Thursday, Agenus Inc. (NASDAQ:AGEN) announced the results of its end-of-Phase 2 meeting with the FDA to advance its immunotherapy combination, botensilimab (BOT) and balstilimab (BAL), for adult patients with relapsed/refractory microsatellite-stable colorectal cancer (r/r MSS CRC) with no active liver metastases (NLM).

The FDA discouraged the accelerated approval pathway and advised against submitting these results to support an Accelerated Approval based on its view that objective response rates may not translate to survival benefits.

Given the limited treatment options for late-stage colorectal cancer and the promising survival data from the Phase I trial of botensilimab plus balstilimab (bot/bal), William Blair notes that replicating these Phase 1 results in the Phase 2 trial could support an accelerated approval. Therefore, they are surprised by the recent announcement.

Due to the regulatory setback and the company’s limited financial resources, the analyst has downgraded Agenus stock to Market Perform, pending more clarity on the financing of the pivotal trial.

William Blair considers botensilimab an attractive asset for business development. However, without an accelerated approval pathway and a limited balance sheet, the company lacks strong negotiation leverage and may have to forfeit significant long-term potential.

The FDA’s regulatory clarity may aid ongoing discussions, potentially increasing the likelihood of a collaboration agreement soon, which poses a risk to the analyst’s downgrade.

Due to its demonstrated clinical efficacy across various indications, William Blair remains confident in Agenus’s next-generation CTLA-4 antibody, botensilimab.

“Although we still believe the company will be able to find a development partner for botensilimab, the terms may not be as favorable to Agenus given recent setbacks and significant capital needs,” William Blair writes.

Price Action: AGEN stock is down 21.2% at $5.75 at last check Friday.

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