Agenus cuts down Incyte deal for $80M cash in hand

Dive Brief:

  • Sharing a bit of Valentine's Day love, Incyte and Agenus have rejiggered their 2015 checkpoint modulator collaboration, with Incyte gifting Agenus $80 million in equity investment and milestone payments.
  • In the original deal, the two companies shared the R&D costs of the GITR and OX40 I/O programs, with the TIM-3 and LAG-3 programs running on a tiered royalty deal or 6% to 12%.
  • The new agreement puts GITR and OX40 onto a 15% royalty deal rather than a profit split, along with up to $510 million in future milestone payments. Investors seemed to like the change, driving a modest increase in Agenus stock Wednesday morning. 

Dive Insight:

The original 2015 deal between Agenus and Incyte focused on four checkpoint modulator programs directed at GITR, OX40, TIM-3 and LAG-3 and gave Incyte access to Agenus' Retrocyte Display antibody discovery platform. Agenus snagged $60 million in fee and equity, and was eligible for up to $350 million. The two companies were set to share profit and R&D costs equally for the GITR and OX40 programs, with the TIM-3 and LAG-3 programs funded by Incyte and tiered mid-single to low-double digit royalties going to Agenus.

But this has now all turned around — while the research is ongoing, all four programs will now be royalty-bearing, with Agenus taking up the offer of 15% royalties for the GITR and OX40 programs, both in Phase 1, and retaining the 6% to 12% royalties for the TIM-3 and LAG-3 programs, currently preclinical.

"We believe the amended agreement will help streamline the development of our collaboration portfolio, provide the opportunity to prioritize our other internal programs towards rapid commercialization and help foster the development of our portfolio of novel I/O programs," said Garo Armen, chairman and CEO of Agenus.

Neither company has said exactly why the deal has changed, but it appears to be to take the financial pressure off the smaller company in the short term, rather than holding out for jam tomorrow in a profit split.

"The revised agreement will also strengthen Agenus’ balance sheet and reduce cash burn," Armen added.

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Filed Under: Mergers and Acquisitions / Deals
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