Good day, ladies and gentlemen. And welcome to the Agenus Third Quarter 2019 Financial Results and Business Update Conference Call. As a reminder, today's conference is being recorded. Now, I would like to turn the conference over to Dr. Jennifer Buell, Chief Operating Officer of Agenus. Please go ahead, Dr. Buell..

Thank you, operator. Today's call is being webcast and will be available on our website with our accompanying slide material for replay. Just a reminder, the slides are now live on our webcast and accessed through computer, you will be able to view them manually.

Before we start, we would like to remind you that this call will include forward-looking statements, including statements regarding our clinical development and regulatory 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. As a reminder, this call is being recorded for audio broadcast. Joining me today are Dr. Garo Armen, Chairman and Chief Executive Officer; Dr.

Anna Wijatyk, Head of Clinical Development and Operations; and Craig Klaskin, our Vice President of Finance. I’m going to start this call today by saying first asking our Garo to provide you with the reality of Agenus operationally and in the marketplace. I expect these facts, as they are and what we have achieved, will be eye-opening to you all.

Garo?.

Our CTLA-4 antibody; Zalifrelimab and our PD-1 antibody, Balstilimab. I know these are mouthfuls, and I'm just getting used to using them myself. We are targeting commercializing both agents in the first half of 2021, which means we will be filing our BLA or BLAs in 2020. Our first indication will be second line cervical cancer.

But, and importantly, we are developing these two antibodies because they are critically important agents to be used in combination with many of our own next generation antibodies including bispecifics, in combination with our allogeneic cell therapy for which our first IND is on track to be filed this year.

And also in combination with our cancer vaccines which include our off-the-shelf phosphorylated antigen vaccine where we have a highly proprietary position. As you can see from our IND chart, we have generated 13 immuno-oncology agents, which are all in clinical development trajectory.

We expect that some of the next generation agents in our pipeline can help expand the market opportunity for our PD-1 and our CTLA-4 antibodies.

For example, to the extent that the combination of our NexGen CTLA-4 antibody plus our PD-1 antibody performs better than those in the market today, we believe our PD-1 commercial opportunity could be substantial. And on that note, we plan to start our combination trials for our NexGen CTLA-4 and our own PD-1 antibodies this month.

In addition to the leverage, our PD-1 and CTLA-4 antibodies provide us with for our development strategy, we have been approached by several companies who have expressed their interest to access our agents to develop with their own proprietary products. And this has of course many advantages that we can discuss for them and of course for us as well.

The first of these transactions is expected to be finalized in the next few weeks. Each of these transactions will involve a modest upfront, cash milestones and double-digit royalties. I will now provide you with some insights into our ongoing cervical cancer trial.

As we have promised, we have completed the required enrollment of our PD-1 CTLA-4 combination trial in cervical cancer, and we expect to complete enrollment of our monotherapy trial,, the PD-1 trial by year-end.

We have completed the planned interim analysis of our combination trial and expect to complete the planned interim analysis of our monotherapy trial soon. We have shared the results generated from our interim analysis of our combo trial with our data safety and monitoring board.

And based on both, safety and efficacy signals, they issued a recommendation to proceed to completion. I should also point out that in preparation for our potential BLA filing next year, we have produced commercial grade materials for both of our antibodies.

I will now switch to some visuals, additional visuals and address questions we are asked frequently. The next visual represents the evolution of our pipeline in the past four years. Our pipeline in 2015 is in the second visual we have included seven products.

Since that time, we have created an extensive portfolio of checkpoint antibodies, if you can switch to the next visual, portfolio of antibodies, allogeneic cell therapy and neoantigen vaccines. I believe our pipeline represents one of the most comprehensive portfolios in immuno-oncology today.

It also allows us and our partners to explore optimal combinations without having to compromise, based on limitations to access, which we experienced by the way many years ago, when we were trying to do combination trials with vaccines and checkpoints. And unfortunately at that time, we did not have access to checkpoints the way we have today.

Another question we get asked related to how are we able to manage so many programs given our limited monetary and human resources. First regarding human resources, I humbly believe that we have built one of the best teams in the industry. They are inventive, smart, highly knowledgeable, very passionate about their work and very hardworking.

Without them, we would not be able to have achieved all of this. We expect our team to be the key drivers of our continuing innovation and success. Regarding monetary resources, if I can ask you to switch to the slide that has our partnerships in the last four years at slide number five, I would like to draw your attention to the following visual.

This speaks to our resourcefulness in having raise a significant amount of money, which has been in excess of $500 million in the past four years alone, and we have not done a marketed stock offering for the last four and half years. Of course that has positives and negatives, but we hope that our shareholders will view most of it as positives.

We aim to continue to fund our future operations largely through these types of creative mechanisms until we achieve profitability. Another question we get often is have we sold all rights to our pipeline. And slide number six answers that question. The answer is of course no. This pipeline chart shows that we have partnered and what we have retained.

All magenta colored products represented in this pipeline and the agents rather, belong to us 100%. Importantly, we’ve also retained the rights to generate bispecific molecules with all of our proprietary targets.

And as we demonstrate, clinical activity of some of our clinical stage immuno-oncology agents, we plan to keep more and more North American rights for ourselves and license ex-North American rights to others. Lastly, I would like to show you three recent subjects. These are 12-month performance charts.

And, they show our performance, which is in bright green, relative to number one, the large and medium-sized biotechnology companies; secondly, it shows our performance, again in bright green, relative to 28 immuno-oncology companies; and the third chart shows our performance relative to the Drug Index and the Biotechnology Index.

As you can see, the performance of our Company is substantially better than essentially all others. Our absolute stock performance has been dragged down by the sector. And of course, we are not satisfied with our absolute performance of the stock price.

In addition to our continuing efforts to improve our communications and education, we have recently hired an investor relations professional who will be known to at least some of you.

And we look forward to her interacting with investors and analysts with a high level of frequency for us to be able to provide you with additional data and education on our portfolio and for that matter for the sector as well.

In spite of the fact that the sector has experienced unprecedented and explosive revenue growth in the last five years in the form of for example the two PD-1s and CTLA-4 antibody expected the top $20 billion in revenues this year, recent trends have shed some doubts about the sector’s ability to continue with the past momentum.

Now, this is an important section and I draw your attention to it. We aspire to return confidence to the high hopes for the sector with our performance near and long term. And on that note, during 2020, we expect to generate clinical data on our following immuno-oncology agents and trials.

And I specifically draw your attention to the fact that there are six agents that we expect clinical data out of next year, and I will go over them one by one, in seven different programs. The first one is clinical data on our PD-1 CTLA-4 combo trial in cervical cancer; second one, clinical data on our PD-1 monotherapy trial in cervical cancer.

Now, beyond these first two, we are going to talk about new agents. So, these are highly innovative new products. The third one, clinical data on our next-gen CTLA-4 dose escalation trial. Four, clinical data now on our NexGen CTLA-4 combination trial with our own PD-1.

Five, clinical data from tumor conditioning bispecific GS-1423, which is now in the hands of Gilead, licensed to Gilead fully. Sixth, clinical data on our own bispecific agent 1223, designed to deplete intratumoral Tregs. And seven, clinical data on our differentiated CD137 antibody, AGEN2373.

So, all these developments are slated for the upcoming year. And we're very, very pleased with the fact that we will have clinical data on multiple programs from six different immuno-oncology agents that have been in our portfolio and in the hands of our partners.

Finally, before I turn this to Jenn Buell, I want you to let you know that on November 15, that is the following Friday, by the way, we are hosting an R&D Day in New York. The event with an update on the field of immuno-oncology by experts, Dr. Steven O'Day, and Dr.

Manuel Hidalgo, as well as presentations from the Company on our lead CTLA-4 and PD-1 programs, our next generation agents including CTLA-4 molecule, our NexGen CTLA-4, and our discovery engine and capabilities. It will be informative. And I hope that some of you will be able to attend it. But, nonetheless, it will be available via webcast.

By the way, we also plan on having research days in other cities and in Europe in the next coming months. Now, Dr. Jenn Buell, our Chief Operating Officer..

Thank you very much, Garo. As Garo mentioned, this is indeed a very exciting time for us. While the transformation of the Company occurred within the last four years, we are operating with the integration, agility and flexibility of a team that’s been together for decades.

This is largely due to our shared passion to deliver high-impact therapies and small, fast clinical trials designed for a rapid regulatory and commercial success with products that are acceptable to our patients who need them. We share commitment to transform the experience that diagnosis of cancer means for patients. And I'm very excited to have Dr.

Anna Wijatyk share details about the progress we're making in the clinic. Before doing so, I want to summarize a few highlights of our progress in 2019 with details on some of our critical catalysts.

This year, we’ve made remarkable progress on our trials, which includes the completion of accrual into one trial and approaching completion of accrual into our second. The interim analyses, which were preplanned, based on independent core lab reviews are underway.

To-date, our available investigator reported data underscore the clinical benefits of our PD-1, AGEN2034, Zalifrelimab as a monotherapy for patients with refractory cervical cancer, and furthermore, the benefit of the addition of CTLA-4, which is our AGEN1884 Balstilimab to PD-1 in combination with PD-1 to expand response rate and potentially the durability of these responses, and I will tell you more about these programs shortly.

We advanced four novel discoveries to IND this year. And these discoveries are now advancing in the clinic, generating validating data on the differentiated proof of mechanism of our potentially first or best-in-class agents.

These discoveries include our next generation CTLA-4, AGEN1181; our differentiated CD137 AGEN2373; our first-in-class Treg depleting bispecific antibody AGEN1223; and of course, GS-1423, a bi-functional molecule, now exclusively licensed to Gilead and being developed by them.

In summary, this year, we've generated data on more than 250 patients with our lead CTLA-4 and PD-1 programs. We’ve completed enrollment and the interim analysis for one late-stage trial designed to support approval, and we're on track to complete enrollment and the interim analysis for the second trial this year.

We've advanced our next generation CTLA-4 AGEN1181 through several dose escalation cohorts and will start combinations imminently. We have advanced our differentiated CD137 Agenus and to early dose evaluation. We’ve activated the clinical trial for our Treg depleting bispecific AGEN1223.

Furthermore, we've advanced our allogeneic cell therapy into IND-enabling for a filing this year and engage regulators to enable rapid combination of our allogeneic cell therapy and our antibodies. In addition to these clinical milestones, we've also announced three cash milestones in our Gilead collaboration approximating $23 million.

We've also entered into an agreement to manufacture GS-1423 for Gilead through undisclosed financials.

Finally, due to the blockbuster sales of GSK's Shingrix vaccine containing our proprietary QS-21 adjuvant now exceeding $1.6 billion in the first nine months in the market, we have extinguished our contingent financial obligations of $25.9 million to Healthcare Royalty.

As a reminder, Agenus remains eligible to receive sales milestones of Shingrix of up to $40 million, which are likely to come next year, based on current trends of Shingrix revenues. Now, I'll take just a couple of minutes to zoom into our NexGen CTLA-4, our differentiated CD137 agonist, and our AgenTus cell therapy company.

To reiterate Garo's earlier point, all of these next generation agents show important added benefit with PD-1 and our preclinical interrogation, in some cases with CTLA-4 for the combination of both. Given the preponderance of data we generated with our lead molecule, we are able to accelerate the combination with our novel agents quickly.

These include combinations with our allogeneic cell therapy. So, first to extend on Garo’s introduction of our NexGen CTLA-4 AGEN1181.

As a reminder, it's designed to address the shortcomings of the first generation CTLA-4 and to expand benefit to the majority of patients who otherwise experience low responses to first generation CTLA-4s due to a genetic polymorphism.

We shared early clinical readouts of this molecule with our scientific advisors and we plan to share these data more broadly as a mature and as combinations with our PD-1 AGEN2034 commence.

As Garo alluded to earlier, AGEN1181, our NexGen CTLA-4, in combination with our PD-1 or others, outperforms currently available first gen CTLA-4 PD-1 combinations. It will be an extraordinary outcome for patients and all of our stakeholders. Now, I'll turn to our differentiated anti-CD137 molecule, AGEN2373, into the clinic.

This molecule is designed with important safety and efficacy advantages over competitor molecules. AGEN2373 is a fully human monoclonal antibody that boosts the immune response to cancer cells by enhancing a specific CD137 co-stimulatory signaling and activated immune cells.

This is both, the adaptive t-cells and innate encased cell parts of the immune system. This makes it a very attractive target for cancer immune therapy. Importantly, these unique binding properties of AGEN2373 are designed to enhance efficacy while limiting the systemic toxicity that has hampered the development of competitor molecules.

Before I turn the call over to Anna, I'd like to give you a brief update on AgenTus, our cell therapy subsidiary. AgenTus continues to delve on the progress we shared during our last call.

Our proprietary allogeneic cell format is advancing to IND, and the Company's highest priority and focus is to deliver allogeneic cell therapy approaches with proprietary targets and combinations with AgenTus antibodies for patients with solid tumors as well as with hematologic cancers.

To accelerate our efforts, we have appointed an industry veteran, physician and financing expert, Dr. Walter Flamenbaum as CEO. One of Walter's highest priorities is to bring our discussions on financing to a positive conclusion. I will now turn the call over to Anna to give you a brief update on our most-advanced programs.

Anna?.

Thank you, Jenn and Garo. This year has indeed been very productive and exciting, as Jenn and Garo descried.

I have had a pleasure to work with an extraordinary team to deliver real breakthrough outcomes and timing to complete enrollment in our trials designed to support BLA as well as in parallel, advance four novel molecules to the clinic this year with the same accelerated pace.

As a matter of fact, similar to our accelerated pace shared in discovery and manufacturing, our clinical operations team is innovating to do the same in the clinic. In that regard, we have advanced from IND clearance to first-in-man trial in a matter of weeks and exactly 69 days to first patient in after the IND clear.

As Jenn and Garo already mentioned, the progress on our lead molecules is very important to enable us to start the combination with our next generation molecules.

The first combinations with our next generation CTLA-4 AGEN1181 is expected to start this month and our PK and PD data that we are acquiring in an ongoing manner are informing optimal dosing in the study. Now, our lead programs.

Our proprietary CTLA-4 and PD-1 antibodies, Zalifrelimab and Balstilimab are advancing towards the planned BLA filing in 2020.

At the upcoming Society of Immunotherapy and Cancer Conference this year, we will present clinical data from our Phase 1 dose escalation and expansion cohort showing that Balstilimab is well-tolerated and reveals immunologic as clinical activity in recurrent ovarian cancer, which is more impressive than what was previously reported in this population with other PD-1 antibodies.

As Garo and Jenn reminded, we are pursuing Balstilimab as a monotherapy and in combination with Zalifrelimab in patients with relapsed/refractory category cervical cancer. In the combination trial, we have completed our accrual requirement for a potential BLA filing as well as interim analysis.

Our data continues to support our conviction that this validated I-O combination may impart meaningful benefit including improvement in response rate and durability of response beyond what is available today to these patients. And as a reminder, this is a disease that affects young women.

These women have failed earlier lines of therapy, which in some cases included surgery, radiation, chemotherapy and other agents, often multiple combinations. When they progress, there are very limited to no treatment options for these patients. We are working with the sense of urgency to deliver meaningful treatment to this vulnerable population.

We believe that our first generation agents, both alone and in combination can do that. We are working with our clinical advisors and the FDA in our effort to advance this product quickly.

This is why while we plan to publicly disclose data on our interim analysis this year, we have been advised to do otherwise, in order to protect the integrity of our ongoing trials and succeed with the BLA filing as quickly as we can in 2012. I look forward to providing additional information at our upcoming R&D Day on November 15th. Thank you.

And now, I will turn it back to Garo..

Thank you very much, Anna and your team for moving our clinical programs at such a record pace. As I mentioned in our strategy -- as our strategy is to balance between monetizing a portion of our discoveries every year while increasingly keeping rights to North America for some of our very valuable assets.

Earlier I indicated that we expect to generate meaningful clinical data in the next 12 months and a significant number of both, partnered and wholly-owned programs. This, we expect to help our efforts to monetize on our ex-U.S. rights with significant value considering.

This strategy will be tested with our second generation CTLA-4 antibody, currently in clinical development as Jenn and Anna talked about with prospects of generating early but potentially meaningful clinical data in the next months.

Our ability to control key components of immuno-oncology combinations under one roof, specifically checkpoint antibodies, cell therapy, neoantigen vaccines and our QS-21 adjuvant, we believe is a key advantage in our ability to develop the right combination drugs, and in our ability to price them affordably, all for the purpose of benefiting patients.

Before turning the call over to Christine for recapping our quarterly financial report, I wanted to summarize a few key points. We have an outstanding pipeline of novel and second generation immuno-oncology designed to deliver substantial benefit to patients with cancer.

We expect to become a commercial-stage company with our PD-1 and CTLA-4 antibodies, first in cervical cancer with strategies to rapidly expand to other cancers, particularly with our combination agents.

We are emphasizing smaller focused trials to achieve high-response rates specifically targeted patients who are not being effectively served by today's first generation immuno-oncology agents.

In addition to the clinical readouts, which I outlined earlier, targeted for the year 2020, it is what we expect to accomplish by year's end 2019 and into 2020. One, complete our monotherapy, as we talked about, PD-1 trial accrual and conduct our planned interim analysis for this trial for a BLA filing.

Both are monotherapy and combination trials designed to lead to BLA filings for accelerated approvals. Two, complete dose escalation and commence combination trials for our second generation CTLA-4 with our proprietary PD-1 molecule.

Three, as I mentioned earlier, advance our differentiated best-in-class molecules into clinic, including advancing and generating clinical readouts with our differentiated CD137 molecule, AGEN2373 and our selected Treg depleting bispecific AGEN1223. Advanced additional breakthrough discoveries and file at least two additional INDs in 2020.

Advance our allogeneic cell therapy program and have AgenTus funded independently, as Jenn mentioned. And importantly, we expect to complete additional business development transactions in 2019 and in 2020. Now, I will turn it over to Christine Klaskin to provide financial highlights.

Christine?.

Thank you, Garo. We ended the third quarter of 2019 with a cash balance of $93 million as compared to $53 million at December 31, 2018. Our cash used in operations for the quarter ended September 2019 was $28 million, compared to $25 million for the same period in 2018.

Cash provided by operations for the nine months ended September 2019 was $13 million, which compared to cash used in operations of $95 million for the same period in 2018.

For the third quarter ended September 30, 2019, we reported net loss of $46 million or $0.33 per share compared to a net loss for the same period in 2018 of $34 million or $0.29 per share.

For the nine months ended September 30, 2019, we reported a net loss of $81 million or $0.58 per share compared to a net loss for the same period in 2018 of $113 million or $1.04 per share.

During the nine months ended September 2019, we recognized revenue of $116 million, which includes revenue from our transaction with Gilead and non-cash royalties earned. This compares to revenue of $30 million for the nine months ended September 2018.

Through the third quarter of 2019, we also recorded $30 million of non-cash interest expense due to our transaction with Healthcare Royalty related to the sale of future royalties. I now turn the call back Garo..

Thank you, all. Thank you, Jenn, Christine and Anna. And thank you all for your attention. Now, I will turn the call over to Chuck to field questions..

[Operator Instructions] And our first question will come from Biren Amin of Jefferies. Please go ahead..

Yes. Hi, guys. Thanks for taking my questions. Garo, can you just maybe talk about the 2034 monotherapy and combo trial with 1884? I think, that trial has arm 1, which has monetary component and arm 2, which is a combo component.

Which of these was interim analysis conducted for? And can you just talk about the thresholds that you would need to hit in order to start the study on enrollment for each arm?.

Okay. Biren, just a reminder, I did mention during my talk, the one that we conducted an interim analysis for is the combination trial. And, I must also emphasize that these are planned interim analyses. So, they are preplanned into the trial. The other preplanned interim analysis for the monotherapy trial will happen soon.

And, we will also of course make that available to our DSMB. With regard to our regulatory strategy, I will turn it over to my colleagues here, Jenn and Anna to comment on that..

So, just to be very clear, these trials are being conducted as two single arm trials to support BLA approval, both of them pre-discussed with the agency and otherwise. Now, the monotherapy trial with PD-1 is in relapsed/refractory cervical cancer, and that trial accrual is ongoing, planned to be completed by end of year.

To support accelerated approval, which is our regulatory strategy with this particular product in this indication, we effectively need to demonstrate what pembro has done comparable to pembro, which is as you know, between 12% and 14% response rates.

We have not completed the interim analysis yet, the planned interim analysis for the monotherapy trial, but we are on track to do so, before year-end.

For the combination trial where we believe that we are going to deliver expanded response rate and durability of response, given the mechanism of action of the addition of CTLA-4 to an indication that is largely based in a virally-induced tumor such as cervical.

And just comparably, we’ve seen that addition of CTLA-4 in a number of different cancer types has done this, in RCC, in some data presented at ESMO in cervical cancer and otherwise. We believe that we will do the same with our own combination program.

Similarly, combination CTLA-4 and PD-1 is being pursued as a single arm trial to forward accelerated approval in second line cervical cancer with accrual completed and the planned interim analysis also completed.

While we would very much like the opportunity to share the data publicly, in our most recent discussions with our regulatory advisors, the agency and our scientific advisors, it’s likely in the best interest of the Company and the integrity of the trials not to do as at this time.

However, we do plan to provide you with a good clinical review, and Anna will do so at the Investor Day where you’ll have sense of how the activity of the monotherapy and the combination of our agents are working in cervical cancer and in number of other different cancer types.

Anna, do you want to add anything to that?.

No. I fully agree with what you said, Jenn. I think, on the way of completing enrollment for the monotherapy study, we completed the combination therapy, and the durability obviously requires more time to be followed on. And so, I think, we’ll just push through and will stay on track for our filing in 2020..

Fantastic. Thanks, Anna. And I'll make one more point, Biren. We will continue to ascertain data from these agents in total for a number of the different reasons for our own pipeline development as well as for some of the collaborative -- in clinical collaborations that we're contemplating. And so, what you will see is that the accrual will be open.

And to our discretion, we’ve completed our obligation to meet that trial enrollment but we have the discretion and opportunity to continue to accumulate data in these indications. So, I don't there to be any confusion..

So, let me, if could, ask some follow-ups on your comments. On the combination arm for the interim, do you believe you’ve hit the necessary threshold that you needed to hit on that analysis? I'm going to assume ORR was the primary endpoint that you’ve done for that analysis.

And second, I guess, as it relates to dosing on the combination arms, can you just review that for us? And then, I guess, third question is for the combination cohort.

Were these specifically PD-1 positive patients at baseline that you’ve enrolled in the study?.

So, maybe, Anna, if we might do this in a bit of a different order, we’ll start with dosing, we’ll talk about the endpoints, and PD-L1, the patient selectivity, and then impression of where we are with the data.

Anna?.

So, in terms of both studies, actually, we have enrolled patients, regardless of the PD-L1 status. So, they are not selected specifically. We obviously are assessing this PD-L1 efficient status, but the selection has not happened at the study enrollment.

In terms of availability and the promise of the data from the interim analysis, as you know very well, interim analyses are slated on a small number of patients and they only give you a preliminary glimpse of what the totality of the data will look like.

They are slated mostly for the assessment of that futility and then the early safety signals that as such this has been evaluated by our data safety monitoring board. And as Garo mentioned the committee recommended to continue the study without modification.

So, at this point, I don't think we can disclose any more data, based on the recommendation from regulators and advisors and the importance of keeping the data integrity for the filing..

Dosage used? There was a question about which dosage we’ve used?.

So, in terms of the combination therapy, the dosage we used for the CTLA-4 is 1 milligram per kilogram every six weeks. So, it's a much lower dose than in the monotherapy settings for this agent.

So, that also gives you potential good safety profile and that is on top of the PD-1 agent used every two weeks, 1 milligram per kilogram -- sorry 2 milligrams per kilogram in this population..

And Biren, I'm going to add a couple of points here. On the dosing, we have the opportunity and have done the comparability to have flexibility in how we want to dose these products. So, the trial is designed to interrogate, as Anna mentioned, biweekly dosing PD-1 AGEN2034 at 3 mgs per K and AGEN1884 at 1 mg per K.

And none of the patients agents have come off due to interoperability. And that was the reason for selection to get the real value of CTLA-4 dosing, we want to ensure proper exposure. Additionally, the PD-1 selection biomarker. Now, as you can imagine, we know that pembro is approved in a selected population patients who are positive for PD-L1.

And we are pursuing, while we’ll analyze these data, we believe that when you add CTLA-4 on top of PD-1, it may be able to bring the benefit regardless of this particular biomarker selection. And that's an important point, and our data supports our hypothesis in this regard.

With respect to the outcomes, as Anna mentioned, and we're very thoughtful and conservative about the presentation of these data, but I'll say that based on the preponderance of evidence that you're seeing in this indication with the combination, we're very confident in the results that we're seeing as of now..

And our next question will come from Matt Phipps of William Blair. Please go ahead..

So, I was just wondering if you could maybe firm up the timeline for a little bit for the second line cervical filings, now that you've completed enrollment in one and soon to complete enrollment in the other. And I assume response rate with a certain duration of therapy is what will be needed.

Is it is six months duration that you have to report on for auxiliary approval or can give any clarification there?.

So, Matt, very big questions. With respect to the timing, while we have advanced these programs, and Anna and her exceptional team, we are certainly ahead of our earlier projections. But, what I will say is that we have not -- we will certainly -- we feel very strongly that we will hit our BLA filing in 2020.

We believe that we are earlier than prior projections, but we have not yet given an actual time line for that filing. So, if you will just bare with us, we will continue to keep you informed as much as we can as we advance through this process. We are in the process of now building out the submission package.

So, on the last point, or follow-up right now, as you know with these patients, the disease is really uniformly [indiscernible]. There are no highly beneficial products for these patients. And they progress very quickly. They progress in 8 to 12 weeks. So, that would be the minimum amount of time that we would be following these patients.

And ideally, with the extension or with activity, we can see responses and continue to follow patients beyond 6 and ideally to 12 and longer -- months and longer. But, we will now in a few months after dosing starts, what the activity looks like. I hope that helps..

Good, thanks. And then, do these have to be filed together or can they be filed separately, just....

They filed it through independent BLA path. So, they don't need to be filed together..

Okay.

And then, as far as the 1181 development strategy, just curious if you think you can maybe go after some kind of an accelerated initial pathway and melanoma patients who don't have that high affinity CD16 allele or you try to go after other tumor types where maybe CTLA-4 hasn’t been as effective? Just kind of curious what your current thoughts are on the next steps for that program..

Matt, thank you very much. I'll tell you we just are coming off of a -- a couple of days go, we held an advisory board meeting with our key scientific advisors who are incredibly experienced in this space, and many of their names will be known to you. We’ve spoken about this opportunity.

And based on the data available to us to-date, we are perusing development pathways that will leverage accelerated approvals via the U.S. FDA.

We do think that there is a large unmet need in some of these tumors, such as melanoma, as you’ve mentioned, as well as other tumors where first generation CTLA-4s are proved, and this next generation may actually expand the benefit to the patients as you’ve mentioned.

We will be -- and Anna can speak to this collecting data, particularly on this biomarker selected population as well. But, right now, we’ve opened the trials to a broad group, because our NexGen CTLA-4 covers the gamut. It should address all of the mechanisms for first generation CTLA-4 plus the added benefit in those patients with the polymorphism.

Anna?.

Yes. And to answer that, I think, it’s still early in the development as we think that we are planning to open combination cohorts as well as we are perusing data gathering for different dosage for the dose escalation phases.

We are contemplating opening dose expansion cohorts in a number of indications that could be of interest such as refractory, melanoma indication. So, that's definitively in our plans..

Okay. And lastly on AgenTus, so just -- this has been something that's been kind of around in the background for a while and talked about spinning off into an entity and getting its own funding.

I mean, how confident are you that you can make that happen now? And I think there's definitely some interest from investors, and I'm trying to reduce the burn rate a little bit, and maybe this is one way where that can happen I guess?.

Yes. Matt, let me -- I mean, you make some very good points here. There are several drivers. One is that after the acquisitions of two high profiles of high companies, the interest in the field sort of cooled down, and that has had a slightly negative effect in our timelines of funding it independently. However, AgenTus has been spun out.

It is a separate company in terms of legal, financial, and other considerations. We are getting closer to filing an IND, which I think will be a very important value inflection point for us. We’re slated for that IND filing this month.

Whereas, previously we were pursuing both autologous and allogeneic formats, now, there is focus on the allogeneic format. So, we will no longer be pursuing autologous format, which is -- puts us in a much more focused strategy.

And so, once we file our IND and the operations become clarified for the investors, we feel very confident that we will be able to fund this company separately in the next few months..

Our next question will come from Harshita Polishetty, an investor. Please go ahead..

Hi. Good morning. Congrats on the quarter, and thank you for providing the updates this morning. Just one question on my end. With regard to the Gilead collaboration, I noticed that they filed to offer up to 11.1 million of Agenus shares on October 25th. This is the entire Gilead stake in Agenus, if I remember correctly.

So, I was hoping you could provide some color on what's happening there, and perhaps a brief update on how the collaboration is ongoing?.

Sure. As you know, Harshita, we have fulfilled all of our 2019 milestone obligations with Gilead. And our collaboration is proceeding on a very, very positive path. And so, our additional opportunities in coming years in terms of additional milestone payments, and so on that we're very hopeful, will materialize, including in 2020.

With regard to the filing that you're referencing, unfortunately because of legal requirements, sometimes disclosures are misleading. I mean, you'd expect that the SEC and the legal profession would make this language disclosures that would be crystal clear. But, that's not the case unfortunately.

And so, this filing of 11 million shares is simply a registration statement. So, as per contractual obligation, and we've done this previously with other companies where there's a share exchange, we are obligated to register the shares. It has nothing to do whatsoever with Gilead's interest to sell shares.

In fact, to the best of our knowledge, Gilead has absolutely no plans to sell any of the shares as we have seen no such sales from our previous partnerships. So, it's a combination of language that unfortunately is that as clear as it should be and perhaps investors not indulging in reading beyond the first paragraph..

Great. That's really helpful. Thank you so much for the color, Garo..

It's our pleasure..

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Dr. Garo Armen for any closing remarks. Please go ahead..

Thank you very much, Chuck. Harshita's question has sort of evoked other sort of misperceptions. One misperception is that we have a significant amount of debt on our balance sheet. And once again, this is an accounting mishap in the way things are disclosed. So, we have no substantial debt on our balance sheet.

What that is, is representative of the royalty arrangement that we did with HCR about a couple of years ago or less, which obligates us to put a number on our balance sheet that has nothing to do with our debt obligation. In fact, under no circumstances that debt obligation could be triggered.

And, in fact, as Jenn mentioned earlier, our only debt obligation, which was $27.5 million, has already been extinguished because of the success of Shingrix. Shingrix' sales have exceeded a certain amount, which is $1 billion in net revenues that extinguishes that obligation.

And moreover, if you look at the publicly disclosed Shingrix revenues and annualize that number, we will meet the next two milestones in the course of 2020 for payment of additional $40 million to Agenus. So, next year, we expect to have reasonable milestones, including this one that will augment our cash position.

And when we make a public disclosure in our financial statements that we have enough cash into the second quarter of next year, it does not include all of these additional milestones that are due to us. So, just bear with us, we'll make things a lot more clearer going forward.

And at the expense of simplicity, we will add simple comments that make these disclosures more digestible and less confusing. So, thank you very much for your attention. We look forward to keeping you abreast of additional progress.

And we're heading into a very exciting 2020 in terms of both data and other accomplishments, and we look forward to communicating all of that to you. Thank you..

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect..