What happened

Shares of the clinical-stage cancer immunotherapy company Agenus (AGEN 1.05%) fell by a worrisome 17.9% in December, according to data from S&P Global Market Intelligence.

What's behind this double-digit move lower? As the company kept quiet on the news front last month, Agenus' December swoon was probably due to a heavy amount of tax-loss selling before the start of the new year. 

Human T-cells.

Image source: Getty Images.

So what

Agenus stock is set to drift even lower this year, thanks to a lack of key regulatory or clinical catalysts on the near-term horizon. Perhaps even more problematic, Agenus has now fallen well behind the leaders in the checkpoint-modulator space. The first major combination therapies in solid tumors, for instance, are slated to start reading out this year. Agenus, by its admission, doesn't expect to start rolling out data for its PD-1 and CTLA-4 combo studies until 2019 at the earliest. 

Now what

Agenus' decision a few years back to transform into a leading checkpoint-modulator company has yet to pay off, and Wall Street seems to be suggesting that it never will -- at least based on the anemic performance of its stock. Point blank: The market is expected to be flooded with PD-1 and other checkpoint inhibitors over the next few years -- leaving little room for smaller companies with drugs that aren't well differentiated in some tangible fashion.

To be fair, Agenus may surprise us all by bringing a truly unique checkpoint inhibitor -- or combo therapy -- to market. But the odds seem exceptionally long at this point. If this small-cap drugmaker did have a novel product candidate in its arsenal, after all, one of its development partners probably would have scooped it up by now.