Agenus has as fairly simple and compelling long term investment thesis. Would you rather drive a car with two accelerators, faulty brakes, and no steering wheel or one with an accelerator, brake, and steering wheel? If you think the second is preferable then you might want to look at the collection of immuno-oncology assets that Agenus has developed.
Immuno-oncology is a red hot therapeutic area led in no small part by checkpoint inhibitors. These drugs work in varying ways but their ultimate goal is to either unmask the tumor so that the adaptive immune system can recognize it or to ramp the immune response to such a level that it overwhelms the tumors ability to evade. These drugs are elegant and effective but they come at a cost. When you increase the ability of the immune system to recognize and attack tumors, you are also increasing their ability to attack healthy cells as the methods used by tumor cells to avoid the immune system are often used by healthy cells to avoid being attacked.
As such, the dose limiting toxicities for checkpoint inhibitors revolve around autoimmunity adverse events but these drugs clearly find a therapeutic window that is generating impressive results across a number of tumor types. With the purchase of 4-Antibody last year, Agenus has a deep pipeline of checkpoint inhibitors that encompass significant and validated targets (GITR, OX40, PD-1, CTLA-4, TIM-3, and LAG-3).
Of course, checkpoint inhibition is not curative, so researchers are looking at various combinations to increase the efficacy and Agenus is clearly positioned to thrive in that environment. While combining checkpoint inhibitors can increase efficacy, these drugs have overlapping toxicities so the autoimmune adverse events can become quite problematic. If we think of the immune system as a car, then checkpoint combinations are increasing the accelerators and taking off the breaks. Ideally, you would want to find a way to steer the car the tumor as you accelerate and this is where the Prophage cancer vaccines thrive.
In general, the efficacy of cancer vaccines has been mixed and this makes sense in light of our currently understanding of the tumor microenvironment. Tumors only thrive when they have developed the ability to evade the immune system, therefore using a vaccine that guides the immune system to the tumor will, in and of itself, have limited utility. This changes, however, if you can hinder the ability of the tumor to evade the immune system, which is exactly what the checkpoint inhibitors can accomplish.
Vaccine and checkpoint inhibitor combinations have the potential to synergistically increase efficacy. In addition, since the two approaches do not have overlapping toxicities that increase in efficacy does not come at the cost of increased autoimmunity adverse events. Obviously, this approach needs to be demonstrated in the clinic but Agenus sits at the intersection of what should be two key foundations of the evolving immuno-oncology landscape.