What happened

Shares of Agenus (NASDAQ:AGEN), a clinical-stage immuno-oncology company, jumped 51.6% in November, according to data from S&P Global Market Intelligence. A solid third-quarter report and a clinical trial failure from AstraZeneca (NASDAQ:AZN) pushed up the stock.

So what 

Agenus' vaccine booster is a part of Shingrix, a new shingles vaccine that GlaxoSmithKline (NYSE:GSK) launched late last year. Sales of the vaccine exceeded expectations and reached an annualized $1.5 billion run rate during the third quarter.

Agenus signed away its royalty percentage for the blockbuster vaccine in return for $190 million earlier this year, but part of its deal with Healthcare Royalty Partners includes a $25.9 million clawback that Agenus won't need to pay. It also looks as if Agenus has a shot at collecting $40.4 million in milestone payments if Shingrix sales achieve an annualized run rate of $2.75 billion.

Money arranged in the shape of an upward sloping chart.

Image source: Getty Images.

Agenus also perked up after AstraZeneca announced dismal pivotal trial results with two checkpoint inhibitors. Imfinzi and tremelimumab are drugs that inhibit immune checkpoint inhibitors PD-1, and CTLA-4, respectively. Agenus has similar candidates ready for late-stage testing, and investors were pleased to see that Astra's combo probably won't be a competitive threat.

Now what

There's already an anti-CTLA-4 and at least half-a-dozen PD-1 checkpoint inhibitors already approved in the U.S., so Agenus will have a hard time finding a partner willing to pay for costly late-stage trials. That's going to be a problem for Agenus, because it finished September with just $46 million in cash and cash equivalents after losing $112 million during the first nine months of the year.

Agenus will probably earn some milestone payments here and there from a handful of collaboration partners, but shareholders should remain braced for another value-diluting share offering in the quarters ahead.

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