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Here's Why Agenus Stock Is Getting Hammered Today

By Cory Renauer - Oct 22, 2021 at 12:22PM

Key Points

  • At the suggestion of the Food and Drug Administration, Agenus withdrew a Biologics License Application for balstilimab as a treatment for second-line cervical cancer.
  • Agenus' application was for accelerated approval was based on response rate data.
  • The FDA recently approved a similar drug, Keytruda from Merck, for similar patients based on positive long-term survival data.

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The company's experimental anti-PD1 drug hit a wall.

What happened

Shares of Agenus ( AGEN -5.40% ) dropped more than 32% this morning after the company gave investors bad news regarding its experimental cancer immunotherapy balstilimab. The company has withdrawn the Biologics License Application (BLA) that the Food and Drug Administration (FDA) began reviewing earlier this year. The biotech stock was down 25.3% as of 11:40 a.m. EDT on Friday.

So what 

Agenus has a large pipeline of experimental drugs, but it doesn't have the cash flows required to develop them at a pace that satisfies investors. The company was gunning for accelerated approval of balstilimab, an anti-PD1 candidate, as a treatment for second-line cervical cancer. 

Upset investor in front of a computer.

Image source: Getty Images.

Unfortunately for Agenus, the FDA granted full approval to another anti-PD1 drug, Keytruda from Merck ( MRK -0.63% ), before it got around to issuing accelerated approval of balstilimab. Agenus has good tumor-shrinkage data from an open-label study. In June, we learned that Keytruda significantly improved overall survival in a larger, longer confirmatory trial with similar patients.

Now what

Agenus will discontinue a confirmatory trial for balstilimab as monotherapy for cervical cancer, but the company isn't throwing in the towel yet. Agenus intends to continue developing its anti-PD1 candidate as part of combination treatments.

Discontinuing balstilimab's confirmatory trial is expected to lower operating costs by over $100 million. Agenus finished June with just $73 million in cash after burning through $138 million in the first half of 2021. The company received a $200 million cash injection in July thanks to a licensing deal with Bristol Myers Squibb ( BMY 2.46% ). With fewer balstilimab expenses, this could be enough to see the company through 2022.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Agenus Inc. Stock Quote
Agenus Inc.
AGEN
$2.98 (-5.40%) $0.17
Merck & Co., Inc. Stock Quote
Merck & Co., Inc.
MRK
$74.44 (-0.63%) $0.47
Bristol Myers Squibb Company Stock Quote
Bristol Myers Squibb Company
BMY
$54.95 (2.46%) $1.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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