{"url_path":"/sec/agen/10-q/2026/item-2","section_key":"item-2","section_title":"Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-11","source_url":"https://www.sec.gov/Archives/edgar/data/1098972/0001193125-26-217082-index.html","accession_number":"0001193125-26-217082","cik":"0001098972","ticker":"AGEN","issuer_name":"AGENUS INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1098972/0001193125-26-217082-index.html","primary_entity_key":"0001098972","primary_entity_name":"AGENUS INC"},"word_count":4168,"has_tables":true,"body_markdown":"Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations\n\nForward Looking Statements\n\nThis Quarterly Report on Form 10-Q and other written and oral statements we make from time to time contain certain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). You can identify these forward-looking statements by the fact they use words such as “could,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe,” “will,” “potential,” “opportunity,” “future” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. You can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. These statements relate to, among other things, our business strategy, our research and development, our product development efforts, our ability to commercialize our product candidates, the activities of our licensees, our prospects for initiating partnerships or collaborations, the timing of the introduction of products, the effect of new accounting pronouncements, uncertainty regarding our future operating results and our profitability, anticipated sources of funds as well as our plans, objectives, expectations, and intentions.\n\nMore detailed descriptions of these risks and uncertainties and other risks and uncertainties applicable to our business that we believe could cause actual results to differ materially from any forward-looking statements are included in in Part I-Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We encourage you to read those descriptions carefully. Although we believe we have been prudent in our plans and assumptions, no assurance can be given that any goal or plan set forth in forward-looking statements can be achieved. We caution investors not to place significant reliance on forward-looking statements contained in this document; such statements need to be evaluated in light of all the information contained in this document. Furthermore, the statements speak only as of the date of this document, and we undertake no obligation to update or revise these statements.\n\nAgenus, Prophage, Retrocyte Display and STIMULON are trademarks of Agenus Inc. and its subsidiaries. All rights reserved.\n\nOverview\n\nAgenus is a clinical-stage biotechnology company focused on discovering and developing immunotherapies for cancer and infectious disease. Our primary business is immuno-oncology (\"I-O\"), where we are advancing antibody-based programs to activate innate and adaptive immunity, overcome tumor immune evasion and expand the population of patients who may benefit from immunotherapy. Our lead clinical program is botensilimab (\"BOT\" or \"AGEN1181\"), alone and in combination with balstilimab (\"BAL\"). We also maintain select clinical-stage immuno-oncology assets that may be used as standalone agents or as complements to BOT plus BAL (\"BOT/BAL\"). Agenus also maintains an equity investment in MiNK Therapeutics, Inc. (\"MiNK\"), with an approximate fair value of $22.9 million as of March 31, 2026, and a majority ownership of a vaccine adjuvant business through our subsidiary SaponiQx, Inc. (\"SaponiQx\"). Our common stock is listed on The Nasdaq Capital Market under the symbol \"AGEN.\"\n\nThe first quarter of 2026 and the period shortly thereafter included several developments that materially advanced our strategic priorities: continued expansion of physician engagement through regulatory-authorized access pathways and the appointment of an exclusive global access distribution partner; the commencement of patient enrollment in the global Phase 3 BATTMAN trial; the closing of the strategic collaboration with Zydus Lifesciences Ltd. and the triggering of the first $20.0 million contingent payment under that collaboration; the conclusion of the U.S. Securities and Exchange Commission's investigation as to the Company; and the dismissal of the related putative securities class action by the U.S. District Court for the District of Massachusetts.\n\nIn France, BOT/BAL is available under the national Autorisation d'Accès Compassionnel (\"AAC\") framework for eligible patients in MSS metastatic colorectal cancer without active liver metastases (added September 2025), platinum-resistant or platinum-refractory ovarian cancer (added January 2026), and certain advanced soft-tissue sarcomas (added January 2026). Treatment under the AAC framework is reimbursed through the French national health system. Outside France, BOT/BAL may be available in select countries through paid named-patient programs initiated by treating physicians and governed by local regulations and national reimbursement or coverage frameworks. In April 2026, we named BAP Pharma as our global distribution partner to support BOT/BAL access programs end-to-end, including request coordination, regulatory navigation, distribution logistics and payment processing. These programs do not constitute marketing approval, may be modified or discontinued by applicable authorities, and do not assure future regulatory approvals.\n\nIn April 2026, the global Phase 3 BATTMAN (CCTG CO.33) trial commenced patient enrollment. Conducted together with the Canadian Cancer Trials Group (\"CCTG\") and participating cooperative groups, BATTMAN is evaluating BOT plus BAL versus best supportive care in approximately 830 patients with refractory, unresectable MSS/pMMR metastatic colorectal cancer across more than\n\n23\n\n \n\n100 sites in Canada, France, Australia and New Zealand, and is intended to support potential regulatory filings in the United States and the European Union.\n\nIn January 2026, we closed the strategic collaboration with Zydus Lifesciences Ltd. (\"Zydus\"), under which we received $91.0 million in cash consideration at closing, comprising $75.0 million for the transfer of our Emeryville and Berkeley biologics manufacturing facilities and a $16.0 million equity investment in Agenus common stock. The collaboration also includes an exclusive license for Zydus to develop and commercialize BOT and BAL in India and Sri Lanka, with Agenus eligible to receive royalties on net sales in those territories, and provides for up to $50.0 million in additional contingent payments tied to BOT and BAL production orders. In March 2026, the first $20.0 million contingent payment was triggered based on contracted work orders for BOT/BAL chemistry, manufacturing and controls (CMC) and production activities. The Zydus collaboration secures dedicated, long-term U.S. biologics manufacturing capacity to support clinical development, authorized access programs and potential future commercial supply.\n\nBased on existing data, we intend during 2026 to seek Accelerated Approval in the United States and Conditional Approval in the European Union for BOT plus BAL in refractory microsatellite-stable metastatic colorectal cancer without active liver metastases.\n\nOn May 4, 2026, the U.S. Securities and Exchange Commission informed the Company that it has concluded its investigation as to the Company and does not intend to recommend an enforcement action against the Company. On March 24, 2026, the U.S. District Court for the District of Massachusetts granted the Company's motion to dismiss the related putative securities class action in its entirety. The lead plaintiff has filed a Notice of Appeal. See Note S to our Condensed Consolidated Financial Statements and Part II, Item 1 (Legal Proceedings) for additional information.\n\nBotensilimab is a multifunctional anti-CTLA-4 antibody designed to activate both innate and adaptive anti-tumor immune responses, with mechanisms intended to extend immunotherapy benefit to \"cold\" tumors that generally respond poorly to standard of care and to conventional PD-1/CTLA-4 therapies. Botensilimab is designed to prime and activate T cells, downregulate intratumoral regulatory T cells, activate myeloid cells and induce long-term memory responses. Balstilimab is a fully human monoclonal IgG4 anti-PD-1 antibody designed to block PD-1 from interacting with PD-L1 and PD-L2. BOT, alone and in combination with BAL, has been evaluated in approximately 1,300 patients across more than 60 centers worldwide and across nine tumor types, including colorectal cancer, sarcoma, non-small cell lung cancer, hepatocellular cancer, pancreatic cancer, melanoma, ovarian cancer and triple-negative breast cancer. BOT plus BAL is investigational and has not been approved by the U.S. Food and Drug Administration (the \"FDA\") or the European Medicines Agency for commercial sale.\n\nIn our randomized Phase 2 trial reported at the American Society of Clinical Oncology Gastrointestinal Cancers Symposium in January 2025, the BOT 75 mg plus BAL regimen achieved a 19% objective response rate and a 55% disease control rate in heavily pretreated patients with refractory MSS metastatic colorectal cancer without active liver metastases, with no objective responses observed in the control arm. In long-term follow-up data from the Phase 1b study (n=123) presented at the European Society for Medical Oncology Gastrointestinal Cancers Congress in July 2025, BOT plus BAL showed approximately 42% two-year overall survival and median overall survival of approximately 21 months in this population. Pan-tumor data from more than 400 heavily pretreated patients in the Phase 1b C-800-01 study, presented at the European Society for Medical Oncology Congress in October 2025, showed approximately 39% two-year overall survival and median overall survival of 17.2 months across multiple tumor types. Sarcoma data published in the Journal of Clinical Oncology in January 2025 (n=52) showed a 19.2% overall response rate, with 27.8% in angiosarcoma. Ovarian cancer data published in the Journal for ImmunoTherapy of Cancer in December 2025 showed a 23% overall response rate and 14.8 months median overall survival in heavily pretreated patients.\n\nOur strategy is to focus capital on execution of programs that we believe have the clearest path to meaningful clinical and commercial value, led by BOT/BAL in colorectal cancer and selected other tumor types. We maintain manufacturing flexibility through strategic collaborations, with an emphasis on our Zydus collaboration. Our internal discovery and translational platforms support target identification, antibody generation, biomarker analysis and candidate selection, and have supported development of agents directed to CTLA-4, PD-1, CD137, CD73/TGF-beta, ILT2, LAG-3, TIM-3 and TIGIT, all of which remain proprietary assets of Agenus.\n\nHistorical Results of Operations\n\nThree months ended March 31, 2026 compared to the three months ended March 31, 2025\n\nPre-commercial product revenue\n\nWe recognized pre-commercial product revenue of approximately $4.6 million during the three months ended March 31, 2026, representing sales of BOT+BAL provided to patients through regulatory-authorized early access pathways under both France’s Authorisation d’Accès Compassionnel (\"AAC\") framework and paid named patient programs (\"NPPs\"), where permitted.\n\n24\n\n \n\nNon-cash royalty revenue related to the sale of future royalties\n\nIn January 2018, we sold 100% of our worldwide rights to receive royalties from GSK on sales of GSK’s vaccines containing our STIMULON QS-21 adjuvant to HCR. As described in Note H to our Condensed Consolidated Financial Statements, this transaction has been recorded as a liability that amortizes over the estimated life of our Royalty Purchase Agreement with HCR. As a result of this liability accounting, even though the royalties are remitted directly to HCR, we record these royalties from GSK as revenue. Non-cash royalty revenue related to our agreement with GSK increased $5.6 million, to approximately $29.1 million for the three months ended March 31, 2026, from $23.6 million for the three months ended March 31, 2025, due to increased net sales of GSK’s vaccines containing our STIMULON QS-21 adjuvant.\n\nResearch and development expense\n\nResearch and development expense includes the costs associated with our internal research and development activities, including compensation and benefits, occupancy costs, manufacturing costs, costs of consultants, and administrative costs. Research and development expense decreased 45% to $11.8 million for the three months ended March 31, 2026 from $21.5 million for the three months ended March 31, 2025. Decreased expenses in the three months ended March 31, 2026 primarily relate to a 1.9 million decrease in third-party services and other expenses, largely due to the timing of expenses related to the advancement of our antibody programs, a $3.3 million decrease in personnel related expenses, substantially due to a decrease in headcount due to the sale of our manufacturing operations to Zydus in January 2026, a $2.4 million decrease in other research and development expenses, primarily attributable to a decrease in facility and depreciation expense due to the sale of our manufacturing operations to Zydus in January 2026, and a $1.9 million decrease in expenses attributable to the activities of our subsidiaries, which decrease is partially attributable to the deconsolidation of MiNK.\n\nGeneral and administrative expense\n\nGeneral and administrative expense consists primarily of personnel costs, facility expenses, and professional fees. General and administrative expenses decreased 56% to $6.9 million for the three months ended March 31, 2026 from $15.7 million for the three months ended March 31, 2025. Decreased expenses in the three months ended March 31, 2026 primarily relate to a $3.2 million decrease in personnel related expenses, substantially due to a decrease in headcount due to the sale of our manufacturing operations to Zydus in January 2026 and a decrease in share-based compensation expense, a $1.9 million decrease in professional fees, mainly due to a decrease in external legal expenses, a $1.7 million decrease other general and administrative expenses, primarily attributable to a decrease in facility and depreciation expense due to the sale of our manufacturing operations to Zydus in January 2026, and a $2.0 million decrease in expenses attributable to the activities of our subsidiaries, which decrease is partially attributable to the deconsolidation of MiNK.\n\nMiNK Therapeutics, Inc. equity method investment fair value adjustment\n\nThe MiNK Therapeutics, Inc. equity method investment fair value adjustment of $1.4 million for the three months ended March 31, 2026, represents the fair value adjustment for our remaining investment in MiNK, for which we have elected the fair value option. The fair value of our equity investment is based on readily determinable pricing available on a securities exchange.\n\nGain on Zydus asset sale\n\nThe $40.4 million gain recognized at the closing of the Zydus transactions represents the total gain recognized from the Zydus Asset Purchase Agreement and Securities Purchase Agreement. Refer to Note R to our Condensed Consolidated Financial Statements for additional detail.\n\nInterest expense, net\n\nInterest expense, net increased to approximately $14.7 million for the three months ended March 31, 2026 from $12.8 million for the three months ended March 31, 2025, mainly due to increased non-cash interest recorded in connection with our Royalty Purchase Agreement with HCR, primarily attributable to increased sales forecasts of GSK’s vaccines containing our STIMULON QS-21 adjuvant and an increase of the non-cash interest expense recorded in connection with our Ligand Purchase Agreement.\n\n25\n\n \n\nResearch and Development Programs\n\n \n\nFor the three months ended March 31, 2026, our research and development programs consisted largely of our antibody programs as indicated in the following table (in thousands).\n\n \n\n \n\n \n\n \n\nThree Months Ended March 31,\n\n \n\n \n\nYear Ended December 31,\n\n \n\nResearch and\nDevelopment Program\n\n \n\nProduct\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nAntibody programs\n\n \n\nVarious\n\n \n\n$\n\n8,877\n\n \n\n \n\n$\n\n55,493\n\n \n\n \n\n$\n\n113,135\n\n \n\n \n\n$\n\n178,445\n\n \n\nVaccine adjuvant\n\n \n\nSTIMULON cpcQS-21\n\n \n\n \n\n67\n\n \n\n \n\n \n\n1,638\n\n \n\n \n\n \n\n1,844\n\n \n\n \n\n \n\n10,296\n\n \n\nCell therapies\n\n \n\nVarious\n\n \n\n \n\n—\n\n \n\n \n\n \n\n3,282\n\n \n\n \n\n \n\n7,558\n\n \n\n \n\n \n\n16,283\n\n \n\nOther research and development programs\n\n \n\nVarious\n\n \n\n \n\n2,878\n\n \n\n \n\n \n\n18,925\n\n \n\n \n\n \n\n32,991\n\n \n\n \n\n \n\n29,545\n\n \n\nTotal research and development expenses\n\n \n\n \n\n \n\n$\n\n11,822\n\n \n\n \n\n$\n\n79,338\n\n \n\n \n\n$\n\n155,528\n\n \n\n \n\n$\n\n234,569\n\n \n\n \n\nResearch and development program costs include compensation and other direct costs plus an allocation of indirect costs, based on certain assumptions and our review of the status of each program. Our product candidates are in various stages of development and significant additional expenditures will be required if we start new clinical trials, encounter delays in our programs, apply for regulatory approvals, continue development of our technologies, expand our operations, and/or bring our product candidates to market. The total cost of any particular clinical trial is dependent on a number of factors such as trial design, length of the trial, number of clinical sites, number of patients, and trial sponsorship. The process of obtaining and maintaining regulatory approvals for new therapeutic products is lengthy, expensive, and uncertain. Because of the current stage of our product candidates, among other factors, we are unable to reliably estimate the cost of completing our research and development programs or the timing for bringing such programs to various markets or substantial partnering or out-licensing arrangements, and, therefore, when, if ever, material cash inflows are likely to commence.\n\nLiquidity and Capital Resources\n\nWe have incurred annual operating losses since inception, and we had an accumulated deficit of $2.1 billion as of March 31, 2026. We expect to incur significant losses over the next several years as we continue development of our technologies and product candidates, manage our regulatory processes, initiate and continue clinical trials, and prepare for potential commercialization of products. To date, we have financed our operations primarily through corporate partnerships, advance royalty sales and the issuance of equity. From our inception through March 31, 2026, we have raised aggregate net proceeds of approximately $2.06 billion through the sale of common and preferred stock, the exercise of stock options and warrants, proceeds from our Employee Stock Purchase Plan, royalty monetization transactions, and the issuance of convertible and other notes.\n\nWe maintain an effective registration statement (the “Registration Statement”) covering up to $300.0 million of common stock, preferred stock, warrants, debt securities and units. The Registration Statement includes prospectuses covering the offer, issuance and sale of up to 20.6 million shares of our common stock from time to time in “at-the-market offerings” pursuant to an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. as our sales agent. We sold approximately 284,000 and 2.8 million shares of our common stock pursuant to the Sales Agreement during the three months ended March 31, 2026 and the period of April 1, 2026 through May 7, 2026, respectively, and received aggregate net proceeds totaling $12.7 million. As of May 7, 2026, approximately 5.3 million shares remained available for sale under the Sales Agreement.\n\nOur cash and cash equivalents at March 31, 2026 were $35.0 million. As of March 31, 2026, we had debt outstanding of $30.5 million in principal, $5.1 million is due June 2026, and $24.75 million is due November 2026.\n\nDuring the first quarter of 2026, we materially strengthened our liquidity position. MiNK Therapeutics repaid a $5.2 million related-party note receivable, and we closed agreements with Zydus Lifesciences Ltd (\"Zydus\") and its affiliates, under which we received $91.0 million of consideration, subject to certain adjustments. These adjustments include reimbursable expenses, other required closing payments, including approximately $5.8 million of transaction expenses, and $7.5 million placed into a twelve-month escrow, which is to be released in accordance with the predefined parameters set forth in the Zydus agreements. See Note R for further discussion of the proceeds received in connection with the Zydus closing.\n\nAs of March 31, 2026, we had cash and cash equivalents of $35.0 million, compared with $3.0 million as of December 31, 2025. The March 31, 2026 cash balance excludes the $7.5 million held in escrow under the Zydus agreements, which is releasable to the Company in accordance with the predefined provisions of those agreements, and does not reflect outstanding receivables under our\n\n26\n\n \n\nearly access programs for botensilimab/balstilimab — including France’s Autorisation d’Accès Compassionnel (“AAC”) framework and paid named patient programs in other jurisdictions where permitted — which we expect to collect during the second quarter of 2026. Subsequent to quarter end, we received an additional $11.7 million in net proceeds from sales of common stock under our at-the-market equity offering program.\n\nAlso during the first quarter, we made cash payments of approximately $18.0 million to contract development and manufacturing organizations (CDMOs) and contract research organizations (CROs). CDMO payments principally funded the release of commercial-grade botensilimab supply and progressed manufacturing readiness for balstilimab. CRO payments principally supported the generation and delivery of clinical data sets required for our planned accelerated approval submission in the United States and conditional marketing authorization application in the European Union. These payments substantially settled liabilities accrued in prior periods and are reflected in the period-over-period decrease in accounts payable rather than in operating expenses for the three months ended March 31, 2026.\n\nThe output of these activities — clinical and pre-commercial supply of botensilimab and progressing supply of balstilimab, together with the regulatory data packages supporting planned U.S. and E.U. submissions — represents productive assets supporting future revenue generation across multiple periods. Cash deployments of this nature are distinct from our recurring operating expense base. We expect continued payments of this type during the second quarter as supply build and data-package completion advance, with the magnitude of those payments determined by the timing of CDMO and CRO milestone deliverables.\n\nWe have incurred significant losses since our inception in 1994. As of March 31, 2026, we had an accumulated deficit of $2.1 billion.\n\nBased on our current operating plan and projections, including scheduled debt payments in the look-forward period (the majority of which is secured by certain real estate properties), and assuming completion of additional capital transactions currently under discussion, we believe our existing cash resources, together with anticipated revenues from our early access programs, will be sufficient to support our critical liquidity requirements into 2027. Advancing our planned registration and commercialization strategy for botensilimab/balstilimab and funding the Company through achievement of profitability will require additional capital.\n\nWe have historically financed our operations through corporate partnerships, advance royalty transactions, and debt and equity financings. We are actively pursuing additional financing and strategic alternatives, including corporate transactions, out-licensing arrangements, asset sales, project financing, additional debt or equity financings, and other strategic transactions, and we are in active discussions with potential strategic and financial partners regarding several of these alternatives.\n\nBecause the timing and completion of these transactions are not entirely within our control, in accordance with applicable accounting standards, substantial doubt exists about our ability to continue as a going concern for at least one year after the filing date of this Quarterly Report on Form 10-Q. The consolidated financial statements have been prepared assuming we will continue as a going concern and contemplate the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. We have also implemented cost management measures to preserve liquidity.\n\nOur operating expenses for the quarter ended March 31, 2026, include cash and non-cash expenses. Non-cash expenses for the period include share-based compensation expense, depreciation and amortization expense and certain other non-cash items. Operating expenses in the first quarter also included expenses associated with our manufacturing facilities in the period before the facilities were sold to Zydus and costs incurred for services provided by Zydus that will be settled through the first contingent payment under the Zydus Purchase Agreement.\n\nDuring the first quarter of 2026 we made cash payments totaling approximately $51.8 million, this included significant payments to settle liabilities accrued in prior periods and are not reflected in operating expenses for the three months ended March 31, 2026. These payments consisted of $18.0 million to contract development and manufacturing organizations (CDMOs) for the release of commercial-grade botensilimab supply, to contract research organizations (CROs) and clinical support organizations for clinical data sets supporting our planned accelerated approval submission in the United States and our conditional marketing authorization application in the European Union, $22.0 million in other non-recurring payments, including payments to settle finance lease and debt obligations in connection with the closing of the Zydus transactions and payments related to our manufacturing operations sold to Zydus in January 2026. The remaining $11.8 million in payments related to our other recurring operating activities.\n\nWe have also entered into payment plans with a portion of our existing vendors, allowing us to repay the associated accounts payable balances over a defined period.\n\nOur future cash requirements include, but are not limited to, supporting clinical trial and regulatory efforts and continuing our other research and development programs. Since inception, we have entered into various agreements with contract manufacturers,\n\n27\n\n \n\ninstitutions, and clinical research organizations (collectively “third party providers”) to perform pre-clinical activities and to conduct and monitor our clinical studies and trials. Under these agreements, subject to the enrollment of patients and performance by the applicable third-party provider, we have estimated our total payments to be $690.2 million over the term of the related activities. Through March 31, 2026, we have expensed $629.9 million as research and development expenses and $586.1 million has been paid under these agreements. The timing of expense recognition and future payments related to these agreements is subject to the enrollment of patients and performance by the applicable third-party provider. We plan to enter into additional agreements with third party providers and we anticipate significant additional expenditures will be required to initiate and advance our various programs.\n\nPart of our strategy is to develop and commercialize some of our product candidates by continuing our existing collaboration arrangements with academic and collaboration partners and licensees and by entering into new collaborations. As a result of our collaboration agreements, we will not completely control the efforts to attempt to bring those product candidates to market.\n\nNet cash used in operating activities for the three months ended March 31, 2026 and 2025 was $36.0 million and $25.6 million, respectively. Our future ability to generate cash from operations will depend on achieving regulatory approval and market acceptance of our product candidates, achieving benchmarks as defined in existing collaboration agreements, and our ability to enter into new collaborations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Forward Looking Statements” in Part I, Item 2 of this Quarterly Report on Form 10-Q and the risks highlighted in Part I, Item 1A \"Risk Factors\" of our 2025 Form 10-K."}