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 September 30, 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 November 5, 2021: 256,831,180 shares

Agenus Inc.

Nine Months Ended September 30, 2021

Table of Contents

		Page
PART I
ITEM 1.	Financial Statements:	2
	Condensed Consolidated Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020	2
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2021 and 2020 (Unaudited)	3
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2021 and 2020 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 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	19
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	25
ITEM 4.	Controls and Procedures	25
PART II
ITEM 1.	Legal Proceedings	26
ITEM 1A.	Risk Factors	26
ITEM 6.	Exhibits	81
	Signatures	82

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)

	September 30, 2021 (unaudited)			December 31, 2020
ASSETS
Cash and cash equivalents	$	256,529		$	99,871
Short-term investments		4,999			—
Accounts receivable		21,773			1,157
Prepaid expenses		18,342			10,746
Other current assets		6,758			2,009
Total current assets		308,401			113,783
Property, plant and equipment, net of accumulated amortization and depreciation of    $49,433 and $47,201 at September 30, 2021 and December 31, 2020, respectively		50,279			26,790
Operating lease right-of-use assets		31,246			33,480
Goodwill		24,528			25,452
Acquired intangible assets, net of accumulated amortization of $13,335 and    $11,841 at September 30, 2021 and December 31, 2020, respectively		8,993			10,886
Other long-term assets		14,192			4,123
Total assets	$	437,639		$	214,514
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current portion, long-term debt	$	542		$	833
Current portion, liability related to sale of future royalties and milestones		63,684			57,362
Current portion, deferred revenue		19,682			17,186
Current portion, operating lease liabilities		2,368			1,950
Accounts payable		25,118			17,015
Accrued liabilities		31,955			29,057
Other current liabilities		6,782			6,481
Total current liabilities		150,131			129,884
Long-term debt, net of current portion		12,786			18,879
Liability related to sale of future royalties and milestones, net of current portion		189,229			176,263
Deferred revenue, net of current portion		5,407			28,282
Operating lease liabilities, net of current portion		38,900			34,065
Contingent purchase price considerations		3,739			10,208
Other long-term liabilities		1,894			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; no and 12,459 shares designated, issued,    and outstanding at September 30, 2021 and December 31, 2020, respectively		—			26,917
STOCKHOLDERS’ EQUITY (DEFICIT)
Series A-1 convertible preferred stock; 31,620 shares designated, issued, and    outstanding at September 30, 2021 and December 31, 2020; liquidation value    of $33,408 at September 30, 2021		0			0
Common stock, par value $0.01 per share; 400,000,000 shares authorized;    247,511,769 and 196,090,980 shares issued at September 30, 2021 and    December 31, 2020, respectively		2,475			1,961
Additional paid-in capital		1,463,524			1,257,502
Accumulated other comprehensive income		177			2,772
Accumulated deficit		(1,424,322	)		(1,465,907	)
Total stockholders’ equity (deficit) attributable to Agenus Inc.		41,854			(203,672	)
Non-controlling interest		(6,301	)		(7,826	)
Total stockholders’ equity (deficit)		35,553			(211,498	)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	437,639		$	214,514

See accompanying notes to unaudited condensed consolidated financial statements.

2

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(Amounts in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenue:
Research and development	$	238,986		$	4,286		$	242,265		$	24,283
Service revenue		1,375			1,599			4,201			2,621
Other revenue		—			—			35			52
Non-cash royalty revenue related to the sale of future royalties		12,593			8,947			28,903			29,950
Total revenues		252,954			14,832			275,404			56,906
Operating expenses:
Cost of service revenue		(817	)		(911	)		(2,589	)		(1,545	)
Research and development		(42,937	)		(32,134	)		(125,122	)		(107,048	)
General and administrative		(21,385	)		(14,380	)		(54,388	)		(39,188	)
Contingent purchase price consideration fair value adjustment		(275	)		(2,196	)		(13,531	)		(4,652	)
Operating income (loss)		187,540			(34,789	)		79,774			(95,527	)
Other income (expense):
Gain on extinguishment of debt		6,197			—			6,197			—
Loss on modification of debt		—			—			—			(2,720	)
Non-operating income (expense)		121			(648	)		2,059			(2,040	)
Interest expense, net		(16,581	)		(16,209	)		(49,147	)		(44,874	)
Net income (loss)		177,277			(51,646	)		38,883			(145,161	)
Dividends on Series A-1 convertible preferred stock		(53	)		(52	)		(158	)		(157	)
Less: net loss attributable to non-controlling interest		(1,275	)		(493	)		(2,702	)		(1,854	)
Net income (loss) attributable to Agenus Inc. common stockholders	$	178,499		$	(51,205	)	$	41,427		$	(143,464	)
Per common share data:
Basic net income (loss) attributable to Agenus Inc. common stockholders	$	0.76		$	(0.28	)	$	0.19		$	(0.87	)
Diluted net income (loss) attributable to Agenus Inc. common stockholders	$	0.72		$	(0.28	)	$	0.18		$	(0.87	)
Weighted average number of Agenus Inc. common shares outstanding:
Basic		235,407			182,667			219,677			165,682
Diluted		246,726			182,667			232,512			165,682
Other comprehensive income (loss):
Foreign currency translation gain (loss)		(83	)	$	864		$	(2,595	)	$	2,557
Other comprehensive income (loss)		(83	)		864			(2,595	)		2,557
Comprehensive income (loss)	$	178,416		$	(50,341	)	$	38,832		$	(140,907	)

See accompanying notes to unaudited condensed consolidated financial statements.

3

AGENUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

(Amounts in thousands)

	Series C-1						Series A-1
	Convertible						Convertible
	Preferred Stock						Preferred Stock				Common Stock						Treasury Stock
	Number of Shares			Amount			Number of Shares		Par Value		Number of Shares		Par Value		Additional Paid-In Capital		Number of Shares		Amount		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	)
Net loss		—			—			—		—		—		—		—		—		—		-			(701	)		(83,290	)		(83,991	)
Other comprehensive income		—			—			—		—		—		—		—		—		—		1,262			—			—			1,262
Share-based compensation		—			—			—		—		—		—		5,075		—		—		—			356			—			5,431
Shares sold at the market		—			—			—		—		3,392