On Thursday, Agenus Inc . (NASDAQ:AGEN) experienced a shift in market expectations as H.C. Wainwright adjusted its stance on the company's stock, downgrading it from Buy to Neutral with a price target (PT) of $9.
The revision follows the U.S. Food and Drug Administration's (FDA) recommendation against an accelerated approval pathway for Agenus's bot/bal as a treatment for relapsed/refractory microsatellite stable colorectal cancer (MSS-CRC).
The FDA has suggested that Agenus proceed with a Phase 3 study instead of seeking accelerated approval, citing concerns that the objective response rate (ORR) observed in the company's interim Phase 2 data may not be indicative of an actual survival benefit.
Agenus disclosed initial findings from the Phase 2 trial that assessed monotherapy doses of bot in 75 mg and 150 mg, as well as combined bot/bal at the same dosages. The study involved 201 patients across four cohorts, with an additional 33 patients receiving the standard of care (SOC), which included regorafenib and/or trifluridine/tipiracil.
The most promising results came from the 75 mg bot/bal cohort, which showed an ORR of 19.4%, including two potential responses awaiting confirmation. Without these two, the confirmed ORR stands at 16%. However, the ORR for the 150 mg bot/bal cohort was only 8.2%. These findings are relatively consistent with the 23% ORR reported in the Phase 1 study.
Despite the ORR consistency, the combined ORR for the two dosages in the Phase 2 study dropped to 14%, raising questions about the dose-response relationship. Agenus has indicated that it saturated the target at the 75 mg dose and noted similar effects in the Phase 1 study, although it did not specify the ORR by dose.
Looking ahead, Agenus suggested that a Phase 3 trial could potentially begin by the end of 2024, though H.C. Wainwright estimates it might be pushed to the first half of 2025. The requirement of a Phase 3 trial for approval could delay the potential launch of the treatment by several years.
In light of these developments and the need for additional survival data from the Phase 2 study, the firm has opted for a more cautious outlook on Agenus shares.
In other recent news, Agenus Inc. has made some significant strides in its operations and financial standing. The company recently presented its IST study results, which showed a 75% pathological response rate and a 40% complete pathological response rate in the treatment of colorectal cancer with bot/bal. The study, maintained by H.C. Wainwright, also indicated that longer exposure to the treatment resulted in higher response rates.
Agenus also reported Q1 revenue of $28 million, but a net loss of $63.5 million. To boost its financial resources, the company secured a $100 million financing deal with Ligand Pharmaceuticals, which could potentially increase to $200 million.
The company has also appointed Dr. Jennifer Buell to its Board of Directors. With over 27 years of experience in the biopharmaceutical industry, Dr. Buell will be guiding the company's BOT/BAL program towards a Biologics License Application and exploring new avenues for cancer therapy delivery.
Furthermore, Agenus has scheduled a key regulatory meeting with the U.S. Food and Drug Administration (FDA) to discuss the development of its combination cancer therapy, botensilimab and balstilimab (BOT/BAL). This therapy has previously been granted a fast track designation by the FDA and has shown potential in treating metastatic microsatellite stable colorectal cancer.
These recent developments highlight the progress Agenus is making in its operations, financial standing, and cancer therapy research.
InvestingPro Insights
In the wake of recent developments with Agenus Inc. (NASDAQ:AGEN), investors may find the real-time data and InvestingPro Tips particularly relevant for assessing the stock's potential. Agenus has demonstrated significant price performance with a 1 Month Price Total Return of 36.49% and an even more impressive 3 Month Price Total Return of 256.74%. This robust short-term growth aligns with the company's strong return metrics over the last week and month, suggesting a positive market sentiment.
However, the company's financial health raises some concerns. Agenus is currently operating with a negative Price / Book ratio of -1.85 as of the last twelve months ending Q1 2024, indicating that the market values the company less than its net asset value.
Furthermore, the company's Gross Profit Margin stands at a concerning -37.72%, reflecting the challenges Agenus faces in converting sales into actual profit. This is consistent with the InvestingPro Tip that highlights the company's weak gross profit margins.
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