Agenus completes $115 million royalty transaction with Oberland Capital

By Lisa Kerner

Charlotte, N.C., Sept. 9 – Agenus Inc. announced a $115 million non-dilutive royalty transaction pursuant to a note purchase agreement with an investor group led by Oberland Capital Management, LLC.

Proceeds will be use to advance the company’s immuno-oncology programs, according to a news release.

In return for $100 million at closing to Agenus, Oberland Capital will have the right to receive 100% of Agenus’ rights to the worldwide royalties on sales of GlaxoSmithKline’s shingles and malaria prophylactic vaccine products that contain QS-21 adjuvant until all principal and interest on the loan has been paid.

Agenus, at its option, will receive an additional $15 million in cash if the Food and Drug Administration approves the shingles vaccine on or before June 30, 2018.

Also, Agenus has the right to buy back the loan at any time under pre-specified terms.

Notes issued under the agreement will accrue interest at a rate of 13.5% per annum, compounded quarterly. Principal and interest payments will only be made from the royalties paid by GSK on the vaccines.

The loan is generally limited recourse and secured only by the future royalties on vaccines.

If and when all principal and interest on the notes have been repaid, 100% of the remaining GSK royalty payments will revert back to Agenus, the release stated.

Agenus repurchased from Ingalls & Snyder Value Partners LP and Arthur Koenig (Ingalls) their rights to receive 20% of all of the GSK royalties for $20 million in cash, plus 300,000 shares of Agenus common stock immediately prior to executing the note purchase agreement with Oberland.

The initial $100 million cash payment is expected to yield net cash proceeds of roughly $78 million to Agenus, inclusive of the $20 million payment to Ingalls.

Agenus is a Lexington, Mass., biotechnology company working to develop treatments for cancers and infectious diseases.

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