Agenus Inc.

Good afternoon, and welcome to Agenis, Inc.' 's investor briefing call. Currently, all participants are in a listen-only mode. A question-and-answer session will follow the formal remarks. As a reminder, this conference is being recorded. I will now turn the call over to Zach Arman, head of investor relations.

Thank you, operator. Welcome to Agenis' investor briefing call. Earlier today, we issued a press release announcing a strategic collaboration between Agenis and Zytus Life Sciences, which we are here to review in more detail with you today. A copy of the press release is available on our website at www.investors.agenisbio.com. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements. These statements are subject to risks and uncertainties, which may cause actual results to differ materially from expectations. Please refer to our SEC filings for further detail. Joining me today are Garrel Arman, Chairman and CEO, and Dr. Stephen O'Day, Chief Medical Officer. I'll now turn the call over to Garrel Arman.

Thank you, Zach, and good afternoon, everyone. Thank you for joining us. On today's call, we will be discussing an exciting new partnership between Agenis Enzytis. It's an exciting opportunity for both companies and for trade between two great nations, the world's oldest democracy and the world's largest democracy. But before I get into the details, I want to start with why this is so important. As you've been hearing lately, colorectal cancer is on the rise, particularly among the younger people under the age of 50. Colorectal cancer, which is known as CRC, incidences have doubled in the US adults under 55 from 1995 to present. By 2030, colorectal cancer is projected to become the leading cause of cancer-related death in men under 50, that is in the USA. These younger patients, especially need treatment other than chemotherapy, radiation, and life-altering surgeries. They deserve an alternative with life-changing side effects. And this was, by the way, a major topic of discussion at the ASCO meeting, which I attended, along with 75 to 80 meetings that we had with KOLs and investigators who came to meet with us without getting paid a penny. I must stress the importance of that. The new leadership at HHS and the FDA recognize what I just said. One of the president's first action with Secretary Kennedy was to set up the Make America Healthy Again Commission, which is focused on investigating the causes of America's worsening health trends. The commission issued its report last month And one major area of focus was the rise in cancer incidences among younger people. This is alarming. Secretary Kennedy has pledged to root out conflicts of interest. And the FDA commissioner, Dr. Marty Makary, has repeatedly stressed the need to accelerate approval of meaningful treatments. I underlined meaningful treatments in this context. This shifting regulatory environment is deeply encouraging to us and for the entire research community who is discovering and developing novel and effective therapies, not incremental therapies that extend life by marginal timelines, a few weeks to a few months, with horrible side effects. And so it is an exciting time at Agenis. We have new data, we have added to our leadership, and now we have a new partnership and a new environment at the FDA. We'll talk about these one by one. Let's talk about new data. Phobotansilumab and Bostromab, which we call Bot-Bal, and by the way, the entire community now has started calling it Bot-Bal, We are generating consistent and compelling data across different lines of treatment, both in the neoadjuvant setting, all the way down to major lines of treatment for patients that have exhausted every single available therapy. And this is happening across multiple cold tumors that have historically defied standard immunotherapy treatments. These include MSS colorectal cancer, which, by the way, accounts for more than 85% of the colorectal cancer cases, certain hard-to-treat breast cancers, like non-small cell lung cancer, I'm sorry, triple negative breast cancer, sarcomas, which have been a traditionally difficult target for patients, and hepatocellular carcinoma, among others. As I mentioned, I just got back from my school in Chicago, where we presented translational data showing that butt valve elicited a response in MSS tumors, which, as I said, historically had not responded to any immunotherapy to speak of. Now, all of this Bill spoke of Dr. Miriam Chalabi's presentation at AACR in late April of this year. Dr. Chalabi presented results from investigator-sponsored NeoASIS 10 cancer study trial in the neoadjuvant setting. This study showed pathologic complete responses across multiple cancers. And importantly, no dose-limiting toxicities, and all patients proceeded to our next level of treatment, like surgery, on schedule. As Dr. Chalabi stated, these findings substantiate the importance of this immunotherapy in early treatment settings and highlight the broad potential utility of this combination, as she was talking about that time. Let me spend a second on new leadership that we've added. To support this next phase of development, we recently welcomed Dr. Richard Goldberg, a world-renowned GI oncology expert, as our chief development officer. He was with us at ASCA as well. His leadership will be pivotal as we advance towards reengaging the FDA for metastatic CRC and down the road for other tumor types as well. Now let's come to new partnerships and new opportunities. And of course, today is about our new partnership and new opportunities. It's expected that United States will reach a trade agreement with India any day now. And in both countries, there is renewed sense of confidence in Indian American relations and trade. Leaders in America recognize the need to secure America's biopharma supply chain. Very important part of the agenda here. For all these reasons, now is a great time for this particular agreement that we entered into today. And that is why we decided it's now, it's now that's the right time to move on to this kind of agreement. I believe this agreement And our relationship will benefit Agenis and Zydus, but also our two great countries, which are already great trading partners. Let me go to slide two, if I may. And slide two talks about the strategic collaboration unites Agenis' pioneering research and development capabilities with Zydus worldwide manufacturing and operating strengths. Now, if you sort of take a step back and look at the reasons why we consummated our Emeraldville strategy to make commercial-grade products, I might add state-of-the-art facility that will make this commercial-grade product, it has to do with the fact that we wanted a reliable, consistent, means of supplying in the event that our expectations and patients' expectations came true, that BOTVAL became a standard for the treatment of many difficult-to-treat cancers. That was the original reason why we did this, because at that time, we realized that it would have been too risky for us to just depend on traditional CDMOs. Now, what I'm delighted to announce with this agreement is that even though this transaction transferred the ownership to Zydus, we have the same drivers of integrity, reliability, efficiency, and quality in Zydus in a facility that we've built and with a team that has played a major role in building this facility and running it right now. So that's one of the reasons why having this partnership with Zydus makes our relationship, not just in the context of generating additional funds for our own company, but also looking at the future and anticipating that future with a reliable partner. Okay. Now, this partnership and the divestiture of our non-core assets mark a new chapter for us for the reasons that I've told you. Agenis 2.0, that's sort of a good way of conceptualizing our next chapter, a focused innovation engine with a clear path to value generation through its streamlined execution and smart partnering. That is the desired outcome. and this is what we expect to execute on. For those of you joining that may not be as familiar with Gydus Log Sciences, they're a leading global pharmaceutical company with a fantastic reputation in India and beyond. With an 11 billion market cap, it is headquartered in India, employs over 27,000 people across 55 countries. including the United States. They bring deep expertise in manufacturing, clinical development, and regional care delivery, with $2.6 billion in 2024 revenues and an expanding chain of multidisciplinary hospitals and trial infrastructure across Southeast Asia. Now with this, Genesis positions for substantial value creation through a layered approach that integrates scientific advancements with commercial foresight fortitude. Now, this is an interesting chart, and it tells you what our first phase of execution is, which is block-bound approval in the U.S. being our focus. Next, of course, will be Europe shortly thereafter. And then after that, We have huge opportunities in indication expansion, other market approvals, and also very importantly, and this was highlighted, by the way, at a number of our meetings at ASCO by some of the world leaders in immuno-oncology who understand how immuno-oncology works. And their mandate is to help the system understand how immuno-oncology works and how the endpoints should be evaluated in the context of immunological effect on the tumor. So we are positioned today for substantial value creation through a layered approach that integrates scientific advancements with commercial foresight. Together we're combining scientific innovation and global operational strength to unlock the full potential of BotVal and expand our research and to expand our patients worldwide. Strengthening financial foundations, of course, is key. And our focus strategy of capital infusion to power eugenics plays a major role in that. And having a like-minded partner is one of the best ways of accomplishing this. So with this transaction, we are divesting our non-core assets, which are hard assets. Manufacturing is not our sweet spot, but it happens to be Zydus' sweet spot. That doesn't mean we haven't excelled in manufacturing. It simply means that we have very important agendas to execute on with innovation and bringing these products to patients as soon as possible. And Zydus will be a very important part of that execution. So looking at the deal structure, in addition to the $75 million up front and the $50 million in contingent payments, we're also planning the divestment of land assets valued at $40 to $50 million in the second half of this year. Of course, these types of transactions can be delayed. So with that qualification, our intent is to monetize on our real estate assets in California that are not part of this deal. And, of course, together, we also have the 16 million equity investments from Zydus, which is also a very big vote of confidence in us at $750 a share. We're reinforcing our balance sheet, reducing our cash burn, and focusing our capital where it derives the most value for us and our shareholders, and also, very importantly, for our patients. are in need of an innovative and potentially curative product our vision is centered on both science-driven innovations and of course butt bell is the lead in this but we have a whole bunch of clinical stage products behind but that innovation only delivers impact if it reaches patients efficiently and that's why we are concentrating our resources on u.s and U.S. Registrational Trials for BPAL, with an understanding that our moral responsibility is to go beyond the U.S. as soon as possible, and India is one of those territories. And while integrating Zytus's advanced analytics to streamline our development, improve trial design, and optimize patient selection will be critical. Remember Zytus. is a company that's not just in pharmaceutical manufacturing, but they own a number of hospitals in India, including a cancer-dedicated hospital, as well as a CRO that advances clinical trials not just in India, but also other countries. I had the pleasure of visiting India several weeks ago and visiting three of their hospitals and also visiting with their CRO. And this is a meeting of the mind that has emerged to consummate this transaction. So our vision is centered on bold, again, science-driven innovation, but that innovation only delivers impact if it reaches patients efficiently. That's why we are concentrating our resources on U.S. registration, as I said before. The key is in our clinical trial development, reducing timelines, lowering costs, and ultimately accelerating our path to regulatory approval. That is key. And having the ability to integrate with some of the subsidiaries or related companies of Zydus and execute clinical trials at record pace and allowing that to inform what clinical trials and what combinations and what indications should be pursued in the U.S. is a very substantial advantage that will add value to Agenis and, very importantly, value to Zytus. So, through this partnership, as I said before, we gain access to Zytus's extensive clinical trial networks across India and beyond. And, of course, this accelerates our ability to bring BustBio to more patients and more indications leveraging their operational scale alongside our scientific leadership. We also see significant strategic value in combining Buck with upcoming PD-L1 biosimilars, PD-1 and PD-L1, I might say, that ZYVIS will be manufacturing. They're already well ahead of their competition in this area. And this will give us an opportunity that could help unlock the current $50 billion global market segment in immunotherapy by adding BOTS strength to the current state of affairs in immunotherapy, which reaches less than one-third of the eligible patients. But our expectation is that with BOTS infusion, into these combinations, we can significantly expand that market. Significantly expand that market. So with this partnership, Agenis is executing a dual pathway to Strategy 4.0 prioritizing U.S. registration trials while simultaneously leveraging Zytus's extensive infrastructure to advance development in emerging markets. This, by the way, allows us to accelerate approvals. It is a model that pays scientific innovation with operational scale to maximize patient impact and shareholder value. Patient impact must be the driver for shareholder value, not the other way around. And in conclusion, with new data coming at ESMO in July, Continued regulatory engagement, both in the U.S. and in Europe, and now through ZYBIS, we expect this to be with India as well. And new regional partnership discussions underway. Agenis is positioned not just for progress, but for transformation. That is the Agenis 2.0 vision in action. science-led partner-enabled and patient-focused strategy. Now, in conclusion, I just want to divert your attention to one thing, and that is the team that worked tirelessly over the past months and continues to work tirelessly for potential additional transactions is the team that we would like to reward, and that is the subject of our asking at our shareholder meeting for resolutions. So as a final note, we will have our 2025 shareholder meeting on June 17th, and it is critically important that all shareholders of Agenis resolve April 24, 2025 record date, quote, very important. Agenis' proxy solicitor, Alliance Advisors, has been with us for over 10 years. is available to assist you with your voting of shares, even if you do not have access to your proxy card. This could be done on the phone. Their phone number is 844-202-6561. And you can also email them at agen at allianceadvisors.com. And please do this as soon as possible to ensure that the team who delivered on this transaction is motivated and continues to work to deliver and expand on this transaction and more. Thank you very much for your continued support. And operator, Tiffany, we are ready for questions.

At this time, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star one again. For today's call, we kindly ask that you limit your questions to one and one follow-up. We will pause for just a moment to compile the Q&A roster. Your first question comes from Colleen Cussey with Baird. Please go ahead. Hi.

Good afternoon and congrats on the deal and thanks for taking our questions. So you referenced future clinical trials. Any more color on what indications those might be and whether that be funded by Agenis or Zytis or both? And then I have a follow-up, please.

When we, Colleen, thank you for that question. When we were in India several weeks ago, Zydus brought together eight of India's absolutely top-notch oncologists. They flew them from all over India, and as you know, India is not a small country, so it takes effort to travel to the city of Ahmedabad, where Zydus is headquartered. And so we had the opportunity to connect with them in person, by the way, no Zoom connections or team connections. It was all in person. And we presented data from all the trials, which include certainly colorectal cancer, because that's where we have the largest database, but also cancers in earlier stage setting and most recently, the AACR presentation by Dr. Miriam Chalabi. And also in our interactions with Zytus-owned or affiliated hospitals, we had the opportunity to meet with the head of the hospital that is specialized in cancer. I believe it's a thousand-bed hospital just dedicated to cancer. And the head of that hospital is a breast cancer surgeon. In our conversations, it became clear that there was very high interest in pursuing the triple negative breast cancer. And based on the data, I admit that the data is small, but it's very compelling. I mean, if you have neoadjuvant patients with triple negative breast cancer that respond to your treatment in six weeks, and a number of them respond with complete pathologic responses, that is an eye-opener. So when we went through that data, there's definitely high interest in pursuing indications like triple negative breast cancer. And in India, by the way, it's much less competitive. It's much less competitive in terms of competing with existing standards of care or upcoming standards of care. So we have, I think, a terrific opportunity there to pursue this. to pursue other neoadjuvant trials like sarcoma and also specialty cancers that come in small numbers in the US, but those numbers are a bit more in India. So there will be a very high level of interest for Zydus to pursue and expand things in India. And of course, with our resources, we will be focusing on CRC. No question about that. including starting our registration trials in CRC this year with a group that is specialized in conducting these trials at a fraction of the cost. We've referred to this before, at a fraction of the cost as regular CROs because they're a nonprofit and they've had a fantastic record with other products both in terms of rapid enrollment and registration. So, this is not an unknown entity, and we will have more on this to come in the second half of next year. Sorry, second half of this year. It's a very high priority for us.

Yeah. Great. Thank you. And yeah, our follow-up is on CRC. Any update on the timing of your FDA meeting? And can you talk about what you plan to discuss at that meeting? Talk about your level of confidence that the FDA will agree to an accelerated approval pathway. Thank you.

Well, when dealing with the traditional FDA, I cannot make any unequivocal statements about their position. However, what I can tell you is that we have expanded our data set from last year's meeting to this year's meeting. How so? We have more patients. And we have more mature data. One of the questions of the FDA last year was based on their publication. They had some doubts about whether or not 20% response rates would translate to long-term benefit. Well, now we have more than one year additional data, and the results have been absolutely consistent and persistent. And of course, they need to make that judgment in conscience for us to encourage for accelerated .

Your next question comes from Joseph Bruschka with HC Wainwright.

Hi, this is Joey on for Emily Bodner. So briefly you mentioned about the triple negative breast cancer and the interest from Zytus. Do you believe they're going to initiate any clinical trials evaluating Bopal in the near term? And what might the regulatory process look like in India?

So in terms of the regulatory process in India, of course, we will defer all of that to Zytus because they're the experts. They're a very well-established and very well-respected company by Indian authorities. And we have not yet worked out the details of the exact next steps for clinical trials in triple negative breast cancer and other indications. But that's part of our work plan coming up in the next months.

Thank you. And just one follow-up. When can we expect the $50 million contingent payments to be made? And how do you plan to recognize the $75 million upfront payment in your financial statements?

So I think Christine with us about the recognition of the $75 million in our financial statements. So we'll get back to you on that. But there's no, I just want you to know that there are no tax consequences to that. There's zero tax consequences. So we'll reflect that transaction appropriately in our financial statements with the realization that there's no tax consequence. That's number one. Number two, with regard to contingent payments, It is a function of how quickly we put in our orders for manufacturing in the Emerald facility. And I'm confident that those will come very quickly. I'm talking about no later than the next 18 months, starting in the next few months. I see.

All right. Thank you so much. And congratulations on the news partnership.

Your next question comes from Mayank Mamthani with B Reilly Securities. Please go ahead.

Hey, good afternoon, team. Congrats on the deal. Thanks for taking your question. So with $91 million coming in and you getting close to a $50 million operating bond, now these non-core assets are off your P&L. Any color on impact on your cash runway you could provide and whether the phase three U.S. study, assuming that remains on track to initiate later this year, is that part of your operating burn?

And then I have a follow-up. So as I indicated in our last call, we expect that our operating burn will be annualized $50 million going forward. Okay, that's what we anticipate. Now, in terms of... how we will fit in our plans for phase three trials designed for full approval, full approval. And that I will tell you this year. If we initiate these trials, which I expect to initiate this year, our total expenditure for these trials this year will be approximately, I'm talking about a very large randomized two-arm trial Our expenditures for this year will be no more than $5 million. Our expenditures next year will be no more than $12 million. And our expenditures the following year, which will be the conclusion of the trial, will be no more than approximately $8 million for a total of approximately $25 million. Over three years. Over three years.

Wow. I guess I have to ask a follow-up to that. Is that because the product, the arrangement that you have with Zytus on product supply, so that $50 million will basically net out as, you know, contingent payments will net out as the cost for that drug? Is that essentially the cost savings and these costs that you're talking about are the CRO-related costs?

Okay. So let me answer this in two ways. We are not including any Zytus-related data management cost savings or anything else. This is if we were to do this trial on our own without Zytus, the numbers that I've given you would be the numbers. Now, why is that such a cost saving? Well, the outfit, this is on their website that we will be working with, is called CTCG. Okay? Okay. And this outfit is specializing, first of all, it's a nonprofit agency. And it does clinical trials in Canada, in France, in Australia, and New Zealand. Only a small population comes from New Zealand. So the major populations are Canada, France, and Australia. All reference countries. All reference countries. A part of the big cost savings is related to the fact that the standard of care treatment is covered in its entirety by those countries, in its entirety. Secondly, another big cost saving is that because this is a nonprofit, there are substantial cost savings associated with their CRO function of the trial. They're very excited about this. They've already teed up centers. And we expect them to execute at record pace. And we met with them at ASCO a couple of days ago. And their level of enthusiasm is very, very high. So by the way, just for clarity, it's Canadian Cancer Trials Group. It's CCTG. I may have pronounced the sequence wrongly. CCTG, Canadian Cancer cancer trials group, and they have already vetted with this program.

Understood. And then my follow-up to a prior question was around this data that you have accumulated for the Part B meeting. Appreciate, you know, there's been incremental survival data, more patients. I think the total of 250 patients, if you add the Phase I expanded cohort and then the phase two, boardwalk, you know, two arms, I get about 250 subjects. Are you able to comment on whether we'll get data on all of this at ESMO GI, or would we get data on a specific phase one extended cohort at ESMO GI? I'm just trying to understand when the sheet would be able to see that entire package that would be presented to the FDA. Thanks for taking the question.

the very best doctor all days with us, and I'm going to defer to him to answer this question.

Yeah, Mark, we haven't released, obviously, all the details, but we plan to update our, and it's been accepted, the extended phase one data, which includes an additional year of follow-up and a significant additional number of patients. at ESMO GI, not the Phase II data at that time.

And we are tentatively scheduled to have an investigator forum at ESMO GI where we will be discussing everything, not just in the context of what will be presented.

Would that be released as part of some corporate deck update, the phase two active comparative control data?

Of course. We will share the phase two data with the investigators.

And with investors, would that be shared around ASCO GI?

Yeah. Mark, we've said since ASCO GI we've reported the response data. which was the primary input of the study. We continue to wait for follow-up and time-sensitive endpoints, and hopefully by the second half of the year, those will be mature enough to present or convey data in the Phase 2 trial. Understood. Thank you for that clarification.

Stephen, is it fair to say that so far the Response rate data in phase one first cohort, phase one second cohort, and phase two has been consistent across the board.

Absolutely.

Yeah. So that's the most important thing. And one thing that you need to factor into this is that these three different cohorts are maturing sequentially. and so so far the response rate is consistent and in the phase one first cohort and second cohort the survival and the tail of the curve is consistent and in the phase two we need to have a little bit more time to demonstrate what i just said in the first cohort in the second school

Okay. I just got this question coming in. When do you think base case, Garo, you should be in a position to file? And any, you know, any planning as you think about the scenarios for this FDA meeting? Any, what are in your mind the scenarios that you're preparing for?

I think it'd be inappropriate for me to presume what the FDA will say or will do. But I'd say stay tuned.

Got it. Thank you.

Your next question comes from Matt Phipps with William Blair. Please go ahead.

Hi, great. This is Madeline on for Matt Phipps. Thanks for taking the question and congrats on the update. In terms of the next steps for BOTVAL and CRC, are you just prioritizing registrational trials in late stage CRC at this time or are you considering pursuing a potential path in neoadjuvant setting as well.

Right. So for...based on our current plans, we're going to sprint with a randomized trial for registration in the late-line setting. That's a trial that I spoke about, CCTG, and then we plan on executing that trial on our own by the end of this year. Now, with regard to neoadjuvant, the question is very pertinent because neoadjuvant data that we have published is unequivocal. I mean, when you see the results, and you have, from the first trial, which was NEST at Cornell, a second trial, UNICORN, which was across 11 centers with more than double the number of patients, we observed absolute consistency. And what is that consistency? We're talking about 100% pathological responses in a significant number of patients in record time. We're talking about in four to eight weeks. And then subsequently, the neoasis trial, which is the one that was presented at AACR, and there'll be updates on that trial because that trial continues to accrue at a very fast pace across multiple cancers, including CRC, have also shown absolutely consistent outcomes across the board. So it's sort of a no-brainer to go after that market because the earlier you treat patients, the better the outcomes, and these trials confirm that. So there's no question about is there a contribution for another product that's being used because you're not using this in combination with chemo or radiation or anything else. So with that, the market opportunity is very large. And of course, patient opportunity is profound. And what that means is that the quality of life for these patients, should they undergo chemotherapy, radiation, and mutilating surgery, is horrible. And so if we can replace that over time, it will mean a great deal for the patients and a great deal for the market opportunity as well. So what do we do with that? I think I'd say stay tuned. We have plans for funding that trial through innovative mechanisms, and that's one of the things that we're working on as the next phase.

Thanks. That will conclude our question and answer session. I will now turn the call back over to Gero Armand for closing remarks.

Thank you very much for everyone participating in this call. Like all good things, things take a little time. You know, we have been working on this transaction and eight other transactions, eight other transactions simultaneously over the last six months. over the last six months. So we're grateful that we brought the most important elements of our next phase, which is to life today. But we continue to explore opportunities along the lines of what I just mentioned, for example, for the neoadjuvant setting trial. And so I apologize for how much this takes, thanks to lawyers, regulators, and others. I think we are destined to deliver only because we have a product, we're blessed by a product that has profound activity. And we've demonstrated this now in well over 1,200 patients and counting. So I'm very grateful to our team for making this a reality for us, for working hard, and to generate some superb clinical data as well as executing on transactions that we're talking about simultaneously. So this is a big feat, and that's one of the reasons I drew your attention to working with us with our proxy solicitors to make sure that our team is appropriately recognized. Thank you very much.

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.