Incyte cash boost not enough to stave off major Agenus cuts

The biotech will cut 50 positions while also scaling back on management roles

After Incyte and Agenus retooled their R&D pact last month, which gave the biotech access to some quick cash, it appeared that something was amiss; today, Agenus said it will be closing its Basel site; “consolidate” key functions to its Cambridge, U.K., and Lexington, Massachusetts, facilities, and “phase out” around 50 staffers from across its business by the fall.

It will also see Robert Stein, M.D., Ph.D., its president of R&D, “retire,” and become a senior R&D adviser exclusive to Agenus; namely, one would assume, to help reduce his pay packet. And other execs aren’t safe either, as it aims to “transition or consolidate certain key management positions,” which means cutting back on leadership roles.

And it doesn’t stop there: The biotech is also reorganizing its business and ops to “sharpen its focus on clinical development of its two checkpoint inhibitor antibodies and vaccine program,” which include combination therapies targeting CTLA-4 and PD-1. It will also push on with two preclinical antibodies targeting 4-1BB and TIGIT, as well as AutoSynVax, a clinical-stage neoantigen cancer vaccine.

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A month ago, it rejigged an R&D pact with Incyte, which will now work alone on developing and selling the GITR and OX40 antibody programs that it had been working on with Agenus.

In early 2015, the pair agreed to work on the antibodies INCAGN1876 (anti-GITR agonist) and INCAGN1949 (anti-OX40 agonist) together in a development and commercialization pact, but this deal has now been seriously tweaked, which was originally worth $60 million in cash with promises of up to $350 million in biobucks.

Its new deal added more biobucks and boosted its balance sheet by $80 million, all the while reducing its development expenses, but clearly not by enough to stop the ax from swinging.

It will also look to boost its manufacturing focus in Berkeley, CA to “ensure GMP readiness,” it says adding that this is “particularly pertinent as Agenus progresses its clinical registration trials with an intent to commercialize within the next four years.”

Garo Armen, Agenus CEO, said: “These changes to our organizational structure make us a leaner and more focused organization, which is critically important for our next phase of advancement towards commercial readiness. We will also maintain a focused R&D effort to rapidly generate and develop best of breed novel immuno-oncology candidates. It is important to indicate that as an agile and efficient company we aim to rapidly deliver effective treatments at affordable prices.”

Back in the fall of 2015, Agenus traded away future royalties on a GlaxoSmithKline-partnered vaccine adjuvant in exchange for up to $115 million, saying at the time that it planned to invest the proceeds in its growing pipeline of immuno-oncology treatments.

Under that royalty financing deal, Agenus handed over the rights to QS-21, used alongside GSK vaccines for malaria and shingles, to an investor group led by Oberland Capital for a $100 million loan, recouping another $15 million if and when the shingles vaccine wins FDA approval.

Agenus has gradually shifted its focus toward immuno-oncology over the past few years, buying up new technologies to flesh out its cancer pipeline.

And back in early 2014, the company had just $25 million in the bank and was trading at less than $3 a share after a GSK-related clinical setback.