On Friday, Jefferies adjusted its stance on Agenus Inc . (NASDAQ:AGEN), downgrading the stock from Buy to Hold while raising the price target to $7 from $3.
The decision came after the U.S. Food and Drug Administration (FDA) advised Agenus against submitting their Biologics License Application (BLA) for BOT+BAL in microsatellite stable colorectal cancer (MSS-CRC) for accelerated approval. The FDA's concern is that the objective response rate (ORR) observed might not necessarily indicate a survival benefit for patients.
The company is now set to initiate a randomized Phase 3 trial and plans to engage with the FDA to reconsider their stance as Phase 2 data matures. However, the analyst noted that this development introduces a high level of uncertainty regarding the drug's approval process.
Additionally, concerns about the company's cash position were highlighted, as near-term approval now seems unlikely, which could affect Agenus's financial stability.
The recent stock split was also a factor in Jefferies' reassessment. The firm has adjusted the colorectal cancer approval timeline in its financial model for Agenus and is awaiting further clarity on the situation. The raised price target to $7 reflects the new valuation despite the downgrade to Hold, indicating a revised expectation for the stock's future performance.
The FDA's feedback has prompted Agenus to change its regulatory strategy, and the outcome of their efforts to persuade the agency will be closely watched by investors and stakeholders. The company's next steps and the results from the forthcoming Phase 3 trial will be critical in determining the potential for BOT+BAL in treating MSS-CRC.
In other recent news, Agenus Inc. has faced a series of adjustments in stock ratings. William Blair and Baird downgraded Agenus stock from Outperform to Market Perform and Neutral respectively, citing regulatory challenges and financial constraints.
However, H.C. Wainwright maintained its Buy rating for Agenus, following the presentation of encouraging study results for the use of botensilimab and balstilimab (BOT/BAL) as a treatment for colorectal cancer.
In financial developments, Agenus secured a $100 million financing deal with Ligand Pharmaceuticals, potentially increasing to $200 million, despite reporting a Q1 revenue of $28 million and a net loss of $63.5 million. This financial boost is expected to aid in the continued development of the company's drug candidates.
Agenus also announced the appointment of Dr. Jennifer Buell to its Board of Directors, bringing over 27 years of biopharmaceutical industry experience to the company. In terms of regulatory matters, Agenus has scheduled a crucial meeting with the FDA to discuss the development of its BOT/BAL combination cancer therapy.
InvestingPro Insights
As Agenus Inc. (NASDAQ:AGEN) navigates the FDA's feedback and prepares for a Phase 3 trial, investors are closely monitoring the company's financial health and stock performance. According to real-time data from InvestingPro, Agenus has a market capitalization of $153.29 million and is experiencing significant revenue growth, with a 69.94% increase in the last twelve months as of Q1 2024. Despite this growth, the company's gross profit margin is in negative territory at -37.72%, reflecting challenges in profitability.
InvestingPro Tips highlight that Agenus is quickly burning through cash, which aligns with concerns about the company's financial stability mentioned by Jefferies. Additionally, the stock has experienced high price volatility and has taken a notable hit over the last week. These factors contribute to a complex investment landscape, where Agenus's short-term financial obligations exceed its liquid assets, and analysts do not anticipate the company will be profitable this year.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available that could provide further insights into Agenus's performance and outlook. By using the coupon code PRONEWS24, investors can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription to access these valuable tips.
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