Agenus Inc (AGEN) 2019 Q3 法說會逐字稿

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 a computer, you'll 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 time lines as well as time lines for date of 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 Christine Klaskin, our Vice President of Finance.

I'm going to start this call today by first asking 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?

Thank you, Jen. During our last quarterly call, I shared a visual with you. That's the very first slide that you have in your possession. This one speaks to our R&D productivity. And the fact that over the last 4 years in IND filings, we have outpaced other immuno-oncology companies, large and small. Also important is the fact that all the INDs that we have filed, all 13 of them so far, represent inventions of Agenus.

During this call, we will update you on the progress we've made with our most advanced programs: 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 2 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 presently.

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 next-gen 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 next-gen CTLA-4 and our on 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 with 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 4 years. Our pipeline in 2015, is in the second visual you have, included 7 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 hard-working. 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 4 years, that's Slide #5. I would like to draw your attention to the following visual. This speaks to our resourcefulness in having raised a significant amount of money, which has been in excess of $500 million in the past 4 years alone. And we have done -- we have not done a marketed stock offering for the last 4.5 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 #6 answers that question. The answer is, of course, no. This pipeline chart shows what we have partnered and what we have retained. All magenta-colored products represented in this pipeline -- in the agents rather, belong to us 100%. Importantly, we 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 3 recent stock charts. 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're 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 5 years, in the form of, for example, the 2 PD-1s and CTLA-4 antibody expected to top $20 billion in revenues this year, recent trends have shed some doubt about the sector's ability to continue with the fast 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 6 agents that we expect clinical data out of next year, and I will go over them one by one, in 7 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 2, 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 on our next-gen CTLA-4 combination trial with our own PD-1. Five, clinical data from our tumor-conditioning bispecific, GS-1423, which is now in the hands of Gilead, licensed to Gilead fully. Six, clinical data on our own bispecific, AGEN1223, 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 are very, very pleased with the fact that we would have clinical data on multiple programs from 6 different immuno-oncology agents that have been in our portfolio and in the hands of our partners.

Finally, before I turn this to Jen Buell, I want 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 will include 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 next-gen 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. Jen 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 only within the last 4 years, we're 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 rapid regulatory and commercial success with products that are accessible to all patients who need them.

We share a commitment to transform the experience that a 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 in our trials, which includes a completion of accrual into 1 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 benefit of our PD-1 AGEN2034, balstilimab, as a monotherapy for patients with refractory cervical cancer. And furthermore, the benefit of the addition of CTLA-4, this is our AGEN1884, zalifrelimab, 2 PD-1 -- in combination with PD-1 to extend response rate and potentially, the durability of these responses. Anna will tell you more about these programs shortly.

We advanced 4 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 agonist, AGEN2373; our first-in-class Treg-depleting bispecific antibody, AGEN1223; and of course, GS-1423, a bifunctional molecule now exclusively licensed to Gilead and being developed by them.

In summary, this year, we 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 agonist into 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 engaged regulators to enable rapid combinations of our allogeneic cell therapy and our antibodies.

In addition to these clinical milestones, we've also announced 3 cash milestones in our Gilead collaboration approximating $23 million. We've also entered into an agreement to manufacture GS-1423 for Gilead for undisclosed financials.

Finally, due to the blockbuster sales of GSK Shingrix vaccine, containing our proprietary QS-21 adjuvant, now exceeding $1.6 billion in the first 9 months in the market, we have extinguished our contingent financial obligation of $25.9 million to health care 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 next-gen 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 in our preclinical interrogation, and in some cases, with CTLA-4 or 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 next-gen 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 in first-generation CTLA-4 due to a genetic polymorphism. We've shared early clinical readouts of this molecule with our scientific advisor. And we plan to share these data more broadly as they mature and as combinations with our PD-1 AGEN2034 commence. As Garo alluded to earlier, if AGEN1181, our next-gen 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. It's in the clinic. This molecule was 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 in activated immune cells. This is both the adaptive T-cells and innate NK cells on parts of the immune system. This makes it a very highly -- a very attractive target for cancer immunotherapy. Importantly, these unique binding properties of AGEN2373 are designed to enhance efficacy by 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 build 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 Agenus antibodies to patients with solid tumors as well as those with hematologic cancer. To accelerate our efforts, we've 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, Jen and Garo. This year has indeed been very productive and exciting, as Jen and Garo described. I have had the pleasure to work with an extraordinary team to deliver real breakthrough outcomes in timing to complete enrollment in our trials, designed to support BLA as well as in parallel, advance 4 novel molecules to the clinic this year, at 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 clearance.

As Jen 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 this study.

Now our lead programs. Our proprietary CTLA-4 and PD-1 antibodies, zalifrelimab and balstilimab, are advancing towards a planned BLA filing in 2020. At the upcoming Society of Immunotherapy in Cancer Conference this year, we'll present clinical data from our Phase I dose escalation and expansion cohort showing that balstilimab is well-tolerated and reveals immunologic and 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 Jen reminded, we are pursuing balstilimab as a monotherapy and in combination with zalifrelimab in patients with relapsed refractory cervical cancer. In the combination trial, we have completed our accrual and 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 a sense of urgency to deliver meaningful treatments to this vulnerable population. We believe that our first-generation agent, both alone and in combination, can do that. We are working with our clinical advisors and the FDA in our efforts to advance this product quickly. This is why, while we planned 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 2020.

I look forward to providing additional information at our upcoming R&D Day on November 15. 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, that 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, on 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 consideration. This strategy will be tested with our second-generation CTLA-4 antibody currently in clinical development, as Jen 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 agents designed to deliver a 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 targeting 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, here 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 BLA filing. Both our monotherapy and combination trials are 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've mentioned earlier, advance our differentiated best-in-class molecules in the clinic, including advancing and generating clinical readouts with our differentiated CD137 molecule, AGEN2373 and our selective Treg-depleting bispecific, AGEN1223; and advance additional breakthrough discoveries and file at least 2 additional INDs in 2020; advance our allogeneic cell therapy program and have AgenTus funded independently, as Jen mentioned.

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 9 months ended September 2019 was $13 million, which compares 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 9 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 9 months ended September 2019, we recognized revenue of $116 million, which includes revenue from our transaction with Gilead and noncash royalties earned. This compares to revenue of $30 million for the 9 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 health care royalty related to the sale of future royalties.

I now turn the call back to Garo.

Thank you, all. Thank you, Jen, Christine and Anna. And thank you all for your attention. Now we'll turn the call over to Chuck to field questions.

(Operator Instructions) And our first question will come from Biren Amin of Jefferies.

Garo, can you just maybe talk about the 2034 monotherapy in combo trial with 1884? I think that trial has Arm-1, which is monotherapy component, Arm-2 which is a combo component. Which of these arms was the interim analysis conducted for? And can you just talk about the thresholds that you would need to hit in order to stop 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're 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, Jen and Anna, to comment on that.

Thanks so much, Biren. So just to be very clear, these trials are being conducted as 2 single arm trials, to support BLA approvals, 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're on track to do so before year-end.

For the combination trial, where we believe that we're going to deliver expanded response rates and durability of response, given the mechanism of action of the addition of CTLA-4 to an indication that is largely based on a virally induced tumor, such as cervical. And just comparably, we've seen the 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 support 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 is likely in the best interest of the company and the integrity of the trials not to do so 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 a sense of how the activity of the monotherapy and the combination of our agents are working in cervical cancer and a number of other different cancer types.

Anna, do you want to add anything to that?

No. I fully agree what you said, Jen. I think we are underway 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 we 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 different reasons, for our own pipeline development as well as for some of the collaborative and 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 the trial enrollment, but we have the discretion and opportunity to continue to accumulate data in these indications. So I don't want there to be any confusion.

So let me -- if I 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 their PD-L1 status. So they are not selected specifically. We obviously are accessing to the PD-L1 efficient status but the selection had not happened at the study enrollment. In terms of the availability and the promise of the data from the interim analysis, as you all know very well, interim analysis are slated on the 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 the futility and then the early safety signals and as such that 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 believe 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 6 weeks. So it's a much lower dose than in a monotherapy sequence for this agent, so that also gives you a potential good safety profile. And that is on top of the PD-1 agent used every 2 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 of PD-1, AGEN2034 at 3 mg per kg and AGEN1884 at 1 mg per kg. And none of the patients have come off due to intolerability and that was the reason for the 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 of 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-L1, it may be able to bring the benefit regardless of this particular biomarker selection. And that's an important point, and our data support 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.

So I was just wondering if you could maybe firm up the time lines 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 6 months duration that you have to report on for auxiliary approval, or can you give any clarification there?

So Matt, very good questions. With respect to the timing, while we have advanced these programs, and with 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 -- well, we feel very strongly that we'll 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'll just bear with us, we'll continue to keep you informed as much as we can as we advance through this process. We're in the process of now building out the submission package.

So the last point for follow-up right now, as you know with these patients, the disease is really uniformly fatal. 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, 12 months and longer. But we will know in a few months after dosing starts what the activity looks like. I hope that helps.

Great. Yes. And then do these have to be filed together or can they be filed separately just ...

They file the 2 independent BLA paths, 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 in maybe 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 forward for that program.

Matt, thank you very much. I'll tell you, we just are coming off of -- a couple of days ago, 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 pursuing development pathways that will leverage accelerated approvals via the U.S. FDA.

We do think that there's 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 approved. 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 next-gen CTLA-4 covers the gamut. It will -- it should address all of the mechanisms for our first-generation CTLA-4 plus the added benefit in those patients with the polymorphism.

Anna?

Yes, and to add to that, I think it's so early in the development as we think that we are planning to open combination cohorts as well as we are pursuing data gathering for different doses 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 indications. So that's definitively in our plans.

Okay. And lastly on AgenTus. 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 made a very good point here. There are several drivers. One is that after the acquisitions of 2 high-profile cell therapy 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 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.

Congrats on the quarter and thank you for providing the update 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 25. This is the entire Gilead's 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 there are 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 are referencing, unfortunately because of legal requirements, sometimes disclosures are misleading. I mean you'd expect that the SEC and the legal profession would make the 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 share and 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 not as clear as it should be and perhaps investors not indulging in reading beyond the first paragraph.

(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 -- sorry -- 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 had 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 Jen 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 2 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 the 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.