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Operator
Welcome to the Janus first quarter 2022 financial results conference call. My name is James, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the Q&A session, if you have a question, please press 01 on your touchtone phone. And I'd now like to turn the call over to Ethan Lovell, Chief External Affairs and Communications Officer. Mr. Lovell, you may begin.
James
Thank you, James, and thank you all for joining us today. Today's call is being webcast and will be available on our website for replay. I'd like to remind you that this call will contain forward-looking statements, including statements regarding our clinical development, regulatory and commercial plans, and timelines, as well as timelines for data release and partnership opportunities. These statements are subject to risks and uncertainties, and we refer you to our SEC filings for more details on these risks. Joining me today on the call are Dr. Gero Arman, Chairman and Chief Executive Officer, Dr. Steven O'Day, Chief Medical Officer, Dr. Dan Chand, Head of Drug Discovery, Christine Klaskin, Vice President of Finance, and Dr. Jennifer Buell, Chief Executive Officer of Mink Therapeutics. Now I'd like to turn the call over to Gero to highlight our progress and speak to our outlook for the remainder of the year. Gero?
James
Thank you, Ethan. And thank you all for being with us today. As we all have witnessed, the biotech sentiment is the most negative we've seen in decades. Given the current climate, I'd like to begin today's call by indicating that we are aware of this reality and are putting on hold all programs which are not critical for near-term value generation. Wireless, and importantly, We are marching ahead with programs which we believe have the prospects of generating significant near-term value. Overall, we expect these steps will result in significant cost reduction for the balance of this year. Ironically, despite recent trends, scientific and medical innovation is at an all-time peak. It appears that irrational exuberance coupled with recent regulatory uncertainty, I'm mumbling my words here by even talking about regulatory uncertainty, but particularly this is happening in the U.S., of course, has made it more difficult for investors to differentiate between the good, the bad, and the ugly. Still, some companies will continue to innovate and achieve success. Several like us have already started restructuring their operations and curtailing their ambitions to adjust to current realities. While this shifting environment has led to a discouraging financial climate for biotech, we believe companies like Agenis with integrated capabilities and importantly platforms which can drive continuous innovation will emerge at the forefront. A few will be able to build significant value while advancing profoundly effective treatments and cures. At Agenis, we expect that our portfolio of innovative discoveries and our steadfast commitment will trump all hurdles and deliver life-changing medicines to patients while creating significant value for all stakeholders. Thus, Agenis' strategy is to continue to drive innovation in today's shifting environment. Now I will outline our highest priority programs, starting with Potencilumab, our most advanced fully-owned program represents the highest potential in our portfolio. This is, by the way, based on the fact that the compound, Potencilumab, is the most advanced in the clinic among the novel compounds that we have in our portfolio. Our expectations of Potencilumab as a potential blockbuster I.O. agent are supported with additional clinical data, which we expect to present at an upcoming cancer conference. Botansilumab is an activator of both innate and adaptive arms of the immune system. Data from our proprietary vision platform continues to support its broad and unique activity, including responses in patients with so-called cold tumors, which typically do not respond to immune therapy. We have expanded patient enrollment in our existing clinical trials in specific cohorts of patients, which will form the basis of our Phase II studies in colorectal cancer, melanoma, and pancreatic cancer. Our efforts to initiate these studies are currently in high gear. Our clinical development strategy of Potencilumab is to demonstrate clear superiority to existing checkpoint immunotherapies and or other standards of care. This is based on strong signals we have observed in our Phase I study in patients who were heavily pretreated. These observations led to our prioritization of relapsed refractory melanoma, MSS colorectal cancer, and pancreatic cancer as our target indications for potential approval. Now, for a minute, for context, colorectal cancer is the third leading cause of cancer-related deaths in the United States, with over 50,000 Americans dying each year. Immunotherapy treatments in colorectal cancer have been largely unsuccessful, partly because Most colorectal cancers are cold tumors. And for those with metastatic disease, five-year survival rates are in the low teens. Also for context, current standards of care for patients which are represented in our trials deliver approximately a 2% response rate with significant side effects and minor improvement in survival. In contrast, botansilumab in combination with our anti-PD-1 bolstilumab has delivered significantly higher response rates, which will be discussed soon. Botansilumab also holds significant potential in melanoma, where despite treatment advances, there remains few effective therapies for those who fail frontline regimens, particularly with immunotherapies as well. In addition to these indications, we presented data at last year's CITSE, demonstrating that rotencilumab benefits in several other cold tumors, including endometrial, cervical, and pancreatic cancers. Over 50% of patients treated with botansilumab had received at least three prior lines of therapy. Botansilumab produced objective responses in these difficult-to-treat patient settings. Hence, we're preliminarily exploring development strategies across these indications to bring therapy options to patients who have limited or no options today. The unique attributes of Potencilimab have been the result of the deliberate efforts of our team, who engineered this molecule based on their understanding of tumor biology and the immune system. These translated into a unique mechanism of action, which results in the activity of Potencilimab across a variety of tumors. We presented botansilumab's activity in nine different tumors. While this botansilumab binds to CTLA-4, it has a much broader activity by targeting both the adaptive and the innate immune arms of the system. We're working closely with scientific and regulatory experts to advance potencylamide in hard-to-treat cancers, which I mentioned, include cancers characterized by cold tumor types. We're hopeful that the unique attributes of this molecule will lead to life-changing outcomes for underserved patients, including potential treatments for pediatric cancers. While advancing our portfolio with our high priority programs, we're also pursuing our business development plans with potential collaborators. In addition, we're actively looking at innovative financing mechanisms, which we have excelled in delivering previously. Adopting our business model in consideration of the current industry landscape is for us a critical extension of our innovation. and strategic thinking. Agenis has had an impressive track record of VD transactions and innovative financings with more than $800 million raised in just the past six years and potential to realize significant milestone in royalty payments from six different companies involving eight product candidates currently in clinical development. As Agenis moves with speed and innovation to execute our scientific discovery and clinical research, we're committed to taking the steps which will ensure our medical advances will be widely available to patients all over the world. Investing in integrated discovery development and manufacturing capabilities and emphasizing on international approaches to clinical development and commercialization are critical to achieving our objectives in this regard. We're putting these strategies into practice. For example, with Balzac, as we strive to make this combination available in ex-U.S. territories and as we continue to prioritize industry partnerships, which allow Agenis to retain elements of independence and control over the development of our molecules. It is also noteworthy to mention that Agenis' science has already advanced 16 discoveries into clinical development, and with a very exciting cell therapy company, represented today by the CEO, Dr. Jennifer Bew. that's Mink Therapeutics, created as a separate company, and another, Saponix, potentially in the making. Our ability to discover and innovate best-in-class molecules and treatments has been the basis for a significant number of productive industry partnerships. Our company values and the high worth we place on science has been instrumental in industry breakthrough therapies, such as GSK's Shingrix vaccine, with current analyst estimates of approaching $3 billion in annualized revenues this year. As I mentioned earlier, we're also sharpening our focus around expense management. to extend our runway to continue with our discoveries uninterrupted. Every aspect of this process matters to us. We have initiated a comprehensive review to eliminate non-discretionary spending and implement highly efficient practices. While we believe Agenis is in a strong financial position with over $260 million in cash, Our view is to exercise a conservative fiscal policy, particularly in times of uncertainty in financial markets and drug regulation. Our focus also includes our technology advancements, which drive efficiencies in product discovery and innovation. This is highlighted by our unique discovery platform, Vision, which has led to, among others, to our emerging work on myeloid checkpoint targets. At AACR in April, we presented data on our anti-ILT2 anybody, agent 1571, which represents our first fully-owned clinical stage myeloid targeting agent. In preclinical studies, agent 1571 has already demonstrated several important advantages. We expect to enroll patients in our phase one studies of agent 1571 shortly. Our plans are to evaluate this agent both as monotherapy and in combination guided by readouts from our vision platform. Last month, We also announced the receipt of a $5 million milestone payment from our partner, Gilead Sciences. While this is a tiny amount, it denotes the advancement of agent 2373, RCD137 agonist, which has unique advantages over other molecules. CD137 is an important pathway for anti-tumor immunity due to its ability to enhance T cell and NK cell proliferation, cytokine secretion, and cellular cytotoxicity. Importantly, Agen 2373 was designed to mitigate the liver toxicity that has limited the advancement of a first-generation molecule. Gilead retains an exclusive option to license Agen 2373, while Agenis has the ability to opt in for a 50-50 profit share and U.S. commercialization rights. Agenis stands to receive up to $570 million in future potential option fields and milestones from this product candidate alone. And that would be, of course, additional royalty payments, depending on the magnitude of a product like this upon successful launch. Development of AGEN-1777, our FC-enhanced digit by specific antibody partnered with BMS, is also advancing in the clinic. We continue to believe One-triple-seven represents a best-in-class antibody with an increasing body of evidence suggesting, indicating that FC enhancement is required to achieve optimal results with a digit-targeting approach. The programs I highlighted today signify Agenis' unique ability to advance our own pipeline with our own combinations. which is also enabled by information and knowledge we gather from our proprietary vision platform. Among others, vision informs upstream target prioritization and downstream biomarker identification as well as trial design. It is this ability to work rapidly with independence and integrity driven by science that positions Agenis to be a leader in biotech's currently shifting environment. So thank you very much, and I now turn it over to Christine, and I'll come back shortly after that.
Ethan
Thank you, Garo. We ended our first quarter 2022 with a cash and short-term investment balance of $263 million. as compared to $307 million on December 31st, 2021. We recognized revenue of $26 million for the quarter ended March 31, 2022, which represents an increase of $14 million from the $12 million reported for the same quarter in 2021. Both amounts include revenue related to non-cash royalties earned, revenue recognized under our collaboration agreements, and in 2022 milestones received. Net loss for the quarter ended March 31, 2022 with $51 million, which includes non-cash expenses of $21 million compared to a net loss for the same period of 2021 of $54 million, which includes non-cash expenses of $20 million. Per share losses were 19 cents per share in the first quarter of 2022, as compared to per share losses of 27 cents in the first quarter of 2021. Cash used in operations for the three months ended March 31, 2022 was $52 million up from the $43 million for the quarter ended March 31, 2021. As Garo mentioned, the company has initiated cost containment measures with expected reductions in operating expenses in the coming quarters. I now turn the call back to Garo.
James
Thank you very much, Christine. To summarize, despite the stressful external landscape, we continue to make important advances in a field which is in need. We have a number of important developments, including near-term data disclosures, initiation of Phase II Boticella Map programs, We're delivering on our promise of building a company with a diverse pipeline and moving swiftly to address areas of high unmet patient need. By the end of 2022, we expect to have initiated several new clinical studies, including the three phase two studies for Otezumab that we spoke about, a phase one monotherapy study for AGEN1571, We also expect to complete enrollment in the relapse refractory melanoma cohort of our combination study involving Wotacillimab and Agen 2373. In addition, there's of course the potential of corporate collaborations and additional cash infusions from them during the course of this year. Thank you again for your attention, and we will now open the call for questions.
Operator
Thank you. We can begin our question and answer session. If you have a question, please press 01 on your phone. If you wish to be removed from the question queue, you may press 02. And if you're using a speakerphone, you may need to pick up the handset first before pressing the numbers. So once again, if you have a question, please press 01 on your phone. Our first question comes from Minak Mantaini. I apologize. From Raleigh Securities.
Minak Mantaini
Good morning. Thanks for taking my questions and helpful biotech sector specific commentary there, Gano. So maybe just to kick up things with, you know, your recent prioritization of ILT2 as an important target and my large checkpoint inhibitor. So what was just curious, what was the rationale for that and sort of your history in that space, and also if you could talk to, you know, how might Sanofi's development and I think some data coming at ASCO inform your development and sort of the, you know, basket of initial solid tumors you might prioritize. And then I have a follow-up.
James
Let me first turn it to Dr. Dan Chan to address at least a part of these questions.
Dan Chan
Thank you, Garo. Mayank, thank you for that question. As you're aware, Agenis is well familiar with the ILT space. In fact, we built Merck's ILT4 antibody in K4830, which is progressing in the clinic, showing activity in patients that are refractory to PD-1 therapies as by design by Agenis. With that knowledge and experience that we've built in the space, we've also retained ILT2 You can see at AACR the potential for IL-D2 activity in not only complementary to PD-1, but also extending activity to colder tumors where PD-1 is not active. We've also demonstrated broad activity of HF1571, which includes activity that goes beyond just myeloid activation, which includes T-cell, NK, and NKT activation. You'll also notice from our poster ACR that we demonstrate best-in-class activity compared to other ILT2-targeting agents, which includes the most advanced clinical asset, the biome acid. We have demonstrated in head-to-head studies that Agent 1571 has not only moral therapy potential, but it's a superior activator of both myeloid activation and T and NK activation.
Minak Mantaini
Great. Thank you for that helpful comment.
James
I think the second part of the question is what tumors will we study? And I think maybe Dan could start and Dr. Odeh could finish that.
Dan Chan
Sure. Thank you. And I'll turn it over to Dr. Odeh shortly. So as you saw from our poster, we demonstrated that HLA-G, which is the main ligand for LT2, are expressed in tumor types that are independent of PD-L1 expression. So we see this as complementary. Of course, we will be exploring this retrospectively in the clinic. We've also identified as part of our preclinical development potential biomarker of response to HN1571, which will also be applied to our trial. Stephen?
Odeh
Yeah, Myron, thanks. Thank you for the question. Obviously, you can see our excitement around the ILT2, ILT4 field. Obviously, the myeloid space has been a challenge, but we really feel this is an important space. The ILT2 that we have put forward with the ACR, as Dan said, has both myeloid as well as lymphoid feature activation features, which may bring it best in class. And obviously the IL-T4 that our molecule that Merck is advancing is looking to, is showing some early promise. So in terms of tumor types, you know, I think obviously we're going to do the phase one broadly and look because obviously ovarian cancer, other tumors, even liver metastasis may very much be myeloid-dependent, pancreas, and others. So what's really great about our pipeline right now is botanistilamab obviously looks like, as the next generation CTLA-4, is really broader than CTLA-4 in terms of its innate adaptive sort of synapse in the FC-enhanced region. Really, we think bringing broader T cell repertoire recognition of weak neoantigens. And I think so that innate adaptive space that botanistilumab brings and then bringing a myeloid active drug that has lymphoid coverage also may be very exciting. So we couldn't be more excited about sort of the areas of the pipeline that we're going to bring forward and then have combinational potential.
Minak Mantaini
Thank you. Understood. And then on botanistilumab, how might you be thinking of a second half or fall medical conferences for, uh, incremental data disclosures? And, and, and, and if you are able to comment, um, you know, relative to what you've said before, you know, obviously melanoma landscape, very, very different than pancreatic and with CRC, you, you do have a specific trial design in place, a comparative study, but any, any incremental thoughts on, um, you know, melanoma and pancreatic for development and registration would be helpful. Sure.
James
Let me just tell you regarding the conference. So we have not disclosed the conference that we're going to be presenting at yet, but it is an important medical conference, cancer conference. But stay tuned, and that disclosure will be made shortly. But now let me turn it to Dr. O'Day about the trial design. One of the reasons our Phase II trials have taken a little bit of time to commence is related to the fact that the regulatory environment has gotten to be somewhat all over the place. And we've had to make sure that we consult with the appropriate parties to design the kinds of trials that are going to be meaningful for the next steps in product registration. Now, with that, it's important to note, and Dr. O'Dea will elaborate on this, that all of the trials in the phase two setting, particularly given the regulatory environment that we're in right now, will be randomized in one way or another, okay? Randomized to either standard of care or randomized within the drug that we're studying. So, Dr. Odey, please take it from here.
Odeh
So what I would say is, as Gara has said, we are laser-focused on our botanostilumab program because the Phase I, which is now an extended Phase I program, is showing really remarkable activity in a number of solid tumors, and the data continues to be encouraging. Because of this, we see it as a potential foundational partner, and the development plans which has taken some time to really be very strategic, is really going to ask three fundamental questions. One, as a single agent, is it differentiated and powerful? And obviously, melanoma is a disease to test that with a clear benchmark for ipilimumab, which we think we can beat. The second is colorectal, where combination therapy with RPD1 is showing significant activity And so this will be an area where we can see how botanostilumab combines with a PD-1. And then finally, a very cold tumor like pancreas, given our preclinical data showing very powerful combinational potential of botanostilumab with chemotherapy in a mouse model and some early signal in the clinic with response to pancreas with botanostilumab, we think this is an excellent experiment to look at botanistilumab in combination with chemotherapy. So the three registrational pathways, melanoma, colorectal, and pancreas, are really asking three fundamental scientific questions, single agent activity, combination with chemo, and combination with PD-1. And so we look forward to following that data and seeing if it can become a real new asset to the IO community in terms of targets, And most importantly, clinical performance in unmet needs. Great.
Minak Mantaini
And my final question was on the OPEX savings that you guys are working on. You know, obviously very astute and makes a lot of sense in this environment to, you know, prioritize as much as you can. So are you able to quantify that? any of that, or is that sort of work in progress? And maybe also comment on, you know, since a majority of the work will be on potential MAP development and, you know, potential combination regimens in the tumor types we talked about and beyond, how might you be thinking, you know, of some of that PNL burden that's to come, you know, starting next year?
James
Okay, so we haven't quantified the savings yet, but let me tell you that it's going to be 5 or 10 percent. We are talking about significant savings associated with the measures that we're taking. But as I said earlier, all of these savings are taking place without compromising the delivery of our highest priority programs, which includes 1181. So there's no way we're going to compromise the advancement of 1181 because it is the most advanced, the most promising, potentially blockbuster compound in our portfolio. That doesn't mean we're not excited about the rest of the compounds in our portfolio. It's just the fact that this is the most advanced makes it much more compelling to support near-term. And as I talked about, some of the other compounds are also advancing. For example, the expenses associated with 1571 through Phase I clinical trials is relatively modest, and compounds such as our CD137 are also advancing rapidly with the potential of the option holder exercising the option, which will or when it happens, which will bring in significant additional cash resources into the company. And 1-777, on the other hand, is being advanced entirely with Bristol-Myers' support. So a lot of these compounds, other than 1181, are either representing minor expenditures going forward, or are entirely underwritten by our collaborators.
Minak Mantaini
Great, thanks for taking that question.
Operator
Our next question comes from Qiwen of Jefferies.
spk01
Hi, this is Qiwen of Jefferies. Thank you for taking my questions. I'm asking questions on behalf of Kelly Hsu. I do have two quick questions. Number one, for the Phase II trials for Bolton Cinemab, I just want to clarify, you said the trial is about to launch. Is that most likely starting Q2 or Q3? And second is that previously you said in colorectal cancer or cervical cancer, the response rate is very low. Could you maybe give a rough number, like what is likely the response rate that would clear the regulatory hurdle? That's question number one. And for question number two, I just want to follow up on the operating cash expenses. Now, besides the cost containment, is there any other measures you're currently considering that will potentially risk cash? Or putting it out of the way, what is the expected milestone payment that you'd like to receive in the next few quarters? Thank you.
James
OK. So let me start out with the trials, timing of the trials. All three trials that we spoke about, phase two trials, are expected to commence starting in the third quarter of this year. starting in the third quarter of this year. And as I mentioned, one of the reasons it's taken so long is for us to be able to confer with the appropriate advisors, authorities, and so on and so forth, to make sure that we have considered everything. And that's one of the reasons for each trial having multiple arms, including randomization, in some cases, to the standard of care. All of this means that trial design has been finalized. So the only hurdle between now and initiation of these trials is simple operations. So we are clear on the kinds of trials that are going to be the subject of our phase two undertakings. Now, with regard to expenses, I think your question, if I understand it correctly, is Did you have a question on the expenses?
spk01
Yeah, I just want to understand, besides the cost containment, is there any other plans to ? Oh, I see.
James
Right. And then you also wanted to know if there are any additional milestones that we will receive this year. The answer is yes, we expect additional milestones to be received for the balance of this year. We haven't disclosed what they are, but stay tuned. And with regard to additional cash resources, as you know, we've been very, very resourceful in doing collaborations with companies and other creative transactions. We haven't tapped... I mean, this is the horrible time to do that. We have no plans of any marketed stock issuance, if that is the question that you're asking. And it's a horrible environment to do that in any way. But we've been very creative in transactions. And I don't want to elaborate on what we have in active consideration right now. But everything you do is, of course, has some element of dilution, including partnerships, because you're giving up part of the upside of your compounds. But what we plan on doing is to be as creative as possible, including potential royalty transactions that will support our needs in coming years.
spk01
Thank you.
Operator
Our next question comes from Matt Phillips of William Blair.
Matt Phillips
Hi, good morning. Thanks for taking my call. Dr. O'Day, I was wondering, for your Phase II melanoma trial and relapsed refractory melanoma, obviously the first-line market is changing a bit with the recent approval of the PD-1 LAG-3. So just wondering if you're going to enroll patients who have just failed a PD-1, failed PD-1 plus LAG-3, or would you even enroll patients who failed Opdivo, Yervoy?
Odeh
Yes. Hi, Matt. Yes. Obviously, the frontline setting in melanoma now involves three options, you know, single-agent PD-1s, combinations with CTLA-4, ipinevo, and then obviously the new LAG-3 PD-1 combinations So, we will be looking at all of those groups. Obviously, the space is sort of divided between ipinevo frontline and then PD-1 monotherapy. We expect that some patients will now be failing. We know they will be failing the LAG-3 combination, too, and we'll be looking at all three of those. We think we have a not just a CTLA-4 drug, but potentially a broader, you know, drug with 1181. And we certainly want to understand whether it can rescue any of those scenarios.
Matt Phillips
Okay, great. Thank you for that. And then just to help clarify for what to expect in the third quarter, is this just combination? Is there also additional monotherapy updates of what you guys showed at CITSE and then Is this all tumor types, or was it focusing on some of these ones that you're going into phase two as far as additional patients beyond what we saw at CIDC?
Odeh
Sorry, Matt. I guess I don't understand the question.
Matt Phillips
You said some potent still map updates coming in Q3, some additional clinical data. You guys got to show data at CIDC. Is this just Is it the patients across both the monotherapy and the combination? Is it just the combination? Yeah.
Odeh
So as Gerald said, we are continuing to expand the phase one trial in a number of different areas, particularly around the diseases like melanoma, colorectal, pancreas, that we plan to open phase two trials. And so we will be bringing data forward at important medical conferences later this year, and we haven't announced where, but the additional data around those diseases will be updated at conferences later this year.
James
So, Matt, to be clear on that note, as you remarked, we had done a phase one study with over 100 patients enrolled, And then we were getting set up to start our phase two studies late last year. And so for a while, these phase one enrollments had slowed down. But because of the longer timelines required for our initiation of phase two studies, we made a deliberate effort and executed on it in enrolling patients in specific two studies. And since that decision was made earlier this year, enrollment in those cohorts that will be the subject of phase two studies has actually exploded. And so we have considerable more patients in those cohorts that have generated data which will be the subject of our upcoming presentation with additional data disclosure. Does that
Matt Phillips
Yeah, no, that's great. Thanks for the additional clarity on that. I look forward to it. Thanks for taking my questions.
Operator
And once again, if you have a question, please press 01. And we have no more questions.
James
Thank you very much, everybody. And thank you very much for your attention in these very busy times. We look forward to fielding your questions, and don't hesitate to contact us as required.
Operator
Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.
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