Pharma, R&D

Agenus pockets a fast $80M in cash and hands the R&D keys over to Incyte

Hervé Hoppenot

Looking to put some cash in the bank and cut back on its burn rate, Agenus $AGEN is stepping out of a 50/50 development deal it struck with Incyte $INCY and settling for a royalty slice on some of the work they’re doing together.

Back in early 2015, Incyte paid $60 million for an upfront and equity and promised up to $350 million in milestones to jump on board Agenus’s antibody discovery platform. That deal covered a slate of checkpoint regulators that could be crucial to Incyte’s future covering GITR, OX40, LAG-3 and TIM-3.

Today, though, Lexington, MA-based Agenus took a $20 million accelerated milestone payment from Incyte and sold 10 million shares at a premium $6 a share to its partner. In exchange they dropped the co-funded programs on GITR and OX40 antibody programs and turned them into royalty bearing deals, with Agenus settling for a 15% revenue stream instead of a profit split.

The TIM-3 and LAG-3 antibody programs remain royalty-bearing programs at 6% and 12%. Incyte is in charge of the full slate of programs on a global basis, and it’s sweetening the biobuck pie for Agenus, boosting it from $350 million to $510 million.

These kinds of rewrites are rare in biotech. Agenus would have stood to garner far more from a successful effort if they kept a profit split. But it may not have been able to raise enough cash to get the job done.

Agenus shareholders, though, seemed relatively happy with the new deal. The biotech’s stock is up about 10% to $4.50.

“The antibody discovery collaboration between Incyte and Agenus has progressed well and has already resulted in two programs in clinical trials. We look forward to further developing our GITR and OX40 antibody programs, and exploring immunotherapy combinations with these compounds and other agents in the near future,” said Hervé Hoppenot, CEO of Incyte.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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