Agenus' CEO Discusses Q4 2011 Results - Earnings Call Transcript

Agenus Inc. (AGEN)

Q4 2011 Earnings Conference Call

March 5, 2012 11:00 AM ET


Jonae Barnes – Vice President of Investor Relations & Communication

Shalini Sharp – Vice President and Chief Financial Officer

Garo Armen – Chairman and Chief Executive Officer


Reni Benjamin – Rodman

John Sonnier – William Blair

Megan McCloskey – MLV & Company

Bobby Cohen – Revolution Investment



Good morning, my name is Melisa and I will be your conference operator today.

At this time I would like to welcome everyone to the Agenus fourth quarter and year end 2011 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. (Operator Instructions)

Thank you. Mr. Jonae Barnes, Vice President of Investor Relations and Communications. You may begin your conference.

Jonae Barnes

Great. Thank you, Melisa and good morning everyone. Welcome to Agenus’ conference call to discuss the financial results for the fourth quarter and 12 months ended 2011. With me today is Garo Armen, Chairman and CEO and Shalini Sharp, CFO.

During this call, we will review our financial results, as well as provide a corporate update. We will then open up the call for a Q&A session. But before we continue, I would like to remind you that this conference call will contain forward-looking statements, including statements regarding the company’s cash position, timing of potential income streams and development and commercialization efforts, timelines, availability of data and potential efficacy with respect to products and product candidates of the company and its partners.

These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Reference to these risks and uncertainties is made in today’s press release and they are disclosed in more detail in our more recent filings with the U.S. Securities and Exchange Commission.

These statements speak only as of the date of this call and Agenus undertakes no obligation to update or revise the statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. While evaluating Agenus’ business and securities, investors should give a careful consideration to these risks and uncertainties. As a reminder, this call is being recorded for audio replay.

With that, I will now turn the call over to Shalini to review our financial results for the fourth quarter and year ended 2011.

S halini Sharp

Thank you, Jonae. Good morning everyone and thank you for joining us on today’s call. By now we hope you have had a chance to review this morning’s press release. For the fourth quarter of 2011 the company reported a net loss attributable to common stock holders of $6.2 million or $0.29 per share compared to the net loss attributable to common stock holders in the fourth quarter of 2010 of $2.6 million or $0.16 per share.

The key reason to the increase in reported loss for the fourth quarter of 2011 was that in 2010 our net loss included non-cash non-recurring gains totaling $4.7 million. For the year ended December 31, 2011 the company incurred a net loss attributable to common stock holders $24.1 million or $1.21 per share compared with the net loss attributable to common stock holders of $22.7 million or $1.41 per share for the comparable period in 2010.

The company’s net cash burn for the year ended December 31, 2011 was $17.1 million compared to $15.7 million for the same period in 2010. The 2011 net cash burn figure reflects primarily the company’s efforts to support the Prophage Series vaccine. Our 2010 cash burn figure it met the non-recurring business development payments and tax credit totaling $2.7 million.

Our cash and cash equivalent were $10.7 million as of December 31, 2011. I’m very pleased to report that subsequent to the end of the year Agenus have strengthen its cash position by more than $15 million with two non-dilutive initiatives, which include $9 million of an extended agreement with GlaxoSmithKline and $6.25 million to a license of non-core technologies. In addition, we raised $2.8 million in equity issuances. Collectively the activities increased the company’s cash position by $18 million from the year end 2011 cash position of $10.7 million, which at our current burn rate will be sufficient to fund operations through 2013.

Our net cash burn for 2012 is anticipated to be in the range of $13 million to $15 million. This burn projection is net of approximately $1.5 million in facilities related savings related to the amendment of our Lexington, Massachusetts lease in April 2011 reflecting our ongoing cost containment efforts.

This concludes the financial portion of the call. Garo will now provide the corporate update.

Garo Armen

Thanks Shalini. I’m very pleased to report that 2012 is already proving to be an exciting year for us on a number of fronts. One, as Shalini indicated we started the year by strengthening our balance sheet by $18 million. Two, the GSK news today of the expected license and manufacturing agreement further validates QS-21 as a key adjuvant and expanded potential use in additional indications in the GSK biologics pipeline. Three, under the terms of the GSK agreement we will receive a non-refundable payment of $9 million. And four, also we agreed to rent GSK the first right to negotiate for the purchase of Agenus or certain of its assets. This first right to negotiate expires after five years.

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