UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 000-29089

Agenus Inc.

(exact name of registrant as specified in its charter)

Delaware	06-1562417
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3 Forbes Road, Lexington, Massachusetts 02421

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code:

(781) 674-4400

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01	AGEN	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Number of shares outstanding of the issuer’s Common Stock as of May 4, 2021: 222,441,009 shares

Agenus Inc.

Three Months Ended March 31, 2021

Table of Contents

		Page
PART I
ITEM 1.	Financial Statements:	2
	Condensed Consolidated Balance Sheets as of March 31, 2021 (Unaudited) and December 31, 2020	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2021 and 2020 (Unaudited)	3
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit for the three months ended March 31, 2021 and 2020 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (Unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	21
ITEM 4.	Controls and Procedures	22
PART II
ITEM 1A.	Risk Factors	23
ITEM 6.	Exhibits	78
	Signatures	79

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share amounts)

	March 31, 2021 (unaudited)			December 31, 2020
ASSETS
Cash and cash equivalents	$	119,366		$	99,871
Accounts receivable		2,173			1,157
Prepaid expenses		10,678			10,746
Other current assets		3,446			2,009
Total current assets		135,663			113,783
Property, plant and equipment, net of accumulated amortization and depreciation of    $48,354 and $47,201 at March 31, 2021 and December 31, 2020, respectively		27,149			26,790
Operating lease right-of-use assets		33,585			33,480
Goodwill		24,334			25,452
Acquired intangible assets, net of accumulated amortization of $12,176 and    $11,841 at March 31, 2021 and December 31, 2020, respectively		9,994			10,886
Other long-term assets		4,190			4,123
Total assets	$	234,915		$	214,514
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current portion, long-term debt	$	1,463		$	833
Current portion, liability related to sale of future royalties and milestones		55,286			57,362
Current portion, deferred revenue		22,826			17,186
Current portion, operating lease liabilities		2,058			1,950
Accounts payable		19,477			17,015
Accrued liabilities		31,048			29,057
Other current liabilities		6,216			6,481
Total current liabilities		138,374			129,884
Long-term debt, net of current portion		18,913			18,879
Liability related to sale of future royalties and milestones, net of current portion		185,432			176,263
Deferred revenue, net of current portion		21,555			28,282
Operating lease liabilities, net of current portion		35,187			34,065
Contingent purchase price considerations		9,164			10,208
Other long-term liabilities		1,643			1,514
Commitments and contingencies
CONVERTIBLE PREFERRED STOCK
Preferred stock, par value $0.01 per share; 5,000,000 shares authorized:
Series C-1 convertible preferred stock; 10,459 and 12,459 shares designated, issued,    and outstanding at March 31, 2021 and December 31, 2020, respectively		22,596			26,917
STOCKHOLDERS’ DEFICIT
Series A-1 convertible preferred stock; 31,620 shares designated, issued, and    outstanding at March 31, 2021 and December 31, 2020; liquidation value    of $33,302 at March 31, 2021		0			0
Common stock, par value $0.01 per share; 400,000,000 shares authorized;    217,861,586 and 196,090,980 shares issued at March 31, 2021 and    December 31, 2020, respectively		2,179			1,961
Additional paid-in capital		1,328,747			1,257,502
Accumulated other comprehensive income (loss)		(1,002	)		2,772
Accumulated deficit		(1,519,584	)		(1,465,907	)
Total stockholders’ deficit attributable to Agenus Inc.		(189,660	)		(203,672	)
Non-controlling interest		(8,289	)		(7,826	)
Total stockholders’ deficit		(197,949	)		(211,498	)
Total liabilities, convertible preferred stock and stockholders’ deficit	$	234,915		$	214,514

See accompanying notes to unaudited condensed consolidated financial statements.

2

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(Amounts in thousands, except per share amounts)

	Three Months Ended March 31,
	2021			2020
Revenue:
Research and development	$	1,571		$	1,928
Service revenue		1,629			—
Other revenue		35			44
Non-cash royalty revenue related to the sale of future royalties		8,484			13,156
Total revenues		11,719			15,128
Operating expenses:
Cost of service revenue		(1,105	)		—
Research and development		(36,677	)		(36,363	)
General and administrative		(16,352	)		(10,613	)
Contingent purchase price consideration fair value adjustment		1,044			4,384
Operating loss		(41,371	)		(27,464	)
Other income (expense):
Loss on modification of debt		—			(2,720	)
Non-operating income (expense)		2,858			(1,052	)
Interest expense, net		(15,890	)		(14,035	)
Net loss		(54,403	)		(45,271	)
Dividends on Series A-1 convertible preferred stock		(53	)		(52	)
Less: net loss attributable to non-controlling interest		(726	)		(597	)
Net loss attributable to Agenus Inc. common stockholders	$	(53,730	)	$	(44,726	)
Per common share data:
Basic and diluted net loss attributable to Agenus Inc. common stockholders	$	(0.27	)	$	(0.31	)
Weighted average number of Agenus Inc. common shares outstanding:
Basic and diluted		200,331			145,061
Other comprehensive income (loss):
Foreign currency translation gain (loss)		(3,774	)	$	1,227
Other comprehensive income (loss)		(3,774	)		1,227
Comprehensive loss	$	(57,504	)	$	(43,499	)

See accompanying notes to unaudited condensed consolidated financial statements.

3

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

(Unaudited)

(Amounts in thousands)

	Series C-1						Series A-1
	Convertible						Convertible
	Preferred Stock						Preferred Stock				Common Stock
	Number of Shares			Amount			Number of Shares		Par Value		Number of Shares		Par Value		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)			Non-controlling Interest			Accumulated Deficit			Total
Balance at December 31, 2020		12		$	26,917			32	$	0		196,093	$	1,961	$	1,257,502	$	2,772		$	(7,826	)	$	(1,465,907	)	$	(211,498	)
Net loss		—			—			—		—		—				—		—			(726	)		(53,677	)		(54,403	)
Other comprehensive income		—			—			—		—		—		—		—		(3,774	)		—			—			(3,774	)
Share-based compensation		—			—			—		—		—		—		3,669		—			263			—			3,932
Shares sold at the market		—			—			—		—		18,950		190		60,669		—			—			—			60,859
Payment of CEO payroll in shares		—			—			—		—		19		—		68		—			—			—			68
Issuance of shares for services		—			—			—		—		5		—		20		—			—			—			20
Conversion of series C-1 convertible preferred stock		(2	)		(4,321	)		—		—		2,000		20		4,301		—			—			—			4,321
Exercise of stock options and employee share purchases		—			—			—		—		796		8		2,518		—			—			—			2,526
Balance at March 31, 2021		10		$	22,596			32	$	0		217,863	$	2,179	$	1,328,747	$	(1,002	)	$	(8,289	)	$	(1,519,584	)	$	(197,949	)

4

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

(Unaudited)

(Amounts in thousands)

	Series C-1				Series A-1
	Convertible				Convertible
	Preferred Stock				Preferred Stock				Common Stock
	Number of Shares		Amount		Number of Shares		Par Value		Number of Shares		Par Value		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)			Non-controlling Interest			Accumulated Deficit			Total
Balance at December 31, 2019		12	$	26,917		32	$	0		137,819	$	1,378	$	1,059,583	$	(1,324	)	$	(5,981	)	$	(1,284,993	)	$	(231,337	)
Net loss		—		—		—		—		—		—		—		—			(597	)		(44,674	)		(45,271	)
Other comprehensive income		—		—		—		—		—		—		—		1,227			—			—			1,227
Share-based compensation		—		—		—		—		—		—		2,397		—			—			—			2,397
Shares sold at the market		—		—		—		—		24,716		247		64,876		—			—			—			65,123
Amendment of 2015 warrants and issuance of 2020 warrants		—		—		—		—		—		—		3,145		—			—			—			3,145
Payment of consultant in shares		—		—		—		—		4		0		12		—			—			—			12
Exercise of stock options and employee share purchases		—		—		—		—		765		8		2,196		—			—			—			2,204
Balance at March 31, 2020		12	$	26,917		32	$	0		163,304	$	1,633	$	1,132,209	$	(97	)	$	(6,578	)	$	(1,329,667	)	$	(202,500	)

See accompanying notes to unaudited condensed consolidated financial statements.

5

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Amounts in thousands)

	Three Months Ended March 31,
	2021			2020
Cash flows from operating activities:
Net loss	$	(54,403	)	$	(45,271	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,729			1,700
Share-based compensation		4,001			2,397
Non-cash royalty revenue		(8,484	)		(13,156	)
Non-cash interest expense		15,611			13,844
Change in fair value of contingent obligations		(1,044	)		(4,384	)
Loss on modification of debt		—			2,720
Changes in operating assets and liabilities:
Accounts receivable		(1,039	)		13,649
Prepaid expenses		53			465
Accounts payable		1,646			1,190
Deferred revenue		(1,087	)		(1,875	)
Accrued liabilities and other current liabilities		2,255			(8,471	)
Other operating assets and liabilities		(1,982	)		2,687
Net cash used in operating activities		(42,744	)		(34,505	)
Cash flows from investing activities:
Purchases of plant and equipment		(196	)		(644	)
Net cash used in investing activities		(196	)		(644	)
Cash flows from financing activities:
Net proceeds from sale of equity		60,859			65,123
Proceeds from employee stock purchases and option exercises		2,526