Shares of Agenus (AGEN) were up by as much as ten percent to open the trading week on Monday, with volume surpassing the daily norm by mid-day. The spark to this latest run flared last week when an announcement of an expansion of a partnership with GlaxoSmithKline (GSK) ignited buyout talks in regards to the two companies. In the expansion of the partnership deal, it was included that GSK would receive a 'first right of refusal' in the event of an Agenus buyout, or if certain of Agenus properties were to be on the bidding block, namely QS-21 and/or Prophage.
The two companies are already married through a partnership for QS-21 Stimulon, a vaccine adjuvant being used in many of GSK's late stage vaccine candidates. Along with the newly-compiled agreement, "GSK will pay Agenus a non-refundable payment of $9 million, of which $2.5 million is creditable against future manufacturing technology transfer royalty payments. The agreement also includes royalty payments for an undisclosed indication upon commercialization of a vaccine product."
Agenus also has the cancer immunotherapy treatment Prophage under development in Phase II trials to treat glioma, another possible target for GSK. Glaxo may be awaiting the results of the ongoing trial before determining the full value of Agenus, although it's also possible that QS-21 is the company's sole target.
Agenus has been trading under the radar for quite some time before last week's news hit, but the growing association with a big player like Glaxo could continue to bring in the added investor interest that would lead to a sustained price run.
Keep in mind, however, Prophage is still a long way from market and QS-21 royalties alone will not be enough to bring this company to superstardom, so any protracted rise in price may have to come as the result of the buyout rumors - until results from the ongoing Phase II start rolling in.
With volume and price still on the move, AGEN may be for real again.
Disclosure: Long AGEN.