Agenus 8 Near Term Data Drivers, A Market Opportunity Over $17B
Scott Matusow | Apr 29, 2013 09:19AM ET
Today, we will take a detailed look into a company that has an imminent catalyst, a number of important Phase II and Phase III data releases throughout 2013, and a product pipeline with potential to tap into a $17B market.
Agenus (AGEN) is a promising biotech company with two exciting platforms that focus on developing breakthrough immunotherapies for cancer and infectious diseases. Using their innovative Heat Shock Protein (HSP) and Saponin platforms, Agenus has developed a potentially lucrative pipeline of groundbreaking technologies and product candidates. Its products under development include QS-21 Stimulon adjuvant, which is in Phase III clinical trials for the treatment of malaria, melanoma, non-small cell lung cancer, and shingles, as well as for the treatment of various infectious diseases, multiple cancer types, and Alzheimers disease; and HerpV, a therapeutic vaccine candidate that is in Phase II clinical trial for the treatment of genital herpes.
Agenus' developmental pipeline focuses on therapies for some of the world's most disconcerting diseases. Their QS-21 Stimulon Adjuvant aims to strengthen the body's immune response to a vaccine's antigen and is being tested on Malaria, Melanoma, Shingles, Alzheimer's Disease, Genital Herpes, and Non-Small Cell Lung Cancer. Additionally, their Prophage series provides therapies for Renal Cell Carcinoma, newly diagnosed Glioma, and also recurrent Glioma. Aligned with powerful partners like GlaxoSmithKline (GSK) and Janssen, Agenus is currently under speculated and I believe investors have yet to valuate the potential of their pipeline.
Agenus' Platform and Pipeline:
- HSP Platform
Heat shock proteins are a type of protein with the purpose of regulating the timing and conformation (shape) of cells throughout the body. They are "chaperones" for cells in the sense that they bind to the peptides in a cell and form a complex, so that our immune system can recognize diseased cells. When a diseased cell is no longer able to function and dies, heat shock proteins are released from the cell and our body uses that as a signal to generate an immune response. To put it simply, Agenus takes advantage of this natural immune response by results in late 2012 for the QS-21 Stimulon Adjuvant in GlaxoSmithKline's RTS,S for Malaria and has several other trials underway for additional indications. These catalysts include Phase III Mage A3 for Melanoma, and Phase III A3 for non-small cell lung cancer. Agenus is also partnered with GalaxoSmithKline for both of these indications. Furthermore, a Phase II HerpV trial for Genital Herpes is underway, with data due in the fourth quarter of 2013.
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Speculating further into the future, Agenus has a Phase III trial for HZ/su for shingles with data due in 2014 and also 10 other undisclosed indications.
Financial Position:
According to Agenus' latest financial report, the company recently retired its outstanding $39 million 8.00% senior secured convertible notes due August 2014. These Notes were exchanged for $10 million in cash, 2,500,000 shares of common stock and a twenty percent revenue interest from QS-21 Stimulon partnered programs. In addition, the company entered into two separate $5 million debt transactions for $10 million total in notes plus 500,000 share warrants. Following these transactions, Agenus' total debt obligation outstanding is $10 million, down from $39 million.
Share Structure:
Agenus has a low float, which means that as traders gain interest in this stock, price appreciation should happen relatively quickly. Additionally, the small short interest shows that many traders realize the potential of this company and don't want to be caught short going into this data release. Also on a positive note, insiders hold a decent amount of the company, which is important in helping determine how much conviction the people running the company have in their own development.
Insider Transactions:
Garo Armen, the Chief Executive Officer of Agenus, acquired 250,277 shares on December 23, 2012 at a price of $4.33 per share. He has added additional shares as recently as March 31, 2013 and currently holds 927,400 shares total, worth over $4 million. The CEO purchasing a large amount is bullish and demonstrates that he is confident about the company going forward.
Charts and Indicators
Taking a look at the above 60-minute chart over the last 20 trading sessions, we can see that traders have been accumulating Agenus. The stock price has been climbing steadily heading into the May 1 data presentation. The accumulation/distribution line has broken out and is in an uptrend with volume increasing.
The above 100 day chart shows the stock is trading above its 50, 100 and 200 day moving averages, and the Money Flow Index and Relative Strength Index are in a current uptrend. All of these indicators signal bullish sentiment going forward.
In my opinion, AGEN is on the verge of breaking out of a longer term wedge and believe that share price will increase quickly in the days leading into the catalyst. Of course, if data release is positive after May 1st, we should also see a major increase in share price as investors speculate on AGEN's future.
Conclusion:
In my opinion, AGEN offers investors and traders an interesting opportunity in 2013. With several catalysts spread throughout the year, traders will be able to capitalize on the increased speculated value of the company. From an investing standpoint, AGEN has a promising pipeline of products and have aligned themselves with powerful partners. I believe AGEN is one of the better small-cap biotechnology companies on the market and shows great potential going forward.
My short term price target opinion is $5.50 per share heading into this Wednesday. On a good data release, I believe AGEN should reach $6.50 or so.
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