 

Non-controlling interest

 

 

10,222

 

 

 

13,469

 

Total stockholders’ equity

 

 

13,638

 

 

 

47,909

 

Total liabilities and stockholders’ equity

 

$

456,174

 

 

$

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 June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

1,907

 

 

$

1,708

 

 

$

8,647

 

 

$

3,279

 

Royalty sales milestone

 

 

17,316

 

 

 

 

 

 

17,316

 

 

 

 

Service revenue

 

 

1,559

 

 

 

1,196

 

 

 

3,126

 

 

 

2,825

 

Other revenue

 

 

 

 

 

 

 

 

 

 

 

35

 

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

 

 

144

 

 

 

7,826

 

 

 

17,778

 

 

 

16,310

 

Total revenues

 

 

20,926

 

 

 

10,730

 

 

 

46,867

 

 

 

22,449

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of service revenue

 

 

(2,024

)

 

 

(667

)

 

 

(2,567

)

 

 

(1,772

)

Research and development

 

 

(44,960

)

 

 

(45,508

)

 

 

(87,404

)

 

 

(82,184

)

General and administrative

 

 

(18,914

)

 

 

(16,650

)

 

 

(37,866

)

 

 

(33,003

)

Contingent purchase price consideration fair value adjustment

 

 

407

 

 

 

(14,300

)

 

 

943

 

 

 

(13,256

)

Operating loss

 

 

(44,565

)

 

 

(66,395

)

 

 

(80,027

)

 

 

(107,766

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating income (expense)

 

 

9,061

 

 

 

(920

)

 

 

9,118

 

 

 

1,938

 

Interest expense, net

 

 

(13,731

)

 

 

(16,676

)

 

 

(28,930

)

 

 

(32,566

)

Net loss

 

 

(49,235

)

 

 

(83,991

)

 

 

(99,839

)

 

 

(138,394

)

Dividends on Series A-1 convertible preferred stock

 

 

(53

)

 

 

(53

)

 

 

(106

)

 

 

(105

)

Less: net loss attributable to non-controlling interest

 

 

(2,801

)

 

 

(701

)

 

 

(5,081

)

 

 

(1,427

)

Net loss attributable to Agenus Inc. common stockholders

 

$

(46,487

)

 

$

(83,343

)

 

$

(94,864

)

 

$

(137,072

)

Per common share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss attributable to Agenus Inc. common stockholders

 

$

(0.17

)

 

$

(0.37

)

 

$

(0.35

)

 

$

(0.65

)

Weighted average number of Agenus Inc. common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

277,033

 

 

 

222,906

 

 

 

267,723

 

 

 

211,681

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation gain (loss)

 

$

1,179

 

 

$

1,262

 

 

$

657

 

 

$

(2,512

)

Other comprehensive income (loss)

 

 

1,179

 

 

 

1,262

 

 

 

657

 

 

 

(2,512

)

Comprehensive loss

 

$

(45,308

)

 

$

(82,081

)

 

$

(94,207

)

 

$

(139,584

)

 

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

 

 

 

(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

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

4


 

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