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Agenus target raised to $7 at H.C. Wainwright; "undervalued player in immuno-oncology"

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Agenus (NASDAQ:AGEN) had its price target raised to $7 from $6 at H.C. Wainwright (HCW), which said the biotechnology company’s checkpoint modulators (CPMs) prove to be an “Incyteful” investment.

Shares of the Lexington, Massachusetts based company were trading at $4.97, down 1.29 percent, at 1:59 p.m. in New York. They have rallied 57 percent over the past six months.

HCW, which has a “buy” recommendation on the stock, cited a new co-development collaboration Agenus has with Incyte (NASDAQ:INCY), focusing on antibodies targeting four different CPM targets.

“The agreement marks a second major validation for the company’s [Incyte] investment in Agenus’ platform technology which has already attracted a collaboration with Merck (NYSE:MRK),” analyst Reni Benjamin wrote in a research note to investors today.

In December, Agenus’ partner GlaxoSmithKline (NYSE:GSK) announced positive Phase 3 data from the HZ/su shingles vaccine program, demonstrating best-in-class efficacy, reducing the risk of shingles by 97.2 percent, HCW said.

HCW believes that with a focus on developing a combinable, immuno-oncology pipeline including eight fully human CPMs, $100 million in cash (pro forma), and the potential to secure new partnerships, Agenus represents an undervalued player in the immuno-oncology space.

Yesterday, Agenus reported revenue of $1.6 million, substantially higher than HCW’s estimate of $263,000. Operational costs were $19.3 million, compared to HCW’s estimate of $14.3 million.

HCW said the higher-than-expected expenses translated to a net loss of $26.0 million, or $0.41 loss per share compared to HCW’s estimates of a $10.2 million loss, or $0.16 loss per share.

The equities research firm said that based on its model, it expects Agenus’s cash to fund operations into 2017.

HCW said the deal with Incyte leaves two relatively advanced checkpoint modulator programs “unpartnered” — the PD-1 and CTLA-4 programs could be scooped up by an existing or new partner in the future.

The deal also leaves room for Agenus to develop its own unique antibodies against GITR, OX40, LAG-3, and TIM-3, provided they are used for indications outside of the heme/onc space, the broker said.

HCW believes the GITR and OX40 programs (partnered with Incyte) could enter the clinic in 2016.

Quick facts: Agenus Inc

Price: 5.18 USD

NASDAQ:AGEN
Market: NASDAQ
Market Cap: $950.23 m
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