UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 6, 2018
AGENUS INC.
(Exact name of registrant as specified in its charter)
| DELAWARE | 000-29089 | 06-1562417 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 3 Forbes Road Lexington, MA |
02421 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: 781-674-4400
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On January 6, 2018, Agenus Inc. (“Agenus”), through its wholly-owned subsidiary, Antigenics LLC (“Antigenics”), entered into a Royalty Purchase Agreement (the “Royalty Purchase Agreement”) with Healthcare Royalty Partners III, L.P. and certain of its affiliates (collectively, “HCR”). Pursuant to the terms of the Royalty Purchase Agreement, HCR will purchase 100% of Antigenics’ worldwide rights to receive royalties from GlaxoSmithKline (“GSK”) on sales of GSK’s vaccines containing Agenus’ QS-21 Stimulon® adjuvant.
As consideration for the purchase of the royalty rights, HCR will pay $190.0 million at closing, less certain transaction expenses. Antigenics will also be entitled to receive up to approximately $40.0 million in milestone payments based on sales of GSK’s vaccines as follows: (i) $15.0 million upon reaching $2.0 billion last-twelve-months net sales any time prior to 2024 and (ii) $25.0 million upon reaching $2.75 billion last-twelve-months net sales any time prior to 2026. Antigenics would owe approximately $25.9 million to HCR in 2021 if neither of the following sales milestones are achieved: (i) 2019 sales exceed $1.0 billion or (ii) 2020 sales exceed $1.75 billion (the “Rebate Payment”).
As part of the transaction, Agenus will guaranty the potential Rebate Payment and will secure the obligation with substantially all of its assets pursuant to a security agreement, subject to certain customary exceptions and excluding all assets necessary for AgenTus Therapeutics, Inc.
The Royalty Purchase Agreement contains certain representations and warranties regarding Antigenics’ rights and obligations with respect to GSK and the commercialization of GSK’s vaccines, as well as customary representations and warranties regarding Antigenics generally. The Royalty Purchase Agreement also contains certain covenants around Antigenics’ rights and obligations with respect to GSK and the commercialization of GSK’s vaccines, as well as customary covenants, including covenants that limit or restrict Antigenics’ ability to incur indebtedness or liens or otherwise merge, consolidate or acquire assets or securities.
The closing of the transactions contemplated by the Royalty Purchase Agreement is subject to customary closing conditions. At the closing, the upfront proceeds will be used to redeem Antigenics’ currently outstanding $115.0 million principal amount of notes issued pursuant to the Note Purchase Agreement dated September 4, 2015 with Oberland Capital SA Zermatt LLC and the purchasers named therein.
The foregoing description of the Royalty Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the Royalty Purchase Agreement, which will be filed as an exhibit to a subsequent filing made by Agenus under the Securities Exchange Act of 1934.
On January 8, 2018, Agenus issued a press release relating to the Royalty Purchase Agreement. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit |
Description of Exhibit | |
| 99.1 | Press Release dated January 8, 2018. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: January 8, 2018 | AGENUS INC. | |||||
| By: | /s/ Christine M. Klaskin | |||||
| Christine M. Klaskin | ||||||
| VP, Finance | ||||||
Exhibit 99.1
Agenus Inc. Announces $230 Million Royalty Monetization with HealthCare Royalty Partners
LEXINGTON, MA, January 8, 2018 /PRNewswire/ — Agenus Inc. (NASDAQ: AGEN), an immuno-oncology company with a pipeline of immune checkpoint antibodies and cancer vaccines, today announced a $230 million non-dilutive royalty transaction with HealthCare Royalty Partners (HCR). The transaction is comprised of $190 million of cash proceeds at closing plus up to $40 million in milestone payments. Agenus will use part of these proceeds to redeem its royalty bond from Oberland and the additional monies to advance its registrational studies with anti-CTLA-4 and anti-PD-1 for planned BLA filings in 2019 and 2020.
At closing, HCR will receive the rights to royalties on sales of GlaxoSmithKline’s QS-21 containing vaccines. Agenus retains all rights for the development of QS-21 with its entire portfolio of checkpoint antibodies, vaccines, and cellular therapies* with no third party obligation.
Agenus is advancing its QS-21 powered vaccine, AutoSynVax™, in combination with validated checkpoint antibodies to generate immune recognition of tumors unresponsive to checkpoint blockade alone.
“This transaction reflects the significant value that can be generated from our assets and our ability to execute non-dilutive transactions to strengthen our balance sheet,” said Dr. Garo Armen, Ph.D., Chairman and Chief Executive Officer of Agenus. “Part of the proceeds will fund our pivotal programs designed to achieve our near-term goals to become a commercial company with a planned BLA filing by the second half of 2019.”
John Urquhart, Principal at HCR commented, “HealthCare Royalty Partners is pleased to partner with Agenus in this royalty financing transaction that recognizes the significant value of the immune-potent QS-21 adjuvant.”
After the repurchase of the Oberland obligation, the transaction is expected to yield net proceeds of approximately $28 million to Agenus at closing, plus the potential for up to an additional $40 million of milestone payments. In the event that certain sales milestones are not met, Agenus will owe HCR approximately $26 million in 2021.
Bank of America Merrill Lynch acted as sole structuring advisor to Agenus for the transaction. Goodwin Procter LLP acted as special counsel to Agenus and Cadwalader, Wichersham & Taft LLP represented HCR.
About Agenus
Agenus is a clinical-stage immuno-oncology company focused on the discovery and development of therapies that engage the body’s immune system to fight cancer. The Company’s vision is to expand the patient populations benefiting from cancer immunotherapy
by pursuing a number of combination approaches that leverage a broad repertoire of antibody therapeutics and proprietary cancer vaccine platforms. The Company is equipped with a suite of antibody discovery platforms and a state-of-the-art GMP manufacturing facility with the capacity to support early phase clinical programs. Agenus is headquartered in Lexington, MA. For more information, please visit www.agenusbio.com; information that may be important to investors will be routinely posted on our website.
*About AgenTus Therapeutics, Inc.
AgenTus Therapeutics is a preclinical-stage biopharmaceutical company that will focus on the discovery, development, and commercialization of breakthrough “living drugs” to advance potential cures for cancer patients. AgenTus will employ naturally-derived and engineered receptors, specifically T cell receptors (TCRs) and Chimeric Antigen Receptors (CARs), designed to supercharge human immune effector cells to seek and destroy cancer. AgenTus will also aim to advance adoptive cell therapy formats which would enable off-the-shelf living drugs. AgenTus will have locations in Lexington, MA and Cambridge, UK. For more information, please visit www.agentustherapeutics.com.
About HealthCare Royalty Partners
HCR is a private investment firm that purchases royalties and uses debt-like structures to invest in commercial or near-commercial stage life science assets. HCR has $3.5 billion in cumulative capital commitments with offices in Stamford (CT), San Francisco, Boston and London. For more information, visit www.healthcareroyalty.com.
Forward-Looking Statements
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the federal securities laws, including statements regarding the expected closing of the royalty transaction with HCR and the consideration thereunder, Agenus’ intended uses for the proceeds from the transaction, including the redemption of the Oberland royalty bond, the expect net proceeds from the transaction, Agenus clinical trial plans and activities, including planned BLA filings, and the anticipated operations and benefits of AgenTus Therapeutics. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, among others, the factors described under the Risk Factors section of our most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K filed with the Securities and Exchange Commission. Agenus cautions investors not to place considerable reliance on the forward-looking statements contained in this release. These statements speak only as of the date of this press release, and Agenus undertakes no obligation to update or revise the statements, other than to the extent required by law. All forward-looking statements are expressly qualified in their entirety by this cautionary statement.
Contact:
Agenus Inc.
Jennifer Buell, PhD
781-674-4420
Jennifer.Buell@agenusbio.com