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Why Is Agenus (AGEN) Down 13% Since Last Earnings Report?

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A month has gone by since the last earnings report for Agenus (AGEN - Free Report) . Shares have lost about 13% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Agenus due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Agenus Q4 Loss Wider Than Expected, Pipeline in Focus

Agenus reported fourth-quarter 2018 loss of 40 cents per share, wider than the Zacks Consensus Estimate of a loss of 28 cents and the year-ago loss of 35 cents.

The company generated revenues of $6.5 million, which includes non-cash royalties earned, compared with $8.4 million in the year-ago quarter. Revenues missed the Zacks Consensus Estimate of $7 million.

Quarterly Highlights

Research and development (R&D) expenses increased 13.1% to $36 million. General and administrative expenses decreased 0.6% to $9.7 million.

Pipeline Update

Agenus is a clinical-stage immuno-oncology company with a comprehensive portfolio, consisting of antibody-based therapeutics, adjuvants and cancer vaccine platforms.

In December 2018, Agenus inked a collaboration deal with Gilead Sciences to develop and commercialize up to five immuno-oncology (I-O) therapies. In January 2019, Agenus announced the closing of its I-O partnership deal with Gilead. Agenus recently received $7.5 million in cash as milestone payment from Gilead, after the FDA accepted the former's investigational new drug (IND) application for AGEN1423. AGEN1423 is a first-in-class molecule, currently developed in partnership with Gilead as a potential treatment for cancer. Agenus is also eligible to receive additional milestones from Gilead in the days ahead.

Agenus has filed the IND for AGEN1223. The company also has an IND submission planned for AGEN2373 in the first half of 2019. Agenus will be responsible for developing the option studies up to the option decision points, during which Gilead may acquire the exclusive rights to the programs on option exercise.

Lead clinical-stage antibodies, CTLA-4 and PD-1 are progressing well. The company intends to file for accelerated approval by 2020.

2018 Results

The company reported a net loss $1.44 per share in 2018 compared with a net loss of $1.23 in 2017. The increase reflects reduced revenues during 2018 due to an accelerated milestone received during 2017 from Incyte (INCY) that went missing in 2018. Revenues were also negatively impacted by loss incurred in 2018 on early extinguishment of debt and increased non-cash interest on the company’s liability related to the sale of future royalties.

Revenues decreased 14.9% year over year to $19.5 million in 2018.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 7.35% due to these changes.

VGM Scores

At this time, Agenus has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Agenus has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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