Good day, ladies and gentlemen, and welcome to the Agenus Second Quarter 2017 Earnings Conference Call. As a reminder, today's conference call is being recorded. At this time, I would like to turn the conference over to Michael Plater, Head of Corporate Affairs and Chief of Staff to the CEO of Agenus. Please go ahead, Mr. Plater.

Thank you. Welcome to the Agenus Second Quarter 2017 Conference Call. Before I continue, I would like to remind you that this conference call will contain forward-looking statements, including without limitations statements regarding the company's potential income stream, research and development and clinical trial and manufacturing plants and activity, the publication of data, the potential application of the company's technologies and product candidates toward the prevention and treatment of diseases and the company's plans to pursue its cell therapy portfolio through a separate business entity. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Reference to these risks and uncertainties is made in today's press release and they are disclosed in more detail on our recent filing on the U.S. Securities and Exchange Commission. These statements speak only as of the date of this call and Agenus undertakes no obligation to update or revise these statements, except to the extent required by law. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. When evaluating Agenus' business and securities, investors should give careful considerations to these risks and uncertainties. As a remainder this call is being recorded for audio broadcast. With me today are Dr. Garo Armen, Chairman and Chief Executive Officer; Dr. Jennifer Buell, Vice President, Research and External Affairs; Dr. Jean-Marie Cuillerot, our Chief Medical Officer; and Christine Klaskin, our Vice President of Finance. During this call, Garo will provide a corporate update; Jean-Marie will talk about our clinical plans and deliverables; Jennifer will provide an update on vaccines and pre-clinical programs and manufacturing and Christine will provide a financial review. We will then open the call for questions. With that, let me turn the call over to Garo.

Thank you, Michael. Good morning and thank you for joining us. Before I provide you with an update on our recent advancements, I would like to briefly review with you what got us to where we are today. The last 3.5 years have been transformative for our company. This transformation started with our acquisition of 4-Antibody in early 2014. It was a pivotal transaction that allowed us to significantly expand our team of world-class experts and our top-notch technology platforms and programs. In the past three years, we've also had a deliberate strategy to put into place end-to-end capabilities that are critical for the speedy and cost effective development of products. Speed of development is critically important today. Every week and every month counts, because immuno-oncology product development timelines from first patient enrollment to approval, have plunged to about four years. It was twice that number up until a few years ago. This was first evidenced by the approval of the first anti-PD-1 antibody in 2015. And more recently by the approval of anti-PD-L1 antibody, avelumab. I'll remind you that our Chief Medical Officer, Jean-Marie Cuillerot in his previous role accomplished the clinical development of avelumab in four years. Also importantly today, it is widely believed by many of the experts that combinations of I-O agents will be the drivers of disruptive innovation to cure many cancers. The ability to combine novel I-O agents and rapidly progress them through development are the key drivers of success. Now, let me address why we are ideally positioned for rapidly advancing combination immuno-oncology agents. One, our diverse immuno-oncology portfolio gives us the ability to practice combinations that will yield the most effective treatments for patients. These include checkpoint antibodies, bispecifics, neo-antigen vaccines, cell therapies and adjuvants, all under one roof. And two, our…

Thank you, Garo and good morning. As Garo said, we have seen real progress in the clinic. We are executing on our clinical development strategy and are on track to be commercial within the next four years. We presented at ASCO the interim data for our anti-CTLA-4 antibody, AGEN1884. The data showed that our anti-CTLA-4 antibody is well tolerated at doses up to 3 mgs/kg. We therefore see the partial response observed at 0.1 mgs/kg with a 92% reduction in tumor burden in a patient with angiosarcoma who had failed [indiscernible]. This is a very encouraging sign of clinical activity. These patients remain on study and are now confirmed to have a complete response. We'll add additional three patients at 6 mgs/kg, which will not go higher in those [ph] patients as the drug is intended to be developed as a combination. Early hints of clinical activity and a very good safety profile are encouraging, given our plan to pursue a combination trial for AGEN1884 with our anti-PD-1 AGEN2034 later this year. Our Phase 1/2 trial for AGEN2034 is also in progress and we anticipate recruiting patients with second line cervical cancer in the fourth quarter. I want to take a moment to address the recent readout from the AstraZeneca's MYSTIC trial. As you know, MYSTIC did not meet its PFS [indiscernible] endpoint and we see this as a positive for Agenus for the following reasons. Number one, other than Yervoy, AGEN1884 is now the most clinically adjuvant anti-CTLA-4 antibody with a decent shift in mechanism of action as compared to AZ’s tremelimumab. We have both IgG1 and IgG2 antibodies that target CTLA-4 in our inventory, but last year, we made a deliberate decision to move the adjuvant format, AGEN1884 forward into Phase 1 studies, given the clear biological advantages and superior pre-clinical data over the IgG1 molecule. The IgG1 variant provides more than [indiscernible] receptor. In addition to working CTLA-4, AGEN promote FcyR-dependent anti-tumor mechanisms expected to provide superior therapeutic benefits compared to IgG2 antibody. Third, in the BMS checkmate trial 012, the combination of Opdivo, an anti-PD-1 and Yervoy, an anti-CTLA-4, in advanced non-small cell lung cancer resulted in a PFS that was double that observed with Opdivo alone. If the follow-up checkmate-227 trial confirms these results, it will further confirm the superior efficacy of the IgG1 format, again supporting the rationale for AGEN1884 in combination. Last, the Agenus anti-CTLA-4/PD-1 combination dosing schedule will be consistent with what has been used in previous successful clinical trials. However, we believe the potential for targeting CTLA-4 remains unrealized, including the ability to enable future immuno-oncology combinations, when paired with the right molecule, including vaccines. I like to now turn this over to Jen to review some of the key highlights concerning our vaccine, research and manufacturing.

Thank you, Jean-Marie and Garo. It's my pleasure to review our continued progress with vaccine development, our pre-clinical pipeline and to expand on the manufacturing progress that Garo highlighted earlier. I’ll begin by discussing the current neo-antigen vaccine landscape and our progress. As you know, we are one of only four known companies to have a neo-antigen vaccine in the clinic. Our AutoSynVax or in short ASV, neo-antigen vaccine is based on our clinically validated platform and is currently advancing in Phase 1 clinical testing. ASV is co-administered with our immune potent adjuvant, QS-21, which as you heard was a party to the unprecedented efficacy of GSK shingles vaccine awaiting approval this year. We have completed patient enrollment in our QS-21 containing ASV trial and expect the readouts for immunogenicity in the second half of this year. As you may recall, we presented early clinical proof of mechanism data at AACR a few months ago. Two recent reports describing Phase 1 data for neo-antigen vaccines in the setting of melanoma point to a resounding conclusion that the delivery of predictive neoepitopes is capable of generating a tumor specific immune response as well as notable signs of clinical efficacy. Importantly in patients with metastatic or recurrent disease, combination treatment with checkpoint blockade, such as an anti-PD-1 achieved complete responses. These data continue to support the fact that an immune educating approach such as a vaccine can improve clinical responses and be delivered effectively in combination with checkpoint blockade. From our perspective, these data suggest the rationale for combination of cancer vaccines with our checkpoint antibodies. We also believe these data validate our neo-antigen vaccine approach and our clinical strategy, which is to combine our neo-antigen vaccine with our own CTLA-4 and/or PD-1 antibodies. Importantly, our heat shock protein-based vaccine delivery as well as our adjuvant QS-21 are clinically validated and differentiated, positioning us for a clear competitive advantage. Our programs with Incyte are advancing with expected important milestones in the next six months. Our collaboration with UCB is off to a very strong start as we work to develop multi specific therapeutic antibodies in immuno-oncology. Additionally, we have formalized a research collaboration with Amgen. This collaboration is intended to leverage our proprietary phosphorylated peptide programs. I will now touch upon the steps we are taking on the manufacturing front to prepare for a future commercial launch. As Garo mentioned, we are already seeing the significant benefit of having an in-house GMP manufacturing facility and the key talent we have retained and built. Our manufacturing capability has enabled us with an efficient and uninterrupted supply of GMP material for our clinical programs. For registrational studies, we have now selected our commercial partner for both drug substance and drug product. As Jean-Marie has already mentioned, we are now commercial ready - we are now prepared to be commercial ready within the next four years. And with that, I'll pass it over to Christine to provide an update on our finances.

Thank you, Jen. Cash, cash equivalents and short-term investments were $96.8 million at June 30, 2017, compared to $76.4 million as of December 31, 2016. For the six months ended June 30, 2017, Agenus reported a net loss of $48.8 million or $0.51 per share compared with a net loss for the same period in 2016 of $60.1 million or $0.69 per share. The decrease in net loss for the six months ended June 30, 2017 compared to the net loss for the same period in 2016 was primarily due to the accelerated milestone payment received from Incyte during the first quarter of this year. Our operating expenses have increased $9.2 million over the same period in 2016. For the second quarter ended June 30, 2017, Agenus reported a net loss of $31.7 million or $0.32 per share compared with a net loss for the second quarter of 2016 of $28.3 million or $0.33 per share. The increase in net loss for the three months ended June 30, 2017 compared to the net loss for the same period in 2016 was primarily due to the later stage advancements of all our programs.

Thank you, Christine. Once again in summary, we expect to achieve our near-term clinical and manufacturing milestones to continue to drive our clinical development program forward towards commercialization. We also expect to close on a number of strategic transactions by year-end and continue to further grow the business with the expected spin-out of our cell therapy program. Now, I'd like to turn it back to the operator to begin questions.

We will now begin the question-and-answer session. [Operator Instructions] And the first question comes from the line of Mike King of JMP Securities. Please go ahead.

My first question is on AutoSynVax. I'm just wondering, what - can you help us understand what kind of metrics you'll be using to judge success and sort of what gates the program from going to the next level, would it be some kind of a clinical response in reaction to neo-antigen? Would it be laboratory metrics? Would it be some combination thereof, maybe a little color on those would be helpful? Thanks.

Hi, Mike. This is Jennifer. Thanks so much for the question. I’d first like to mention that as soon as we opened the trial, we essentially accrued all of the initial patients required for the safety evaluation, that's the primary endpoint of this initial run-in phase. We are also, as I mentioned, looking at immunogenicity. So what's the response, the immune response to the delivery of these neo-antigens? And some of this can be seen as we presented at AACR this year, where we showed that our patients who had no baseline immune recognition of their tumor, post administration of ASV, had immune recognition of their tumor based on CD4 and CD8 early spot responses. So that was a very important finding for us, of course validating what we had already seen when we use the HSP platform in patients infected with HSV-2, that vaccine induced immunologic response was validated. We will demonstrate the same in these first six patients treated and we will be initiating our combination trial, which we have not disclosed the design of which yet, towards the end of this year.

And then just a bigger picture, just as far as the portfolio is concerned, with the position that you find yourselves in with regard to 1884 and 2034 behind some significant competitors, do you feel like you have to raise the bar in order to be competitive in terms of outcomes, PFS, OS or do you think it is adequate to try to direct the programs towards niches within the marketplace that have yet to be filled.

I will have Jean-Marie address that issue, but suffice it to say, we have one of the world's experts in this field of expeditious and smart clinical development and that's Jean-Marie. Please address Mike's question.

I will try to be to the part of your comments, Garo. There are plenty of ways to develop a PD-1 CTLA-4 today. One doesn't have to follow this side of track to the originators. One might find better population in sign indications already developed by, let's say, BMS. One can develop this combination in indication that are so far ignored by BMS. And third, one may perfectly use anti-PD-1 anti-CTLA-4 as a backbone to add a third component of the system in order to raise the bar than higher compared to what has been achieved today, by just PD-1 and anti-CTLA-4. Does it address your question?

Yes, I guess, to some degree. I was hoping for a little bit more specifics, but I understand it - for competitive reasons, you may not want to share those exact parameters. Maybe one concluding question, I'll jump back in queue is, when might the first time be where we could see some combination of 1884, 2034 and AutoSynVax, is that something that you're currently contemplating? Thanks.

Yes, absolutely. So we have the objective to initiate our Phase 1b with anti-PD-1 and anti-CTLA-4 by the end of the year. And we also plan to move our vaccine platform in combination with 1884 in the first part of 2018.

The next question comes from Matt Phipps of William Blair.

Just two quick ones. First, Jean-Marie you mentioned that you're planning on using the CTLA-4 PD-1 combination doses that are consistent with what has been used in successful clinical trials. Obviously, there is an approved dosing schedule in melanoma, but that is different from what BMS is testing in other indications. So just wondering if you could give a little clarity there on exactly what dosing regimen you think would be optimal for something like cervical cancer.

We have a good data for CheckMate-012 that tested the dosing schedule of both PD-1 and CTLA-4. The lesson learned from that study is that it requires an emergency population and sufficient number of patients by dose cohort to be able to have a meaningful assessment on what's the most active and safe. So there are a lot of information coming from CheckMate-012 in terms of what does work extremely well and is still tolerable, that data coming from the first line lung cancer population and there is no obvious reason why such a dosing schedule could not be applied to other tumor types. When it comes to the dose of Yervoy, [indiscernible] combination with nivolumab, while clearly here BMS had to incorporate their legacy of the dosing schedule for Yervoy in order to add a nivolumab component to the equation. What we know now is that the anti-PD-1 is to be administered at the dose that would be considered as adequate as a monotherapy and that the anti-CTLA-4 had to be administrated at lower dose and what will target for single agent use and to have a more protracted administration schedule every 6 or 12 weeks. So there is plenty of information from CheckMate-012.

And then specifically in your Phase 1b that you're planning on launching, do you feel confident that you can just start with something similar to the CheckMate-012 dose or you actually still do some kind of dose combination exploration?

We are going to have a prudent and I would say conventional dose escalation exercise [ph] in order to learn in the zone that has been described by BMS, i.e., the anti-PD-1 at full dose and the anti-CTLA-4 at relatively low dose to the protracted schedule. So there will be dose escalation exercise for the purpose to ensure the absolute patient safety, but we know pretty much we are going to learn. So we are not going to reproduce the dose escalation exercise performed by CheckMate-012 and we're going to use only what we can triangulate as being the best dose in terms of benefit risk for the patient.

And then lastly Garo, you mentioned, correct if I'm wrong, but a partner model of non-exclusivity for your lead antibodies and for upfront cash. Can you give any more details there? Would that be indication specific or geography specific or how exactly would that work?

It would be global, so notice that we are not giving rights to these compounds, we're just providing access for them to do clinical trials and also providing access to our product in a commercial setting. And that significantly expends third-party flexibility to do the kinds of trials with combinations that they don't quite have with already marketed products today. And by the way Matt, this is just one of our business model. So I don't want to give an impression that all of what we're doing is based on this, I mean our overall business model for partnering and for prioritizing our portfolio. As you know, we have a lot going on and it's a balancing process between what we want to keep for ourselves and what we want to partner on one hand. And on the other hand, when it comes to foundational antibodies like CTLA-4 and PD-1, which we have derisked considerably so far, we will have the ability to keep those for ourselves, but also create almost like a Microsoft model of providing access to platforms for third parties to use with their own agents. And so that's on one hand. On the other hand, our concentration is on North American market. We are basically discussing all aspects of ex-North America licensing of antibodies, vaccines and T-cells with third parties.

Next question comes from line of Jason McCarthy of Maxim Group.

Hi, guys. Just want to split off to a different antibody that I know you have in your pipeline, it's a LAG-3. And Garo, like you said, the space is moving to combinations particularly the checkpoint inhibitors. I know Bristol is now, you know, has eight or nine LAG-3 PD-1 combos, is that a strategy that Agenus is thinking about as well?

As you know, we have licensed our LAG-3 and TIM-3 antibodies to Incyte. So Incyte is in charge of full development of those compounds and we get royalties and milestones. And it would be inappropriate for me to really comment on exactly their plans because that's clearly in their turf.

And just for the CTLA-4 for 1884, once you get the Phase 1 data, what are the plans for Phase 2? How many patients do you believe you need to layer in and are there specific tumor types that you would like to layer into the next part of clinical development?

Clearly, that's indications specific, but I will let Jean-Marie to answer what we can answer today for again - once again for competitive reasons.

I think it's safe to say that we have enough safety data to now envision combination with other checkpoints.

We have a follow-up question from Matt Phipps of William Blair. Please go ahead.

One last question about the 1884 Phase 1 trial. Have you taken pre- and post- treatment biopsies? Have you been able to look for the depletion of regulatory T-cells, it's obviously kind of a mechanism that's been hypothesized for the IgG1, CTLA-4 construct, but the evidence clinically has kind of been back and forth on whether or not that's actually the mechanism of action?

Well, we cannot disclose that, this is the capacity of an IgG1 anti-CTLA-4. That contributed a clinical activity. We have the recent example of MYSTIC. There might be something between IgG1, IgG2 that might explain why BMS has a response rate of 45% and why earlier response rate of 25%, that's number one. Number 2, we have not performed biopsies pre and post in the study that is aiming chiefly at establishing the safety in BK and PD of the compound through Phase 1, that aim to be as fast as possible, [indiscernible] very severely impact the speed of the Phase 1. I don't dispute that it might be something interesting in the long run. However, we know that we have a functional equivalent of Yervoy, so there was nobody, no grant to invest heavily in unmasking an ADCC versus Treg that BMS has never demonstrated.

The next question comes from the line of Biren Amin of Jefferies. Please go ahead.

Maybe just a question on the TIGIT program. What are the timelines to move that forward and what are your, I guess plans to develop in combination with 2034? Thanks.

Thanks so much for bringing up the TIGIT program. It’s quite an exciting program here as well as in the field of course. We have not disclosed our formal timelines for this program for competitive purposes. I - suffice it to say, we are advancing quite aggressively and we have announced some of the upcoming IND-enabling activities that are happening here at Agenus and the TIGIT program is one of our priority programs. So we are completely invested in advancing this quite quickly and I think additional details can be coming out maybe as soon as our next earnings call. I guess the second part of your question was on combination with 2034, and similarly we have not disclosed what our clinical plans or clinical trial or designs will be for our TIGIT assets.

This concludes our question-and-answer session. I would like to turn the conference back over to Michael Plater for any closing remarks.

Thank you, operator. I would like to remind listeners that a replay of this call will be available approximately two hours after the call and that the call will also be accessible from the company's website www.agenusbio.com. On behalf of the management team at Agenus, I would like to thank everyone for joining us on today's call. I will be available to receive any further inquiries following this call. With that operator, please conclude the call.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.