Agenus Shares Spike Higher Following Mid-Day Upgrade To Buy From Maxim

Shares of Agenus Inc AGEN were trading up more than 9 percent on Friday afternoon, after Maxim Group upgraded its rating on the stock from Hold to Buy, while establishing a price target of $7.00. Analysts Jason McCarthy and Jason Kolbert highlighted a few elements behind their bullishness.

First off, they noted that the company posted a net loss of $88 million on revenue of $25 million for 2015. The experts pointed out that revenue was driven by the company’s partnerships with Incyte Corporation INCY and Merck & Co., Inc. MRK.

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Agenus started the year with $172 million in cash— enough to support multiple checkpoint and vaccine programs through key inflection points, the report continued. In fact, the first two checkpoints, AGEN1884 (CTLA-4) and INCAGN1876 (GITR), “should be in phase I studies in solid tumors in the coming weeks.” The analysts look for two other INDs in 2016 and progress with the collaboration with Merck.

Vaccines

Agenus is going back and conducting additional Phase II studies in newly diagnosed GBM in the second half of the year, and Maxim sees this with good eyes, reminding investors about the importance of trial design to a good outcome.

“On another front Agenus is moving the next-gen autologous vaccine platform ‘AutoSynVax’ toward clinical development,” the report continued. Indication(s) have not been disclosed yet.

Bottom Line

Agenus now counts with more checkpoints than anyone else in the immuno-oncology space. The company has accomplished this via a combination of “acquisitions, in-house R&D expertise and big pharma partnerships,” McCarthy and Kolbert explained.

When combined with the right vaccine and adjuvant platform, these checkpoints “kick the immune system into action. As such we believe at the current depressed valuation the risk/reward is compelling.”

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.