UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

For the fiscal year ended December 31, 20152016

or

For the transition period from             to

Commission File Number: 000-29089

Agenus Inc.

(exact name of registrant as specified in its charter)

3 Forbes Road, Lexington, Massachusetts 02421

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code:

(781) 674-4400

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  o☐    No  þ☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  o☐    No  þ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ☑    No  o☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  þ☑

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o☐    No  þ☑

The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 20152016 was: $571.0$287.3 million. There were 86,516,48498,328,556 shares of the registrant’s Common Stock outstanding as of February 29, 2016.28, 2017.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement for the registrant’s 2016 Annual Meeting of Stockholders, which definitive proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year end of December 31, 2015, are incorporated by reference into Part III of this Annual Report on Form 10-K.None.

TABLE OF CONTENTS

Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K and other written and oral statements the Company makes from time to time contain forward-looking statements. You can identify these forward-looking statements by the fact they use words such as “could,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe,” “will,” “potential,” “opportunity,” “future” and other words and terms of similar meaning. Forward-looking statements include discussion of future operating or financial performance. You also can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements involve risks and uncertainties that could delay, divert or change any of them, and could cause actual outcomes to differ materially. These statements relate to, among other things, our business strategy, our research and development, our product development efforts, our ability to commercialize our product candidates, the activities of our licensees, our prospects for initiating partnerships or collaborations, the timing of the introduction of products, the effect of new accounting pronouncements, our future operating results and our potential profitability, availability of additional capital as well as our plans, objectives, expectations, and intentions.

Although we believe we have been prudent in our plans and assumptions, no assurance can be given that any goal or plan set forth in forward-looking statements can be achieved, and readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this report. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of new information, future events or otherwise.

The risks identified in this Annual Report on Form 10-K, including, without limitation, the risks set forth in Part I-Item 1A. “Risk Factors,” could cause actual results to differ materially from forward-looking statements contained in this Annual Report on Form 10-K. We encourage you to read those descriptionsdescriptions carefully. Such statements should be evaluated in light of all the information contained in this document.

ASV ^TM, AutoSynVax ^TM, Oncophage^®, PSV ^TM, PhosphoSynVax ^TM, Prophage^TM, Retrocyte Display^TM, SECANT^® and Stimulon^® are trademarks of Agenus Inc. and its subsidiaries. All rights reserved.

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PART I

Our Business

We are ana clinical-stage immuno-oncology (“I-O”) company focused on the discovery and development of revolutionary new treatmentstherapies that engage the body’s immune system to benefit patients suffering fromfight cancer. Our approach to cancer immunotherapy involves a diverse portfolio consisting of antibody-based therapeutics, adjuvants and cancer vaccine platforms. We, in collaboration with our partners, have focuseddeveloped a number of immuno-modulatory antibodies against important nodes of immune regulation. These include antibodies targeting CTLA-4, GITR and OX40 that are in clinical development, and our anti-PD-1 antibody anticipated to enter the clinic in the first half of 2017. Our discovery pipeline includes a number of proprietary checkpoint modulating (“CPM”) antibodies against innovative targets such as TIGIT and 4-1BB (also known as CD137). We believe that tailored combination therapies are essential to combat some of the most resistant cancers. Accordingly, our immune education strategy focuses on immuno-oncology since our inception over 20 years ago, and todaypursuing antibodies as well as vaccine candidates in conjunction with adjuvants. We believe we are uniquely positioned to treat cancers because we have a seriesportfolio of platformsproduct candidates and capabilitiestechnologies that spans across an array of immunological modalities. At Agenus, we have embraced the concept that cancers are complicated diseases requiring multi-pronged approaches to treatment. We believe that the future of cancer therapy will depend upon the ability to identify and possess the best treatment regime for an individual based on the specific cancer and patient profile. We are building the capabilities and platforms to address these complex needs.multiple therapeutic categories.

We are developing a comprehensive immuno-oncology portfolio driven by the followingvertically integrated biotechnology company equipped with a suite of technology platforms and programs, which we intenda good manufacturing practice (“GMP”) manufacturing facility with the capacity to utilize individuallysupport early phase clinical programs. In addition to our broad and in combination:

Our programs aim to stimulate the immune system to recognize and eradicate cancer cells and to disable the mechanisms that cancer cells employ to evade detection and destruction by the immune system. By combining multiple powerful antibody platforms,synergistic pipeline, we have established a highly integrated approachworld-class I-O research and clinical development team, including experts that have contributed to target identificationthe development, in-licensing and validation,registrational trajectory of staple antibody therapeutics such as Yervoy®, Avelumab and forHumira®, among others.  

Our common stock is currently listed on The Nasdaq Capital Market under the discovery, developmentsymbol “AGEN.”

Our Vision

We envision combination therapies as the cornerstone of future oncology treatment regimens. In addition, we believe that a balanced portfolio of product candidates should focus on both validated targets as well as more novel, innovative targets. CTLA-4 and manufacturePD-1 antagonists have recently been recognized as the first clinically validated immunotherapy combination. Based on this finding, we believe that these two antibodies acting in combination, as well as other more innovative immuno-modulatory antibodies or immune education approaches, could be a focal point of monoclonalthe next generation of I-O combinations. Thus, we plan to pursue our proprietary PD-1 and CTLA-4 antibody programs aggressively through the clinic, and follow on with future combination therapies that integrate our cancer vaccine platforms as well as our antibodies against novel targets. One of our core visions is to substantially expand the small patient populations that modulate targets of interest. benefit from existing immune-based therapies.

Our Strategy

The breadth of our portfolio gives us the ability to combine our proprietary antibodies, vaccines, and adjuvants to explore and optimize cancer treatments. Our strategy is to develop these agents either alone or in combinations to yield best-in-class treatments.

We assess In addition, our clinical development commercialization and partnering strategies for eachstrategy is tailored to achieve our goal of our product candidates periodically based on several factors, including pre-clinical and clinical trial results, competitive positioning and funding requirements and resources. becoming a commercial organization in the next four years. We are currently collaborating with companies such as Incyte Corporation, Merck Sharpe & Dohmepursuing a tiered risk profile and Recepta Biopharma SA. Through these alliances, as well as our own internal programs, we currently have over a dozen antibody programs, including our anti-CTLA-4 (partnered with Receptatargeting compressed timelines for certain South America territories) and anti-GITR (partnered with Incyte) antibody programs that each received U.S. Federal Drug Administration, or FDA, clearance to commence clinical trials in January 2016. We expect to initiate these trials in the first half of 2016.

We are also advancing a series of Heat Shock Protein, or HSP, peptide-based vaccines to treat cancer. In July 2014, we reported positive results from a Phase 2 clinical trial with our Prophage vaccine, which showed that patients with newly-diagnosed glioblastoma, or ndGBM, who were treated with a combination of our Prophage vaccine and standard of care showed substantial improvement both in progression-free survival and median overall survival, each as compared to historical control data.regulatory filing. We plan to advance our Prophage vaccine intoadopt a randomized, well-controlled clinical trial for ndGBMrapid and de-risked path to registration by co-targeting PD-1 and CTLA-4 in the second halfindications where blockade of 2016. We also reported positive results in June 2014 from a Phase 2 clinical trial with our synthetic HerpV vaccine candidate for genital herpes. Although we determined not to advance this product candidate in herpes, based on our findings we launched our AutoSynVax, or ASV, synthetic cancer vaccine program in 2015, andthese checkpoints has been found efficacious. In addition, we plan to initiate our first clinical trial for this program in the second half of 2016.

Our QS-21 Stimulon adjuvantpursue novel breakthrough indications to further expedite market entry. Second line cervical cancer is partnered with GlaxoSmithKline plc., or GSK, andone such indication where we believe there is a key componentniche opportunity in multiple GSK vaccine programs that target prophylactic or therapeutic impact in a variety of infectious diseases and cancer. Thesecertain markets. In addition, our programs are in various stages,anticipated to pose moderate regulatory risk and will entail: 1) pursuit of optimal I-O antibody and vaccine combinations with CTLA-4 and/or PD-1 targeted antibodies as the most advanced being GSK’s shingles and malaria programs, for which GSK announced positive Phase 3 results in December 2014 and October 2013, respectively. In September 2015, we monetized a portion of the future royalties we are contractually entitled to receive from GSK from sales of its shingles and malaria vaccines and received net proceeds of approximately $78.2 million.

Our business activities include product research and development, intellectual property prosecution, manufacturing, regulatory and clinical affairs, corporate finance and development activities, and supportbackbone; 2) advancement of our collaborations. Our product candidates require clinical trialsantibody programs against innovative targets, such as 4-1BB and approvals from regulatory agencies, as well as acceptanceTIGIT, to the clinic alone or in the marketplace.combination with other products in our pipeline; and 3) continued advancement of vaccine candidate opportunities. Part of our strategy is to develop and commercialize some of our product candidates by continuing our existing arrangements with academic and corporate collaborators and licensees and by entering into new collaborations.

Our Assets

Our I-O assets include antibody-based therapeutics, adjuvants and cancer vaccine platforms. We believe that we are the third company, along with Bristol-Myers Squibb (“BMS”) and AstraZeneca, to have a CTLA-4 checkpoint inhibitor in the clinic. Once our PD-1 antagonist is in clinical development, we could be the only company, other than BMS, to feature both CTLA-4 and PD-1 assets in its clinical pipeline. To complement our portfolio of foundational CPMs, we have a number of antibody programs against more innovative targets involved in immune modulation. These include 4-1BB and TIGIT as well as a number of undisclosed targets with a potential to be best-in-class or first-in-class antibody-based therapeutics. We also have three proprietary cancer vaccine platforms: Prophage™ vaccine, AutoSynVax™ vaccine (“ASV”) and PhosphoSynVax™ vaccine (“PSV”). Additionally, our autologous

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Our common stock(Prophage) and synthetic (ASV^™ and PSV^™) vaccine candidates are protein complexes that consist of heat shock proteins (“HSPs”) and peptides that are either tumor-derived or tailor-made based on the unique genomic fingerprint of a patient’s tumor, respectively. Highlighting our combination treatment approach, a Phase 2 clinical trial sponsored by the National Cancer Institute (“NCI”) is currently listed on The Nasdaq Capital Market underin progress to evaluate the symbol “AGEN.”efficacy of Prophage in combination with Merck’s PD-1 antagonist, Keytruda®, in patients with newly diagnosed glioblastoma (“ndGBM”). Our QS-21 Stimulon adjuvant is partnered with GlaxoSmithKline plc. (“GSK”) and is a key component in multiple GSK vaccine programs that have a prophylactic or therapeutic impact in a variety of infectious diseases and cancer.

Our Antibody Discovery Platforms and CPM Programs

In February 2014, we acquired our Retroviral B Lymphocyte Display, or Retrocyte Display, platform asCheckpoint antibodies regulate immune response against pathogens that invade the body and are achieving positive outcomes in a resultnumber of cancers that were untreatable only a few years ago. Two classes of checkpoint targets include:

We possess a suite of antibody discovery platforms that have enabled us to improve the speed, cost and quality of our acquisition of 4-Antibody AG, or 4-AB, a private European-based biopharmaceutical company. Retrocyte Display is a proprietary antibody discovery platform designed for the rapid discovery and optimization of fully-human and humanized monoclonal antibodies against a wide array of molecular targets. Our Retrocyte Display platform uses a high-throughput approach incorporating human antibody libraries expressed in mammalian B-lymphocytes and is designed to screen and generate therapeutic antibody drug candidates. We complemented this platform in April 2015 with the acquisition of our SECANT yeast display antibody discovery platform from Celexion, LLC, or Celexion, and in September 2015 with the exclusive license to a phage display library.  The addition of the phage display library and SECANT yeast display platform in combination with our Retrocyte Display platform gives us broad, integrated and highly productive antibody discovery platforms. Each of these complementary platforms is designed to yield diverse antibody candidates, and together they increase the variety of addressable targets and diversity of antibody candidates. These approaches are intended to combine the speed, diversity, and selectivity of our discovery platforms to yield high affinity antibodies and bolster our antibody discovery capabilities internally and for our partners. We now have the potential to integrate three high quality complementary antibody display technologies with innovative computational, structured-based design approaches to discover and optimize best-in-class monoclonal antibodies as future medicines.

product development efforts. In addition to the use of our antibody discovery platforms that are designed to drive the discovery of future CPM antibody candidates, we may alsoare planning to employ a variety of techniques to identify and optimize our antibody candidates. We will use our recently acquired capabilitiesFor example, while we have been primarily focused on monoclonal antibodies over the past two years, we are beginning to accelerateexplore multispecific antibody technologies, collaborations, and product candidate opportunities.  

In April 2016, we presented preclinical data at the development of our portfolio of CPM candidatesAmerican Association for Cancer Research (“AACR”) conference for our ownanti-CTLA-4 programs, AGEN1884 and those of our partnersAGEN2041 (both partnered with Recepta Biopharma SA (“Recepta”) for certain South American territories). The presentations covered preclinical pharmacology for each antibody, including detailed studies that demonstrate AGEN1884 and potential collaborators. These added capabilities will position usAGEN2041 bind to exploit new technological and development capabilities and also to facilitate new partnership opportunities beyond our current portfolio.  

There are dozens of checkpoints as well as ligands that interact with these checkpoints, each of which areCTLA-4 expressed on variousT cells and potently block engagement of CD80 and CD86, leading to enhanced T cell types involvedresponsiveness. We also reported data that AGEN1884 or AGEN2041 augmented vaccine response in immune responses.primates. This finding demonstrates that both antibodies are functional and we believe exemplifies their utility in combination with therapeutic cancer vaccines. In most instances, these checkpoints2017 at AACR, we plan to present evidence that our clinical-stage CTLA-4 antagonist (AGEN1884) combines effectively with our clinic-ready PD-1 antagonist antibody (AGEN2034) and ligands workother antibodies targeting the PD-1/PD-L1 axis to control and shape ourpromote superior T cell immune responses and promotecompared to either monotherapy. Furthermore, in mice a surrogate CTLA-4 targeted antibody augments vaccine-induced immune responses when combined with our health.ASV vaccine candidate. In April 2016, we also announced that the last decade, the biotechnology industry has begun to understand that these checkpoint processes can also intensify diseases, including cancer and auto-immune diseases. Understanding the roles that checkpoint processes can playfirst patient had been dosed in cancer has led to advancesour Phase 1 clinical trial of AGEN1884. The open-label, multicenter trial in the treatment of many patients with advanced cancer. We have learned that, whileor refractory cancer can be recognized byis designed to evaluate the immune system as “non-self”safety of AGEN1884 and trigger potential immune control, cancer can hijack checkpoint processesdetermine the estimated maximum tolerated dose. In 2017, we plan to protect itself from either immune detection or immune destruction. Advances in cancer treatment are emerging based on therapeutic monoclonal antibodies targeting checkpoint receptors or their ligands, facilitating immune response against cancers. Someinitiate combination trials with our clinical stage CTLA-4 and PD-1 antagonists and define the optimal dose of the CPM antibodies thatcombination for pivotal trials.  

In the past year there has been third party validation of the clinical benefit of antibody combination approaches, most specifically the importance of targeting CTLA-4 as the backbone of these combination strategies. Regimens involving lower and less frequent dosing of CTLA-4 antibody in combination with PD-1 inhibitors have been developedshown to date include Bristol-Myers Squibb’s Yervoy^® (CTLA-4 antagonist) and Opdivo^® (PD-1 antagonist) and Merck’s Keytruda^® (PD-1 antagonist). Agents like these have not only led to increased protracted survival for many patients with certain forms of cancer, such as melanoma and lung cancer, but they are also leading to apparent cures in some patients with advanced metastatic cancer.

Our strategy includes identifying opportunities to advance our portfolio of CPMs as single agents and in optimized combinations, including potential combinations with our vaccines and other agents. We and our partners currently have pre-clinical andyield more pronounced clinical programs exploring fully human and humanized monoclonal antibodies against several important checkpoint targets including GITR, OX40, CTLA-4, PD-1, TIM-3, LAG-3, CEACAM1 and other undisclosed targets. We are working to discover and develop monoclonal CPM antibodies to modulateefficacy than either agent alone. Importantly, this was achieved without the activity of these targets, selectively reactivate the immune system and thwart attempts by cancer to evade destruction. Weadded toxicity. Many experts believe these CPM antibodies will be beneficial in the treatment of cancer patients by allowing the immune system to more effectively recognize and destroy cancer cells.

In 2015, we filed investigational new drug applications (INDs) for antibodies targeting CTLA-4 and GITR (filed with Incyte), and in January 2016 we announced that the FDA gave clearancecombination of CTLA-4 antibodies with PD-1 blockade using a tolerable dosing regimen is a foundational I-O regimen. We expect our anti-PD-1 antibody candidate, AGEN2034, to begin clinical trials with these two CPM candidates. Clinical trials with these CPMs are planned to initiateenter the clinic in the first half of 2016. 2017.

We are planning to develop our anti-PD-1 antibody as a monotherapy as well as in combination with our anti CTLA-4 antibody in second line cervical cancer. Chemoradiation therapy is the current standard of care for earlier lines of treatment. In distant metastatic patients, platinum based chemotherapy, with or without bevacizumab, is the current standard of care. However, there are no established therapies for second line cervical cancer and the five-year survival rate of recurrent/metastatic cervical cancer is 16.8%. Cervical cancer is a malignancy that is driven by the persistent infection by certain types of human papilloma virus (“HPV”). Anti PD-1/PD-L1 have shown to be active in virally induced disease and, specifically, HPV induced squamous cell cancer of the head and neck. In these tumors, anti PD-1 blockade might induce objective responses as well as prolongation of survival.

In addition weto pursuing validated targets, our discovery pipeline also includes a number of antibody programs against innovative immunomodulatory targets such as TIGIT and 4-1BB (also known as CD137). 4-1BB is a co-stimulatory molecule involved in mediating recruitment of immune infiltrates into the tumor microenvironment. We have product candidates targeting OX40selected a lead agonist that targets this molecule, which exhibits compelling pharmacologic properties and PD-1could confer clinical advantages and poise this molecule to be a best-in-class therapeutic. TIGIT is a co-inhibitory checkpoint expressed on innate and adaptive immune cell populations. Preclinical models indicate that antibody-mediated TIGIT blockade not only serves to stimulate lymphocyte activation and cytotoxic activity, but also synergizes with PD-1/PD-L1 inhibition to promote anti-tumor immunity. We have selected a lead molecule for this target that is advancing into IND-enabling studies, and we expect to initiate clinical trials for one or more of these compounds during the second half of 2016.through preclinical development.

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Partnered CPM Programs

In January 2015, we entered into a broad, global alliance with Incyte Corporation (“Incyte”) to discover, develop and commercialize novel immuno-therapeutics using our antibody platforms. The collaboration was initially focused on four CPM programs targeting GITR, OX40, TIM-3 and LAG-3, and in November 2015, we expanded ourthe alliance by adding three additional novel undisclosed CPM targets. Pursuant to the terms of the collaboration,original agreement, Incyte made non-creditable, non-refundable upfront payments to us totaling $25.0 million. Targets under the collaboration arewere designated as either profit-share programs, where the parties shareshared all costs and profits equally, or royalty-bearing programs, where Incyte fundsfunded all costs, and we arewere eligible to receive milestones and royalties. TheUnder the original collaboration agreement, programs targeting

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GITR, OX40 and two of the undisclosed targets arewere designated as profit-share programs, while the other targets currently under collaboration arewere royalty-bearing programs. For each profit-share product, we arewere eligible to receive up to $20.0 million in future contingent development milestones. For each royalty-bearing product, we arewere eligible to receive (i) up to $155.0 million in future contingent development, regulatory, and commercialization milestones and (ii) tiered royalties on global net sales at rates generally ranging from 6%-12%. For each royalty-bearing product, we also have the right to elect to co-fund 30% of the development costs incurred following initiation of pivotal clinical trials in return for increased royalties. In addition, we and Incyte have the option to jointly nominate and pursue the development and commercialization of CPM programs that target additional checkpoint targets during a five-year discovery period. For each antibody arising from a program that the parties elect to bring into our collaboration, we will have the option to designate that program as a profit-share or royalty-bearing program. Concurrent with the execution of the original collaboration agreement, we and Incyte also entered into a stock purchase agreement pursuant to which Incyte purchased approximately 7.76 million shares of our common stock for an aggregate purchase price of $35.0 million, or approximately $4.51 per share. In February 2017, we and Incyte amended the terms of the original collaboration agreement to, among other things, convert the GITR and OX40 programs from profit-share to royalty-bearing programs with royalties on global net sales at a flat 15% rate for each. In addition, the profit-share programs relating to two undisclosed targets were removed from the collaboration, with one reverting to Incyte and one to Agenus (the latter being our TIGIT antibody program), each with royalties on global net sales at a flat 15% rate. The remaining three royalty-bearing programs in the collaboration targeting TIM-3, LAG-3 and one undisclosed target remain unchanged, and there are no more profit-share programs under the collaboration. Pursuant to the amended agreement, we received accelerated milestone payments of $20.0 million from Incyte related to the clinical development of INCAGN1876 (anti-GITR agonist) and INCAGN1949 (anti-OX40 agonist). Across all programs in the collaboration, we are now eligible to receive up to a total of $510.0 million in future potential development, regulatory and commercial milestones. Concurrent with the execution of the amendment agreement, we and Incyte entered into a separate stock purchase agreement whereby Incyte purchased an additional 10 million shares of Agenus common stock at $6.00 per share. Immediately following the transaction, Incyte owned approximately 18.1% of our outstanding common stock.

At the April 2016 AACR conference, we also presented data for two antibody candidates under the Incyte collaboration: INCAGN1949 (anti-OX40 agonist) and INCAGN1876 (anti-GITR agonist). The presentations covered preclinical pharmacology for each antibody, including optimized features. INCAGN1949 and INCAGN1876 have been optimized to mediate receptor forward signaling under suboptimal T-cell receptor (“TCR”) stimulatory conditions, leading to enhanced agonistic properties and increased production of TNFα and IFNγ by immune effector cells. At AACR 2017, we are presenting additional preclinical data for both INCAGN1949 (anti-OX40 agonist) and INCAGN1876 (anti-GITR agonist) which further characterize these antibody candidates.  In June 2016, we announced that the first patient was dosed in a Phase 1/2 clinical trial of INCAGN1876. The open-label, dose-escalation portion of the trial is evaluating the safety and tolerability of INCAGN1876 in patients with advanced or metastatic solid tumors and will determine the pharmacologically active and/or maximum tolerated dose of INCAGN1876. Part 2 of the trial is planned to further evaluate the recommended dose of INCAGN1876 in selected tumor types, including advanced or metastatic endometrial adenocarcinoma, melanoma, non-small cell lung cancer and renal cell carcinoma. In addition, in November 2016 we announced the commencement of a Phase 1/2 clinical trial of INCAGN1949. The open-label, dose-escalation portion of the trial is evaluating the safety and tolerability of INCAGN1949 in patients with advanced or metastatic solid tumors and will determine its pharmacologically active and/or maximum tolerated dose. Part 2 of the trial is planned to evaluate the recommended dose of INCAGN1949 in multiple tumor types.

In addition, in April 2014, we entered into a collaboration and license agreement with Merck to discover and optimize fully-human antibodies against two undisclosed CPM targets.targets for which Merck could elect whether or not to proceed into development. Merck selected a lead product candidate against one of the undisclosed Merck targets to advance into preclinical studies, leading to a $2.0 million milestone payment that we received in May 2016. Under the terms of the agreement, Merck is responsible for all future product development expenses for the clinical development and commercialization of antibodies generated under the collaboration, and weselected antibody candidate. We are eligible to receive approximately $100.0up to an additional $99.0 million in potentialmilestone payments, associated with the completion of certain clinical, regulatory and commercial milestones, as well as royalty paymentsin addition to royalties on any worldwide product sales.

Recently we also formalized a research collaboration with UCB Biopharma SPRL (“UCB”). The collaboration leverages the antibody engineering capabilities of UCB and Agenus in the area of novel bispecific antibody discovery. We also continue to collaborate with Recepta SA on the development of antibodies targeting CTLA-4 and PD-1, and we expect to continue exploring additional future collaborations.

Vaccine Platform ProgramsPlatforms

Our current vaccine platform programsplatforms for the treatment of cancer, and potentially other indications, include our HSP based Prophage vaccine candidates, and our synthetic vaccine candidates, ASV and PhosphoSynVax^™, or PSV^™.PSV.

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HSPs are a group of proteins present at high levels in most mammalian cells. Their expression is increased when cells are exposed to elevated temperatures or other stresses. A potential role for HSPs in regulating immune responses was revealed when it was first discovered that HSP complexes purified from cancer cells produced immunity to cancer, whereas HSP complexes purified from normal tissue did not. This discovery led to the understanding that HSPs bind to and carry a broad sampling of the protein environment within cells, including mutant proteins that might arise from genetic mutations within cancer cells. It was further shown that immunization with HSP complexes purified from tumors and used as vaccines to interact with antigen-presenting cells that then cross present the HSP-associated antigenic peptides to generate aboth CD4 and CD8 positive T-cell immune response.responses. These activated T-cells target the cancer cells of the tumor, from which the HSP complexes were derived. In order to provide effective immunization in this manner,derived, for destruction. Thus HSP complexes isolated from cancer cells are particularly effective.effective in mediating successive immunization. Since HSPs are expressed in all tumor cells, the approach of immunizing with the HSP complexes isolated from a particular tumor is broadly applicable to a variety of cancer types. We believe that we pioneered the use of gp96, an HSP, purified from a patient’s own tumor tissue, as a way to make vaccines tailored to stimulatingeliciting immune recognition and potential immune control of a specifican individual patient’s cancer.

Because cancer is a highly variable disease from one patient to another, due to extensive mutation of cancer cells, we believe that a patient-specific vaccination approach is optimal to generate a more robust and targeted immune response against the disease.

Prophage Vaccine Candidates

Our Prophage cancer vaccine candidates arecandidate, HSPPC-96, is an autologous therapiescancer vaccine therapy derived from patient cancer tissues that are surgically removed.removed from an individual patient. As a result, a Prophage vaccine tailored for a patient is produced fromcontains a broad sampling of potentially antigenic mutant proteins from sucheach patient’s own tumor. Prophage vaccines are designed to program the body’s immune system to target only the specific cells expressing thesethat express those mutant antigens, thereby reducing the risk that the body’s immune response against the tumor after vaccination will also affect healthy tissue and cause debilitating side effects often associated with chemotherapy and radiation therapy.

Enhancing immune response using personalized vaccines, particularly in combination with CPMs, could be beneficial in cancers where a low number of mutant proteins leads to weakened immunogenicity. Glioblastoma (“GBM”) represents one such example and is the most common primary malignant brain tumor, accounting for the majority of diagnoses of malignant cancers of the brain. GBM is a cancer affecting the central nervous system arising from glial cells that become malignant, and is at present a rapidly fatal disease.

To date, more than 1,000 patients have been treated with Prophage vaccines in clinical trials, covering a broad range of cancer types, and no serious immune-mediated side effects have been observed. The results of these trials have been published and/or presented at scientific conferences. These results indicate observable clinical and/or immunological activity across many types of cancer. Taken together, these trials show promising evidence of clinical benefit from Prophage vaccines and also establish that such vaccines can be effectively manufactured under current good manufacturing practices (“cGMP”), conditions and internationally distributed.

OurIn January 2017, we announced a clinical trial collaboration with the NCI. The double-blind, randomized controlled Phase 2 trial will evaluate the effect of Prophage vaccines are currentlyin combination with pembrolizumab (Keytruda®) in patients with ndGBM. The trial is being studied in two different settingsconducted by the Brain Tumor Trials Collaborative (“BTTC”), a consortium of GBM: patients who have been newly diagnosed as well as those with recurrent disease. Glioblastoma is the most common primary malignant brain tumor and accounts for the majority of diagnoses of malignant cancerstop academic centers led by Dr. Mark Gilbert, Chief of the brain.Neuro-Oncology Branch at the NCI Center for Cancer Research. The trial consists of two-arms with one arm receiving pembrolizumab as a monotherapy and a second arm receiving both Prophage and pembrolizumab in combination. Forty-five patients are being randomly assigned to each arm. Under this collaboration, we are suppling Prophage, Merck is providing pembrolizumab (Keytruda®) and NCI and BTTC member sites are recruiting patients and conducting the trial.

5At the American Society of Clinical Oncology (“ASCO”) conference in 2015, we announced final results from a single-arm, multicenter, open-label Phase 2 clinical trial in 46 patients with ndGBM treated with our Prophage vaccine in combination with standard of care: surgical resection, radiation and temozolomide. These results showed that patients treated with Prophage vaccine had a median progression free survival (“PFS”) of 18 months, with 33% of patients progression free at 24 months and indicate improvement compared to historical data for patients treated with the standard of care (PFS of six to nine months). Median overall survival (“OS”), the primary endpoint of the trial, was 23.8 months and remains durable in patients treated with Prophage. These data were published on February 13, 2017, in a manuscript in Clinical Cancer Research, a journal of the American Association for Cancer Research.  

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In addition to studies with ndGBM patients, we also previously reported data on recurrent GBM is a cancer affecting the central nervous system arising from glial cells that become malignant, and it is currently a rapidly fatal disease. The American Cancer Society estimates that 23,770 new cases of brain and other nervous system cancer will be diagnosed in the United States during 2016, and that 16,050 people in the United States will die from these tumors during 2016.

patients treated with Prophage. In December 2013, we published our Phase 2 results demonstrating that more than 90% of the patients treated with Prophage vaccine were alive at six months after surgery and 30% were alive at 12 months after surgery. Additionally, the median overall survival was approximately 11 months. This comparescompared favorably to historical control data with expected median survival for recurrent GBM patients of three to nine months. The data were published in a manuscript in Neuro-Oncology, the official journal of the Society of Neuro-Oncology.

In July 2014, we announced final results from a single-arm, multiple-center, open-label Phase 2 clinical trial in 46 patients with ndGBM treated with our Prophage vaccine in combination with standard of care: surgical resection, radiation and temozolomide. These results showed that patients treated with Prophage vaccine had a median progression free survival, or PFS, of 18 months, with 33% of patients progression free at 24 months. These results indicate improvement compared to historical data for patients treated with the standard of care, for which median PFS is six to nine months. Median overall survival, or OS, the primary endpoint of the trial, was 23.8 months and remains durable in patients treated with Prophage. In this study, the 12 month survival rate was 85% with many surviving beyond the 24 month study period. For the standard of care alone, studies have shown the historical median OS is approximately 16-19 months. Potential benefit from Prophage appears to be more evident in patients with less elevated expression of the checkpoint ligand PD-L1 on their white blood cells. This defines a potential group of responders to Prophage plus standard of care and also suggests a potential benefit from the combination of Prophage with CPMs like PD-1 antagonists in patients with more elevated PD-L1 on peripheral mononuclear white blood cells.  In data reported at the American Society of Clinical Oncology, or ASCO, in 2015, a pre-defined subgroup of patients with less elevated monocyte PD-L1 expression (below the median of 54.5%) showed  substantially longer PFS (~27.2 months vs historical median PFS of six to nine months) and OS (~47 months vs a historical median of 16-18.8 months). Durability of a response was evident in this cohort with approximately one third of the patients with less elevated PD-L1 living four years or longer.

In addition, to the Phase 2 trial in patients with ndGBM, the Alliance for Clinical Trials in Oncology, a cooperative group of the National Cancer Institute, or NCI, is supportingwas conducting a randomized Phase 2 clinical trial of the Prophage vaccine in combination with bevacizumab in 222 patients with surgically resectable, recurrent GBM. This trial isstudy was recently closed following an interim analysis that determined the largeststudy was unlikely to demonstrate that the vaccine trial ever funded by the NCI in brain tumors and the largest vaccine study ever conducted in combination with bevacizumab. The study is designedbevacizumab would lead to compare the efficacy of the Prophage vaccine administered witha better survival than bevacizumab either concomitantly or at progression to treatment with bevacizumab alone. The primary endpoint of this study is overall survival. This study design is supported in part by previous research indicatingas a potential synergistic effect between the mechanisms of action behind both the Prophage vaccine and bevacizumab. While the NCI Alliance has confirmed a commitment to completion of the trial, to date, it has been slow to recruit patients.monotherapy. 

ASV Vaccine ProgramPlatform

In June 2014, we reported positive results from a Phase 2 clinical trial with our synthetic HerpV vaccine candidate for genital herpes. This candidate was the first potential recombinant, off-the-shelf application of our HSP technology. The study demonstrated that the HSP70-peptide-QS21 vaccine produced significant CD4 and CD8 positive T-cell responses to antigenic peptides, and that the side effects were mild to moderate and tolerable. We decided not to advance with this technology in herpes but, based on our findings, we launched our ASV synthetic cancer vaccine program in 2015. We planremain on target to initiate a clinical trialstrial for this program in the secondfirst half of 2016.2017.

The objective of our ASV program is to develop a fully synthetic, yet individualindividualized patient specific tumor vaccine targeting the neo-epitope landscape of each patient’s cancer. Mutation-based neo-epitopes, which will form the basis for the immunogens used in ASV, are almost always particular to a given patient. Therefore, ASV is a largely individualized vaccine product. With a small amount of a patient’s tumor as a sample, our ASV program is designed to utilize highly complex bioinformatics and next generation sequencing technologies coupled with complex bioinformatics algorithms to identify mutations in a tumor’s DNA and RNA. Once these mutations have been identified, we will manufacture synthetic peptides encoding these neoepitopes, load these peptides on to our recombinant HSP70 and deliver a fully synthetic polyvalent vaccine to the patient. We believe that the HSP70 platform will shuttle the mutated peptides to sites where they are recognized by the immune system and elicit a cytotoxic and helper T cell response in patients with cancer. We expect that once identified, these tumor cells will be killed and cleared by the immune system.

Sequencing a tumor’s genome has become increasingly common and more cost effective compared to sequencing techniques utilized only a decade ago. ASV represents an unprecedented opportunity to integrate advances in information technology, including next generation sequencing and bioinformatics, with advances in biotechnology to develop individualized cancer vaccines. Tumors harbor a unique set of genetic mutations, some of which can result in mutant proteins. Tumor cells naturally degrade these mutant proteins to produce mutant peptides, and because over 98% of mutations are unique to individual tumors, advances in high-performance computing infrastructure make it feasible to target and synthesize these mutations.

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Identifying and manufacturing selected synthetic immunogenic mutant peptides is anticipated to recapitulate the potential benefits of Prophage as an autologous cancer vaccine in patients where tumor material is insufficient for standard Prophage processing. Assembling synthetically predicted antigens with a recombinant HSP vaccine should allow us to create quantities of autologous vaccines producing lasting benefits for patients with cancer. We plan to initiate the first clinical trial with our ASV vaccine in the second half of 2016.

PSV Vaccine CandidatePlatform

PSV is a vaccine candidate designed to induce immunity against a novel class of tumor specific neo-epitopes:neoepitopes: those arising from dysregulated phosphorylation of various proteins in malignant cells, rather than from tumor-specific mutations producing abnormal protein sequences. In cancerall cells, protein sequences that can becomehave post-translational modifications, such as becoming phosphorylated (a phosphate group is added to particular amino acid residues) that can be associated with cellular functions such as signaling. In cancer cells, this process can become dysregulated and proteins that are not normally phosphorylated as a consequence of dysregulated biochemical processes.can become phosphorylated and proteins that are phosphorylated can become phosphorylated at alternative sites. Some of these mis-phosphorylated peptides can be processed by the cellular machinery that leads to antigen presentation ofon the surface of cells, and there they can potentially be recognized by specific cytotoxic T cells. PhosImmune has described many hundreds of suchSuch phosphoprotein neo-epitopes characterizingneoepitopes have been associated with different forms of cancer, such asincluding but not limited to lung cancer, specific leukemias, ovarian cancer, colon cancer and others. When this happens, it can lead to the destruction of the cancer cells. PSV is a group of potential product candidates intended to induce cellular immunity to abnormal phosphopeptide neo-epitopes characterizingneoepitopes that are characteristic of these various forms of cancer. Phosphopeptides (or phosphopeptide analogues) can be synthesized and complexed with HSP70, in a mannerusing an approach analogous to that used in the generation of Agenus’our previous HerpV vaccine candidate. HerpV has successfully completed a placebo-controlled Phase 2 study, which demonstrated good cellular and humoral responses to synthetic peptide immunogens complexed with HSP70.HSP70 in a placebo-controlled Phase 2 study. We believe that similar responses can be obtained to phosphopeptide or phosphopeptide analogues bound to HSP70 when used as vaccines. Mutation-based neo-epitopes, which will form the basis for the immunogens used in ASV, are almost always particular to a given patient. Therefore, ASV will need toPhosphorylation-based neoepitopes can apparently be a largely individualized vaccine product. In contrast to this, some phosphorylation-based neo-epitopes are apparently found on specific types of cancer in many patients, suggesting that the immunogens used in PSV, while tailored to a particular patient, will be useful in other patients with related forms of cancer. Studies to optimize the immunogens to be used in PSV are on-going. PSV could prove to be particularly useful in enabling activation of immunity against cancer that contains fewer mutation-based neo-epitopes. Currently, scientists believe that it will be difficult to extend immune-based treatments to address these less mutant tumors. As with ASV, the HSP70 platform shuttles the phosphopeptide tumor targets, or PTTs to sites where they are recognized by the immune system and safely elicit an immune response in patients killing and clearing the tumor cells.ongoing.

We acquired the phosphopeptide-based neo-epitope technology from PhosImmune in December 2015. Under the terms of the agreement, we paid PhosImmune’s equity holders an upfront payment of $2.5 million in cash and $7.4 million in common stock at closing. In addition, payments of up to $35.0 million in cash and/or common stock at our election are payable upon the achievement of certain milestones.

The acquisition of PhosImmune allows us to benefit from the peptide analytics expertise of PhosImmune’s founders to create both patient-specific and off-the-shelf cancer vaccines products while leveraging our ASV vaccine developments.

QS-21 Stimulon Adjuvant

QS-21 Stimulon is an adjuvant, which is a substance added to a vaccine or other immunotherapy that is intended to enhance an immune response to the target antigens. A natural product, QS-21 Stimulon is a natural product, a triterpene glycoside, or saponin, purified from the bark of the Chilean soapbark tree, Quillaja saponaria. QS-21 Stimulon has the ability to stimulate antibodyan antibody-mediated immune response and has also been shown to activate cellular immunity. QS-21 StimulonIt has become a key component in the development of investigational preventive vaccine formulations across a wide variety of diseases. These studies have been carried out by academic institutions and pharmaceutical companies in the United States and internationally. A number of these studies have shown QS-21 Stimulon to be significantly more effective in stimulating immune responses than aluminum hydroxide or aluminum phosphate, the adjuvants most commonly used in approved vaccines in the United States today.

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Partnered QS-21 Stimulon Programs

In July 2006, we entered into a license agreement and a supply agreement with GSK for the use of QS-21 Stimulon (the “GSK License Agreement” and the “GSK Supply Agreement,” respectively). In January 2009, we entered into an Amended and Restated Manufacturing Technology Transfer and Supply Agreement (the “Amended GSK Supply Agreement”) under which GSK has the right to manufacture all of its requirements of commercial grade QS-21 Stimulon. GSK is obligated to supply us, or our affiliates, licensees, or customers, certain quantities of commercial grade QS-21 Stimulon for a stated period of time. In March 2012, we entered into a First Right to Negotiate and Amendment Agreement amending the GSK License Agreement and the Amended GSK Supply Agreement to clarify and include additional rights for the use of QS-21 Stimulon (the “GSK First Right to Negotiate Agreement”). In addition, we granted GSK the first right to negotiate for the purchase of the CompanyAgenus or certain of our assets, which right expiresjust recently expired in March 2017. As consideration for entering into the GSK First Right to Negotiate Agreement, GSK paid us an upfront, non-refundable

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payment of $9.0 million, $2.5 million of which is creditable toward future royalty payments. We refer to the GSK License Agreement, the Amended GSK Supply Agreement and the GSK First Right to Negotiate Agreement collectively as the GSK Agreements. As of December 31, 2015,2016, we had received $23.3 million of a potential $24.3 million in upfront and milestone payments under the GSK Agreements. Under the terms of the Agreement, we are generally entitled to receive 2% royalties on net sales of prophylactic vaccines for a period of 10 years after the first commercial sale of a resulting GSK product, with some exceptions.exceptions; however, we have already monetized part of this potential royalty stream as discussed in more detail below. The GSK License and Amended GSK Supply Agreements may be terminated by either party upon a material breach if the breach is not cured within the time specified in the respective agreement. The termination or expiration of the GSK License Agreement does not relieve either party from any obligation which accrued prior to the termination or expiration. Among other provisions, the milestone payment obligations survive termination or expiration of the GSK Agreements for any reason, and the license rights granted to GSK survive expiration of the GSK License Agreement. The license rights and payment obligations of GSK under the Amended GSK Supply Agreement survive termination or expiration, except that GSK's license rights and future royalty obligations do not survive if we terminate due to GSK's material breach unless we elect otherwise.

QS-21 Stimulon is a key component included in certain of GSK's proprietary adjuvant systems, and we believe that a number of GSK's vaccine candidates currently in development are formulated using adjuvant systems containing QS-21 Stimulon, including its shingles and malaria vaccine candidates which have successfully completed Phase 3 clinical trials. In 2016, GSK filed for approval of its shingles vaccine candidate in the United States, European Union and Canada, and is expected to file for approval in Japan in 2017. In December 2014, GSK reported that its ZOE-50 Phase 3 clinical trial evaluating the efficacy of its shingles vaccine candidate, HZ/su, met its primary endpoint. Analysis of the primary endpoint showed that HZ/su reduced the risk of shingles by 97.2% in adults aged 50 years and older compared to placebo. In addition, GSK has reported two positive Phase 3 clinical trials of its RTS,S malaria vaccine candidate containing QS-21 Stimulon, which was accepted by the EMA for regulatory review in July 2014. Assuming regulatory approval, the first products containing QS-21 Stimulon are anticipated to be launched by GSK in 2018. We do not incur clinical development costs for products partnered with GSK. Our other previous licensee, Janssen Science Ireland UC, terminated its license for use of QS-21 Stimulon in May 2016.    

In September 2015, we monetized a portion of the royalties associated with the GSK License Agreement to an investor group led by Oberland Capital Management for up to $115.0 million in the form of a non-dilutive royalty transaction. Under the terms of a Note Purchase Agreement with the investor group (the “Note Purchase Agreement”) we received $100.0 million at closing for which the investors will have the right to receive 100% of our worldwide royalties under the GSK License Agreement on sales of GSK’s shingles (HZ/su) and malaria (RTS,S) prophylactic vaccine products that contain our QS-21 Stimulon adjuvant to pay down principle and interest. Once all principle and interest under the Note Purchase Agreement has been paid, any and all remaining royalties from the GSK License Agreement will accrue to us. The Note Purchase Agreement is designed to allow us to capture both the near and longer term benefit associated royalties from GSK’s vaccine products containing our QS-21 Stimulon. At our option, we are entitled to receive an additional $15.0 million in cash from the investors after approval of HZ/su by the FDA,U.S. Food and Drug Administration (“FDA”), provided such approval does not occur later than June 30, 2018. Also at our option, we have the right to buy back the loan at any time under pre-specified terms. The monetization of these royalty rights allows us to advance a significant portion of the future value of our royalty stream while still allowing us to retain any future monetary upside after the Note Purchase Agreement terms have been satisfied.

QS-21 Stimulon is a key component included in certain of GSK's proprietary adjuvant systems,Manufacturing

Manufacturing CPM Antibodies

We rely on third party contract manufacturing organizations (“CMOs”) to manufacture and we believe that a number of GSK's vaccine candidates currently in development are formulated using adjuvant systems containing QS-21 Stimulon, including its shinglessupply us with the antibodies and malaria vaccine candidates which have successfully completed Phase 3 clinical trials. In December 2014, GSK reported that its ZOE-50 Phase 3 clinical trial evaluating the efficacy of its shingles vaccine candidate, HZ/su, met its primary endpoint. Analysis of the primary endpoint showed that HZ/su reduced the risk of shingles by 97.2% in adults aged 50 yearsdrug substance for our antibody programs and older compared to placebo. In addition, GSK has reported two positive Phase 3 clinical trials of its RTS,S malaria vaccine candidate containing QS-21 Stimulon, which was accepted by the EMA for regulatory review in July 2014. In November 2013, Phase 3 data were reported that demonstrated that RTS,S helps protect children and infants from clinical malaria up to 18 months post vaccination. In November 2012, The New England Journal of Medicine published results of a second Phase 3 trial for RTS,S. In this study, infants aged 6-12 weeks receiving the RTS,S vaccine candidate experienced one-third fewer episodes of both clinical and severe malaria and experienced similar reactions to the injection when compared to those who received the control meningococcal C conjugate vaccine. GSK met both of its co-primary endpoints in the large ongoing efficacy clinical trial. In October 2011, The New England Journal of Medicine published results of the first Phase 3 clinical trial of GSK’s RTS,S malaria vaccine candidate containing QS-21 Stimulon. Results of the study, the largest malaria vaccine efficacy and safety clinical trial ever conducted, demonstrate that RTS,S provided African children with significant protection against clinical and severe malaria, reducing risk by 56% and 47%, respectively,anticipate doing so for the 12-month period following vaccination.

Assuming regulatory approval, the first products containing QS-21 Stimulon are anticipatedforeseeable future. In an effort to be launched by GSK in 2018.  We do not incur clinical development costs for products partnered with GSK. Our other licensee, Janssen Science Ireland UC, recently notified us that they were terminating their license for use of QS-21 Stimulon.    

Manufacturing

Antibody manufacturing

In December 2015,de-risk this reliance, we acquired XOMA Corporation’s antibody manufacturing pilot plant in Berkeley, CA.CA in December 2015. A team of former XOMA employees with valuable chemistry, manufacturing and controls experience has joined us and will continuecontinues to operate the facility. The pilot plant, referred to as “Agenus West,” was acquired to enable us to manufacture antibodies for some of our own CPM programs and those of existing and potential third party collaborators. We expectSince the acquisition, we have refurbished and improved the pilot plant,

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increasing both scale and capacity, with the anticipation that it will be able to provide antibody production development expertise and antibody drug substance to support clinical proof-of-concept studies, and to facilitate some of our future GMP antibody production requirements. We also expect to utilize our Agenus West pilot plant capabilities to accelerate antibody delivery speed, improve quality and increase product yield while providing us with greater manufacturing flexibility, all at reduced costs. We believe our Agenus West pilot plant manufacturing facility could accelerate the time to the clinic and into product commercialization. In addition, in February 2017, we amended our collaboration with Incyte, transferring manufacturing responsibilities for all antibodies under the collaboration to them. This includes antibodies targeting GITR, OX40, TIM-3, LAG-3 and one undisclosed target. We are in the process of transferring manufacturing know how to Incyte to support these endeavors.

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ProphageManufacturing Cancer Vaccines

Prophage vaccines are manufacturedWe manufacture our cancer vaccine candidates from our different vaccine platforms in our Lexington, MA facility. We estimate that this facility could support the production of up to 4,000 batches per year.

Each Prophage vaccine is manufactured using a patient’s own tumor. After the patient undergoes surgery to remove cancerous tumor tissue, the tumor is shipped frozen in a specially designed kit provided we provideby us to our Lexington, Massachusetts facility. Each Prophage vaccine is produced to a specific standard, in a process taking approximately ten hours, after which it undergoes extensive quality testing for approximately two weeks. The turnaround time from the date of surgery to delivery of vaccine is approximately three to four weeks, which generally fits well with the patient’s recovery time from surgery. Once we release the vaccine, it is shipped frozen overnight to the hospital pharmacy or clinician. Prophage vaccines are given as a simple intradermal injection. Agenus has

ASV and PSV vaccine candidates would be manufactured using HSP70 loaded with synthetic peptide synthesized by approved manufacturers. The sequence of the peptides is determined by sequencing and analysis of patient and tumor DNA and RNA and run through complex algorithms by our bioinformatics group who have specialized knowledge of the attributes required to elicit immune responsiveness. This process takes several weeks, after which the manufactured vaccine undergoes extensive quality testing, including sterility testing, for a further two weeks.

We have established, within a single facility, well-defined, cost efficient manufacturing under GMPs.

GMPs, including bioanalytical, quality control and quality assurance, logistics, distribution and supply chain management. After manufacturing, Prophage vaccinesand ASV vaccine candidates are tested and released by our analytical and quality systems staff. The quality control organization performs a series of release assays designed to ensure that the product meets all applicable specifications. Our quality assurance staff also reviews manufacturing and quality control records prior to batch release in an effort to assure conformance with current GMP or cGMP,(“cGMP”) as mandated by the FDA and foreign regulatory agencies.

Our manufacturing staff is rigorously trained and routinely evaluated for conformance to rigorous manufacturing procedures and quality standards. This oversight is intended to ensure compliance with FDA and foreign regulations and to provide consistent vaccine output. Our quality control and quality assurance staff is similarly trained and evaluated as part of our effort to ensure consistency in the testing and release of the product, as well as consistency in materials, equipment and facilities.

QS-21 Stimulon

Except in the case of GSK, we have retained worldwide manufacturing rights for QS-21 Stimulon, and we have the right to subcontract manufacturing for QS-21 Stimulon. In addition, under the terms of our agreement with GSK, upon request by us, GSK is committed to supply certain quantities of commercial grade QS-21 Stimulon to us and our licensees for a fixed period of time.

Intellectual Property Portfolio

We seek to protect our technologies through a combination of patents, trade secrets and know-how, and we currently own, co-own or have exclusive rights to approximately 5040 issued United States patents and approximately 120125 issued foreign patents. Our issued patents include those that cover uses of our core technologies in combination with other agents. Such core technologies include HSP-based vaccines for the treatment of cancers and treatment/prevention of infectious diseases, and saponin adjuvants. We also own, co-own or have exclusive rights to approximately 5035 pending United States patent applications and approximately 5080 pending foreign patent applications. We may not have rights in all territories where we may pursue regulatory approval for Prophage vaccine candidates.

Through ourvarious acquisitions, of 4-AB, PhosImmune and certain assets of Celexion, we own, co-own, or have exclusive rights to a number of patents and patent applications directed to various methods and compositions, including methods for identifying therapeutic antibodies and product candidates arising out of such entities’ technology platforms. In particular, we own patents and patent applications relating to our Retrocyte Display technology platform, a high throughput antibody expression platform for the identification of fully-human and humanized monoclonal antibodies. This patent family is projected to expire between 2029 and 2031. Through our acquisition of PhosImmune, weWe own, co-own, or have exclusive rights to patents and patent applications directed to various methods and compositions, including a patent directed to methods for identifying phosphorylated

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proteins using mass spectrometry. This patent is projected to expire in 2023. We also own patents and patent applications relating to the SECANT^® platform, a platform used for the generation of novel monoclonal antibodies. This patent family is projected to expire between 2028 and 2029. In addition, as we advance our research and development efforts with our institutional and corporate collaborators, we intend to seekare seeking patent protection for certain newly identified therapeutic antibodies and product candidates. We can provide no assurance that any of our patents, including the patents that werewe acquired or in-licensed, in connection with our acquisitions of 4-AB, PhosImmune and certain assets of Celexion, will have commercial value, or that any of our existing or future patent applications, including the patent applications that were acquired or in-licensed, in connection with our acquisitions of 4-AB, PhosImmune and certain assets of Celexion, will result in the issuance of valid and enforceable patents. Our issued patents covering Prophage vaccinesvaccine and methods of use thereof, alone or in combination with other agents, expired or will expire at various dates between 2015 and 2024. In particular, our issued U.S. patents covering Prophage composition of matter expired in 2015. In addition, our issued patents covering QS-21 Stimulon composition of matter expired in 2008. We continue to explore means of extending the life cycle of our patent portfolio.

Various patents and patent applications have been exclusively licensed to us by the following entities:

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University of Virginia

In connection with our acquisition of PhosImmune in December 2015, we obtained exclusive rights to a portfolio of patent applications and one issued patent relating to PTTs under a patent license agreement with the University of Virginia (UVA)(“UVA”). The UVA license gives us exclusive rights to develop and commercialize the PTT technology and an exclusive option to license any further PTT technology arising from ongoing research at UVA until December 2018. Under the license agreement, we will pay low to mid-single digit running royalties on net sales of PTT products, and a modest flat percentage of sublicensing income. In addition, we may be obligated to make milestone payments of up to $2.7 million for each indication of a licensed PTT product to complete clinical trials and achieve certain sales thresholds. The term of the UVA license agreement ends when the last of the licensed patents expires or becomes no longer valid. The UVA license agreement may be terminated as follows: (i) by UVA in connection with our bankruptcy or cessation of business relating to the licensed technology, (ii) by UVA if we commit a material, uncured breach or (iii) by us for our convenience on 180 days written notice.

Ludwig Institute for Cancer Research

On December 5, 2014, 4-ABour wholly-owned subsidiary, Agenus Switzerland Inc. (formerly known as 4-Antibody AG)(“4-AB”), entered into a license agreement with the Ludwig Institute for Cancer Research Ltd. (Ludwig)(“Ludwig”), which replaced and superseded a prior agreement entered into between the parties in May 2011. Pursuant to the terms of the license agreement, Ludwig granted 4-AB an exclusive, worldwide license under certain intellectual property rights of Ludwig and Memorial Sloan Kettering Cancer Center arising from the prior agreement to further develop and commercialize GITR, OX40 and TIM-3 antibodies. On January 25, 2016, we and 4-AB entered into a second license agreement with Ludwig, on substantially similar terms, to develop CTLA-4 and PD-1 antibodies. Pursuant to the December 2014 license agreement, 4-AB made an upfront payment of $1.0 million to Ludwig. The December 2014 license agreement also obligates 4-AB to make potential milestone payments of up to $20.0 million for events prior to regulatory approval of licensed GITR, OX40 and TIM-3 products, and potential milestone payments in excess of $80.0 million if such licensed products are approved in multiple jurisdictions, in more than one indication, and certain sales milestones are achieved. Under the January 2016 license agreement, we are obligated to make potential milestone payments of up to $12.0 million for events prior to regulatory approval of CTLA-4 and PD-1 licensed products, and potential milestone payments of up to $32.0 million if certain sales milestones are achieved. Under each of these license agreements, we and/or 4-AB will also be obligated to pay low to mid-single digit royalties on all net sales of licensed products during the royalty period, and to pay Ludwig a percentage of any sublicensing income, ranging from a low to mid-double digit percentage depending on various factors. The license agreements may each be terminated as follows: (i) by either party if the other party commits a material, uncured breach; (ii) by either party if the other party initiates bankruptcy, liquidation or similar proceedings; or (iii) by 4-AB or us (as applicable) for convenience upon 90 days’ prior written notice. The license agreements also contain customary representations and warranties, mutual indemnification, confidentiality and arbitration provisions.

Mount Sinai School of Medicine

In November 1994, we entered into a patent license agreement with the Mount Sinai School of Medicine (the “Mount Sinai Agreement”). Through the Mount Sinai Agreement, we obtained an exclusive, worldwide license to patent rights relating to the heat shock protein technology that resulted from the research and development performed by Dr. Pramod Srivastava, our founding scientist and a former member of our Board of Directors. We agreed to pay Mount Sinai a royalty on the net sales of products covered by the licensed patent rights and also provided Mount Sinai with a 0.45% equity interest in the Company, or approximately 10,300 shares, valued at approximately $90,000 at the time of issuance. The term of the Mount Sinai Agreement ends when the last of the licensed patents expires in 2016 or becomes no longer valid.

University of Connecticut Health Center

In May 2001, we entered into a license agreement with the University of Connecticut Health Center (“UConn”) which was amended in March 2003 and June 2009. Through the license agreement, we obtained an exclusive, worldwide license to patent rights resulting from inventions discovered under a research agreement that was effective from February 1998 until December 2006. The term of the license agreement ends when the last of the licensed patents expires in 20242028 or becomes no longer valid. UConn may terminate the agreement: (1) if, after 30 days written notice for breach, we continue to fail to make any payments due under the license agreement, or (2) we cease to carry on our business related to the patent rights or if we initiate or conduct actions in order to declare bankruptcy. We may terminate the agreement upon 90 days written notice. We are required to make royalty payments on any obligations created prior to the effective date of termination of the license agreement. Upon expiration or termination of the license agreement due to breach, we have the right to continue to manufacture and sell products covered under the license agreement which are considered to be works in progress for a period of six months. The license agreement contains aggregate milestone payments of

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approximately for each product we develop covered by the licensed patent rights. These milestone payments are contingent upon regulatory filings, regulatory approvals, and commercial sales of products. We have also agreed to pay UConn a royalty on the net sales of products covered by the license agreement as well as annual license maintenance fees beginning in May 2006. Royalties otherwise due on the net sales of products covered by the license agreement may be credited against the annual license maintenance

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fee obligations. Under the March 2003 amendment, we agreed to pay UConn an upfront payment and to make future payments for each patent or patent application with respect to which we exercised our option under the research agreement. As of December 31, 2015,2016, we had paid approximately $745,000 $850,000 to UConn under the license agreement. The license agreement gives us complete discretion over the commercialization of products covered by the licensed patent rights but also requires us to use commercially reasonable diligent efforts to introduce commercial products within and outside the United States. If we fail to meet these diligence requirements, UConn may be able to terminate the license agreement.

Regulatory Compliance

Governmental authorities in the United States and other countries extensively regulate the preclinical and clinical testing, manufacturing, labeling, storage, record keeping, advertising, promotion, export, marketing and distribution, among other things, of our investigational product candidates. In the United States, the FDA under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act and other federal statutes and regulations, subject pharmaceutical products to rigorous review.

In order to obtain approval of a new product from the FDA, we must, among other requirements, submit proof of safety and efficacy as well as detailed information on the manufacture and composition of the product. In most cases, this proof entails extensive preclinical, clinical, and laboratory tests. Before approving a new drug or marketing application, the FDA may also conduct pre-licensing inspections of the company, its contract research organizations and/or its clinical trial sites to ensure that clinical, safety, quality control, and other regulated activities are compliant with Good Clinical Practices or GCP,(“GCP”), or Good Laboratory Practices or GLP,(“GLP”), for specific non-clinical toxicology studies. The FDA may also require confirmatory trials, post-marketing testing, and extra surveillance to monitor the effects of approved products, or place conditions on any approvals that could restrict the commercial applications of these products. Once approved, the labeling, advertising, promotion, marketing, and distribution of a drug or biologic product must be in compliance with FDA regulatory requirements.

In Phase 1 clinical trials, the sponsor tests the product in a small number of patients or healthy volunteers, primarily for safety at one or more doses. Phase 1 trials in cancer are often conducted with patients who have end-stage or metastatic cancer. In Phase 2, in addition to safety, the sponsor evaluates the efficacy of the product in a patient population somewhat larger than Phase 1 trials. Phase 3 trials typically involve additional testing for safety and clinical efficacy in an expanded population at geographically dispersed test sites. The FDA may order the temporary or permanent discontinuation of a clinical trial at any time.

The sponsor must submit to the FDA the results of preclinical and clinical testing, together with, among other things, detailed information on the manufacture and composition of the product, in the form of a new drug application or NDA,(“NDA”), or in the case of biologics, like the Prophage vaccines, a biologics license application or BLA.(“BLA”). In a process that can take a year or more, the FDA reviews this application and, when and if it decides that adequate data are available to show that the new compound is both safe and effective for a particular indication and that other applicable requirements have been met, approves the drug or biologic for marketing.

Whether or not we have obtained FDA approval, we must generally obtain approval of a product by comparable regulatory authorities of international jurisdictions prior to the commencement of marketing the product in those jurisdictions. We are also subject to cGMP, GCP, and GLP compliance obligations and are subject to inspection by international regulatory authorities. International requirements may in some circumstances be more rigorous than U.S. requirements and may require additional investment in manufacturing process development, non-clinical studies, clinical studies, and record keeping that are not required for U.S. regulatory compliance or approval. The time required to obtain this approval may be longer or shorter than that required for FDA approval and can also require significant resources in time, money and labor.

Under the laws of the United States, the countries of the European Union and other nations, we and the institutions where we sponsor research are subject to obligations to ensure the protection of personal information of human subjects participating in our clinical trials. We have instituted procedures that we believe will enable us to comply with these requirements and the contractual requirements of our data sources. The laws and regulations in this area are evolving, and further regulation, if adopted, could affect the timing and the cost of future clinical development activities.

We are also subject to regulation under the Occupational Safety and Health Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, and other current and potential future federal, state, or local regulations. Our research and development activities involve the controlled use of hazardous materials, chemicals, biological materials, various radioactive compounds, and for some experiments we use recombinant DNA. We believe that our procedures comply with the standards prescribed by local, state, and federal regulations; however, the risk of injury or accidental contamination cannot be completely eliminated. We conduct our activities in compliance with the National Institutes of Health Guidelines for Recombinant DNA Research.

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Additionally, the U.S. Foreign Corrupt Practices Act or FCPA,(“FCPA”), prohibits U.S. corporations and their representatives from offering, promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business abroad. The scope of the FCPA includes interactions with certain healthcare professionals in many countries. Other countries have enacted similar anti-corruption laws and/or regulations.

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CompetitionCompetition

Competition in the pharmaceutical and biotechnology industries is intense. Many pharmaceutical or biotechnology companies have products on the market and are actively engaged in the research and development of products for the treatment of cancer.

Many competitors have substantially greater financial, manufacturing, marketing, sales, distribution, and technical resources, and more experience in research and development, clinical trials, and regulatory matters, than we do. Competing companies developing or acquiring rights to more efficacious therapeutic products for the same diseases we are targeting, or which offer significantly lower costs of treatment, could render our products noncompetitive or obsolete. See Part I-Item 1A. “Risk Factors-Risks Related to our Business-Our competitors may have superior products, manufacturing capability, selling and marketing expertise and/or financial and other resources.”

Academic institutions, governmental agencies, and other public and private research institutions conduct significant amounts of research in biotechnology, medicinal chemistry and pharmacology. These entities have become increasingly active in seeking patent protection and licensing revenues for their research results. They also compete with us in recruiting and retaining skilled scientific talent.

The CPM landscape is crowded with several competitors developing assets against a number of targets. Development plans are spread out across various indications and lines of therapy, either alone or in combination with other assets. Competitors range from small cap to large cap companies, with assets in preclinical or clinical stages of development. Therefore, the landscape is dynamic and constantly evolving. We and our partners have CPM antibody programs currently in earlyclinical stage development targeting CTLA-4, GITR and OX40, CTLA-4, LAG-3, TIM-3,with our PD-1 CEACAM1 and other undisclosed targets.antagonist anticipated to enter into the clinic in the first half of this year. We are aware of many companies that have antibody-based products on the market or in clinical development that are directed to the same biological targettargets as some of ourthese programs, including, without limitation, the following: (1) Bristol-Myers SquibbBMS markets ipilimumab, an anti-CTLA-4 antibody, and nivolumab, an anti-PD-1 antibody, and is developing an anti-LAG-3 antibodyagonists to GITR and agonist to OX-40, (2) Merck has an approved anti-PD-1 antibody in the United States, and is developing an anti-GITR agonist, and anti-CEACAM antibodies, (3) Ono Pharmaceuticals has an approved anti-PD-1 antibody in Japan, (4) AstraZeneca /MedimmuneAstraZeneca/Medimmune has anti-CTLA-4, OX-40PD-1, PD-L1, GITR and PD1OX40 targeting antibodies in development, (5) Curetech has an anti-PD-1 antibody in development, (6) Pfizer has an anti-CTLA-4 antibodyanti-PD-L1 (with Merck KgA), anti-PD-1, and anti-OX40 antibodies in clinical development, (7) Tesaro has antibody programs targeting PD-1, TIM-3 and LAG-3, which include both monospecific and dual reactive antibody drug candidates, (8)(6) Novartis has anti-PD-1, anti-PD-L1 and anti-TIM-3anti-GITR antibodies in discovery, and anti-LAG-3 and GITR agonist in clinical trials, and (9)(7) Roche/Genetech has an approved anti-PD-L1 and an anti-OX40 agonistantibody in clinical development. We are also aware of other competitors with PD-1/PD-L1 antibodies in clinical development, including Tesaro, Beigene, Regeneron, CureTech, Eli Lilly, Jiangsu HengRui Medicine, Shanghai Junshi and Macrogenics. We are also aware of competitors with preclinical antibodies against these targets. In addition, we are also aware of competitors with clinical stage antibodies against targets in our earlier stage programs such as TIM-3, LAG-3, 4-1BB, TIGIT and other undisclosed targets. These include, but are not limited to, BMS, Pfizer, Novartis, Merck, Roche, Tesaro and Regeneron. Additionally, we are also aware of competitors with assets against these targets that are in preclinical development. There is no guarantee that our antibody product candidates will be able to compete with our competitors’ antibody products and product candidates.

We are planning to develop our anti PD-1 as a monotherapy as well as in combination with our anti CTLA-4 antibody in second line cervical cancer. We are aware of exploratory, industry sponsored clinical trials that are underway in cervical cancer. Our competitors include, but are not restricted to, Merck (anti-PD-1), Ono Pharmaceuticals and BMS (anti-PD-1 alone or in combination with anti-CTLA-4 or anti-LAG-3), and Advaxis (HPV targeting vaccine alone or in combination with AstraZeneca’s anti-PD-L1 antibody). Additionally, we are also aware of cervical cancer clinical trials exploring other CPM targets including, but not restricted to, PD-L1 + IDO (Roche), VISTA (Janssen), OX40 +/- 4-1BB (Pfizer). However, given the stage, focus, expected efficacy and safety profile of our development programs versus those of our competitors, we believe that our approach provides a fast to market opportunity that will allow us to establish a favorable competitive position.

We have autologous vaccines programs in development including our Prophage vaccine in clinical development for GBM and our neo-antigen based AutoSynVax vaccine in preclinical development. We are aware of many companies pursuing personalized cancer vaccines and/in preclinical or immunotherapies clinical development, including, without limitation, the following: (1) Neon Therapeutics, is developing a personalized neoantigen vaccine; (2) Gritstone Oncology, is discoveringAdvaxis, BioNTech, Moderna and developing a novel tumor-specific neo-antigen (TSNA) based immunotherapies, with an initial focus on lung cancer; (3)Aduro BiotechMerck, Nouscom, Immatics and Advaxis Inc. are developing immunotherapy platforms (Listeria, cyclic dinucleotides, and B-select antibodies); (4) Inovio Pharmaceutical Inc. and Medimmune are collaborating on developing DNA based immunotherapies for cancer and infectious disease; (5) Oncolytics Biotech Inc. is developing oncolytic virus based cancer therapeutics in lung, colorectal and pancreatic cancers; and (6) Oncothyreon is developing synthetic vaccines for cancer therapeutics.Green Peptides.

Several companies have products that utilize similar technologies and/or patient-specific medicine techniques that compete with our HSP based vaccines. For treatment of recurrent glioma, Roche markets bevacizumab and Eisai and Arbor Pharmaceuticals market carmustine. Schering Corporation, a subsidiary of Merck, markets temozolmidetemozolomide for treatment of patients with ndGBM and refractory astrocytoma. Other companies are developing vaccines for the treatment of patients with newly diagnosed glioma,ndGBM, such as Green Cross Cell - formerly

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Innocell Corp (Immuncell-LC), ImmunoCellular Therapeutics (ICT-107), Northwest Biotherapeutics (DC-Vax), Immatics (IMA-950)Mimivax Inc. (SurVaxM), Annias Immunotherapeutics (CMV Vaccine) and Activartis Biotech (GBM-Vax). In addition, TVAX Biomedical, Stemline Therapeutics and Sumitomo Dainippon Pharma are developing immunotherapy candidates TVI-Brain-1, SL-701 and DSP-7888, respectively, for recurrent glioma. Other companies may begin development programs as well.

To the extent we develop our vaccines in other indications or in combination with other product candidates, such as available standard of care agents (Avastin^®), or with CPMs, they could face additional competition in those indications or in those combinations. In addition, and prior to regulatory approval, if ever, our vaccines and our other product candidates may compete for access to patients with other products in clinical development, with products approved for use in the indications we are studying, or with off-label use of products in the indications we are studying. We anticipate that we will face increased competition in the future as new companies enter markets we seek to address and scientific developments surrounding immunotherapy and other traditional cancer and infectious disease therapies continue to accelerate.

We are aware of compounds that claim to be comparable to QS-21 Stimulon that are being used in clinical trials. Several other vaccine adjuvants are in development and could compete with QS-21 Stimulon for inclusion in vaccines in development. These adjuvants include, but are not limited to, (1) oligonucleotides, under development by Pfizer, Idera, Colby, and Dynavax, (2) MF59, under development by Novartis, (3) IC31, under development by Intercell (now part of Valneva), and (4) MPL, under development by GSK. In the past, we have provided QS-21 Stimulon to other entities under materials transfer arrangements. In at least one instance, it is possible that this material was used unlawfully to develop synthetic formulations and/or derivatives of QS-21. In addition, companies such as Adjuvance Technologies, Inc., CSL Limited, and Novavax, Inc., as well as academic institutions and manufacturers of saponin extracts, are developing saponin adjuvants, including derivatives and synthetic formulations. These sources may be competitive to our ability to execute future partnering and licensing arrangements involving QS-21 Stimulon. The existence of products developed by these and other competitors, or other products of which we are not aware or which other companies may develop in the future, may adversely affect the marketability of products developed or sold using QS-21 Stimulon.

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We are also aware of a third party that manufactures pre-clinical material purporting to be comparable to QS-21 Stimulon. The claims being made by this third party may create marketplace confusion and have an adverse effect on the goodwill generated by us and our partners with respect to QS-21 Stimulon. Any diminution of this goodwill may have an adverse effect on our ability to commercialize future products, if any, incorporating this technology, either alone or with a third party.

We anticipate that we will face increased competition in the future as new companies enter markets we seek to address and scientific developments surrounding immunotherapy and other traditional cancer and infectious disease therapies continue to accelerate.

Employees

As of February 29, 2016,28, 2017, we had 230255 employees, of whom 7081 were PhDs and foursix were MDs. None of our employees are subject to a collective bargaining agreement. We believe that we have good relations with our employees.

Corporate History

Antigenics L.L.C. was formed as a Delaware limited liability company in 1994 and was converted to Antigenics Inc., a Delaware corporation, in February 2000 in conjunction with our initial public offering of common stock. On January 6, 2011, we changed our name from Antigenics Inc. to Agenus Inc.

Availability of Periodic SEC Reports

Our Internet website address is www.agenusbio.com. We make available free of charge through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission (the “SEC”). The contents of our website are not part of, or incorporated into, this document. In addition, we regularly use our website to post information regarding our business, product development programs and governance, and we encourage investors to use our website, particularly the information in the sections entitled “Financial” and “News,” as sources of information about us.

The public may read and copy any materials filed by Agenus with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

The contents of the websites referred to above are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only.

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Our future operating results could differ materially from the results described in this Annual Report on Form 10-K due to the risks and uncertainties described below. You should consider carefully the following information about risks below in evaluating our business. If any of the following risks actually occur, our business, financial conditions, results of operations and future growth prospects would likely be materially and adversely affected. In these circumstances, the market price of our common stock would likely decline.

We cannot assure investors that our assumptions and expectations will prove to be correct. Important factors could cause our actual results to differ materially from those indicated or implied by forward-looking statements. See “Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K. Factors that could cause or contribute to such differences include those factors discussed below.

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Risks Related to our Business

If we incur operating losses for longer than we expect, or we are not able to raise additional capital, we may be unable to continue our operations, or we may become insolvent.

Our net losses for the years ended December 31, 2016, 2015, and 2014, and 2013, were $127.0 million, $87.9 million, $42.5 million, and $30.1$42.5 million, respectively. We expect to incur additional losses over the next several years as we continue to research and develop our technologies and pursue partnering opportunities, regulatory strategies, commercialization, and related activities. Furthermore, our ability to generate cash from operations is dependent on the success of our licensees and collaboration partners, as well as the likelihood and timing of new strategic licensing and partnering relationships and/or successful development and commercialization of product candidates, including through our collaboration with Incyte,antibody programs and platforms, our HSP-based vaccines,vaccine programs, and vaccines containing QS-21 Stimulon^® adjuvant.our saponin-based vaccine adjuvants.

On December 31, 2015,2016, we had $171.7$76.4 million in cash and cash equivalents and short-term investments. We believe that, based on our current plans and activities, our working capital resources at December 31, 2015,2016, along with the net proceeds of approximately $80 million from Incyte Corporation (“Incyte”) in February 2017 in connection with amending our collaboration agreement and issuing additional shares pursuant to a share purchase agreement, will be sufficient to satisfy our liquidity requirements through the first half of 2017.2018. We expect to attempt to secure additional funds before our current funds are depleted although additional funding may not be available on favorable terms, or at all.

To date, we have financed our operations primarily through the sale of equity and debt securities. In order to finance future operations, going forward, we will be required to raise additional funds in the capital markets, through arrangements with collaboration partners or from other sources. Additional financing may not be available on favorable terms, or at all. If we are unable to raise additional funds when we need them or if we incur operating losses for longer than we expect, we may not be able to continue some or all of our operations, or we may become insolvent. We also may be forced to license or sell technologies to others under agreements that are on unfavorable terms or allocate to third parties substantial portions of the potential value of these technologies.

There are a number of factors that will influence our future capital requirements, including, without limitation, the following:

We have derived the condensed consolidated balance sheet data set forth below as of December 31, 20152016 and 2014,2015, and the condensed consolidated statement of operations data for each of the years in the three-year period ended December 31, 2015,2016, from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

You should read the selected condensed consolidated financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements, and the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

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Changes in cash, cash equivalents, and short-term investments, total current assets, total assets, total current liabilities, long-term debt and stockholders’ (deficit) equity  (deficit) in the periods presented below include the effects of the receipt of net proceeds from our debt offerings, equity offerings, the exercise of stock options, and employee stock purchases that totaled approximately $202.4$3.4 million, $220.4 million, $57.0 million, $36.6 million, $10.5 million, and $8.1$10.5 million in the years ended December 31, 2016, 2015, 2014, 2013, and 2012, and 2011, respectively.

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Overview

We are ana clinical-stage immuno-oncology (“I-O”) company focused on the discovery and development of revolutionary new treatmentstherapies that engage the body’s immune system to benefit patients suffering fromfight cancer. By combining multiple powerful platforms, we have established a highly integratedOur approach to target identificationcancer immunotherapy involves a diverse portfolio consisting of antibody-based therapeutics, adjuvants and validation,cancer vaccine platforms. We, in collaboration with our partners, have developed a number of immuno-modulatory antibodies against important nodes of immune regulation. These include antibodies targeting CTLA-4, GITR and for the discovery,OX40 that are in clinical development, and manufacturingour anti-PD-1 antibody anticipated to enter the clinic in the first half of monoclonal2017. Our discovery pipeline includes a number of proprietary checkpoint modulating (“CPM”) antibodies against innovative targets such as TIGIT and 4-1BB (also known as CD137). We believe that modulate targetstailored combination therapies are essential to combat some of interest. Our broad portfolio of novel checkpoint modulator and other immuno-modulatory monoclonalthe most resistant cancers. Accordingly, our immune education strategy focuses on pursuing antibodies vaccines and adjuvants, workas well as vaccine candidates in combination to provide the opportunity to create best-in-class therapeutic regimens. Our heat shock protein-based vaccine, Prophage™, has successfully completed Phase 2 studies in newly-diagnosed glioblastoma.conjunction with adjuvants.

We are developing a comprehensive immuno-oncologyI-O portfolio driven by the following platforms and programs, which we intend to utilize individually and in combination:

We also have our own GMP manufacturing facility with the capacity to support early phase clinical programs. We originally acquired the facility from XOMA Corporation in December 2015 and have since upgraded and expanded our capabilities.

We assess development, commercialization and partnering strategies for each of our product candidates periodically based on several factors, including pre-clinical and clinical trial results, competitive positioning and funding requirements and resources. We are currently collaborating with companies such as Incyte Corporation (“Incyte”), Merck Sharpe & Dohme and Recepta Biopharma SA.SA (“Recepta”). Through these alliances, as well as our own internal programs, we currently have over a dozen antibody programs, including our anti-CTLA-4 (partnered with Recepta for certain South America territories) and anti-GITR (partneredand anti-OX40 (both partnered with Incyte) antibody programs that each received FDA clearance to commencecommenced clinical trials in Januaryduring 2016. We anticipate commencingrecently amended our collaboration agreement with Incyte to, among other things, convert the GITR and OX40 programs from profit-share to royalty-bearing programs. We are now eligible to receive royalties on global net sales at a flat 15% rate for each of these trialsprograms. There are now no more profit-share programs under the collaboration, and we are eligible to receive up to a total of $510.0 million in future potential development, regulatory and commercial milestones across all programs in the first halfcollaboration. Pursuant to the amended agreement, we received accelerated milestone payments of 2016.$20.0 million from Incyte related to the clinical development of INCAGN1876 (anti-GITR agonist) and INCAGN1949 (anti-OX40 agonist). Concurrent with the execution of the amendment, we and Incyte also entered into a separate stock purchase agreement whereby Incyte purchased an additional 10 million shares of our common stock at $6.00 per share, resulting in proceeds of $80.0 million to us.

WeIn addition to our antibody platforms and CPM programs, we are also advancing a series of HSP peptide-based vaccinesvaccine programs to treat cancer. In July 2014,January 2017, we reported positive results fromannounced a clinical trial collaboration with the NCI, which is a double-blind, randomized controlled Phase 2 clinical trial that will evaluate the effect of our autologous vaccine candidate, Prophage, in combination with our Prophage vaccine, which showed thatpembrolizumab (Keytruda®, Merck & Co., Inc.) in patients with newly-diagnosed GBM, or ndGBM, who were treated with a combination of ourndGBM. Under this collaboration, we are suppling Prophage, vaccineMerck is providing pembrolizumab and standard of care showed substantial improvement both in progression-free survivalthe NCI and median overall survival, each as compared to historical control data.Brain Tumor Trials Collaborative (“BTTC”) member sites are recruiting patients and conducting the trial. We plan to advance our Prophage vaccine into a randomized, well-controlled clinical trial for ndGBM in the second half of 2016. Weare also reported positive results in June 2014 from a Phase 2 clinical trial withadvancing our synthetic HerpV vaccine candidate, for genital herpes. Although we determined not to move forward with this product candidate in herpes, based on our findings we launched our AutoSynVax, synthetic cancer vaccine program in 2015,towards the clinic and we plan to initiate our first clinical trial for this program in the secondfirst half of 2016.2017.

Our QS-21 Stimulon adjuvant is partnered with GlaxoSmithKline or GSK,(“GSK”) and is a key component in multiple GSK vaccine programs that target prophylactic or therapeutic impact in a variety of infectious diseases and cancer. These programs are in various stages, with the most advanced being GSK’s shingles and malaria programs, which GSK announced positive Phase 3 results for in December 2014 and October 2013, respectively. In September 2015, we monetized a portion of the future royalties we are contractually entitled to receive from GSK from sales of its shingles and malaria vaccines through a Note Purchase Agreement and received net proceeds of approximately $78.2 million. In 2016, GSK filed for approval of its shingles vaccine candidate in the United States, European Union and Canada, and is expected to file for approval in Japan in 2017.  Assuming regulatory approval, the first products containing QS-21 Stimulon are anticipated to be launched by GSK in 2018.  We do not incur clinical development costs for products partnered with GSK.  

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Our business activities include product research and development, intellectual property prosecution, manufacturing, regulatory and clinical affairs, corporate finance and development activities, and support of our collaborations. Our product candidates require clinical trials and approvals from regulatory agencies, as well as acceptance in the marketplace. Part of our strategy is to develop and commercialize some of our product candidates by continuing our existing arrangements with academic and corporate collaborators and licensees and by entering into new collaborations.

Our common stock is currently listed on The Nasdaq Capital Market under the symbol “AGEN.”

Our research and development expenses for the years ended December 31, 2016, 2015, and 2014, and 2013, were $95.0 million, $70.4 million, $22.3 million, and $13.0$22.3 million, respectively. We have incurred significant losses since our inception. As of December 31, 2015,2016, we had an accumulated deficit of $779.2$905.3 million.

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To date, we have financed our operations primarily through the sale of equity and debt securities. We believe that, based on our current plans and activities, our working capital resources at December 31, 20152016, along with the net proceeds of approximately $80 million from Incyte in February 2017 in connection with amending our collaboration agreement, and issuing additional shares pursuant to a share purchase agreement, will be sufficient to satisfy our liquidity requirements through the first half of 2017.2018. We may attempt to raise additional funds by: (1) pursuing collaboration, out-licensing and/or partnering opportunities for our portfolio programs and product candidates with one or more third parties, (2) renegotiating third party agreements, (3) selling assets, (4) securing additional debt financing and/or (5) selling equity securities. Satisfying long-term liquidity needs may require the successful commercialization and/or substantial out-licensing or partnering arrangements for our antibody discovery platforms, CPM antibody programs, HSP-based vaccines, and vaccines containing QS-21 Stimulon under development by our licensees. Our long-term success will also be dependent on the successful identification, development and commercialization of potential other product candidates, each of which will require additional capital with no certainty of timing or probability of success. If we incur operating losses for longer than we expect and/or we are unable to raise additional capital, we may become insolvent and be unable to continue our operations.

Historical Results of Operations

Year Ended December 31, 20152016 Compared to the Year Ended December 31, 20142015

Revenue: We generated revenue of $24.8$22.6 million and $7.0$24.8 million during the years ended December 31, 20152016 and 2014,2015, respectively. Revenue primarily includes fees earned under our license agreements, including approximately $14.4$16.2 million and $14.5 million, respectively for the yearyears ended December 31, 2016, and 2015, respectively, related to reimbursement of development costs under our Collaboration Agreement with Incyte. In 2014, revenues included license fees earned and grant revenue.  The increasedecrease in revenue for the year ended December 31, 20152016 is primarily attributable to thedecreased amortization of deferred revenue, andoffset by increased reimbursement of development costs under our Collaboration Agreement with Incyte. During the years ended December 31, 20152016 and 2014,2015, we recorded revenue of $9.3$3.5 million and $3.5$9.2 million, respectively, from the amortization of deferred revenue.

Research and Development: Research and development expenses include the costs associated with our internal research and development activities, including compensation and benefits, occupancy costs, clinical manufacturing costs, costs of consultants, and administrative costs. Research and development expense increased 35% to $95.0 million for the year ended December 31, 2016 from $70.4 million for the year ended December 31, 2015. Increased expenses in 2016 primarily includes the $18.3 million increase in third-party services and other expenses relating largely to the advancement of our CPM antibody programs, a $17.0 million increase in payroll related costs and share-based compensation due to increased headcount, and $3.1 million increase in depreciation expense, offset by a $13.2 million decrease in in-process research and development related to a 2015 asset acquisition.

General and Administrative: General and administrative expenses consist primarily of personnel costs, facility expenses, and professional fees. General and administrative expenses increased 17% to $33.1 million for the year ended December 31, 2016 from $28.4 million for the year ended December 31, 2015. Increased general and administrative expenses in 2016 primarily relate to a $2.0 million increase in payroll related expenses due to increased headcount and a $1.9 million increase in share-based compensation.

Contingent purchase price consideration fair value adjustment: Contingent purchase price consideration fair value adjustment represents the change in the fair value of our contingent purchase price consideration during the year ended December 31, 2016, which resulted in expense of $2.0 million, primarily related to the changes in our market capitalization. The fair value of our contingent purchase price consideration is based on estimates from a Monte Carlo simulation of our market capitalization.

Non-operating (expense)income:  Non-operating expense increased by $3.8 million for the year ended December 31, 2016, which primarily represents our increased foreign currency exchange loss of $1.7 million, offset by the absence of the prior year change in the fair value of our contingent royalty obligation of $6.9 million, loss on extinguishment of our senior subordinated promissory notes issued in April 2013 (the “2013 Notes”), and corresponding offset by the $1.5 million gain on the purchase related to the antibody manufacturing facility acquisition from XOMA Corporation in December 2015.

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Interest Expense, net: Interest expense, net increased to $17.3 million for the year ended December 31, 2016 from $6.6 million for the year ended December 31, 2015 due to the outstanding 2015 Subordinated Notes, issued in February 2015 and the Notes under our NPA, executed in September 2015.

Income tax benefit: For the year ended December 31, 2015, an income tax benefit arose from deferred tax liabilities recognized in connection with our PhosImmune and XOMA acquisitions during the year and relates to the resulting release of our existing valuation allowance on our deferred tax assets. There was no similar benefit for the year ended December 31, 2016.

Year Ended December 31, 2015 Compared to the Year Ended December 31, 2014

Revenue: We generated revenue of $24.8 million and $7.0 million during the years ended December 31, 2015 and 2014, respectively. Revenue primarily includes fees earned under our license agreements, including approximately $14.4 million for the year ended December 31, 2015, related to reimbursement of development costs under our Collaboration Agreement with Incyte. In 2014, revenues included license fees earned and grant revenue. The increase in revenue for the year ended December 31, 2015 is primarily attributable to the amortization of deferred revenue and reimbursement of development costs under our Collaboration Agreement with Incyte. During the years ended December 31, 2015 and 2014, we recorded revenue of $9.3 million and $3.5million, respectively, from the amortization of deferred revenue.

Research and development: Research and development expense increased 215% to $70.4 million for the year ended December 31, 2015 from $22.3 million for the year ended December 31, 2014. Increased expenses in 2015 primarily includes the $19.1 million increase in third-party services and other expenses relating largely to the advancement of our CPM antibody programs, our $13.2 million asset acquisition which was expensed as in-process research and development, a $5.6 million increase in payroll related costs due to increased headcount, and $3.6 million in one-time license technology fees.

General and Administrativeadministrative: General and administrative expenses consist primarily of personnel costs, facility expenses, and professional fees. General and administrative expenses increased 34% to $28.4 million for the year ended December 31, 2015 from $21.2 million for the year ended December 31, 2014. Increased general and administrative expenses in 2015 primarily relate to a $4.1 million increase in professional fees related to our corporate activities, $1.3 million increase in payroll related expenses due to increased headcount and $1.4 million increase in share-based compensation.

Contingent purchase price consideration fair value adjustment: Contingent purchase price consideration fair value adjustment represents the changeincrease in the fair value of our contingent purchase price consideration during the year ended December 31, 2015, which resulted in expense of $6.7 million related to the changes in our market capitalization, including the achievement of the first milestone under our 4-ABAgenus Switzerland Share Exchange Agreement. The fair value of our contingent purchase price consideration is based on estimates from a Monte Carlo simulation of our market capitalization.

Non-operating (expense)income: Non-operating expenseincome for the year ended December 31, 2015 represents primarily the change in the fair value of our contingent royalty obligation of $6.9 million, our foreign currency exchange loss and our loss on extinguishment of our 2013 Notes offset by the $1.5 million gain on the purchase related to the antibody manufacturing facility acquisition from XOMA Corporation in December 2015 described in Note 4 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Non-operating incomeexpense for the year ended December 31, 2014, represents primarily the decrease in the fair value of our contingent royalty obligation due to the termination of GSK’s Phase 3 MAGE-A3 trial in non-small cell lung cancer, which occurred during the first quarter of 2014.2014.

Interest Expense,expense, net: Interest expense net increased to $6.6 million for the year ended December 31, 2015 from $1.3 million for the year ended December 31, 2014 due to the issuance of our 2015 Subordinated Notes in February 2015 and the issuance of the Notes under our NPA which was executed in September 2015.

Income tax benefit: ForFor the year ended December 31, 2015 an income tax benefit arose from deferred tax liabilities recognized in connection with our PhosImmune and XOMA acquisitions during the year and relates to the resulting release of our existing valuation allowance on our deferred tax assets.

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Year Ended December 31, 2014 Compared to the Year Ended December 31, 2013

Revenue: We generated revenue of $7.0 million and $3.0 million during the years ended December 31, 2014 and 2013, respectively. Revenue primarily includes license fees earned, in 2014, grant revenue, and in 2013, service revenue. The increase in revenue for the year ended December 31, 2014 is primarily attributable to (i) the amortization of deferred revenue associated with the acquisition of 4-AB and (ii) a milestone payment received. During the years ended December 31, 2014 and 2013, we recorded revenue of $3.5 million and $1.6 million, respectively, from the amortization of deferred revenue.

Research and Development: Research and development expense increased 72% to $22.3 million for the year ended December 31, 2014 from $13.0 million for the year ended December 31, 2013. Increased expenses in 2014 primarily relate to the $2.2 million increase in third-party services and other expenses relating largely to the advancement of our CPM antibody programs and a $4.0 million increase in payroll related costs due to increased headcount, in each case as a result of the acquisition of 4-AB.

General and Administrative: General and administrative expenses increased 47% to $21.2 million for the year ended December 31, 2014 from $14.5 million for the year ended December 31, 2013. Increased expenses in 2014 primarily related to $2.9 million increase in professional fees related to our corporate activities, and $1.9 million increase in payroll related expenses due to increased headcount as a result of the acquisition of 4-AB.

Contingent purchase price consideration fair value adjustment: Contingent purchase price consideration fair value adjustment represents the increase in the fair value of our contingent purchase price consideration issued in connection with our acquisition of 4-AB during the year ended December 31, 2014. The fair value of our contingent purchase price consideration is based on estimates from a Monte Carlo simulation of our market capitalization and increased primarily due to an increase in our market capitalization from the initial valuation during February 2014 to December 31, 2014.

Non-operating (expense) income: Non-operating income for the year ended December 31, 2014 represents primarily the decrease in the fair value of our contingent royalty obligation due to the termination of GSK’s Phase 3 MAGE-A3 trial in non-small cell lung cancer, which occurred during the first quarter of 2014. For the year ended December 31, 2013, the non-operating expense resulted primarily from the loss on extinguishment of our convertible notes of approximately $3.3 million.

Interest Expense, net: Interest expense decreased to $1.3 million for the year ended December 31, 2014 from $2.4 million for the year ended December 31, 2013 due to the extinguishment of our 2006 Notes during 2013.

Dividends on Series A and A-1 convertible preferred stock: Dividends decreased to approximately $204,000 for the year ended December 31, 2014 from approximately $3.2 million for the year ended December 31, 2013 due to the deemed dividend of 666,666 shares of our common stock issued during the exchange of the Series A for Series A-1 convertible preferred stock during the quarter ended March 31, 2013 and the related reduced dividend obligation subsequent to that exchange.assets

Inflation

We believe that inflation has not had a material adverse effect on our business, results of operations, or financial condition to date.

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Research and Development Programs

For the year ended December 31, 2015,2016, our research and development programs consisted largely of our CPM antibody programs as indicated in the following table (in thousands).