Agenus
Annual Report 2016

Plain-text annual report

Morningstar® Document Research℠ FORM 10-KAGENUS INC - AGENFiled: March 16, 2017 (period: December 31, 2016)Annual report with a comprehensive overview of the companyThe information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results. UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 Form 10-K ☑ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2016or☐☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from toCommission File Number: 000-29089 Agenus Inc.(exact name of registrant as specified in its charter) Delaware 06-1562417(State or other jurisdiction of (I.R.S. Employerincorporation or organization) Identification No.)3 Forbes Road, Lexington, Massachusetts 02421(Address of principal executive offices, including zip code)Registrant’s telephone number, including area code:(781) 674-4400Securities registered pursuant to Section 12(b) of the Act: Common Stock, $.01 Par Value The NASDAQ Capital Market(Title of each class) (Name of each exchange on which registered)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 ☐ No ☑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 ☐ No ☑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 thepreceding 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 90days. Yes ☑ No ☐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 submittedand 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 submitand post such files). ☑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 becontained, 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 thisForm 10-K. ☐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. Large accelerated filer☐ Accelerated filer☑Non-accelerated filer☐(Do not check if a smaller reporting company)Smaller reporting company☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2016 was: $287.3 million. There were 98,328,556 shares of the registrant’sCommon Stock outstanding as of February 28, 2017.DOCUMENTS INCORPORATED BY REFERENCENone. Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.TABLE OF CONTENTS PagePART I ITEM 1.BUSINESS 3 Our Business 3 Intellectual Property Portfolio 9 Regulatory Compliance 11 Competition 12 Employees 13 Corporate History 13 Availability of Periodic SEC Reports 13ITEM 1A.RISK FACTORS 14ITEM 1B.UNRESOLVED STAFF COMMENTS 36ITEM 2.PROPERTIES 36ITEM 3.LEGAL PROCEEDINGS 37ITEM 4.MINE SAFETY DISCLOSURES 37 PART II ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES 38ITEM 6.SELECTED FINANCIAL DATA 39ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 41ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 52ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 53ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 87ITEM 9A.CONTROLS AND PROCEDURES 87ITEM 9B.OTHER INFORMATION 89 PART III ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 90ITEM 11.EXECUTIVE COMPENSATION 93ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS 119ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 121ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES 122 PART IV ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 124ITEM 16FORM 10-K SUMMARY 124 Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Note Regarding Forward-Looking StatementsThis 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-lookingstatements include discussion of future operating or financial performance. You also can identify forward-looking statements by the fact that they do notrelate strictly to historical or current facts. Forward-looking statements involve risks and uncertainties that could delay, divert or change any of them, andcould cause actual outcomes to differ materially. These statements relate to, among other things, our business strategy, our research and development, ourproduct development efforts, our ability to commercialize our product candidates, the activities of our licensees, our prospects for initiating partnerships orcollaborations, the timing of the introduction of products, the effect of new accounting pronouncements, our future operating results and our potentialprofitability, 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-lookingstatements 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. Weundertake 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 causeactual results to differ materially from forward-looking statements contained in this Annual Report on Form 10-K. We encourage you to read thosedescriptions 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, ProphageTM, Retrocyte DisplayTM, SECANT® and Stimulon® are trademarksof Agenus Inc. and its subsidiaries. All rights reserved. 2Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.PART I Item 1.BusinessOur BusinessWe are a clinical-stage immuno-oncology (“I-O”) company focused on the discovery and development of therapies that engage the body’s immunesystem to fight cancer. Our approach to cancer immunotherapy involves a diverse portfolio consisting of antibody-based therapeutics, adjuvants and cancervaccine platforms. We, in collaboration with our partners, have developed a number of immuno-modulatory antibodies against important nodes of immuneregulation. These include antibodies targeting CTLA-4, GITR and OX40 that are in clinical development, and our anti-PD-1 antibody anticipated to enter theclinic in the first half of 2017. Our discovery pipeline includes a number of proprietary checkpoint modulating (“CPM”) antibodies against innovativetargets such as TIGIT and 4-1BB (also known as CD137). We believe that tailored combination therapies are essential to combat some of the most resistantcancers. Accordingly, our immune education strategy focuses on pursuing antibodies as well as vaccine candidates in conjunction with adjuvants. Webelieve we are uniquely positioned to treat cancers because we have a portfolio of product candidates and technologies that spans across these multipletherapeutic categories. We are a vertically integrated biotechnology company equipped with a suite of technology platforms and a good manufacturing practice (“GMP”)manufacturing facility with the capacity to support early phase clinical programs. In addition to our broad and synergistic pipeline, we have established aworld-class I-O research and clinical development team, including experts that have contributed to the development, in-licensing and registrational trajectoryof staple antibody therapeutics such as Yervoy®, Avelumab and Humira®, among others. Our common stock is currently listed on The Nasdaq Capital Market under the symbol “AGEN.” Our VisionWe envision combination therapies as the cornerstone of future oncology treatment regimens. In addition, we believe that a balanced portfolio ofproduct candidates should focus on both validated targets as well as more novel, innovative targets. CTLA-4 and PD-1 antagonists have recently beenrecognized 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 the next generation of I-Ocombinations. Thus, we plan to pursue our proprietary PD-1 and CTLA-4 antibody programs aggressively through the clinic, and follow on with futurecombination therapies that integrate our cancer vaccine platforms as well as our antibodies against novel targets. One of our core visions is to substantiallyexpand the small patient populations that benefit from existing immune-based therapies. Our StrategyThe breadth of our portfolio gives us the ability to combine our antibodies, vaccines, and adjuvants to explore and optimize cancer treatments. Ourstrategy is to develop these agents either alone or in combinations to yield best-in-class treatments. In addition, our clinical development strategy is tailoredto achieve our goal of becoming a commercial organization in the next four years. We are pursuing a tiered risk profile and targeting compressed timelines forregulatory filing. We plan to adopt a rapid and de-risked path to registration by co-targeting PD-1 and CTLA-4 in indications where blockade of thesecheckpoints has been found efficacious. In addition, we plan to pursue novel breakthrough indications to further expedite market entry. Second line cervicalcancer is one such indication where we believe there is a niche opportunity in certain markets. In addition, our programs are anticipated to pose moderateregulatory 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 backbone;2) advancement of our antibody programs against innovative targets, such as 4-1BB and TIGIT, to the clinic alone or in combination with other products inour pipeline; and 3) continued advancement of vaccine candidate opportunities. Part of our strategy is to develop and commercialize some of our productcandidates by continuing our existing arrangements with academic and corporate collaborators and licensees and by entering into new collaborations. Our AssetsOur I-O assets include antibody-based therapeutics, adjuvants and cancer vaccine platforms. We believe that we are the third company, along withBristol-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 foundationalCPMs, we have a number of antibody programs against more innovative targets involved in immune modulation. These include 4-1BB and TIGIT as well as anumber of undisclosed targets with a potential to be best-in-class or first-in-class antibody-based therapeutics. We also have three proprietary cancer vaccineplatforms: Prophage™ vaccine, AutoSynVax™ vaccine (“ASV”) and PhosphoSynVax™ vaccine (“PSV”). Additionally, our autologous3Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(Prophage) and synthetic (ASV™ and PSV™) vaccine candidates are protein complexes that consist of heat shock proteins (“HSPs”) and peptides that areeither tumor-derived or tailor-made based on the unique genomic fingerprint of a patient’s tumor, respectively. Highlighting our combination treatmentapproach, a Phase 2 clinical trial sponsored by the National Cancer Institute (“NCI”) is currently in progress to evaluate the efficacy of Prophage incombination with Merck’s PD-1 antagonist, Keytruda®, in patients with newly diagnosed glioblastoma (“ndGBM”). Our QS-21 Stimulon adjuvant ispartnered with GlaxoSmithKline plc. (“GSK”) and is a key component in multiple GSK vaccine programs that have a prophylactic or therapeutic impact in avariety of infectious diseases and cancer.Our Antibody Discovery Platforms and CPM ProgramsCheckpoint antibodies regulate immune response against pathogens that invade the body and are achieving positive outcomes in a number of cancersthat were untreatable only a few years ago. Two classes of checkpoint targets include:1.inhibitory checkpoints that help suppress an immune response in order to prevent excessive immune reaction resulting in undesired inflammationand/or auto-immunity, and2.stimulatory checkpoints that can enhance or amplify an antigen-specific immune response.We possess a suite of antibody discovery platforms that have enabled us to improve the speed, cost and quality of our product development efforts. Inaddition to the use of our antibody discovery platforms that are designed to drive the discovery of future CPM antibody candidates, we are planning toemploy a variety of techniques to identify and optimize our antibody candidates. For example, while we have been primarily focused on monoclonalantibodies over the past two years, we are beginning to explore multispecific antibody technologies, collaborations, and product candidate opportunities. In April 2016, we presented preclinical data at the American Association for Cancer Research (“AACR”) conference for our anti-CTLA-4 programs,AGEN1884 and AGEN2041 (both partnered with Recepta Biopharma SA (“Recepta”) for certain South American territories). The presentations coveredpreclinical pharmacology for each antibody, including detailed studies that demonstrate AGEN1884 and AGEN2041 bind to CTLA-4 expressed on T cellsand potently block engagement of CD80 and CD86, leading to enhanced T cell responsiveness. We also reported data that AGEN1884 or AGEN2041augmented vaccine response in primates. This finding demonstrates that both antibodies are functional and we believe exemplifies their utility incombination with therapeutic cancer vaccines. In 2017 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 other antibodies targeting the PD-1/PD-L1 axis to promote superior Tcell immune responses compared to either monotherapy. Furthermore, in mice a surrogate CTLA-4 targeted antibody augments vaccine-induced immuneresponses when combined with our ASV vaccine candidate. In April 2016, we also announced that the first patient had been dosed in our Phase 1 clinical trialof AGEN1884. The open-label, multicenter trial in patients with advanced or refractory cancer is designed to evaluate the safety of AGEN1884 and determinethe estimated maximum tolerated dose. In 2017, we plan to initiate combination trials with our clinical stage CTLA-4 and PD-1 antagonists and define theoptimal dose of the combination 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 oftargeting CTLA-4 as the backbone of these combination strategies. Regimens involving lower and less frequent dosing of CTLA-4 antibody in combinationwith PD-1 inhibitors have been shown to yield more pronounced clinical efficacy than either agent alone. Importantly, this was achieved without the addedtoxicity. Many experts believe that the combination of CTLA-4 antibodies with PD-1 blockade using a tolerable dosing regimen is a foundational I-Oregimen. We expect our anti-PD-1 antibody candidate, AGEN2034, to enter the clinic in the first half of 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 linecervical cancer. Chemoradiation therapy is the current standard of care for earlier lines of treatment. In distant metastatic patients, platinum basedchemotherapy, with or without bevacizumab, is the current standard of care. However, there are no established therapies for second line cervical cancer andthe 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 certaintypes of human papilloma virus (“HPV”). Anti PD-1/PD-L1 have shown to be active in virally induced disease and, specifically, HPV induced squamous cellcancer of the head and neck. In these tumors, anti PD-1 blockade might induce objective responses as well as prolongation of survival.In addition to pursuing validated targets, our discovery pipeline also includes a number of antibody programs against innovative immunomodulatorytargets such as TIGIT and 4-1BB (also known as CD137). 4-1BB is a co-stimulatory molecule involved in mediating recruitment of immune infiltrates intothe tumor microenvironment. We have selected a lead agonist that targets this molecule, which exhibits compelling pharmacologic properties and couldconfer clinical advantages and poise this molecule to be a best-in-class therapeutic. TIGIT is a co-inhibitory checkpoint expressed on innate and adaptiveimmune cell populations. Preclinical models indicate that antibody-mediated TIGIT blockade not only serves to stimulate lymphocyte activation andcytotoxic 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 isadvancing through preclinical development.4Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Partnered CPM ProgramsIn 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 inNovember 2015, we expanded the alliance by adding three novel undisclosed CPM targets. Pursuant to the terms of the original agreement, Incyte made non-creditable, non-refundable upfront payments to us totaling $25.0 million. Targets under the collaboration were designated as either profit-share programs,where the parties shared all costs and profits equally, or royalty-bearing programs, where Incyte funded all costs, and we were eligible to receive milestonesand royalties. Under the original collaboration agreement, programs targeting GITR, OX40 and two of the undisclosed targets were designated as profit-shareprograms, while the other targets were royalty-bearing programs. For each profit-share product, we were eligible to receive up to $20.0 million in futurecontingent development milestones. For each royalty-bearing product, we were 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%. Concurrent with theexecution of the original collaboration agreement, we and Incyte also entered into a stock purchase agreement pursuant to which Incyte purchasedapproximately 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 toroyalty-bearing programs with royalties on global net sales at a flat 15% rate for each. In addition, the profit-share programs relating to two undisclosedtargets were removed from the collaboration, with one reverting to Incyte and one to Agenus (the latter being our TIGIT antibody program), each withroyalties on global net sales at a flat 15% rate. The remaining three royalty-bearing programs in the collaboration targeting TIM-3, LAG-3 and oneundisclosed target remain unchanged, and there are no more profit-share programs under the collaboration. Pursuant to the amended agreement, we receivedaccelerated 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 purchaseagreement 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-OX40agonist) 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”) stimulatoryconditions, leading to enhanced agonistic properties and increased production of TNFα and IFNγ by immune effector cells. At AACR 2017, we are presentingadditional preclinical data for both INCAGN1949 (anti-OX40 agonist) and INCAGN1876 (anti-GITR agonist) which further characterize these antibodycandidates. 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 portionof the trial is evaluating the safety and tolerability of INCAGN1876 in patients with advanced or metastatic solid tumors and will determine thepharmacologically active and/or maximum tolerated dose of INCAGN1876. Part 2 of the trial is planned to further evaluate the recommended dose ofINCAGN1876 in selected tumor types, including advanced or metastatic endometrial adenocarcinoma, melanoma, non-small cell lung cancer and renal cellcarcinoma. In addition, in November 2016 we announced the commencement of a Phase 1/2 clinical trial of INCAGN1949. The open-label, dose-escalationportion of the trial is evaluating the safety and tolerability of INCAGN1949 in patients with advanced or metastatic solid tumors and will determine itspharmacologically active and/or maximum tolerated dose. Part 2 of the trial is planned to evaluate the recommended dose of INCAGN1949 in multiple tumortypes.In addition, in April 2014, we entered into a collaboration and license agreement with Merck to discover and optimize fully-human antibodies againsttwo undisclosed CPM targets for which Merck could elect whether or not to proceed into development. Merck selected a lead product candidate against oneof the undisclosed Merck targets to advance into preclinical studies, leading to a $2.0 million milestone payment that we received in May 2016. Under theterms of the agreement, Merck is responsible for all future product development expenses for the selected antibody candidate. We are eligible to receive up toan additional $99.0 million in milestone payments, in 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 engineeringcapabilities of UCB and Agenus in the area of novel bispecific antibody discovery. We also continue to collaborate with Recepta on the development ofantibodies targeting CTLA-4 and PD-1, and we expect to continue exploring additional future collaborations.Vaccine PlatformsOur current vaccine platforms for the treatment of cancer, and potentially other indications, include our HSP based Prophage vaccine candidates, andour synthetic vaccine candidates, ASV and PSV.5Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.HSPs are a group of proteins present at high levels in most mammalian cells. Their expression is increased when cells are exposed to elevatedtemperatures or other stresses. A potential role for HSPs in regulating immune responses was revealed when it was first discovered that HSP complexespurified from cancer cells produced immunity to cancer, whereas HSP complexes purified from normal tissue did not. This discovery led to the understandingthat HSPs bind to and carry a broad sampling of the protein environment within cells, including mutant proteins that might arise from genetic mutationswithin cancer cells. It was further shown that immunization with HSP complexes purified from tumors generate both CD4 and CD8 positive T-cell immuneresponses. These activated T-cells target the cancer cells of the tumor, from which the HSP complexes were derived, for destruction. Thus HSP complexesisolated from cancer cells are particularly effective in mediating successive immunization. Since HSPs are expressed in all tumor cells, the approach ofimmunizing with the HSP complexes isolated from a particular tumor is broadly applicable to a variety of cancer types. We believe that we pioneered the useof gp96, an HSP, purified from a patient’s own tumor tissue, as a way to make vaccines tailored to eliciting immune recognition and potential immune controlof an 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-specificvaccination approach is optimal to generate a more robust and targeted immune response against the disease.Prophage Vaccine CandidatesOur Prophage cancer vaccine candidate, HSPPC-96, is an autologous cancer vaccine therapy derived from cancer tissues that are surgically removedfrom an individual patient. As a result, a Prophage vaccine contains a broad sampling of potentially antigenic mutant proteins from each patient’s own tumor.Prophage vaccines are designed to program the body’s immune system to target only the specific cells that express those mutant antigens, thereby reducingthe risk that the body’s immune response against the tumor after vaccination will also affect healthy tissue and cause debilitating side effects often associatedwith chemotherapy and radiation therapy.Enhancing immune response using personalized vaccines, particularly in combination with CPMs, could be beneficial in cancers where a low numberof mutant proteins leads to weakened immunogenicity. Glioblastoma (“GBM”) represents one such example and is the most common primary malignantbrain tumor, accounting for the majority of diagnoses of malignant cancers of the brain. GBM is a cancer affecting the central nervous system arising fromglial 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 seriousimmune-mediated side effects have been observed. The results of these trials have been published and/or presented at scientific conferences. These resultsindicate observable clinical and/or immunological activity across many types of cancer. Taken together, these trials show promising evidence of clinicalbenefit from Prophage vaccines and also establish that such vaccines can be effectively manufactured under current good manufacturing practices (“cGMP”),conditions and internationally distributed.In January 2017, we announced a clinical trial collaboration with the NCI. The double-blind, randomized controlled Phase 2 trial will evaluate theeffect of Prophage in combination with pembrolizumab (Keytruda®) in patients with ndGBM. The trial is being conducted by the Brain Tumor TrialsCollaborative (“BTTC”), a consortium of top academic centers led by Dr. Mark Gilbert, Chief of the Neuro-Oncology Branch at the NCI Center for CancerResearch. The trial consists of two-arms with one arm receiving pembrolizumab as a monotherapy and a second arm receiving both Prophage andpembrolizumab in combination. Forty-five patients are being randomly assigned to each arm. Under this collaboration, we are suppling Prophage, Merck isproviding pembrolizumab (Keytruda®) and NCI and BTTC member sites are recruiting patients and conducting the trial.At the American Society of Clinical Oncology (“ASCO”) conference in 2015, we announced final results from a single-arm, multicenter, open-labelPhase 2 clinical trial in 46 patients with ndGBM treated with our Prophage vaccine in combination with standard of care: surgical resection, radiation andtemozolomide. These results showed that patients treated with Prophage vaccine had a median progression free survival (“PFS”) of 18 months, with 33% ofpatients progression free at 24 months and indicate improvement compared to historical data for patients treated with the standard of care (PFS of six to ninemonths). Median overall survival (“OS”), the primary endpoint of the trial, was 23.8 months and remains durable in patients treated with Prophage. Thesedata were published on February 13, 2017, in a manuscript in Clinical Cancer Research, a journal of the American Association for Cancer Research. 6Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.In addition to studies with ndGBM patients, we also previously reported data on recurrent GBM patients treated with Prophage. In December 2013, wepublished 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 compared favorably to historical controldata with expected median survival for recurrent GBM patients of three to nine months. The data were published in a manuscript in Neuro-Oncology, theofficial journal of the Society of Neuro-Oncology. In addition, the Alliance for Clinical Trials in Oncology, a cooperative group of the NCI, was conducting arandomized Phase 2 clinical trial of the Prophage vaccine in combination with bevacizumab in 222 patients with surgically resectable, recurrent GBM. Thisstudy was recently closed following an interim analysis that determined the study was unlikely to demonstrate that the vaccine in combination withbevacizumab would lead to a better survival than bevacizumab as a monotherapy. ASV Vaccine PlatformIn June 2014, we reported positive results from a Phase 2 clinical trial with our synthetic HerpV vaccine candidate for genital herpes. This candidatewas the first potential recombinant, off-the-shelf application of our HSP technology. The study demonstrated that the HSP70-peptide-QS21 vaccine producedsignificant CD4 and CD8 positive T-cell responses to antigenic peptides, and that the side effects were mild to moderate and tolerable. We decided not toadvance with this technology in herpes but, based on our findings, we launched our ASV synthetic cancer vaccine program in 2015. We remain on target toinitiate a clinical trial for this program in the first half of 2017.The objective of our ASV program is to develop a fully synthetic, yet individualized patient specific vaccine targeting the neo-epitope landscape ofeach patient’s cancer. Mutation-based neo-epitopes, which will form the basis for the immunogens used in ASV, are almost always particular to a givenpatient. 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 toutilize next generation sequencing technologies coupled with complex bioinformatics algorithms to identify mutations in a tumor’s DNA and RNA. Oncethese mutations have been identified, we will manufacture synthetic peptides encoding these neoepitopes, load these peptides on to our recombinant HSP70and deliver a fully synthetic polyvalent vaccine to the patient. We believe that the HSP70 platform will shuttle the mutated peptides to sites where they arerecognized by the immune system and elicit a cytotoxic and helper T cell response in patients with cancer. We expect that once identified, these tumor cellswill be killed and cleared by the immune system.PSV Vaccine PlatformPSV is a vaccine candidate designed to induce immunity against a novel class of tumor specific neoepitopes: those arising from dysregulatedphosphorylation of various proteins in malignant cells, rather than from tumor-specific mutations producing abnormal protein sequences. In all cells, proteinsequences can have post-translational modifications, such as becoming phosphorylated (a phosphate group is added to particular amino acid residues) thatcan be associated with cellular functions such as signaling. In cancer cells, this process can become dysregulated and proteins that are not normallyphosphorylated 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 on the surface of cells, and there they can potentiallybe recognized by specific cytotoxic T cells. Such phosphoprotein neoepitopes have been associated with different forms of cancer, including but not limitedto lung cancer, specific leukemias, ovarian cancer, colon cancer and others. PSV is intended to induce cellular immunity to abnormal phosphopeptideneoepitopes that are characteristic of these various forms of cancer. Phosphopeptides (or phosphopeptide analogues) can be synthesized and complexed withHSP70, using an approach analogous to that used in the generation of our previous HerpV vaccine candidate. HerpV demonstrated good cellular and humoralresponses to synthetic peptide immunogens complexed with HSP70 in a placebo-controlled Phase 2 study. We believe that similar responses can be obtainedto phosphopeptide or phosphopeptide analogues bound to HSP70 when used as vaccines. Phosphorylation-based neoepitopes can apparently be found onspecific types of cancer in many patients, suggesting that the immunogens used in PSV, while tailored to a particular patient, will be useful in other patientswith related forms of cancer. Studies to optimize the immunogens to be used in PSV are ongoing.QS-21 Stimulon AdjuvantQS-21 Stimulon is an adjuvant, which is a substance added to a vaccine or other immunotherapy that is intended to enhance an immune response tothe target antigens. QS-21 Stimulon is a natural product, a triterpene glycoside, or saponin, purified from the bark of the Chilean soapbark tree, Quillajasaponaria. QS-21 Stimulon has the ability to stimulate an antibody-mediated immune response and has also been shown to activate cellular immunity. It hasbecome a key component in the development of investigational preventive vaccine formulations across a wide variety of diseases. These studies have beencarried out by academic institutions and pharmaceutical companies in the United States and internationally. A number of these studies have shown QS-21Stimulon to be significantly more effective in stimulating immune responses than aluminum hydroxide or aluminum phosphate, the adjuvants mostcommonly used in approved vaccines in the United States today.7Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Partnered QS-21 Stimulon ProgramsIn 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” andthe “GSK Supply Agreement,” respectively). In January 2009, we entered into an Amended and Restated Manufacturing Technology Transfer and SupplyAgreement (the “Amended GSK Supply Agreement”) under which GSK has the right to manufacture all of its requirements of commercial grade QS-21Stimulon. GSK is obligated to supply us, or our affiliates, licensees, or customers, certain quantities of commercial grade QS-21 Stimulon for a stated periodof time. In March 2012, we entered into a First Right to Negotiate and Amendment Agreement amending the GSK License Agreement and the Amended GSKSupply Agreement to clarify and include additional rights for the use of QS-21 Stimulon (the “GSK First Right to Negotiate Agreement”). In addition, wegranted GSK the first right to negotiate for the purchase of Agenus or certain of our assets, which just recently expired in March 2017. As consideration forentering into the GSK First Right to Negotiate Agreement, GSK paid us an upfront, non-refundable payment of $9.0 million, $2.5 million of which iscreditable toward future royalty payments. We refer to the GSK License Agreement, the Amended GSK Supply Agreement and the GSK First Right toNegotiate Agreement collectively as the GSK Agreements. As of December 31, 2016, we had received $23.3 million of a potential $24.3 million in upfrontand milestone payments under the GSK Agreements. Under the terms of the Agreement, we are generally entitled to receive 2% royalties on net sales ofprophylactic vaccines for a period of 10 years after the first commercial sale of a resulting GSK product, with some exceptions; however, we have alreadymonetized part of this potential royalty stream as discussed in more detail below. The GSK License and Amended GSK Supply Agreements may beterminated by either party upon a material breach if the breach is not cured within the time specified in the respective agreement. The termination orexpiration of the GSK License Agreement does not relieve either party from any obligation which accrued prior to the termination or expiration. Among otherprovisions, the milestone payment obligations survive termination or expiration of the GSK Agreements for any reason, and the license rights granted to GSKsurvive expiration of the GSK License Agreement. The license rights and payment obligations of GSK under the Amended GSK Supply Agreement survivetermination or expiration, except that GSK's license rights and future royalty obligations do not survive if we terminate due to GSK's material breach unlesswe 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 vaccinecandidates currently in development are formulated using adjuvant systems containing QS-21 Stimulon, including its shingles and malaria vaccinecandidates 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 trialevaluating the efficacy of its shingles vaccine candidate, HZ/su, met its primary endpoint. Analysis of the primary endpoint showed that HZ/su reduced therisk 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 itsRTS,S malaria vaccine candidate containing QS-21 Stimulon, which was accepted by the EMA for regulatory review in July 2014. Assuming regulatoryapproval, the first products containing QS-21 Stimulon are anticipated to be launched by GSK in 2018. We do not incur clinical development costs forproducts 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 CapitalManagement 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 royaltiesunder the GSK License Agreement on sales of GSK’s shingles (HZ/su) and malaria (RTS,S) prophylactic vaccine products that contain our QS-21 Stimulonadjuvant to pay down principle and interest. Once all principle and interest under the Note Purchase Agreement has been paid, any and all remainingroyalties 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 termbenefit associated royalties from GSK’s vaccine products containing our QS-21 Stimulon. At our option, we are entitled to receive an additional $15.0million in cash from the investors after approval of HZ/su by the U.S. Food and Drug Administration (“FDA”), provided such approval does not occur laterthan 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 rightsallows 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 NotePurchase Agreement terms have been satisfied.ManufacturingManufacturing CPM AntibodiesWe rely on third party contract manufacturing organizations (“CMOs”) to manufacture and supply us with the antibodies and drug substance for ourantibody programs and anticipate doing so for the foreseeable future. In an effort to de-risk this reliance, we acquired XOMA Corporation’s antibodymanufacturing pilot plant in Berkeley, CA in December 2015. A team of former XOMA employees with valuable chemistry, manufacturing and controlsexperience joined us and continues to operate the facility. The pilot plant, referred to as “Agenus West,” was acquired to enable us to manufacture antibodiesfor some of our own CPM programs and those of existing and potential third party collaborators. Since the acquisition, we have refurbished and improved thepilot plant,8Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.increasing both scale and capacity, with the anticipation that it will be able to provide antibody production development expertise and antibody drugsubstance to support clinical proof-of-concept studies, and facilitate some of our future GMP antibody production requirements. We also expect to utilize ourAgenus West pilot plant capabilities to accelerate antibody delivery speed, improve quality and increase product yield while providing us with greatermanufacturing flexibility, all at reduced costs. We believe our Agenus West pilot plant manufacturing facility could accelerate the time to the clinic and intoproduct commercialization. In addition, in February 2017, we amended our collaboration with Incyte, transferring manufacturing responsibilities for allantibodies under the collaboration to them. This includes antibodies targeting GITR, OX40, TIM-3, LAG-3 and one undisclosed target. We are in the processof transferring manufacturing know how to Incyte to support these endeavors.Manufacturing Cancer VaccinesWe manufacture our cancer vaccine candidates from our different vaccine platforms in our Lexington, MA facility.Each Prophage vaccine is manufactured using a patient’s own tumor. After the patient undergoes surgery to remove cancerous tumor tissue, the tumoris shipped frozen in a specially designed kit provided by us to our Lexington, Massachusetts facility. Each Prophage vaccine is produced to a specificstandard, in a process taking approximately ten hours, after which it undergoes extensive quality testing for approximately two weeks. The turnaround timefrom 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 intradermalinjection.ASV and PSV vaccine candidates would be manufactured using HSP70 loaded with synthetic peptide synthesized by approved manufacturers. Thesequence of the peptides is determined by sequencing and analysis of patient and tumor DNA and RNA and run through complex algorithms by ourbioinformatics group who have specialized knowledge of the attributes required to elicit immune responsiveness. This process takes several weeks, afterwhich 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, including bioanalytical, quality control andquality assurance, logistics, distribution and supply chain management. After manufacturing, Prophage and ASV vaccine candidates are tested and releasedby our analytical and quality systems staff. The quality control organization performs a series of release assays designed to ensure that the product meets allapplicable specifications. Our quality assurance staff also reviews manufacturing and quality control records prior to batch release in an effort to assureconformance with current GMP (“cGMP”) as mandated by the FDA and foreign regulatory agencies.Our manufacturing staff is trained and routinely evaluated for conformance to rigorous manufacturing procedures and quality standards. Thisoversight is intended to ensure compliance with FDA and foreign regulations and to provide consistent vaccine output. Our quality control and qualityassurance 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 inmaterials, equipment and facilities.QS-21 StimulonExcept in the case of GSK, we have retained worldwide manufacturing rights for QS-21 Stimulon, and we have the right to subcontract manufacturingfor QS-21 Stimulon. In addition, under the terms of our agreement with GSK, upon request by us, GSK is committed to supply certain quantities ofcommercial grade QS-21 Stimulon to us and our licensees for a fixed period of time.Intellectual Property PortfolioWe seek to protect our technologies through a combination of patents, trade secrets and know-how, and we currently own, co-own or have exclusiverights to approximately 40 issued United States patents and approximately 125 issued foreign patents. Our issued patents include those that cover uses of ourcore technologies in combination with other agents. Such core technologies include HSP-based vaccines for the treatment of cancers andtreatment/prevention of infectious diseases, and saponin adjuvants. We also own, co-own or have exclusive rights to approximately 35 pending United Statespatent applications and approximately 80 pending foreign patent applications. We may not have rights in all territories where we may pursue regulatoryapproval for Prophage vaccine candidates. Through various acquisitions, we own, co-own, or have exclusive rights to a number of patents and patent applications directed to various methodsand compositions, including methods for identifying therapeutic antibodies and product candidates arising out of such entities’ technology platforms. Inparticular, we own patents and patent applications relating to our Retrocyte Display technology platform, a high throughput antibody expression platform forthe identification of fully-human and humanized monoclonal antibodies. This patent family is projected to expire between 2029 and 2031. We own, co-own,or have exclusive rights to patents and patent applications directed to various methods and compositions, including a patent directed to methods foridentifying phosphorylated9Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.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 weadvance our research and development efforts with our institutional and corporate collaborators, we are seeking patent protection for certain newly identifiedtherapeutic antibodies and product candidates. We can provide no assurance that any of our patents, including the patents that we acquired or in-licensed,will have commercial value, or that any of our existing or future patent applications, including the patent applications that were acquired or in-licensed, willresult in the issuance of valid and enforceable patents. Our issued patents covering Prophage vaccine and methods of use thereof, alone or in combinationwith other agents, expired or will expire at various dates between 2015 and 2024. In particular, our issued U.S. patents covering Prophage composition ofmatter expired in 2015. In addition, our issued patents covering QS-21 Stimulon composition of matter expired in 2008. We continue to explore means ofextending the life cycle of our patent portfolio.Various patents and patent applications have been exclusively licensed to us by the following entities:University of VirginiaIn connection with our acquisition of PhosImmune in December 2015, we obtained exclusive rights to a portfolio of patent applications and oneissued patent relating to PTTs under a patent license agreement with the University of Virginia (“UVA”). The UVA license gives us exclusive rights todevelop and commercialize the PTT technology and an exclusive option to license any further PTT technology arising from ongoing research at UVA untilDecember 2018. Under the license agreement, we will pay low to mid-single digit running royalties on net sales of PTT products, and a modest flatpercentage 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 PTTproduct to complete clinical trials and achieve certain sales thresholds. The term of the UVA license agreement ends when the last of the licensed patentsexpires or becomes no longer valid. The UVA license agreement may be terminated as follows: (i) by UVA in connection with our bankruptcy or cessation ofbusiness 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 writtennotice.Ludwig Institute for Cancer ResearchOn December 5, 2014, our wholly-owned subsidiary, Agenus Switzerland Inc. (formerly known as 4-Antibody AG)(“4-AB”), entered into a licenseagreement with the Ludwig Institute for Cancer Research Ltd. (“Ludwig”), which replaced and superseded a prior agreement entered into between the partiesin May 2011. Pursuant to the terms of the license agreement, Ludwig granted 4-AB an exclusive, worldwide license under certain intellectual property rightsof Ludwig and Memorial Sloan Kettering Cancer Center arising from the prior agreement to further develop and commercialize GITR, OX40 and TIM-3antibodies. On January 25, 2016, we and 4-AB entered into a second license agreement with Ludwig, on substantially similar terms, to develop CTLA-4 andPD-1 antibodies. Pursuant to the December 2014 license agreement, 4-AB made an upfront payment of $1.0 million to Ludwig. The December 2014 licenseagreement also obligates 4-AB to make potential milestone payments of up to $20.0 million for events prior to regulatory approval of licensed GITR, OX40and TIM-3 products, and potential milestone payments in excess of $80.0 million if such licensed products are approved in multiple jurisdictions, in morethan one indication, and certain sales milestones are achieved. Under the January 2016 license agreement, we are obligated to make potential milestonepayments 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-singledigit 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 lowto mid-double digit percentage depending on various factors. The license agreements may each be terminated as follows: (i) by either party if the other partycommits 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 (asapplicable) for convenience upon 90 days’ prior written notice. The license agreements also contain customary representations and warranties, mutualindemnification, confidentiality and arbitration provisions.University of Connecticut Health CenterIn May 2001, we entered into a license agreement with the University of Connecticut Health Center (“UConn”) which was amended in March 2003and June 2009. Through the license agreement, we obtained an exclusive, worldwide license to patent rights resulting from inventions discovered under aresearch agreement that was effective from February 1998 until December 2006. The term of the license agreement ends when the last of the licensed patentsexpires in 2028 or becomes no longer valid. UConn may terminate the agreement: (1) if, after 30 days written notice for breach, we continue to fail to makeany 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 orderto declare bankruptcy. We may terminate the agreement upon 90 days written notice. We are required to make royalty payments on any obligations createdprior 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 tocontinue to manufacture and sell products covered under the license agreement which are considered to be works in progress for a period of six months. Thelicense agreement contains aggregate milestone payments of10Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.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 licenseagreement as well as annual license maintenance fees beginning in May 2006. Royalties otherwise due on the net sales of products covered by the licenseagreement may be credited against the annual license maintenance fee obligations. Under the March 2003 amendment, we agreed to pay UConn an upfrontpayment and to make future payments for each patent or patent application with respect to which we exercised our option under the research agreement. As ofDecember 31, 2016, we had paid approximately $850,000 to UConn under the license agreement. The license agreement gives us complete discretion overthe commercialization of products covered by the licensed patent rights but also requires us to use commercially reasonable diligent efforts to introducecommercial products within and outside the United States. If we fail to meet these diligence requirements, UConn may be able to terminate the licenseagreement.Regulatory ComplianceGovernmental 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 theUnited States, the FDA under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act and other federal statutes and regulations, subjectpharmaceutical 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 detailedinformation on the manufacture and composition of the product. In most cases, this proof entails extensive preclinical, clinical, and laboratory tests. Beforeapproving a new drug or marketing application, the FDA may also conduct pre-licensing inspections of the company, its contract research organizationsand/or its clinical trial sites to ensure that clinical, safety, quality control, and other regulated activities are compliant with Good Clinical Practices (“GCP”),or Good Laboratory Practices (“GLP”), for specific non-clinical toxicology studies. The FDA may also require confirmatory trials, post-marketing testing, andextra surveillance to monitor the effects of approved products, or place conditions on any approvals that could restrict the commercial applications of theseproducts. Once approved, the labeling, advertising, promotion, marketing, and distribution of a drug or biologic product must be in compliance with FDAregulatory 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 theefficacy of the product in a patient population somewhat larger than Phase 1 trials. Phase 3 trials typically involve additional testing for safety and clinicalefficacy in an expanded population at geographically dispersed test sites. The FDA may order the temporary or permanent discontinuation of a clinical trialat any time.The sponsor must submit to the FDA the results of preclinical and clinical testing, together with, among other things, detailed information on themanufacture and composition of the product, in the form of a new drug application (“NDA”), or in the case of biologics, like the Prophage vaccines, abiologics license application (“BLA”). In a process that can take a year or more, the FDA reviews this application and, when and if it decides that adequatedata 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 internationaljurisdictions prior to the commencement of marketing the product in those jurisdictions. We are also subject to cGMP, GCP, and GLP compliance obligationsand 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 arenot required for U.S. regulatory compliance or approval. The time required to obtain this approval may be longer or shorter than that required for FDAapproval 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 aresubject to obligations to ensure the protection of personal information of human subjects participating in our clinical trials. We have instituted proceduresthat we believe will enable us to comply with these requirements and the contractual requirements of our data sources. The laws and regulations in this areaare 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 andRecovery Act, and other current and potential future federal, state, or local regulations. Our research and development activities involve the controlled use ofhazardous materials, chemicals, biological materials, various radioactive compounds, and for some experiments we use recombinant DNA. We believe thatour procedures comply with the standards prescribed by local, state, and federal regulations; however, the risk of injury or accidental contamination cannotbe completely eliminated. We conduct our activities in compliance with the National Institutes of Health Guidelines for Recombinant DNA Research.11Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Additionally, the U.S. Foreign Corrupt Practices Act (“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 orretain business abroad. The scope of the FCPA includes interactions with certain healthcare professionals in many countries. Other countries have enactedsimilar anti-corruption laws and/or regulations.CompetitionCompetition in the pharmaceutical and biotechnology industries is intense. Many pharmaceutical or biotechnology companies have products on themarket 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 inresearch and development, clinical trials, and regulatory matters, than we do. Competing companies developing or acquiring rights to more efficacioustherapeutic products for the same diseases we are targeting, or which offer significantly lower costs of treatment, could render our products noncompetitive orobsolete. See Part I-Item 1A. “Risk Factors-Risks Related to our Business-Our competitors may have superior products, manufacturing capability, selling andmarketing expertise and/or financial and other resources.”Academic institutions, governmental agencies, and other public and private research institutions conduct significant amounts of research inbiotechnology, medicinal chemistry and pharmacology. These entities have become increasingly active in seeking patent protection and licensing revenuesfor 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 acrossvarious indications and lines of therapy, either alone or in combination with other assets. Competitors range from small cap to large cap companies, withassets in preclinical or clinical stages of development. Therefore, the landscape is dynamic and constantly evolving. We and our partners have CPM antibodyprograms currently in clinical stage development targeting CTLA-4, GITR and OX40, with our PD-1 antagonist anticipated to enter into the clinic in the firsthalf 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 samebiological targets as these programs, including, without limitation, the following: (1) BMS markets ipilimumab, an anti-CTLA-4 antibody, and nivolumab,an anti-PD-1 antibody, and is developing agonists to GITR and OX-40, (2) Merck has an approved anti-PD-1 antibody in the United States, and is developingan anti-GITR agonist, (3) Ono Pharmaceuticals has an approved anti-PD-1 antibody in Japan, (4) AstraZeneca/Medimmune has anti-CTLA-4, PD-1, PD-L1,GITR and OX40 targeting antibodies in development, (5) Pfizer has anti-PD-L1 (with Merck KgA), anti-PD-1, and anti-OX40 antibodies in clinicaldevelopment, (6) Novartis has anti-PD-1, anti-PD-L1 and anti-GITR antibodies in clinical trials, and (7) Roche/Genetech has an approved anti-PD-L1 and ananti-OX40 antibody 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 preclinicalantibodies against these targets. In addition, we are also aware of competitors with clinical stage antibodies against targets in our earlier stage programs suchas TIM-3, LAG-3, 4-1BB, TIGIT and other undisclosed targets. These include, but are not limited to, BMS, Pfizer, Novartis, Merck, Roche, Tesaro andRegeneron. Additionally, we are also aware of competitors with assets against these targets that are in preclinical development. There is no guarantee that ourantibody 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 aloneor in combination with AstraZeneca’s anti-PD-L1 antibody). Additionally, we are also aware of cervical cancer clinical trials exploring other CPM targetsincluding, but not restricted to, PD-L1 + IDO (Roche), VISTA (Janssen), OX40 +/- 4-1BB (Pfizer). However, given the stage, focus, expected efficacy andsafety profile of our development programs versus those of our competitors, we believe that our approach provides a fast to market opportunity that will allowus 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 basedAutoSynVax vaccine in preclinical development. We are aware of many companies pursuing personalized cancer vaccines in preclinical or clinicaldevelopment, including, without limitation, the following: Neon Therapeutics, Gritstone Oncology, Advaxis, BioNTech, Moderna and Merck, Nouscom,Immatics and Green Peptides.Several companies have products that utilize similar technologies and/or patient-specific medicine techniques that compete with our HSP basedvaccines. For treatment of recurrent glioma, Roche markets bevacizumab and Eisai and Arbor Pharmaceuticals market carmustine. Schering Corporation, asubsidiary of Merck, markets temozolomide for treatment of patients with ndGBM and refractory astrocytoma. Other companies are developing vaccines forthe treatment of patients with ndGBM, such as Green Cross Cell - formerly12Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Innocell Corp (Immuncell-LC), ImmunoCellular Therapeutics (ICT-107), Northwest Biotherapeutics (DC-Vax), Mimivax Inc. (SurVaxM), AnniasImmunotherapeutics (CMV Vaccine) and Activartis Biotech (GBM-Vax). In addition, TVAX Biomedical, Stemline Therapeutics and Sumitomo DainipponPharma are developing immunotherapy candidates TVI-Brain-1, SL-701 and DSP-7888, respectively, for recurrent glioma. Other companies may begindevelopment 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 productsapproved 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 faceincreased competition in the future as new companies enter markets we seek to address and scientific developments surrounding immunotherapy and othertraditional 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 indevelopment 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 byIntercell (now part of Valneva), and (4) MPL, under development by GSK. In the past, we have provided QS-21 Stimulon to other entities under materialstransfer 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 ofsaponin extracts, are developing saponin adjuvants, including derivatives and synthetic formulations. These sources may be competitive to our ability toexecute future partnering and licensing arrangements involving QS-21 Stimulon. The existence of products developed by these and other competitors, orother products of which we are not aware or which other companies may develop in the future, may adversely affect the marketability of products developedor sold using QS-21 Stimulon.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 bythis third party may create marketplace confusion and have an adverse effect on the goodwill generated by us and our partners with respect to QS-21Stimulon. 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. EmployeesAs of February 28, 2017, we had 255 employees, of whom 81 were PhDs and six were MDs. None of our employees are subject to a collectivebargaining agreement. We believe that we have good relations with our employees.Corporate HistoryAntigenics L.L.C. was formed as a Delaware limited liability company in 1994 and was converted to Antigenics Inc., a Delaware corporation, inFebruary 2000 in conjunction with our initial public offering of common stock. On January 6, 2011, we changed our name from Antigenics Inc. to AgenusInc.Availability of Periodic SEC ReportsOur Internet website address is www.agenusbio.com. We make available free of charge through our website our annual reports on Form 10-K, quarterlyreports 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 SecuritiesExchange Act of 1934, as amended (“Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish suchmaterial to, the Securities and Exchange Commission (the “SEC”). The contents of our website are not part of, or incorporated into, this document. Inaddition, we regularly use our website to post information regarding our business, product development programs and governance, and we encourageinvestors 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 SECmaintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with theSEC 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 intendedto be inactive textual references only. 13Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 1A.Risk FactorsOur future operating results could differ materially from the results described in this Annual Report on Form 10-K due to the risks and uncertaintiesdescribed below. You should consider carefully the following information about risks below in evaluating our business. If any of the following risks actuallyoccur, our business, financial conditions, results of operations and future growth prospects would likely be materially and adversely affected. In thesecircumstances, 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 differmaterially from those indicated or implied by forward-looking statements. See “Note Regarding Forward-Looking Statements” in this Annual Report on Form10-K. Factors that could cause or contribute to such differences include those factors discussed below.Risks Related to our BusinessIf 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, orwe may become insolvent.Our net losses for the years ended December 31, 2016, 2015, and 2014, were $127.0 million, $87.9 million, and $42.5 million, respectively. We expectto incur additional losses over the next several years as we continue to research and develop our technologies and pursue partnering opportunities, regulatorystrategies, commercialization, and related activities. Furthermore, our ability to generate cash from operations is dependent on the success of our licenseesand collaboration partners, as well as the likelihood and timing of new strategic licensing and partnering relationships and/or successful development andcommercialization of product candidates, including through our antibody programs and platforms, our vaccine programs, and our saponin-based vaccineadjuvants.On December 31, 2016, we had $76.4 million in cash and cash equivalents and short-term investments. We believe that, based on our current plansand activities, our working capital resources at December 31, 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 2018. We expect to attempt to secure additional funds before our current fundsare 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, we will berequired to raise additional funds in the capital markets, through arrangements with collaboration partners or from other sources. Additional financing maynot 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 weexpect, 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 toothers 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: •the number and characteristics of the product candidates we and our partners pursue; •our and our partners’ ability to successfully develop, manufacture, and commercialize product candidates; •the scope, progress, results and costs of researching and developing our future product candidates and conducting pre-clinical and clinicaltrials; •the timing of, and the costs involved in, obtaining regulatory approvals for our and our licensees’ product candidates; •the cost of manufacturing; •our ability to establish and maintain strategic partnerships, licensing or other arrangements and the financial terms of such arrangements; •the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing our intellectual property rights; •the costs associated with any successful commercial operations; and •the timing, receipt and amount of sales of, or royalties on, our future products and those of our partners, if any.General economic conditions in the United States economy and abroad may have a material adverse effect on our liquidity and financial condition,particularly if our ability to raise additional funds is impaired. The ability of potential patients and/or health care payers to pay for our future products, if any,could also be adversely impacted, thereby limiting our potential revenue. In addition, any negative impacts from any deterioration in the credit markets onour collaboration partners could limit potential revenue from our product candidates.14Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Our and our subsidiaries’ obligations related to our monetization of royalties payable to us by GlaxoSmithKline (“GSK”), in respect of its shinglesvaccine, HZ/su, along with our 2015 Subordinated Notes, could materially and adversely affect our liquidity.In September 2015, we and our wholly-owned subsidiary, Antigenics LLC (“Antigenics”), entered into an Note Purchase Agreement (“NPA”) withOberland Capital SA Zermatt LLC (“Oberland”), as collateral agent, an affiliate of Oberland as the lead purchaser and certain other purchasers, pursuant towhich Antigenics issued $100.0 million aggregate principal amount of limited recourse notes (the “Notes”) to the purchasers. Antigenics has the option toissue an additional $15.0 million aggregate principal amount of Notes (the “Additional Notes”) to the purchasers within 15 days after approval of GSK’sshingles vaccine, HZ/su, by the Food and Drug Administration (“FDA”), provided such approval occurs on or before June 30, 2018. The Notes accrue interestat a rate of 13.5% per annum, compounded quarterly, from and after September 8, 2015 (the “Closing Date”). Principal and interest payments are due on eachof March 15, June 15, September 15 and December 15, and shall be made solely from the royalties paid from GSK to Antigenics on sales of GSK’s shinglesand malaria vaccines. GSK will send all royalty payments to a segregated bank account, and to the extent there are insufficient royalties deposited into theaccount to fund a quarterly interest payment, the interest will be capitalized and added to the aggregate principal balance of the loan. The final legal maturitydate of the Notes is the earlier of (i) the 10th anniversary of the first commercial sale of GSK’s shingles or malaria vaccines and (ii) September 8, 2030 (the“Maturity Date”).On September 8, 2018, each purchaser has the option to require Antigenics to repurchase up to 15% of the Notes issued to such purchaser on theClosing Date (the “Put Notes”) at a purchase price equal to the principal amount thereof plus accrued and unpaid interest thereon (the “Put Payment”). On theearlier of (i) September 8, 2027 and (ii) the Maturity Date, Antigenics is required to pay the purchasers an amount equal to the following (the “Make-WholePayment”): $100.0 million (or $115.0 million if the Additional Notes are sold) minus the aggregate amount of all payments made in respect of the Notes(regardless of whether characterized as principal or interest at the time of payment), including the original principal amount of any repaid Put Notes.The NPA specifies a number of events of default (some of which are subject to applicable cure periods), including (i) failure to cause royalty paymentsto be deposited into the segregated bank account, (ii) payment defaults, (iii) breaches of representations and warranties made at the time the Notes were, or theAdditional Notes are, issued, (iv) covenant defaults, (v) a final and unappealable judgment against Antigenics for the payment of money in excess of $1.0million, (vi) bankruptcy or insolvency defaults, (vii) the failure to maintain a first-priority perfected security interest in the collateral in favor of the collateralagent and (viii) the occurrence of a change of control of Agenus. Upon the occurrence of an event of default, subject to cure periods in certain circumstancesand some limited exceptions, the collateral agent may declare the Notes immediately due and payable, in which case Antigenics would owe a payment equalto the following (the “Accelerated Default Payment”): the outstanding principal amount of the Notes, plus all accrued and unpaid interest thereon, plus apremium payment that would yield an aggregate internal rate of return (“IRR”) for the purchasers as follows: (i) an IRR of 20% if the event of default occurswithin 24 months of the Closing Date, (ii) an IRR of 17.5% if the event of default occurs after 24 months but within 48 months of the Closing Date, and(iii) an IRR of 15% if the event of default occurs more than 48 months after the Closing Date. Upon the occurrence and during the continuance of any eventof default, interest on the Notes also increases by 2.5% per annum.We are a party to the NPA as a guarantor of Antigenics, and we generally guarantee the Put Payment, the Make-Whole Payment and the AcceleratedDefault Payment. If we are obligated to make the Put Payment or the Make-Whole Payment, our liquidity would be materially and adversely affected. If we orAntigenics default on the Notes and we are obligated to pay the Accelerated Default Payment, our liquidity would be materially and adverselyaffected. Satisfaction of the Notes will depend upon the future sales of GSK’s shingles and malaria vaccines, if approved, and, if we are obligated to make thePut Payment, the Make-Whole Payment or the Accelerated Default Payment, our future performance, which is subject to many factors, including the factorsidentified in this “Risk Factors” section and other factors beyond our control.In February 2015, we exchanged senior subordinated promissory notes that we issued in 2013 for new senior subordinated promissory notes in theaggregate principal amount of $5.0 million with annual interest at 8%, and we issued an additional $9.0 million principal amount of such notes (the “2015Subordinated Notes”). The 2015 Subordinated Notes were originally due February 2018, and in March 2017 we amended the 2015 Subordinate Notes toextend the maturity date to February 2020. The 2015 Subordinated Notes include default provisions that allow for the acceleration of the principal paymentof the 2015 Subordinated Notes in the event we become involved in certain bankruptcy proceedings, become insolvent, fail to make a payment of principalor (after a grace period) interest on the 2015 Subordinated Notes, default on other indebtedness with an aggregate principal balance of $13.5 million or moreif such default has the effect of accelerating the maturity of such indebtedness, or become subject to a legal judgment or similar order for the payment ofmoney in an amount greater than $13.5 million if such amount will not be covered by third-party insurance. If we default on the 2015 Subordinated Notesand the repayment of such indebtedness is accelerated, our liquidity could be materially and adversely affected.15Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.If we do not have sufficient cash on hand to pay any of the Put Payment, the Make-Whole Payment or the Accelerated Default Payment when due, orto otherwise service our 2015 Subordinated Notes, we may be required, among other things, to: •seek additional financing in the debt or equity markets; •refinance or restructure all or a portion of our indebtedness; •sell, out-license, or otherwise dispose of assets; and/or •reduce or delay planned expenditures on research and development and/or commercialization activities.Such measures might not be sufficient to enable us to make principal and interest payments. In addition, any such financing, refinancing, or sale ofassets might not be available on favorable terms, if at all.We are dependent upon our collaboration with Incyte to further develop, manufacture and commercialize antibodies against certain targets. If we orIncyte fail to perform as expected, the potential for us to generate future revenues under the collaboration would be significantly reduced, the developmentand/or commercialization of these antibodies may be terminated or substantially delayed, and our business could be severely harmed.In February 2017, we amended the terms of our collaboration agreement with Incyte to, among other things, convert the GITR and OX40 programsfrom profit-share programs, where we and Incyte shared all costs and profits on a 50:50 basis, to royalty-bearing programs, where Incyte funds 100% of thecosts and we are eligible for potential milestones and royalties. In addition, the profit-share programs relating to two undisclosed targets were removed fromthe collaboration, with one reverting to Incyte and one to Agenus, each with a potential 15% royalty to the other party on any global net sales. The remainingthree royalty-bearing programs in the collaboration targeting TIM-3, LAG-3 and one undisclosed target remain unchanged, and there are no more profit-shareprograms under the collaboration. For each program in the collaboration, we serve as the lead for pre-clinical development activities through the filing of aninvestigational new drug application (“IND”), and Incyte has exclusive rights and all decision-making authority for manufacturing, clinical development andcommercialization. Accordingly, the timely and successful completion by Incyte of clinical development and commercialization activities will significantlyaffect the timing and amount of any royalties or milestones we may receive under the collaboration agreement. In addition, we recently announced that weare transferring manufacturing responsibilities to Incyte for antibodies under that collaboration. Any delays or weaknesses in this transfer process or theability of Incyte to successfully manufacture could have an adverse impact on those programs. Incyte’s activities will be influenced by, among other things,the efforts and allocation of resources by Incyte, which we cannot control. If Incyte does not perform in the manner we expect or fulfill its responsibilities in atimely manner, or at all, the clinical development, manufacturing, regulatory approval, and commercialization efforts related to antibodies under thecollaboration could be delayed or terminated. There can be no assurance that any of the development, regulatory or sales milestones will be achieved, or thatwe will receive any future milestone or royalty payments under the collaboration agreement.In addition, our collaboration with Incyte may be unsuccessful due to other factors, including, without limitation, the following: •Incyte may terminate the agreement or any individual program for convenience upon 12 months’ notice; •Incyte has control over the development of assets in the collaboration; •Incyte may change the focus of its development and commercialization efforts or prioritize other programs more highly and, accordingly,reduce the efforts and resources allocated to our collaboration; •Incyte may choose not to develop and commercialize antibody products, if any, in all relevant markets or for one or more indications, if at all;and •If Incyte is acquired during the term of our collaboration, the acquirer may have competing programs or different strategic priorities that couldcause it to reduce its commitment to our collaboration.If Incyte terminates our collaboration agreement, we would need to raise additional capital and may need to identify and come to agreement withanother collaboration partner to advance certain of our antibody programs. Even if we are able to find another partner, this effort could cause delays in ourtimelines and/or additional expenses, which could adversely affect our business prospects and the future of any antibody product candidates under thecollaboration.Our antibody programs are in early stage development, and there is no guarantee that we will be successful in advancing antibody product candidatesthrough clinical development.Our antibody programs are currently in early stage development, and many of our antibody programs are pre-clinical. Even if our pre-clinical studiesor our and/or our partners’ Phase 1 trials produce positive results, they may not necessarily be predictive of the results of future clinical trials in humans.Many companies in the pharmaceutical, biopharmaceutical and biotechnology industries16Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.have suffered significant setbacks in clinical trials after achieving positive results in pre-clinical development or Phase 1 trials, and we cannot be certain thatwe will not face similar setbacks. These setbacks have been caused by, among other things, pre-clinical findings made while clinical trials were underway orsafety or efficacy observations made in clinical trials, including adverse events. Moreover, pre-clinical and clinical data are often susceptible to varyinginterpretations and analyses, and many companies that believed their product candidates performed satisfactorily in pre-clinical studies and clinical trialsnonetheless failed to obtain regulatory approval. If we fail to produce positive results in future clinical trials of antibodies, our business and financialprospects would be materially adversely affected.We are undergoing significant growth across multiple locations, and we may encounter difficulties in managing this growth, which could disrupt ouroperations.From January 1, 2014 to February 28, 2017, our headcount has increased from 70 to 255, in part through various acquisitions and the expansion of ourresearch and development activities both nationally and internationally to California, Virginia, Switzerland and the United Kingdom. We previouslyconducted discovery research operations in Germany, but as part of our efforts to optimize efficiency across our organization, we closed our Jena office andconsolidated these operations in the United Kingdom and Switzerland. We expect to continue increasing our headcount as we continue to build our researchand development capabilities and integrate our acquired technology platforms. To manage this growth and expansion, we must continue to implement andimprove our managerial, operational and financial systems and continue to recruit, train and retain qualified personnel. If our management is unable toeffectively manage our growth, our expenses may increase more than expected, our ability to generate revenue could be reduced, and we may not be able toimplement our business strategy.We may not receive anticipated QS-21 Stimulon revenues from our licensees.We currently rely upon and expect to continue to rely upon our third party licensee, GSK, to develop, test, market and manufacture vaccines thatutilize our QS-21 Stimulon adjuvant. Our other previous licensee, Janssen Science Ireland UC, terminated its license for use of QS-21 Stimulon in May 2016.GSK manages its product development process, and we cannot predict its requirements for QS-21 Stimulon in the future or to what extent, if any, itwill develop and commercialize vaccines that use QS-21 Stimulon as an adjuvant. GSK may initiate or terminate programs containing QS-21 Stimulon at anytime. In addition, even if GSK successfully completes clinical trials with vaccine candidates using QS-21 Stimulon or these vaccine candidates receivepositive decisions from regulatory bodies, there is no guarantee that these products will ultimately obtain regulatory approval or, if so approved, will have asuccessful commercial launch or generate any future milestones or royalty payments. In September 2015, we entered into the NPA and monetized a portion ofthe potential royalties we are entitled to receive from GSK on future sales of its shingles and malaria vaccines, if any. All of the royalties that are payable to usfrom GSK on sales of these products candidates, if any, will be used entirely to satisfy our obligations to the purchasers of the Notes. However, there is noguarantee that GSK’s shingles and malaria vaccines will be approved in any territories for which they seek regulatory approval. Even if GSK’s shingles and/ormalaria vaccines are approved, there is no guarantee that GSK will have a successful commercial launch of either product or generate any revenues from salesto help satisfy our obligations under the NPA. Any inability to receive anticipated revenues, or a reduction in revenues, generated from QS-21 Stimuloncould have a material adverse effect on our business, financial condition and results of operations.Our synthetic Heat Shock Protein (“HSP”) peptide-based platform is in early stage development, and there is no guarantee that a product candidatewill progress from this platform.In June 2014, we reported positive results from a Phase 2 trial with HerpVTM, a vaccine candidate for genital herpes from our synthetic HSP peptide-based platform. While the HerpV Phase 2 trial met its formal endpoints, subjects were not followed long enough to determine whether the magnitude of theeffect on viral load would be sufficient to significantly reduce the incidence, severity, or duration of herpetic lesions or reduce the risk of viral transmission.We do not expect to advance this program into a Phase 3 trial, but we have initiated our ASV synthetic cancer vaccine program based on our prior findingswith this platform. Although we are targeting to initiate a clinical trial for our first AutoSynVax product candidate in the first half of 2017, there is noguarantee that we will be able to do so. There is no guarantee that a product candidate will progress from this platform at all or that results of any potentialfuture clinical trials will be positive. Furthermore, it is possible that research and discoveries by others will render any product candidate from this platform asobsolete or noncompetitive.We may not be able to advance clinical development or commercialize our cancer vaccine candidates or realize any benefits from these programs.The probability of future clinical development efforts leading to marketing approval and commercialization of Prophage vaccines is highly uncertain.Prophage vaccines have been in clinical development for over 16 years, including multiple Phase 1 and 2 trials in eight different tumor types as well asrandomized Phase 3 trials in metastatic melanoma and adjuvant renal cell17Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.carcinoma. To date, none of our clinical trials with Prophage vaccines have resulted in a marketing approval, except in Russia where commercialization ofthe approved product was unsuccessful. All of our currently planned trials involving Prophage are intended to be sponsored by third parties, and there is noguarantee that they will occur at all. In addition, while we believe Prophage vaccines may provide clinical benefit to some patients as a monotherapy and incombination with other therapies, there is no guarantee that, if completed, subsequent Prophage trials would yield useful translational and/or efficacy data.Our current clinical trial plans with Prophage vaccines entails one government sponsored IND in which we provide support and product supply. Forthird-party sponsored trials, we lack the ability to control trial design, timelines, tumor tissue procurement and data availability. For example, we recentlyannounced a clinical trial collaboration with the National Cancer Institute (“NCI”), whereby the NCI is conducting a double-blind, randomized controlledPhase 2 trial to evaluate the effect of Prophage vaccine in conjunction with Merck’s pembrolizumab on the overall survival rate of patients with newlydiagnosed glioblastoma (“ndGBM”). In addition, the Phase 2 trial of Prophage vaccine in combination with bevacizumab in patients with surgicallyresectable recurrent glioma that was being conducted under the sponsorship of the Alliance for Clinical Trials in Oncology, a cooperative group of the NCIand has recently closed. In addition, our other cancer vaccine programs (ASV and PSV) are in preclinical development and there is no guarantee that they willsuccessfully advance in and through the clinic. Current and future studies may eventually be terminated due to, among other things, slow enrollment, lack ofprobability that they will yield useful translational and/or efficacy data, lengthy timelines, or the unlikelihood that results will support timely or successfulregulatory filings. Furthermore, potential changes in clinical practices trending away from the administration of bevacizumab for the treatment of recurrentglioma could exacerbate enrollment issues and/or render the trial design impractical.Changes in our manufacturing strategies, manufacturing problems, or increased demand may cause delays, unanticipated costs, or loss of revenuestreams within or across our programs.Our antibody programs will require substantial manufacturing development and investment to progress. We are currently progressing a portfolio ofantibody programs that are at different stages of development. If these efforts are delayed or do not produce the desired outcomes, this will cause delays indevelopment timelines and increased costs, which may cause us to limit the size and scope of our efforts and studies. In December 2015, we secured our ownantibody manufacturing capabilities with the purchase of a manufacturing pilot plant from XOMA Corporation (“XOMA”), and we expect this facility tosupply us with antibody drug substance requirements through clinical proof-of-concept studies. We will also need to develop or secure later phase and/orcommercial manufacturing capabilities for larger, registrational studies or any commercial supply requirements. For the programs for which we will produceour own drug substance, we will continue to rely on third parties for fill-finish services and other parts of the manufacturing process. These services includethe storage and maintenance of our drug substance during all stages of the manufacturing process. While we maintain insurance to cover certain potentiallosses, there is no guarantee that our insurance coverage will be adequate. Furthermore, we currently rely on contract manufacturing organizations (“CMOs”)and contract research organizations (“CROs”) to support some of our existing antibody programs. Our dependence on external CMOs for the manufacture ofcertain antibodies results in intrinsic risks to our performance, timelines, and costs of our accelerated development plans, and which could divert resourcesaway from our antibody programs and/or lead to delays in the development of our product candidates. In the event that our antibody programs requireprogressively larger production capabilities, our options for qualified CMOs may become more limited.The long-term success of the antibody pilot plant manufacturing facility and capabilities that we acquired from XOMA will depend, in part, on ourability to realize the anticipated synergies, business opportunities and growth prospects from combining our manufacturing facilities in Lexington, MA withthe antibody pilot plant manufacturing facility in Berkeley, CA. We may never realize these anticipated synergies, business opportunities and growthprospects. Assumptions underlying estimates of expected cost savings as a result of the acquisition of the antibody pilot plant manufacturing facility may beinaccurate. If any of these factors limit our ability to successfully manufacture antibodies to support our planned clinical trials, the expectations of futureresults of operations, including certain cost savings and synergies expected to result from the acquisition of XOMA’s antibody pilot plant manufacturingfacility, might not be met. In addition, we recently announced that we are transferring manufacturing responsibilities to Incyte for antibodies under thatcollaboration. Any delays or weaknesses in this transfer process or the ability of Incyte to successfully manufacture could have an adverse impact on thoseprograms. We currently manufacture our Prophage vaccines in our Lexington, MA facility. Manufacturing of the Prophage vaccines is complex, and variousfactors could cause delays or an inability to supply the vaccine. Deviations in the processes controlling manufacture or deficiencies in size or quality ofsource material could result in production failures. Specific vulnerabilities in the process may exist in tumor types in which quality or quantity of tissue islimited, such as recurrent GBM. In addition, regulatory bodies may require us to make our manufacturing facility a single product facility. In such aninstance, we would no longer have the ability to manufacture Prophage vaccines in addition to other product candidates in our current facility.We have given our corporate QS-21 Stimulon licensee, GSK, manufacturing rights for QS-21 Stimulon for use in their product programs. If GSK or itsthird party CMO encounters problems with QS-21 Stimulon manufacturing, any of their programs containing18Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.QS-21 Stimulon could be delayed or terminated, and this could have an adverse effect on our potential license fees, milestone payments and royalties that wemay otherwise receive from these programs and use to satisfy our obligations under the NPA. We have retained the right to manufacture QS-21 for ourselvesand third parties, although no other such programs are anticipated to bring us substantial revenues in the near future, if ever.Our ability to efficiently manufacture our product candidates is contingent, in part, upon our own, and our CMOs’, ability to ramp up production in atimely manner without the benefit of years of experience and familiarity with the processes, which we may not be able to adequately transfer. We currentlyrely upon and expect to continue to rely upon third parties, potentially including our collaborators or licensees, to produce materials required to support ourproduct candidates, pre-clinical studies, clinical trials, and any future commercial efforts. A number of factors could cause production interruptions at eitherour manufacturing facility or the facilities of our CMOs or suppliers, including equipment malfunctions, labor or employment retention problems, naturaldisasters, power outages, terrorist activities, or disruptions in the operations of our suppliers. Alternatively, there is the possibility we may have excessmanufacturing capacity if product candidates do not progress as planned.As mentioned above, reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured all of our productcandidates ourselves, including reliance on the third party for regulatory compliance, the possibility of breach of the manufacturing agreement by the thirdparty because of factors beyond our control, and the possibility of termination or non-renewal of the agreement by the third party, based on its own businesspriorities, at a time that is costly or inconvenient for us.Biopharmaceutical manufacturing is also subject to extensive government regulation. Components of a finished therapeutic product approved forcommercial sale or used in late-stage clinical trials must be manufactured in accordance with current good manufacturing practices (“cGMP”). Theseregulations govern manufacturing processes and procedures (including record keeping) and the implementation and operation of quality systems to controland assure the quality of investigational products and products approved for sale. Our facilities and quality systems and the facilities and quality systems ofsome or all of our third party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatoryapproval of a product candidate. In addition, facilities are subject to on-going inspections and routine audits, and minor changes in manufacturing processesmay require additional regulatory approvals and audits, either of which could cause us to incur significant additional costs, set-backs or delays and eventualloss of revenue.Risks associated with doing business internationally could negatively affect our business.We have research and development operations in Switzerland and the United Kingdom. We expect to pursue pathways to develop and commercializeour product candidates in both U.S. and non-U.S. jurisdictions. Various risks associated with foreign operations may impact our success. Possible risks offoreign operations include fluctuations in the value of foreign and domestic currencies requirements to comply with various jurisdictional requirements suchas data privacy regulations, disruptions in the import, export, and transportation of patient tumors and our products or product candidates, the product andservice needs of foreign customers, difficulties in building and managing foreign relationships, the performance of our licensees or collaborators, geopoliticalinstability, unexpected regulatory, economic, or political changes in foreign and domestic markets, including without limitation any resulting from theUnited Kingdom’s withdrawal from the European Union or our current political regime, and limitations on the flexibility of our operations and costs imposedby local labor laws. For example, in 2008 our Oncophage® vaccine was approved for sale in Russia, but we have never received, and do not expect to receive,any revenues from sales in Russia. See “Risk Factors—Even if we receive marketing approval for our product candidates, such product approvals could besubject to restrictions or withdrawals. Regulatory requirements are subject to change. Further, even if we receive marketing approval, we may not receivesufficient coverage and adequate reimbursement for our products.”Our competitors may have superior products, manufacturing capability, selling and marketing expertise and/or financial and other resources.Our product candidates and the product candidates in development by our collaboration partners may fail because of competition from majorpharmaceutical companies and specialized biotechnology companies that market products, or that are engaged in the development of product candidates andfor the treatment of cancer. Many of our competitors, including large pharmaceutical companies, have greater financial and human resources and moreexperience than we do. Our competitors may: •develop safer or more effective therapeutic drugs or therapeutic vaccines and other products; •establish superior intellectual property positions; •discover technologies that may result in medical insights or breakthroughs, which render our drugs or vaccines obsolete, possibly before theygenerate any revenue, if ever; •adversely affect our ability to recruit patients for our clinical trials;19Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. •solidify partnerships or strategic acquisitions that may increase the competitive landscape; •develop or commercialize their product candidates sooner than we commercialize our own, if ever; or •implement more effective approaches to sales and marketing and capture some of our potential market share.There is no guarantee that our product candidates will be able to compete with potential future products being developed by our competitors.The CPM landscape is crowded with several competitors developing assets against a number of targets. Development plans are spread out acrossvarious indications and lines of therapy, either alone or in combination with other assets. Competitors range from small cap to large cap companies, withassets in preclinical or clinical stages of development. Therefore, the landscape is dynamic and constantly evolving. We and our partners have CPM antibodyprograms currently in clinical stage development targeting CTLA-4, GITR and OX40, with our PD-1 antagonist anticipated to enter into the clinic in the firsthalf 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 samebiological targets as these programs, including, without limitation, the following: (1) BMS markets ipilimumab, an anti-CTLA-4 antibody, and nivolumab,an anti-PD-1 antibody, and is developing agonists to GITR and OX-40, (2) Merck has an approved anti-PD-1 antibody in the United States, and is developingan anti-GITR agonist, (3) Ono Pharmaceuticals has an approved anti-PD-1 antibody in Japan, (4) AstraZeneca/Medimmune has anti-CTLA-4, PD-1, PD-L1,GITR and OX40 targeting antibodies in development, (5) Pfizer has anti-PD-L1 (with Merck KgA), anti-PD-1, and anti-OX40 antibodies in clinicaldevelopment, (6) Novartis has anti-PD-1, anti-PD-L1 and anti-GITR antibodies in clinical trials, and (7) Roche/Genetech has an approved anti-PD-L1 and ananti-OX40 antibody 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 preclinicalantibodies against these targets. In addition, we are also aware of competitors with clinical stage antibodies against targets in our earlier stage programs suchas TIM-3, LAG-3, 4-1BB, TIGIT and other undisclosed targets. These include, but are not limited to, BMS, Pfizer, Novartis, Merck, Roche, Tesaro andRegeneron. Additionally, we are also aware of competitors with assets against these targets that are in preclinical development. There is no guarantee that ourantibody 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 aloneor in combination with AstraZeneca’s anti-PD-L1 antibody). Additionally, we are also aware of cervical cancer clinical trials exploring other CPM targetsincluding, but not restricted to, PD-L1 + IDO (Roche), VISTA (Janssen), OX40 +/- 4-1BB (Pfizer).We have autologous vaccines programs in development including our Prophage vaccine in clinical development for GBM and our neo-antigen basedAutoSynVax vaccine in preclinical development. We are aware of many companies pursuing personalized cancer vaccines in preclinical or clinicaldevelopment, including, without limitation, the following: Neon Therapeutics, Gritstone Oncology, Advaxis, BioNTech, Moderna and Merck, Nouscom,Immatics and Green Peptides.Several companies have products that utilize similar technologies and/or patient-specific medicine techniques that compete with our HSP basedvaccines. For treatment of recurrent glioma, Roche markets bevacizumab and Eisai and Arbor Pharmaceuticals market carmustine. Schering Corporation, asubsidiary of Merck, markets temozolomide for treatment of patients with ndGBM and refractory astrocytoma. Other companies are developing vaccines forthe treatment of patients with ndGBM, such as Green Cross Cell - formerly Innocell Corp (Immuncell-LC), ImmunoCellular Therapeutics (ICT-107),Northwest Biotherapeutics (DC-Vax), 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 productsapproved 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 faceincreased competition in the future as new companies enter markets we seek to address and scientific developments surrounding immunotherapy and othertraditional 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 indevelopment 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) MF59,20Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.under development by Novartis, (3) IC31, under development by Intercell (now part of Valneva), and (4) MPL, under development by GSK. In the past, wehave provided QS-21 Stimulon to other entities under materials transfer arrangements. In at least one instance, it is possible that this material was usedunlawfully to develop synthetic formulations and/or derivatives of QS-21. In addition, companies such as Adjuvance Technologies, Inc., CSL Limited, andNovavax, Inc., as well as academic institutions and manufacturers of saponin extracts, are developing saponin adjuvants, including derivatives and syntheticformulations. These sources may be competitive to our ability to execute future partnering and licensing arrangements involving QS-21 Stimulon. Theexistence of products developed by these and other competitors, or other products of which we are not aware or which other companies may develop in thefuture, may adversely affect the marketability of products developed or sold using QS-21 Stimulon.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 bythis third party may create marketplace confusion and have an adverse effect on the goodwill generated by us and our partners with respect to QS-21Stimulon. 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.Failure to realize the anticipated benefits or our strategic acquisitions and licensing transactions could adversely affect our business, operations andfinancial condition.An important part of our business strategy has been to identify and advance a pipeline of product candidates by acquiring and in-licensing productcandidates, technologies and businesses that we believe are a strategic fit with our existing business. Since we acquired Agenus Switzerland Inc., formerlyknown as 4-Antibody AG (“4-AB”), in February 2014, we have completed numerous additional strategic acquisitions and licensing transactions. Theultimate success of these strategic transactions entails numerous operational and financial risks, including: •higher than expected development and integration costs; •difficulty in combining the technologies, operations and personnel of acquired businesses with our technologies, operations and personnel; •exposure to unknown liabilities; •difficulty or inability to form a unified corporate culture across multiple office sites both nationally and internationally; •inability to retain key employees of acquired businesses; •disruption of our business and diversion of our management’s time and attention; and •difficulty or inability to secure financing to fund development activities for such acquired or in-licensed product candidates, technologies orbusinesses.We have limited resources to integrate acquired and in-licensed product candidates, technologies and businesses into our current infrastructure, andwe may fail to realize the anticipated benefits of our strategic transactions. Any such failure could have an adverse effect on our business, operations andfinancial condition.Failure to enter into and/or maintain significant licensing, distribution and/or collaboration agreements on favorable terms to us may hinder or causeus to cease our efforts to develop and commercialize our product candidates, increase our development timelines, and/or increase our need to rely onpartnering or financing mechanisms, such as sales of debt or equity securities, to fund our operations and continue our current and anticipated programs.As previously noted, our ability to advance our antibody programs depends in part on collaboration agreements such as our collaboration with Incyte.See “Risk Factors—Risks Related to Our Business—We are dependent upon our collaboration with Incyte to further develop, manufacture andcommercialize antibodies against certain targets. If we or Incyte fail to perform as expected, the potential for us to generate future revenues under thecollaboration would be significantly reduced, the development and/or commercialization of these antibodies may be terminated or substantially delayed, andour business could be severely harmed.” In addition, from time to time we engage in efforts to enter into licensing, distribution and/or collaborationagreements with one or more pharmaceutical or biotechnology companies to assist us with development and/or commercialization of our other productcandidates. If we are successful in entering into such agreements, we may not be able to negotiate agreements with economic terms similar to those negotiatedby other companies. We may not, for example, obtain significant upfront payments, substantial royalty rates or milestones. If we fail to enter into any suchagreements, our efforts to develop and/or commercialize our product candidates may be undermined. In addition, if we do not raise funds through any suchagreements, we will need to rely on other financing mechanisms, such as sales of debt or equity securities, to fund our operations. Such financingmechanisms, if available, may not be sufficient or timely enough to advance our programs forward in a meaningful way in the short-term.21Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Because we rely on collaborators and licensees for the development and commercialization of many of our product candidate programs, theseprograms may not prove successful, and/or we may not receive significant payments from such parties.Part of our strategy is to develop and commercialize many of our product candidates by continuing or entering into arrangements with academic,government, or corporate collaborators and licensees. Our success depends on our ability to negotiate such agreements on favorable terms and on the successof the other parties in performing research, pre-clinical and clinical testing, completing regulatory applications, and commercializing product candidates. Ourresearch, development, and commercialization efforts with respect to antibody candidates from our technology platforms are, in part, contingent upon theparticipation of institutional and corporate collaborators. For example, in February 2015, we began a broad collaboration with Incyte to pursue the discoveryand development of antibodies. See “Risk Factors-Risks Related to our Business—We are dependent upon our collaboration with Incyte to further develop,manufacture and commercialize antibodies against certain targets. If we or Incyte fail to perform as expected, the potential for us to generate future revenuesunder the collaboration would be significantly reduced, the development and/or commercialization of these antibodies may be terminated or substantiallydelayed, and our business could be severely harmed.” Furthermore, we have a collaboration arrangement with Recepta for CTLA-4 and PD-1, giving Receptarights to certain South American countries and requiring us to agree upon development plans for these candidates. Disagreements or the failure of either partyto perform satisfactorily could have an adverse impact on these programs.In addition, substantially all product candidates containing QS-21 Stimulon depend on the success of our collaboration partners or licensees, and ourrelationships with these third parties. Such product candidates depend on our collaborators and licensees successfully enrolling patients and completingclinical trials, being committed to dedicating the resources necessary to advance these product candidates, obtaining regulatory approvals, and successfullymanufacturing and commercializing product candidates.The Brain Tumor Trials Collaborative is sponsoring a Phase 2 clinical trial of our Prophage vaccine candidate in combination with Merck’spembrolizumab in patients with glioma. When our licensees or third party collaborators sponsor clinical trials using our product candidates, we cannotcontrol the timing of enrollment, data readout, or quality of such trials or related activities. In addition, substantially all product candidates containing QS-21Stimulon depend on the success of our collaboration partner. Such product candidates depend on our collaborator successfully enrolling patients andcompleting clinical trials, being committed to dedicating the resources to advance these product candidates, obtaining regulatory approvals, and successfullymanufacturing and commercializing product candidates. Development activities for our collaboration programs may fail to produce marketable products due to unsuccessful results or abandonment of theseprograms, failure to enter into future collaborations or license agreements, or the inability to manufacture product supply requirements for our collaboratorsand licensees. Several of our agreements also require us to transfer important rights and regulatory compliance responsibilities to our collaborators andlicensees. As a result of these collaboration agreements, we will not control the nature, timing, or cost of bringing these product candidates to market. Ourcollaborators and licensees could choose not to, or be unable to, devote resources to these arrangements or adhere to required timelines, or, under certaincircumstances, may terminate these arrangements early. They may cease pursuing product candidates or elect to collaborate with different companies. Inaddition, these collaborators and licensees, outside of their arrangements with us, may develop technologies or products that are competitive with those thatwe are developing. From time to time, we may also become involved in disputes with our collaborators or licensees. Such disputes could result in theincurrence of significant expense, or the termination of collaborations. We may be unable to fulfill all of our obligations to our collaborators, which mayresult in the termination of collaborations. As a result of these factors, our strategic collaborations may not yield revenue. Furthermore, we may not be able toenter into new collaborations on favorable terms or at all. Failure to generate significant revenue from collaborations could increase our need to fund ouroperations through sales of debt or equity securities and would negatively affect our business prospects.Our internal computer systems, or those of our third-party CROs, CMOs, licensees, collaborators or other contractors or consultants, may fail or suffersecurity breaches, which could result in a material disruption in our business and operations or could subject us to sanctions and penalties that could havea material adverse effect on our reputation or financial condition.Despite the implementation of security measures, our internal computer systems and those of our current and future CROs, CMOs, licensees,collaborators and other contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war andtelecommunication and electrical failures. While we are not aware of any such material system failure, accident or security breach to date, if such an eventwere to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations. Forexample, the loss of clinical trial data from completed, on-going or future clinical trials could result in delays in our regulatory approval efforts andsignificant costs to recover or reproduce the data. Likewise, we rely on third parties to manufacture our drug candidates and conduct clinical trials, andsimilar events relating to their computer systems could also have a material adverse effect on our business. To the extent that any disruption or securitybreach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incurliabilities and the further development and commercialization of our product candidates could be delayed.22Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We use and store customer, vendor, employee and business partner and, in certain instances patient, personally identifiable information in the ordinarycourse of our business. We are subject to various domestic and international privacy and security regulations, including but not limited to the HealthInsurance Portability and Accountability Act of 1996 (“HIPAA”), which mandates, among other things, the adoption of uniform standards for the electronicexchange of information in common healthcare transactions, as well as standards relating to the privacy and security of individually identifiable healthinformation, which require the adoption of administrative, physical and technical safeguards to protect such information. In addition, many states haveenacted comparable laws addressing the privacy and security of health information, some of which are more stringent than HIPAA. Failure to comply withthese standards, or a computer security breach or cyber-attack that affects our systems or results in the unauthorized release of proprietary or personallyidentifiable information, could subject us to criminal penalties and civil sanctions, and our reputation could be materially damaged and our operations couldbe impaired. We may also be exposed to a risk of loss or litigation and potential liability, which could have a material adverse effect on our business, resultsof operations and financial condition.We are highly reliant on certain members of our management team. In addition, we have limited internal resources and if we fail to recruit and/orretain the services of key employees and external consultants as needed, we may not be able to achieve our strategic and operational objectives.Each of Garo H. Armen, Ph.D., the Chairman of our Board of Directors and our Chief Executive Officer who co-founded the Company in 1994,Dr. Robert Stein, our President of R&D who joined the Company in January 2014, and Dr. Jean-Marie Cuillerot, our Chief Medical Officer who joined theCompany in July 2016, are integral to building our company and developing our technology. If any of Dr. Armen, Dr. Stein or Dr. Cuillerot is unable orunwilling to continue his relationship with Agenus, our business may be adversely impacted. We have employment agreements with each of Dr. Armen,Dr. Stein and Dr. Cuillerot. They each play important roles in our day-to-day activities. We do not carry key employee insurance policies for Dr. Armen,Dr. Stein, Dr. Cuillerot or any other employee.Our future growth success depends to a significant extent on the skills, experience and efforts of our executive officers and key members of our clinicaland scientific staff. We face intense competition for qualified individuals from other pharmaceutical, biopharmaceutical and biotechnology companies, aswell as academic and other research institutions. We may be unable to retain our current personnel or attract or assimilate other highly qualified managementand clinical personnel in the future on acceptable terms. The loss of any or all of these individuals could harm our business and could impair our ability tosupport our collaboration partners or our growth generally. If our management is unable to effectively manage our growth, our expenses may increase morethan expected, our ability to generate revenue could be reduced and we may not be able to implement our business strategy.We rely on a small staff of highly trained and experienced senior management and scientific, administrative and operations personnel and consultantsto conduct our business in certain key areas of our organization. The competition for qualified personnel in the biotechnology field is intense, and if we arenot able to continue to attract and retain qualified personnel and/or maintain positive relationships with our outside consultants, we may not be able toachieve our strategic and operational objectives.Calamities, power shortages or power interruptions could disrupt our business and materially adversely affect our operations.If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our facilities, that damagedcritical infrastructure (such as our manufacturing facility) or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us tocontinue certain activities, such as for example our manufacturing capabilities, for a substantial period of time. In December 2015, we acquired an antibodypilot plant manufacturing facility and leased additional office space in Berkeley, CA. This location is in an area of seismic activity near active earthquakefaults. Any earthquake, terrorist attack, fire, power shortage or other calamity affecting our facilities or those of third parties upon whom we depend maydisrupt our business and could have a material adverse effect on our business, results of operations, financial condition and prospects. The disaster recoveryand business continuity plans we have in place currently are limited and are unlikely to prove adequate in the event of a serious disaster or similar event. Wemay incur substantial expenses and delays as a result of the limited nature of our disaster recovery and business continuity plans, which could have a materialadverse effect on our business.Risks Related to Regulation of the Biopharmaceutical IndustryThe drug development and approval process is uncertain, time-consuming, and expensive.Drug development, including non-clinical testing and clinical development, and the process of obtaining regulatory approvals for new therapeuticproducts, is lengthy, expensive, and uncertain. For example, as of December 31, 2016, we had spent approximately 21 years and $568.0 million on ourresearch and development programs. The development and regulatory approval processes also can vary substantially based on the therapeutic area, type,complexity, and novelty of the product. We must provide regulatory authorities with manufacturing, product characterization, and pre-clinical and clinicaldata demonstrating that our product candidates are safe and effective before they can be approved for commercial sale. It may take us many years to completeour testing,23Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.and failure can occur at any stage. Results of pre-clinical studies do not necessarily predict clinical results, and promising results in early clinical studiesmight not be confirmed in later studies. Any pre-clinical or clinical test may fail to produce results satisfactory to regulatory authorities for many reasons,including but not limited to emerging manufacturing or control issues, limitations of pre-clinical assessments, difficulties to enroll a sufficient number ofpatients, changing therapeutic landscape or failure to prospectively identify the benefit/risk profile of the new product. Pre-clinical and clinical data can beinterpreted in different ways, which could delay, limit, or prevent regulatory approval. Negative or inconclusive results from a pre-clinical study or clinicaltrial, adverse medical events during a clinical trial, or safety issues emerging with products of the same class of drug could require additional studies or causea program to be terminated, even if other studies or trials relating to the program are successful. We or the FDA, other regulatory agencies, or an institutionalreview board may suspend or terminate human clinical trials at any time on various grounds.The timing and success of a clinical trial is dependent on obtaining and maintaining sufficient cash resources, successful production of clinical trialmaterial, enrolling sufficient patients in a timely manner, avoiding or mitigating serious or significant adverse patient reactions, and demonstrating efficacyof the product candidate in order to support a favorable risk versus benefit profile, among other considerations. The timing and success of our clinical trials,in particular, are also dependent on clinical sites and regulatory authorities accepting each trial’s protocol, statistical analysis plan, product characterizationtests, and final clinical results. In addition, regulatory authorities may request additional information or data that is not readily available. Delays in ourability to respond to such requests would delay, and failure to adequately address concerns would prevent, our commercialization efforts. We haveencountered in the past, and may encounter in the future, delays in initiating trial sites and enrolling patients into our clinical trials. Future enrollment delayswill postpone the dates by which we expect to complete the impacted trials and the potential receipt of regulatory approval. There is no guarantee we willsuccessfully initiate and/or complete our clinical trials.Delays or difficulties in obtaining regulatory approvals or clearances for our product candidates may: •adversely affect the marketing of any products we or our licensees or collaborators develop; •impose significant additional costs on us or our licensees or collaborators; •diminish any competitive advantages that we or our licensees or collaborators may attain; •limit our ability to receive royalties and generate revenue and profits; and •adversely affect our business prospects and ability to obtain financing.Delays or failures in our receiving regulatory approval for our product candidates in a timely manner may result in us having to incur additionaldevelopment expense and subject us to having to secure additional financing. As a result, we may not be able to commercialize them in the time frameanticipated, and our business will suffer.Even if we or our partners receive marketing approval for our product candidates, such product approvals could be subject to restrictions orwithdrawals. Regulatory requirements are subject to change. Further, even if we or our partners receive marketing approval, we may not receive sufficientcoverage and adequate reimbursement for our products.Regulatory authorities generally approve products for particular indications. If an approval is for a limited indication, this limitation reduces the sizeof the potential market for that product. Product approvals, once granted, are subject to continual review and periodic inspections by regulatory authorities.Our operations and practices are subject to regulation and scrutiny by the United States government, as well as governments of any other countries in whichwe do business or conduct activities. Later discovery of previously unknown problems or safety issues, and/or failure to comply with domestic or foreignlaws, knowingly or unknowingly, can result in various adverse consequences, including, among other things, possible delay in approval or refusal to approvea product, warning letters, fines, injunctions, civil penalties, recalls or seizures of products, total or partial suspension of production, refusal of thegovernment to renew marketing applications, complete withdrawal of a marketing application, corrective action requirements, and/or criminal prosecution,withdrawal of an approved product from the market, and/or exclusion from government health care programs. Such regulatory enforcement could have adirect and negative impact on the product for which approval is granted and could have a negative impact on the approval of any pending applications formarketing approval of new drugs or supplements to approved applications.Because we operate in a highly regulated industry, regulatory authorities could take enforcement action against us in connection with our licensees’or collaborators’, and/or our business and marketing activities for various reasons. For example, the Foreign Corrupt Practices Act prohibits U.S. companiesand their representatives from offering, promising, authorizing, or making payments to foreign governmental officials for the purpose of obtaining orretaining business abroad.From time to time, new legislation is passed into law that could significantly change the statutory provisions governing the approval, manufacturing,and marketing of products regulated by the FDA and other foreign health authorities. Additionally, regulations and guidance are often revised orreinterpreted by health agencies in ways that may significantly affect our business and24Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.our products. It is impossible to predict whether further legislative changes will be enacted, or whether regulations, guidance, or interpretations will change,and what the impact of such changes, if any, may be. For example, the Patient Protection and Affordable Care Act and the Health Care and EducationAffordability Reconciliation Act of 2010 (collectively the “ACA”), enacted in March 2010, substantially changed the way healthcare is financed by bothgovernmental and private insurers, and significantly impacted the pharmaceutical industry. With regard to pharmaceutical products, among other things,ACA is expected to expand, increase, and change the methodology regarding industry rebates for drugs covered under Medicaid programs; impose an annual,nondeductible fee on any entity that manufactures or imports specific branded prescription drugs and biologic agents, apportioned among those entitiesaccording to market share in certain government healthcare programs; expand eligibility criteria for Medicaid programs by, among other things, allowingstates to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level; expand the entities eligible for discountsunder the Public Health Service pharmaceutical pricing program; create a new Patient Centered Outcomes Research Institute to oversee, identify priorities in,and conduct comparative clinical effectiveness research, along with funding for such research; and make changes to the coverage requirements under theMedicare D program. Significant legislative changes to the ACA also appear likely in the 115th U.S. Congress under the Trump Administration.We expect both government and private health plans to continue to require healthcare providers, including healthcare providers that may one daypurchase our products, to contain costs and demonstrate the value of the therapies they provide. Even if our product candidates are approved, the commercialsuccess of our products will depend substantially on the extent to which they are covered by third-party payors, including government health authorities andprivate health insurers. In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors, and coverageand reimbursement for products can differ significantly from payor to payor. If coverage and reimbursement are not available, or reimbursement is availableonly to limited levels, we or our collaborators may not be able to successfully commercialize our product candidates.New data from our research and development activities, and/or resource considerations could modify our strategy and result in the need to adjust ourprojections of timelines and costs of programs.Because we are focused on novel technologies, our research and development activities, including our nonclinical studies and clinical trials, involvethe ongoing discovery of new facts and the generation of new data, based on which we determine next steps for a relevant program. These developments canoccur with varying frequency and constitute the basis on which our business is conducted. We make determinations on an ongoing basis as to which of thesefacts or data will influence timelines and costs of programs. We may not always be able to make such judgments accurately, which may increase the costs weincur attempting to commercialize our product candidates. We monitor the likelihood of success of our initiatives and we may need to discontinue funding ofsuch activities if they do not prove to be commercially feasible, due to our limited resources.We may need to successfully address a number of technological challenges in order to complete development of our product candidates. Moreover,these product candidates may not be effective in treating any disease or may prove to have undesirable or unintended side effects, toxicities, or othercharacteristics that may preclude our obtaining regulatory approvals or prevent or limit commercial use.Risks Related to Intellectual Property RightsIf we are unable to obtain and enforce patent protection for our product candidates and related technology, our business could be materially harmed.We rely upon a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to ourproduct candidates and technology. Any disclosure to or misappropriation by third parties of our confidential proprietary information could enablecompetitors to duplicate or surpass our technological achievements, eroding our competitive position in the market. Our patent applications may not result inissued patents, and, even if issued, the patents may be challenged and invalidated. Moreover, our patents and patent applications may not be sufficientlybroad to prevent others from practicing our technologies or developing competing products. We also face the risk that others may independently developsimilar or alternative technologies or may design around our proprietary property.Issued patents may be challenged, narrowed, invalidated or circumvented. In addition, court decisions may introduce uncertainty in the enforceabilityor scope of patents owned by biotechnology companies. The legal systems of certain countries do not favor the aggressive enforcement of patents, and thelaws of foreign countries may not allow us to protect our inventions with patents to the same extent as the laws of the United States. Because patentapplications in the United States and many foreign jurisdictions are typically not published until 18 months after filing, or in some cases not at all, andbecause publications of discoveries in scientific literature lag behind actual discoveries, we cannot be certain that we were the first to make the inventionsclaimed in our issued patents or pending patent applications, or that we were the first to file for protection of the inventions set forth in our patents or patentapplications. As a result, we may not be able to obtain or maintain protection for certain inventions. Therefore, the enforceability and scope of our patents inthe United States and in foreign countries cannot be predicted with certainty and, as a result, any patents that we own or license may not provide sufficientprotection against competitors. We may not be able to obtain or maintain patent25Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.protection from our pending patent applications, from those we may file in the future, or from those we may license from third parties. Moreover, even if weare able to obtain patent protection, such patent protection may be of insufficient scope to achieve our business objectives.Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time. Patents have a limitedlifespan. In the United States, the natural expiration of a patent is generally 20 years after its effective filing date. Various extensions may be available;however the life of a patent, and the protection it affords, is limited. Without patent protection for our product candidates, we may be open to competitionfrom biosimilar or generic versions of our product candidates. Furthermore, the product development timeline for biotechnology products is lengthy and it ispossible that our issued patents covering our product candidates in the United States and other jurisdictions may expire prior to commercial launch. Forexample, if we encounter delays in our development efforts, including our clinical trials, the period of time during which we could market our productcandidates under patent protection could be reduced.Our strategy depends on our ability to identify and seek patent protection for our discoveries. This process is expensive and time consuming, and weand our current or future licensors or licensees may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in atimely manner or in all jurisdictions where protection may be commercially advantageous. It is also possible that we or our current licensors or licensees, orany future licensors or licensees, may not identify patentable aspects of inventions made in the course of development and commercialization activities intime to obtain patent protection on them. Therefore, these and any of our patents and applications may not be prosecuted and enforced in a manner consistentwith the best interests of our business. Defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, forexample with respect to proper priority claims, inventorship, etc. If we or our current licensors or licensees, or any future licensors or licensees, fail toestablish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If our current licensors orlicensees, or any future licensors or licensees, are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patentrights, such patent rights could be compromised. If there are material defects in the form or preparation of our patents or patent applications, such patents orapplications may be invalid and unenforceable. Despite our efforts to protect our proprietary rights, unauthorized parties may be able to obtain and useinformation that we regard as proprietary. The issuance of a patent does not ensure that it is valid or enforceable, so even if we obtain patents, they may not bevalid or enforceable against third parties. In addition, the issuance of a patent does not give us the right to practice the patented invention. Third parties mayhave blocking patents that could prevent us from marketing our own patented product and practicing our own patented technology. Any of these outcomescould impair our ability to prevent competition from third parties, which may have an adverse impact on our business.The patent landscape in the field of therapeutic antibody development, manufacture and commercialization is crowded. For example, we are aware ofthird party patents directed to methods for identifying and producing therapeutic antibodies. We are also aware of third party patents directed to antibodies tonumerous targets for which we also seek to identify, develop, and commercialize antibodies. For example, some patents claim antibodies based oncompetitive binding with existing antibodies, some claim antibodies based on specifying sequence or other structural information, and some claim variousmethods of discovery, production, or use of such antibodies.These or other third party patents could impact our freedom to operate in relation to our technology platforms, as well as in relation to developmentand commercialization of antibodies identified by us as therapeutic candidates. As we discover and develop our candidate antibodies, we will continue toconduct analyses of these third party patents to determine whether we believe we might infringe them, and if so, whether they would be likely to be deemedvalid and enforceable if challenged. If we determine that a license for a given patent or family of patents is necessary or desirable, there can be no guaranteethat a license would be available on favorable terms, or at all. Inability to obtain a license on favorable terms, should such a license be determined to benecessary or desirable, could, without limitation, result in increased costs to design around the third party patents, delay product launch, or result incancellation of the affected program or cessation of use of the affected technology.Third parties may also seek to market biosimilar versions of any approved products. Alternatively, third parties may seek approval to market their ownproducts similar to or otherwise competitive with our products. In these circumstances, we may need to defend and/or assert our patents, including by filinglawsuits alleging patent infringement. In any of these types of proceedings, a court or agency with jurisdiction may find our patents invalid and/orunenforceable. Even if we have valid and enforceable patents, these patents still may not provide protection against competing products or processessufficient to achieve our business objectives.We own, co-own or have exclusive rights to approximately 40 issued United States patents and approximately 125 issued foreign patents. We alsoown, co-own or have exclusive rights to approximately 35 pending United States patent applications and approximately 80 pending foreign patentapplications. However, our patents may not protect us against our competitors. Our patent positions, and those of other biopharmaceutical, pharmaceuticaland biotechnology companies, are generally uncertain and involve complex legal, scientific, and factual questions. The standards which the United StatesPatent and Trademark Office (“USPTO”) uses to grant patents, and the standards which courts use to interpret patents, are not always applied predictably oruniformly and can26Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.change, particularly as new technologies develop. Consequently, the level of protection, if any, that will be provided by our patents if we attempt to enforcethem and they are challenged, is uncertain. In addition, the type and extent of patent claims that will be issued to us in the future is uncertain. Any patentsthat are issued may not contain claims that permit us to stop competitors from using similar technology.Through our acquisitions of 4-AB, PhosImmune and certain assets of Celexion, we own, co-own, or have exclusive rights to a number of patents andpatent applications directed to various methods and compositions, including methods for identifying therapeutic antibodies and product candidates arisingout of such entities’ technology platforms. In particular, we own patents and patent applications relating to our Retrocyte DisplayTM technology platform, ahigh throughput antibody expression platform for the identification of fully-human and humanized monoclonal antibodies. This patent family is projected toexpire between 2029 and 2031. Through our acquisition of PhosImmune, we own, co-own, or have exclusive rights to patents and patent applicationsdirected to various methods and compositions, including a patent directed to methods for identifying phosphorylated proteins using mass spectrometry. Thispatent is projected to expire in 2023. We also own patents and patent applications relating to the SECANT® platform, a platform used for the generation ofnovel monoclonal antibodies. This patent family is projected to expire between 2028 and 2029. In addition, as we advance our research and developmentefforts with our institutional and corporate collaborators, we are seeking patent protection for newly identified therapeutic antibodies and product candidates.We can provide no assurance that any of our patents, including the patents that we 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 patentapplications that we acquired or in-licensed in connection with our acquisitions of 4-AB, PhosImmune and certain assets of Celexion, will result in theissuance of valid and enforceable patentsOur issued patents covering Prophage vaccine and methods of use thereof, alone or in combination with other agents, expired or will expire at variousdates between 2015 and 2024. In particular, our issued U.S. patents covering Prophage composition of matter expired in 2015. In addition, our issued patentscovering QS-21 Stimulon composition of matter expired in 2008. We continue to explore means of extending the life cycle of our patent portfolio.The patent position of biopharmaceutical, pharmaceutical or biotechnology companies, including ours, is generally uncertain and involves complexlegal and factual considerations. The standards which the USPTO and its foreign counterparts use to grant patents are not always applied predictably oruniformly and can change. There is also no uniform, worldwide policy regarding the subject matter and scope of claims granted or allowable inbiopharmaceutical, pharmaceutical or biotechnology patents. The laws of some foreign countries do not protect proprietary information to the same extent asthe laws of the United States, and many companies have encountered significant problems and costs in protecting their proprietary information in theseforeign countries. Outside the United States, patent protection must be sought in individual jurisdictions, further adding to the cost and uncertainty ofobtaining adequate patent protection outside of the United States. Accordingly, we cannot predict whether additional patents protecting our technology willissue in the United States or in foreign jurisdictions, or whether any patents that do issue will have claims of adequate scope to provide competitiveadvantage. Moreover, we cannot predict whether third parties will be able to successfully obtain claims or the breadth of such claims. The allowance ofbroader claims may increase the incidence and cost of patent interference proceedings, opposition proceedings, post-grant review, inter partes review, and/orreexamination proceedings, the risk of infringement litigation, and the vulnerability of the claims to challenge. On the other hand, the allowance of narrowerclaims does not eliminate the potential for adversarial proceedings, and may fail to provide a competitive advantage. Our issued patents may not containclaims sufficiently broad to protect us against third parties with similar technologies or products, or provide us with any competitive advantage.We may become involved in lawsuits to protect or enforce our patents, which could be expensive, time consuming and unsuccessful.Third parties may infringe or misappropriate our intellectual property, including our existing patents, patents that may issue to us in the future, or thepatents of our licensors or licensees to which we have a license. As a result, we may be required to file infringement claims to stop third-party infringement orunauthorized use. Further, we may not be able to prevent, alone or with our licensors or licensees, misappropriation of our intellectual property rights,particularly in countries where the laws may not protect those rights as fully as in the United States.If we or one of our licensors or licensees were to initiate legal proceedings against a third party to enforce a patent covering our product candidates,the defendant could counterclaim that the patent covering our product candidates is invalid and/or unenforceable. In patent litigation in the United States,defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third party can assertinvalidity or unenforceability of a patent.In addition, within and outside of the United States, there has been a substantial amount of litigation and administrative proceedings, includinginterference and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in various foreign jurisdictions, regardingpatent and other intellectual property rights in the biopharmaceutical industry. Recently, the AIA introduced new procedures, including inter partes reviewand post grant review. These procedures may be used by27Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.competitors to challenge the scope and/or validity of our patents, including those that patents perceived by our competitors as blocking entry into the marketfor their products, and the outcome of such challenges.Even after they have been issued, our patents and any patents which we license may be challenged, narrowed, invalidated or circumvented. If ourpatents are invalidated or otherwise limited or will expire prior to the commercialization of our product candidates, other companies may be better able todevelop products that compete with ours, which could adversely affect our competitive business position, business prospects and financial condition.The following are non-exclusive examples of litigation and other adversarial proceedings or disputes that we could become a party to involving ourpatents or patents licensed to us: •we or our collaborators may initiate litigation or other proceedings against third parties to enforce our patent rights; •third parties may initiate litigation or other proceedings seeking to invalidate patents owned by or licensed to us or to obtain a declaratoryjudgment that their product or technology does not infringe our patents or patents licensed to us; •third parties may initiate opposition proceedings, post-grant review, inter partes review, or reexamination proceedings challenging the validityor scope of our patent rights, requiring us or our collaborators and/or licensors or licensees to participate in such proceedings to defend thevalidity and scope of our patents; •there may be a challenge or dispute regarding inventorship or ownership of patents currently identified as being owned by or licensed to us; •the USPTO may initiate an interference or derivation proceeding between patents or patent applications owned by or licensed to us and thoseof our competitors, requiring us or our collaborators and/or licensors or licensees to participate in an interference or derivation proceeding todetermine the priority of invention, which could jeopardize our patent rights; or •third parties may seek approval to market biosimilar versions of our future approved products prior to expiration of relevant patents owned byor licensed to us, requiring us to defend our patents, including by filing lawsuits alleging patent infringement.These lawsuits and proceedings would be costly and could affect our results of operations and divert the attention of our managerial and scientificpersonnel. There is a risk that a court or administrative body could decide that our patents are invalid or not infringed by a third party’s activities, or that thescope of certain issued claims must be further limited. An adverse outcome in a litigation or proceeding involving our own patents could limit our ability toassert our patents against these or other competitors, affect our ability to receive royalties or other licensing consideration from our licensees, and may curtailor preclude our ability to exclude third parties from making, using and selling similar or competitive products. An adverse outcome may also put our pendingpatent applications at risk of not issuing, or issuing with limited and potentially inadequate scope to cover our product candidates. The outcome followinglegal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is noinvalidating prior art, of which we and the patent examiner were unaware during prosecution. Additionally, it is also possible that prior art of which we areaware, but which we do not believe affects the validity or enforceability of a claim, may, nonetheless, ultimately be found by a court of law or anadministrative panel to affect the validity or enforceability of a claim, for example, if a priority claim is found to be improper. If a defendant were to prevailon a legal assertion of invalidity and/or unenforceability, we could lose at least part, and perhaps all, of the patent protection on our relevant productcandidates. Such a loss of patent protection could have a material adverse impact on our business.Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or administrativeproceedings, there is a risk that some of our confidential information could be compromised by disclosure. In addition, during the course of litigation oradministrative proceedings, there could be public announcements of the results of hearings, motions or other interim proceedings or developments or publicaccess to related documents. If investors perceive these results to be negative, the market price for our common stock could be significantly harmed. Any ofthese occurrences could adversely affect our competitive business position, business prospects, and financial condition.Intellectual property rights do not necessarily address all potential threats to our competitive advantage. The degree of future protection for ourproprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep ourcompetitive advantage. For example: •others may be able to develop a platform that is similar to, or better than, ours in a way that is not covered by the claims of our patents; •others may be able to make compounds that are similar to our product candidates but that are not covered by the claims of our patents;28Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. •we might not have been the first to make the inventions covered by patents or pending patent applications; •we might not have been the first to file patent applications for these inventions; •any patents that we obtain may not provide us with any competitive advantages or may ultimately be found invalid or unenforceable; or •we may not develop additional proprietary technologies that are patentable.Our commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties. Other entities may have or obtainpatents or proprietary rights that could limit our ability to make, use, sell, offer for sale or import our future approved products or impair our competitiveposition. In particular the patent landscape around the discovery, development, manufacture and commercial use of our pre-clinical CPM antibody programsand therapeutic antibodies is crowded.Third parties may have or obtain valid and enforceable patents or proprietary rights that could block us from developing product candidates using ourtechnology. Our failure to obtain a license to any technology that we require may materially harm our business, financial condition and results of operations.Moreover, our failure to maintain a license to any technology that we require may also materially harm our business, financial condition, and results ofoperations. Furthermore, we would be exposed to a threat of litigation.In the biopharmaceutical industry, significant litigation and other proceedings regarding patents, patent applications, trademarks and otherintellectual property rights have become commonplace. The types of situations in which we may become a party to such litigation or proceedings include: •we or our collaborators may initiate litigation or other proceedings against third parties seeking to invalidate the patents held by those thirdparties or to obtain a judgment that our products or processes do not infringe those third parties’ patents; •if our competitors file patent applications that claim technology also claimed by us or our licensors or licensees, we or our licensors or licenseesmay be required to participate in interference, derivation or other proceedings to determine the priority of invention, which could jeopardizeour patent rights and potentially provide a third party with a dominant patent position; •if third parties initiate litigation claiming that our processes or products infringe their patent or other intellectual property rights, we and ourcollaborators will need to defend against such proceedings; and •if a license to necessary technology is terminated, the licensor may initiate litigation claiming that our processes or products infringe ormisappropriate their patent or other intellectual property rights and/or that we breached our obligations under the license agreement, and weand our collaborators would need to defend against such proceedings.These lawsuits would be costly and could affect our results of operations and divert the attention of our management and scientific personnel. There isa risk that a court would decide that we or our collaborators are infringing the third party’s patents and would order us or our collaborators to stop theactivities covered by the patents. In that event, we or our collaborators may not have a viable alternative to the technology protected by the patent and mayneed to halt work on the affected product candidate or cease commercialization of an approved product. In addition, there is a risk that a court will order us orour collaborators to pay the other party damages. An adverse outcome in any litigation or other proceeding could subject us to significant liabilities to thirdparties and require us to cease using the technology that is at issue or to license the technology from third parties. We may not be able to obtain any requiredlicenses on commercially acceptable terms or at all. Any of these outcomes could have a material adverse effect on our business.The biopharmaceutical industry has produced a significant number of patents, and it may not always be clear to industry participants, including us,which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation isnot always uniform or predictable. If we are sued for patent infringement, we would need to demonstrate that our products or methods either do not infringethe patent claims of the relevant patent or that the patent claims are invalid, and we may not be able to do this. Proving invalidity is difficult. For example, inthe United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issuedpatents. Even if we are successful in these proceedings, we may incur substantial costs and divert management’s time and attention in pursuing theseproceedings, which could have a material adverse effect on us. If we are unable to avoid infringing the patent rights of others, we may be required to seek alicense, defend an infringement action or challenge the validity of the patents in court. Patent litigation is costly and time consuming. We may not havesufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, develop or obtain non-infringing technology,fail to defend an infringement action successfully or have29Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.infringed patents declared invalid, we may incur substantial monetary damages, encounter significant delays in bringing our product candidates to marketand be precluded from manufacturing or selling our product candidates.The cost of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able tosustain the cost of such litigation and proceedings more effectively than we can because of their substantially greater resources. Uncertainties resulting fromthe initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.Patent litigation and other proceedings may also absorb significant management time. If we fail to comply with our obligations under our intellectual property licenses with third parties, we could lose license rights that are important toour business.We are currently party to various intellectual property license agreements. These license agreements impose, and we expect that future licenseagreements may impose, various diligence, milestone payment, royalty, insurance and other obligations on us. These licenses typically include an obligationto pay an upfront payment, yearly maintenance payments and royalties on sales. If we fail to comply with our obligations under the licenses, the licensorsmay have the right to terminate their respective license agreements, in which event we might not be able to market any product that is covered by theagreements. Termination of the license agreements or reduction or elimination of our licensed rights may result in our having to negotiate new or reinstatedlicenses with less favorable terms, which could adversely affect our competitive business position and harm our business.If we are unable to protect the confidentiality of our proprietary information, the value of our technology and products could be adversely affected.In addition to patent protection, we also rely on other proprietary rights, including protection of trade secrets, and other proprietary information. Tomaintain the confidentiality of trade secrets and proprietary information, we enter into confidentiality agreements with our employees, consultants,collaborators and others upon the commencement of their relationships with us. These agreements require that all confidential information developed by theindividual or made known to the individual by us during the course of the individual’s relationship with us be kept confidential and not disclosed to thirdparties. Our agreements with employees and our personnel policies also provide that any inventions conceived by the individual in the course of renderingservices to us shall be our exclusive property. However, we may not obtain these agreements in all circumstances, and individuals with whom we have theseagreements may not comply with their terms. Thus, despite such agreement, such inventions may become assigned to third parties. In the event ofunauthorized use or disclosure of our trade secrets or proprietary information, these agreements, even if obtained, may not provide meaningful protection,particularly for our trade secrets or other confidential information. To the extent that our employees, consultants or contractors use technology or know-howowned by third parties in their work for us, disputes may arise between us and those third parties as to the rights in related inventions. To the extent that anindividual who is not obligated to assign rights in intellectual property to us is rightfully an inventor of intellectual property, we may need to obtain anassignment or a license to that intellectual property from that individual, or a third party or from that individual’s assignee. Such assignment or license maynot be available on commercially reasonable terms or at all.Adequate remedies may not exist in the event of unauthorized use or disclosure of our proprietary information. The disclosure of our trade secretswould impair our competitive position and may materially harm our business, financial condition and results of operations. Costly and time consuminglitigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to maintain trade secret protection could adverselyaffect our competitive business position. In addition, others may independently discover or develop our trade secrets and proprietary information, and theexistence of our own trade secrets affords no protection against such independent discovery.As is common in the biopharmaceutical industry, we employ individuals who were previously or concurrently employed at research institutionsand/or other biopharmaceutical, biotechnology or pharmaceutical companies, including our competitors or potential competitors. We may be subject toclaims that these employees, or we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers,or that patents and applications we have filed to protect inventions of these employees, even those related to one or more of our product candidates, arerightfully owned by their former or concurrent employer. Litigation may be necessary to defend against these claims. Even if we are successful in defendingagainst these claims, litigation could result in substantial costs and be a distraction to management.Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, fee payment and other requirementsimposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to the USPTOand various foreign patent offices at various points over the lifetime of our patents and/or applications. We have30Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.systems in place to remind us to pay these fees, and we rely on our outside counsel or service providers to pay these fees when due. Additionally, the USPTOand various foreign patent offices require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patentapplication process. We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured bypayment of a late fee or by other means in accordance with rules applicable to the particular jurisdiction. However, there are situations in whichnoncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevantjurisdiction. If such an event were to occur, it could have a material adverse effect on our business. In addition, we are responsible for the payment of patentfees for patent rights that we have licensed from other parties.If any licensor of these patents does not itself elect to make these payments, and we fail to do so, we may be liable to the licensor for any costs andconsequences of any resulting loss of patent rights.Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity, and therefore, is costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reformlegislation. Further, recent U.S. Supreme Court rulings have either narrowed the scope of patent protection available in certain circumstances or weakened therights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination ofevents has created uncertainty with respect to the value of patents, once obtained.For our U.S. patent applications containing a claim not entitled to priority before March 16, 2013, there is a greater level of uncertainty in the patentlaw. In September 2011, the Leahy-Smith America Invents Act, or the American Invents Act (“AIA”), was signed into law. The AIA includes a number ofsignificant changes to U.S. patent law, including provisions that affect the way patent applications will be prosecuted and may also affect patent litigation.The USPTO is currently developing regulations and procedures to govern administration of the AIA, and many of the substantive changes to patent lawassociated with the AIA. It is not clear what other, if any, impact the AIA will have on the operation of our business. Moreover, the AIA and itsimplementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of ourissued patents, all of which could have a material adverse effect on our business and financial condition.An important change introduced by the AIA is that, as of March 16, 2013, the United States transitioned to a “first-inventor-to- file” system fordeciding which party should be granted a patent when two or more patent applications are filed by different parties claiming the same invention. A thirdparty that files a patent application in the USPTO after that date but before us could therefore be awarded a patent covering an invention of ours even if wehad made the invention before it was made by the third party. This will require us to be cognizant going forward of the time from invention to filing of apatent application. Furthermore, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our technologyand the prior art allow our technology to be patentable over the prior art. Since patent applications in the United States and most other countries areconfidential for a period of time after filing, we cannot be certain that we were the first to either (i) file any patent application related to our productcandidates or (ii) invent any of the inventions claimed in our patents or patent applications.Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent infringement suit and providingopportunities for third parties to challenge any issued patent in the USPTO. This applies to all of our U.S. patents, even those issued before March 16, 2013.Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal court necessary to invalidate apatent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the sameevidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTOprocedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information ofthird parties.We may have received confidential and proprietary information from third parties. In addition, we employ individuals who were previously employedat other biopharmaceutical, biotechnology or pharmaceutical companies. We may be subject to claims that we or our employees, consultants or independentcontractors have inadvertently or otherwise improperly used or disclosed confidential information of these third parties or our employees’ former employers.Further, we may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved indeveloping our product candidates. We may also be subject to claims that former employees, consultants, independent contractors, collaborators or otherthird parties have an ownership interest in our patents or other intellectual property. Litigation may be necessary to defend against these and other claimschallenging our right to and use of confidential and proprietary information. If we fail in defending any such claims, in addition to31Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.paying monetary damages, we may lose our rights therein. Such an outcome could have a material adverse effect on our business. Even if we are successful indefending against these claims, litigation could result in substantial cost and be a distraction to our management and employees.We may not be able to protect our intellectual property rights throughout the world.Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive. Therequirements for patentability may differ in certain countries, particularly developing countries. For example, China has a heightened requirement forpatentability, and specifically requires a detailed description of medical uses of a claimed drug. In addition, the laws of some foreign countries do not protectintellectual property rights to the same extent as laws in the United States. Consequently, we may not be able to prevent third parties from practicing ourinventions in all countries outside the United States. Competitors may use our technologies in jurisdictions where we have not obtained patent protection todevelop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement oninfringing activities is inadequate. These products may compete with our product candidates, and our patents or other intellectual property rights may not beeffective or sufficient to prevent them from competing.Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legalsystems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection,particularly those relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competingproducts in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs anddivert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patentapplications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and thedamages or other remedies awarded, if any, may not be commercially meaningful. In addition, certain countries in Europe and certain developing countries,including India and China, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In thosecountries, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to our patents to a third party, which couldmaterially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectualproperty rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license.Finally, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual propertylaws.Risks Related to LitigationWe may face litigation or regulatory investigations that could result in substantial damages and may divert management’s time and attention from ourbusiness.From time to time we may become a party to legal proceedings, claims and investigations that arise in the ordinary course of business such as, but notlimited to, patent, employment, securities, commercial and environmental matters. While we currently believe that the ultimate outcome of any of theseproceedings will not have a material adverse effect on our financial position, results of operations, or liquidity, litigation is subject to inherent uncertainty.Furthermore, litigation and regulatory investigations consume both cash and management attention.We maintain property and general commercial insurance coverage as well as errors and omissions and directors and officers insurance policies. Thisinsurance coverage may not be sufficient to cover us for future claims.If we or our employees fail to comply with laws or regulations, it could adversely impact our reputation, business and stock price.We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional and/or negligent failures tocomply with FDA regulations, to provide accurate information to the FDA, to comply with manufacturing standards we have established, to comply withfederal and state health care fraud and abuse, transparency, and/or data privacy and security laws and regulations, to report financial information or dataaccurately or to disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject toextensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices; to promote transparency; and to protect theprivacy and security of patient data. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, salescommission, customer incentive programs and other business arrangements.While we have adopted a corporate compliance program, we may not be able to protect against all potential issues of noncompliance. Efforts to ensurethat our business complies with all applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities willconclude that our business practices may not comply with current or32Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.future statutes, regulations, or case law involving applicable laws and regulations.Employee misconduct could also involve the improper use or disclosure of information obtained in the course of clinical trials, which could result inregulatory sanctions and serious harm to our reputation. In addition, during the course of our operations, our directors, executives and employees may haveaccess to material, nonpublic information regarding our business, our results of operations or potential transactions we are considering. We may not be able toprevent a director, executive or employee from trading in our common stock on the basis of, or while having access to, material, nonpublic information. If adirector, executive or employee was to be investigated, or an action was to be brought against a director, executive or employee for insider trading, it couldhave a negative impact on our reputation and our stock price. Such a claim, with or without merit, could also result in substantial expenditures of time andmoney, and divert attention of our management team.Product liability and other claims against us may reduce demand for our products and/or result in substantial damages.We face an inherent risk of product liability exposure related to testing our product candidates in human clinical trials and manufacturing antibodiesin our Berkeley, CA facility and may face even greater risks if we ever sell products commercially. An individual may bring a product liability claim againstus if one of our product candidates causes, or merely appears to have caused, an injury. Product liability claims may result in: •regulatory investigations; •injury to our reputation; •withdrawal of clinical trial volunteers; •costs of related litigation; and •substantial monetary awards to plaintiffs; and •decreased demand for any future products.We manufacture the Prophage vaccines from a patient’s cancer cells, and medical professionals must inject the vaccines into the same patient fromwhich they were manufactured. A patient may sue us if a hospital, a shipping company, or we fail to receive the removed cancer tissue or deliver that patient’svaccine. We do not have any other insurance that covers loss of or damage to the Prophage vaccines or tumor material, and we do not know whether suchinsurance will be available to us at a reasonable price or at all. We have limited product liability coverage for use of our product candidates. Our productliability policy provides $10.0 million aggregate coverage and $10.0 million per occurrence coverage. This limited insurance coverage may be insufficientto fully cover us for future claims.We are also subject to laws generally applicable to businesses, including but not limited to, federal, state and local wage and hour, employeeclassification, mandatory healthcare benefits, unlawful workplace discrimination and whistle-blowing. Any actual or alleged failure to comply with anyregulation applicable to our business or any whistle-blowing claim, even if without merit, could result in costly litigation, regulatory action or otherwiseharm our business, results of operations, financial condition, cash flow and future prospects.If we do not comply with environmental laws and regulations, we may incur significant costs and potential disruption to our business.We use or may use hazardous, infectious, and radioactive materials, and recombinant DNA in our operations, which have the potential of beingharmful to human health and safety or the environment. We store these hazardous (flammable, corrosive, toxic), infectious, and radioactive materials, andvarious wastes resulting from their use, at our facilities pending use and ultimate disposal. We are subject to a variety of federal, state, and local laws andregulations governing use, generation, storage, handling, and disposal of these materials. We may incur significant costs complying with both current andfuture environmental health and safety laws and regulations. In particular, we are subject to regulation by the Occupational Safety and Health Administration,the Environmental Protection Agency, the Drug Enforcement Agency, the Department of Transportation, the Centers for Disease Control and Prevention, theNational Institutes of Health, the International Air Transportation Association, and various state and local agencies. At any time, one or more of theaforementioned agencies could adopt regulations that may affect our operations. We are also subject to regulation under the Toxic Substances Control Actand the Resource Conservation Development programs.Although we believe that our current procedures and programs for handling, storage, and disposal of these materials comply with federal, state, andlocal laws and regulations, we cannot eliminate the risk of accidents involving contamination from these materials. Although we have a workers’compensation liability policy, we could be held liable for resulting damages in the event of an accident or accidental release, and such damages could besubstantially in excess of any available insurance coverage and could substantially disrupt our business.33Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Risks Related to our Common StockProvisions in our organizational documents could prevent or frustrate attempts by stockholders to replace our current management.Our certificate of incorporation and bylaws contain provisions that could make it more difficult for a third party to acquire us without the consent ofour Board of Directors. Our certificate of incorporation provides for a staggered board and removal of directors only for cause. Accordingly, stockholders mayelect only a minority of our Board at any annual meeting, which may have the effect of delaying or preventing changes in management. In addition, underour certificate of incorporation, our Board of Directors may issue additional shares of preferred stock and determine the terms of those shares of stock withoutany further action by our stockholders. Our issuance of additional preferred stock could make it more difficult for a third party to acquire a majority of ouroutstanding voting stock and thereby effect a change in the composition of our Board of Directors. Our certificate of incorporation also provides that ourstockholders may not take action by written consent. Our bylaws require advance notice of stockholder proposals and director nominations and permit onlyour president or a majority of the Board of Directors to call a special stockholder meeting. These provisions may have the effect of preventing or hinderingattempts by our stockholders to replace our current management. In addition, Delaware law prohibits a corporation from engaging in a business combinationwith any holder of 15% or more of its capital stock until the holder has held the stock for three years unless, among other possibilities, the board of directorsapproves the transaction. Our Board of Directors may use this provision to prevent changes in our management. Also, under applicable Delaware law, ourBoard of Directors may adopt additional anti-takeover measures in the future.Our stock has historically had low trading volume, and its public trading price has been volatile.During the period from our initial public offering on February 4, 2000 to December 31, 2016, and the year ended December 31, 2016, the closing priceof our common stock has fluctuated between $1.80 (or $0.30 pre-reverse stock split) and $315.78 (or $52.63 pre-reverse stock split) per share and $2.72 and$7.36 per share, respectively. The average daily trading volume for the year ended December 31, 2016 was approximately 1,207,067 shares, while theaverage daily trading volume for the year ended December 31, 2015 was approximately 1,652,962. The market may experience significant price and volumefluctuations that are often unrelated to the operating performance of individual companies. In addition to general market volatility, many factors may have asignificant adverse effect on the market price of our stock, including: •continuing operating losses, which we expect over the next several years as we continue our development activities; •announcements of decisions made by public officials or delays in any such announcements; •results of our pre-clinical studies and clinical trials or delays in anticipated timing; •delays in our regulatory filings or those of our partners; •announcements of new collaboration agreements or amendments with strategic partners or developments by our existing collaborationpartners; •announcements of acquisitions; •announcements of technological innovations, new commercial products, failures of products, or progress toward commercialization by ourcompetitors or peers; •failure to realize the anticipated benefits of acquisitions; •developments concerning proprietary rights, including patent and litigation matters; •publicity regarding actual or potential results with respect to product candidates under development; •quarterly fluctuations in our financial results, including our average monthly cash used in operating activities; •variations in the level of expenses related to any of our product candidates or clinical development programs; •additions or departures of key management or scientific personnel; •conditions or trends in the biopharmaceutical, biotechnology and pharmaceutical industries generally; •other events or factors, including those resulting from war, incidents of terrorism, natural disasters or responses to these events; •changes in accounting principles; •general economic and market conditions and other factors that may be unrelated to our operating performance or the operating performance ofour competitors, including changes in market valuations of similar companies; and •sales of common stock by us or our stockholders in the future, as well as the overall trading volume of our common stock.34Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.In the past, securities class action litigation has often been brought against a company following a significant decline in the market price of itssecurities. This risk is especially relevant for us because many biopharmaceutical, biotechnology and pharmaceutical companies experience significant stockprice volatility.The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or ourbusiness. If one or more of the analysts who covers us downgrades our stock, or publishes inaccurate or unfavorable research about our business, our stockprice would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock coulddecrease, which could cause our stock price and trading volume to decline.The sale of a significant number of shares could cause the market price of our stock to decline.The sale by us or the resale by stockholders of a significant number of shares of our common stock could cause the market price of our common stockto decline. As of December 31, 2016, we had 87,794,933 shares of common stock outstanding. All of these shares are eligible for sale on NASDAQ, althoughcertain of the shares are subject to sales volume and other limitations. We have filed registration statements to permit the sale of approximately 22,200,000shares of common stock under our equity incentive plans, to permit the sale of 1,500,000 shares of common stock under our 2015 Inducement Equity Plan,and to permit the sale of 150,000 shares of common stock under an inducement grant. We have also filed registration statements to permit the sale ofapproximately 167,000 shares of common stock under our Employee Stock Purchase Plan, to permit the sale of 325,000 shares of common stock under ourDirectors’ Deferred Compensation Plan, to permit the sale of approximately 20,101,002 shares of common stock pursuant to various private placementagreements (including 1,400,000 shares of common stock issuable upon the exercise of certain warrants that we issued in February 2015) and to permit thesale of approximately 10,000,000 shares of our common stock pursuant to our At Market Issuance Sales Agreement. As of December 31, 2016, an aggregateof approximately 29 million of these shares remained available for sale. In connection with our acquisition of 4-AB in February 2014, we are obligated tomake contingent milestone payments to the former shareholders of 4-AB, payable in cash or shares of our common stock at our option, as follows (i) $10.0million upon our market capitalization exceeding $750.0 million for 30 consecutive trading days prior to the earliest of (a) the tenth anniversary of theClosing Date (b) the sale of 4-AB or (c) the sale of Agenus and (ii) $10.0 million upon our market capitalization exceeding $1.0 billion for 30 consecutivetrading days prior to the earliest of (a) the tenth anniversary of the Closing Date, (b) the sale of 4-AB or (c) the sale of Agenus. In addition, as additionalconsideration for assets that we purchased from Celexion, we agreed to pay to Celexion $4.0 million on the 24-month anniversary of the Closing Datepayable at our discretion in cash, shares of our common stock, or any combination thereof. In connection with our acquisition of PhosImmune in December2015, we issued 1,631,521 shares of our common stock to the shareholders of PhosImmune and other third parties having a fair market value ofapproximately $7.4 million at closing. In addition, we may be obligated in the future to pay certain contingent milestones payments, payable at our electionin cash or shares of our common stock of up to $35.0 million in the aggregate. Pursuant to a technology transfer and license agreement that we entered intowith Iontas Limited (“Iontas”) in September 2015, we agreed to pay up to an aggregate of $3,500,000 upon the completion of certain milestones, payable incash or shares of our common stock at our election. In November 2016, we issued 157,513 shares of our common stock to Iontas as consideration for a $1.0million milestone payment, and in January 2017 we filed a registration statement to provide for the resale of these shares. In March 2017, we issued anadditional 373,351 shares of our common stock to Iontas as consideration for a $1.5 million milestone payment and amended the registration statement toincorporate these additional shares. We are also obligated to file registration statements covering any additional shares that may be issued to Celexion,XOMA, Iontas or the former shareholders of PhosImmune in the future pursuant to the terms of our agreements with Celexion, XOMA, Iontas andPhosImmune, respectively. The market price of our common stock may decrease based on the expectation of such sales. The market price of our commonstock may decrease based on the expectation of such sales.As of December 31, 2016, warrants to purchase approximately 4,351,450 shares of our common stock with a weighted average exercise price per shareof $9.01 were outstanding.As of December 31, 2016, options to purchase 11,693,400 shares of our common stock with a weighted average exercise price per share of $4.51 wereoutstanding. These options are subject to vesting that occurs over a period of up to four years following the date of grant. As of December 31, 2016, we had5,835,130 vested options and 1,942,476 nonvested shares outstanding.As of December 31, 2016, our outstanding shares of Series A-1 Convertible Preferred Stock were convertible into 333,333 shares of our common stock.We may issue additional common stock, preferred stock, restricted stock units, or securities convertible into or exchangeable for our common stock.Furthermore, substantially all shares of common stock for which our outstanding stock options or warrants are exercisable are, once they have beenpurchased, eligible for immediate sale in the public market. The issuance of additional common stock, preferred stock, restricted stock units, or securitiesconvertible into or exchangeable for our common stock or the exercise of stock options or warrants would dilute existing investors and could adversely affectthe price of our securities. In addition, such securities may have rights senior to the rights of securities held by existing investors.35Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We do not intend to pay dividends on our common stock and, consequently your ability to obtain a return on your investment will depend onappreciation in the price of our common stock.We have never declared or paid any cash dividend on our common stock and do not intend to do so in the foreseeable future. We currently anticipatethat we will retain future earnings for the development, operation and expansion of our business. Therefore, the success of an investment in shares of ourcommon stock will depend upon any future appreciation in their value. There is no guarantee that shares of our common stock will appreciate in value ormaintain their current value.Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and to comply with changingregulation of corporate governance and public disclosure could have a material adverse effect on our operating results and the price of our common stock.The Sarbanes-Oxley Act of 2002 and rules adopted by the SEC and NASDAQ have resulted in significant costs to us. In particular, our efforts tocomply with Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations regarding the required assessment of our internal control over financialreporting, and our independent registered public accounting firm’s audit of internal control over financial reporting, have required commitments ofsignificant management time. We expect these commitments to continue.Our internal control over financial reporting (as defined in Rules 13a-15 of the Exchange Act) is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with U.S.GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect all deficiencies or weaknesses in our financialreporting. While our management has concluded that there were no material weaknesses in our internal control over financial reporting as of December 31,2015, our procedures are subject to the risk that our controls may become inadequate because of changes in conditions or as a result of a deterioration incompliance with such procedures. No assurance is given that our procedures and processes for detecting weaknesses in our internal control over financialreporting will be effective.Changing laws, regulations and standards relating to corporate governance and public disclosure, are creating uncertainty for companies. Laws,regulations and standards are subject to varying interpretations in some cases due to their lack of specificity, and as a result, their application in practice mayevolve over time as new guidance is provided, which could result in continuing uncertainty regarding compliance matters and higher costs caused byongoing revisions to disclosure and governance practices. If we fail to comply with these laws, regulations and standards, our reputation may be harmed andwe might be subject to sanctions or investigation by regulatory authorities, such as the SEC. Any such action could adversely affect our operating results andthe market price of our common stock. Item 1B.Unresolved Staff CommentsNone. Item 2.PropertiesWe lease our manufacturing, research and development, and corporate offices in Lexington, Massachusetts occupying approximately 82,000 squarefeet. This lease agreement terminates in August 2023 with an option to renew for one additional ten-year period. We have sublet a portion of this facilityunder a sublease that expires in December 2017.During December 2012 we entered into a commercial lease for approximately 5,600 square feet of office space in New York, New York for use ascorporate offices that terminates in May 2020.We also have research and office facilities in Cambridge, United Kingdom and Basel, Switzerland whose leases expire in December 2025 and June2018, respectively. We previously had research and office facilities in Jena, Germany. In 2016, we closed our Jena office and consolidated these operationsin the United Kingdom and Switzerland. However, we still have a commercial lease in Jena that expires in June 2017.In December 2015, we acquired a manufacturing facility with approximately 24,000 square feet in Berkeley, California to be used in the productionand manufacture of antibody product candidates. In December 2015, we also entered into a commercial lease in Berkeley, California for approximately10,900 square feet to be used for corporate offices which expires in December 2020. We also have a sublease in Berkeley, California for parking that expiresin May 2020.36Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We believe substantially all of our property and equipment is in good condition and that we have sufficient capacity to meet our current operationalneeds. We do not anticipate experiencing significant difficulty in retaining occupancy of any of our manufacturing or office facilities and will do so throughlease renewals prior to expiration or through replacing them with equivalent facilities. Item 3.Legal ProceedingsWe are not party to any material legal proceedings. Item 4.Mine Safety DisclosuresNot applicable. 37Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesOur common stock is currently listed on The Nasdaq Capital Market under the symbol “AGEN.”The following table sets forth, for the periods indicated, the high and low sale prices per share of our common stock. High Low 2015 First Quarter $6.49 $3.80 Second Quarter 10.16 4.90 Third Quarter 9.64 4.33 Fourth Quarter 5.36 3.75 2016 First Quarter 4.63 2.61 Second Quarter 4.82 2.97 Third Quarter 7.31 4.04 Fourth Quarter 7.49 3.71 As of February 28, 2017, there were 692 holders of record and 26,351 beneficial holders of our common stock.We have never paid cash dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future. We currentlyintend to retain future earnings, if any, for the future operation and expansion of our business. Any future payment of dividends on our common stock will beat the discretion of our Board of Directors and will depend upon, among other things, our earnings, financial condition, capital requirements, level ofindebtedness, and other factors that our Board of Directors deem relevant.38Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Stock PerformanceThe following graph shows the cumulative total stockholder return on our common stock over the period spanning December 31, 2011 to December31, 2016, as compared with that of the Nasdaq Stock Market (U.S. Companies) Index and the Nasdaq Biotechnology Index, based on an initial investment of$100 in each on December 31, 2011. Total stockholder return is measured by dividing share price change plus dividends, if any, for each period by the shareprice at the beginning of the respective period, and assumes reinvestment of dividends.This stock performance graph shall not be deemed “filed” with the SEC or subject to Section 18 of the Exchange Act, nor shall it be deemedincorporated by reference in any of our filings under the Securities Act of 1933, as amended (the “Securities Act”).COMPARISON OF CUMULATIVE TOTAL RETURN OF AGENUS INC.,NASDAQ STOCK MARKET (U.S. COMPANIES) INDEXAND NASDAQ BIOTECHNOLOGY INDEX 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Agenus Inc. 100.00 205.00 132.00 198.50 227.00 206.00 NASDAQ Stock Market (U.S. Companies) Index 100.00 115.91 160.32 181.80 192.21 206.63 NASDAQ Biotechnology Index 100.00 131.91 218.45 287.40 326.39 255.62 Item 6.Selected Financial DataWe have derived the condensed consolidated balance sheet data set forth below as of December 31, 2016 and 2015, and the condensed consolidatedstatement of operations data for each of the years in the three-year period ended December 31, 2016, from our audited consolidated financial statementsincluded 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 FinancialCondition and Results of Operations,” our consolidated financial statements, and the notes to our consolidated financial statements included elsewhere inthis Annual Report on Form 10-K.39Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Changes in cash, cash equivalents, and short-term investments, total current assets, total assets, total current liabilities, long-term debt andstockholders’ (deficit) equity in the periods presented below include the effects of the receipt of net proceeds from our debt offerings, equity offerings, theexercise of stock options, and employee stock purchases that totaled approximately $3.4 million, $220.4 million, $57.0 million, $36.6 million, and $10.5million in the years ended December 31, 2016, 2015, 2014, 2013, and 2012, respectively. For the Year Ended December 31, 2016 2015 2014 2013 2012 (in thousands except per share data) Condensed Consolidated Statement of Operations Data: Revenue $22,573 $24,817 $6,977 $3,045 $15,961 Operating expenses: Cost of goods sold — — — (536) (672)Research and development (94,971) (70,444) (22,349) (13,005) (10,564)General and administrative (33,126) (28,370) (21,250) (14,484) (11,465)Contingent purchase price consideration fair value adjustment (1,953) (6,704) (6,699) — — Operating loss (107,477) (80,701) (43,321) (24,980) (6,740)Non-operating (expense) income (2,202) (5,968) 2,096 (2,673) 110 Interest expense, net (17,316) (6,599) (1,261) (2,420) (4,695)Loss before taxes (126,995) (93,268) (42,486) (30,073) (11,325)Income tax benefit (1) — 5,387 — — — Net loss (126,995) (87,881) (42,486) (30,073) (11,325)Dividends on Series A-1 convertible preferred stock (204) (203) (204) (3,159) (792)Net loss attributable to common stockholders $(127,199) $(88,084) $(42,690) $(33,232) $(12,117)Net loss attributable to common stockholders per common share, basic and diluted $(1.46) $(1.13) $(0.71) $(1.12) $(0.51)Weighted average number of common shares outstanding, basic and diluted 87,070 78,212 59,754 29,766 23,629 As of December 31, 2016 2015 2014 2013 2012 (in thousands) Condensed Consolidated Balance Sheet Data: Cash, cash equivalents and short-term investments $76,437 $171,668 $40,224 $27,352 $21,468 Total current assets 91,312 184,095 42,670 28,175 22,615 Total assets 156,986 242,228 74,527 34,835 29,093 Total current liabilities 40,851 28,934 9,229 10,296 4,813 Long-term debt, less current portion 130,542 114,326 4,769 5,384 35,714 Stockholders' (deficit) equity (39,126) 70,728 23,018 (4,481) (17,600) (1)Given our history of incurring operating losses, no income tax benefit has been recognized in our consolidated statements of operations for the yearsended December 31, 2016, 2014, 2013, and 2012 because of the loss before income taxes, and the need to recognize a valuation allowance on theportion of our deferred tax assets which will not be offset by the reversal of deferred tax liabilities. For the year ended December 31, 2015, werecognized an income tax benefit as a result of the deferred tax liabilities recognized in connection with the PhosImmune and XOMA antibodymanufacturing facility acquisitions. 40Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 7.Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewWe are a clinical-stage immuno-oncology (“I-O”) company focused on the discovery and development of therapies that engage the body’s immunesystem to fight cancer. Our approach to cancer immunotherapy involves a diverse portfolio consisting of antibody-based therapeutics, adjuvants and cancervaccine platforms. We, in collaboration with our partners, have developed a number of immuno-modulatory antibodies against important nodes of immuneregulation. These include antibodies targeting CTLA-4, GITR and OX40 that are in clinical development, and our anti-PD-1 antibody anticipated to enter theclinic in the first half of 2017. Our discovery pipeline includes a number of proprietary checkpoint modulating (“CPM”) antibodies against innovativetargets such as TIGIT and 4-1BB (also known as CD137). We believe that tailored combination therapies are essential to combat some of the most resistantcancers. Accordingly, our immune education strategy focuses on pursuing antibodies as well as vaccine candidates in conjunction with adjuvants.We are developing a comprehensive I-O portfolio driven by the following platforms and programs, which we intend to utilize individually and incombination: •our antibody discovery platforms, including our Retrocyte Display™, SECANT® yeast display, and phage display technologies designed toproduce quality human antibodies; •our antibody candidate programs, including our CPM programs; •our vaccine programs, including Prophage™, AutoSynVax™ and PhosPhoSynVaxTM ; and •our saponin-based vaccine adjuvants, principally our QS-21 Stimulon® adjuvant, or QS-21 Stimulon.We also have our own GMP manufacturing facility with the capacity to support early phase clinical programs. We originally acquired the facility fromXOMA 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 withcompanies such as Incyte Corporation (“Incyte”), Merck Sharpe & Dohme and Recepta Biopharma SA (“Recepta”). Through these alliances, as well as ourown internal programs, we currently have over a dozen antibody programs, including our anti-CTLA-4 (partnered with Recepta for certain South Americaterritories) and anti-GITR and anti-OX40 (both partnered with Incyte) antibody programs that each commenced clinical trials during 2016. We recentlyamended our collaboration agreement with Incyte to, among other things, convert the GITR and OX40 programs from profit-share to royalty-bearingprograms. We are now eligible to receive royalties on global net sales at a flat 15% rate for each of these programs. There are now no more profit-shareprograms under the collaboration, and we are eligible to receive up to a total of $510.0 million in future potential development, regulatory and commercialmilestones across all programs in the collaboration. Pursuant to the amended agreement, we received accelerated milestone payments of $20.0 million fromIncyte related to the clinical development of INCAGN1876 (anti-GITR agonist) and INCAGN1949 (anti-OX40 agonist). Concurrent with the execution of theamendment, we and Incyte also entered into a separate stock purchase agreement whereby Incyte purchased an additional 10 million shares of our commonstock at $6.00 per share, resulting in proceeds of $80.0 million to us.In addition to our antibody platforms and CPM programs, we are also advancing a series of vaccine programs to treat cancer. In January 2017, weannounced a clinical trial collaboration with the NCI, which is a double-blind, randomized controlled Phase 2 trial that will evaluate the effect of ourautologous vaccine candidate, Prophage, in combination with pembrolizumab (Keytruda®, Merck & Co., Inc.) in patients with ndGBM. Under thiscollaboration, we are suppling Prophage, Merck is providing pembrolizumab and the NCI and Brain Tumor Trials Collaborative (“BTTC”) member sites arerecruiting patients and conducting the trial. We are also advancing our synthetic vaccine candidate, AutoSynVax, towards the clinic and plan to initiate ourfirst clinical trial for this program in the first half of 2017.Our QS-21 Stimulon adjuvant is partnered with GlaxoSmithKline (“GSK”) and is a key component in multiple GSK vaccine programs that targetprophylactic or therapeutic impact in a variety of infectious diseases and cancer. These programs are in various stages, with the most advanced being GSK’sshingles and malaria programs, which GSK announced positive Phase 3 results for in December 2014 and October 2013, respectively. In September 2015, wemonetized a portion of the future royalties we are contractually entitled to receive from GSK from sales of its shingles and malaria vaccines through a NotePurchase Agreement and received net proceeds of approximately $78.2 million. In 2016, GSK filed for approval of its shingles vaccine candidate in theUnited States, European Union and Canada, and is expected to file for approval in Japan in 2017. Assuming regulatory approval, the first productscontaining QS-21 Stimulon are anticipated to be launched by GSK in 2018. We do not incur clinical development costs for products partnered with GSK. 41Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.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 regulatoryagencies, as well as acceptance in the marketplace. Part of our strategy is to develop and commercialize some of our product candidates by continuing ourexisting 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, were $95.0 million, $70.4 million, and $22.3million, respectively. We have incurred significant losses since our inception. As of December 31, 2016, we had an accumulated deficit of $905.3 million.To date, we have financed our operations primarily through the sale of equity and debt securities. We believe that, based on our current plans andactivities, our working capital resources at December 31, 2016, along with the net proceeds of approximately $80 million from Incyte in February 2017 inconnection with amending our collaboration agreement, and issuing additional shares pursuant to a share purchase agreement, will be sufficient to satisfy ourliquidity requirements through the first half of 2018. We may attempt to raise additional funds by: (1) pursuing collaboration, out-licensing and/or partneringopportunities 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 commercializationand/or substantial out-licensing or partnering arrangements for our antibody discovery platforms, CPM antibody programs, HSP-based vaccines, and vaccinescontaining QS-21 Stimulon under development by our licensees. Our long-term success will also be dependent on the successful identification, developmentand commercialization of potential other product candidates, each of which will require additional capital with no certainty of timing or probability ofsuccess. 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 tocontinue our operations.Historical Results of OperationsYear Ended December 31, 2016 Compared to the Year Ended December 31, 2015Revenue: We generated revenue of $22.6 million and $24.8 million during the years ended December 31, 2016 and 2015, respectively. Revenueprimarily includes fees earned under our license agreements, including approximately $16.2 million and $14.5 million, respectively for the years endedDecember 31, 2016, and 2015, respectively, related to reimbursement of development costs under our Collaboration Agreement with Incyte. The decrease inrevenue for the year ended December 31, 2016 is primarily attributable to decreased amortization of deferred revenue, offset by increased reimbursement ofdevelopment costs under our Collaboration Agreement with Incyte. During the years ended December 31, 2016 and 2015, we recorded revenue of $3.5million and $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 anddevelopment 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 ofour CPM antibody programs, a $17.0 million increase in payroll related costs and share-based compensation due to increased headcount, and $3.1 millionincrease 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 December31, 2015. Increased general and administrative expenses in 2016 primarily relate to a $2.0 million increase in payroll related expenses due to increasedheadcount 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 changein 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 aMonte 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 representsour 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 royaltyobligation of $6.9 million, loss on extinguishment of our senior subordinated promissory notes issued in April 2013 (the “2013 Notes”), and correspondingoffset by the $1.5 million gain on the purchase related to the antibody manufacturing facility acquisition from XOMA Corporation in December 2015.42Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.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 endedDecember 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 ourPhosImmune and XOMA acquisitions during the year and relates to the resulting release of our existing valuation allowance on our deferred tax assets. Therewas no similar benefit for the year ended December 31, 2016. Year Ended December 31, 2015 Compared to the Year Ended December 31, 2014Revenue: We generated revenue of $24.8 million and $7.0 million during the years ended December 31, 2015 and 2014, respectively. Revenueprimarily includes fees earned under our license agreements, including approximately $14.4 million for the year ended December 31, 2015, related toreimbursement of development costs under our Collaboration Agreement with Incyte. In 2014, revenues included license fees earned and grant revenue. Theincrease in revenue for the year ended December 31, 2015 is primarily attributable to the amortization of deferred revenue and reimbursement of developmentcosts 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 $22.3million for the year ended December 31, 2014. Increased expenses in 2015 primarily includes the $19.1 million increase in third-party services and otherexpenses relating largely to the advancement of our CPM antibody programs, our $13.2 million asset acquisition which was expensed as in-process researchand 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 administrative: General and administrative expenses increased 34% to $28.4 million for the year ended December 31, 2015 from $21.2million for the year ended December 31, 2014. Increased general and administrative expenses in 2015 primarily relate to a $4.1 million increase inprofessional fees related to our corporate activities, $1.3 million increase in payroll related expenses due to increased headcount and $1.4 million increase inshare-based compensation.Contingent purchase price consideration fair value adjustment: Contingent purchase price consideration fair value adjustment represents the increasein the fair value of our contingent purchase price consideration during the year ended December 31, 2015, which resulted in expense of $6.7 million relatedto the changes in our market capitalization, including the achievement of the first milestone under our Agenus Switzerland Share Exchange Agreement. Thefair 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 income for the year ended December 31, 2015 represents primarily the change in the fair value of ourcontingent royalty obligation of $6.9 million, our foreign currency exchange loss and our loss on extinguishment of our 2013 Notes offset by the $1.5million gain on the purchase related to the antibody manufacturing facility acquisition from XOMA Corporation in December 2015 described in Note 4 tothe consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Non-operating expense 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-smallcell lung cancer, which occurred during the first quarter of 2014.Interest expense, net: Interest expense net increased to $6.6 million for the year ended December 31, 2015 from $1.3 million for the year endedDecember 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 executedin 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 ourPhosImmune and XOMA acquisitions during the year and relates to the resulting release of our existing valuation allowance on our deferred tax assetsInflationWe believe that inflation has not had a material adverse effect on our business, results of operations, or financial condition to date.43Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Research and Development Programs For the year ended December 31, 2016, our research and development programs consisted largely of our CPM antibody programs as indicated in thefollowing table (in thousands). For the Year Ended December 31, Research andDevelopment Program Product 2016 2015 2014 Prior to2014 Total Heat shock proteins for cancer ProphageVaccines $8,202 $5,508 $6,153 $303,528 $323,391 Checkpoint modulator programs* 83,919 63,290 13,422 — 160,631 Heat shock proteins for infectious diseases HerpV 11 293 2,443 30,309 33,056 Vaccine adjuvant QS-21Stimulon 77 142 321 13,336 13,876 Other research and development programs 2,761 1,211 10 33,556 37,538 Total research and development expenses $94,970 $70,444 $22,349 $380,729 568,492 *Prior to 2014, costs were incurred by Agenus Switzerland Inc. (formerly known as 4-Antibody AG) (“4-AB”), which we acquired in February 2014. Research and development program costs include compensation and other direct costs plus an allocation of indirect costs, based on certainassumptions and our review of the status of each program. Our product candidates are in various stages of development and significant additionalexpenditures will be required if we start new clinical trials, encounter delays in our programs, apply for regulatory approvals, continue development of ourtechnologies, expand our operations, and/or bring our product candidates to market. The total cost of any particular clinical trial is dependent on a number offactors such as trial design, length of the trial, number of clinical sites, number of patients, and trial sponsorship. The process of obtaining and maintainingregulatory approvals for new therapeutic products is lengthy, expensive, and uncertain. Because our CPM antibody programs are pre-clinical and early stage,and because further development of HSP-based vaccines is dependent clinical trial results, among other factors, we are unable to reliably estimate the cost ofcompleting our research and development programs or the timing for bringing such programs to various markets or substantial partnering or out-licensingarrangements, and, therefore, when, if ever, material cash inflows are likely to commence. Active programs involving QS-21 Stimulon depend on ourcollaboration partners or licensees successfully completing clinical trials, successfully manufacturing QS-21 Stimulon to meet demand, obtaining regulatoryapprovals and successfully commercializing product candidates containing QS-21 Stimulon. Product Development PortfolioAntibody Discovery Platforms and CPM ProgramsCheckpoint antibodies regulate immune response against pathogens that invade the body and are achieving positive outcomes in a number of cancersthat were untreatable only a few years ago. Two classes of checkpoint targets include: (i) inhibitory checkpoints that help suppress an immune response inorder to prevent excessive immune reaction resulting in undesired inflammation and/or auto-immunity, and (ii) stimulatory checkpoints that can enhance oramplify an antigen-specific immune response.We are equipped with a suite of antibody discovery platforms and we have integrated these capabilities to improve speed, cost and quality of productdevelopment efforts. In addition to the use of our antibody discovery platforms that are designed to drive the discovery of future CPM antibody candidates,we are planning to employ a variety of techniques to identify and optimize our antibody candidates. For example, while we have been primarily focused onmonoclonal antibodies over the past two years, we are also beginning to explore multispecific antibody technologies, collaborations, and product candidateopportunities. We and our partners currently have pre-clinical and clinical programs exploring fully human and humanized monoclonal antibodies against severalimportant checkpoint targets. In 2016, we and our partners began clinical trials with three of these CPM candidates- CTLA-4, GITR and OX40. In addition,we have a product candidate targeting PD-1 for which we expect to initiate a Phase 1 clinical trial during the first half of 2017. For additional informationregarding our antibody discovery platforms and checkpoint antibody program, please read Part I-Item 1. “Business” of this Annual Report on Form 10-K.Prophage Vaccine CandidatesTo date, more than 1,000 patients have been treated with Prophage vaccines in clinical trials, covering a broad range of cancer types, and no seriousimmune-mediated side effects have been observed. The results of these trials have been published and/or presented at scientific conferences. These resultsindicate observable clinical and/or immunological activity across many types of44Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.cancer. Taken together, these trials show promising evidence of clinical benefit from Prophage vaccines and also establish that such vaccines can beeffectively manufactured under current good manufacturing practices (“cGMP”), conditions and internationally distributed. Because Prophage vaccine arenovel therapeutic vaccines that are patient-specific, meaning derived from the patient’s own tumor, they are experiencing a long development process andhigh development costs, either of which could delay or prevent our commercialization efforts.In January 2017, we announced a clinical trial collaboration with the NCI. The double-blind, randomized controlled Phase 2 trial is evaluating theeffect of Prophage in combination with pembrolizumab (Keytruda®, Merck & Co., Inc.) in patients with ndGBM. The trial is being conducted by the BrainTumor Trials Collaborative (“BTTC”), a consortium of top academic centers led by Dr. Mark Gilbert, Chief of the Neuro-Oncology Branch at the NCI Centerfor Cancer Research. The trial consists of two-arms with one arm receiving pembrolizumab as a monotherapy and a second arm receiving both Prophage andpembrolizumab in combination. Forty-five patients are being randomly assigned to each arm. Under this collaboration, Agenus is suppling Prophage, Merckis providing pembrolizumab (Keytruda®) and NCI and BTTC member sites are recruiting patients and conducting the trial.At ASCO in 2015, we announced final results from a single-arm, multicenter, open-label Phase 2 clinical trial in 46 patients with ndGBM treated withour Prophage vaccine in combination with standard of care: surgical resection, radiation and temozolomide. These results showed that patients treated withProphage vaccine had a median progression free survival, or PFS, of 18 months, with 33% of patients progression free at 24 months and indicate improvementcompared to historical data for patients treated with the standard of care (PFS of six to nine months). Median overall survival, or OS, the primary endpoint ofthe 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 ClinicalCancer Research, a journal of the American Association for Cancer Research. In addition to studies with ndGBM patients, we also previously reported data on recurrent GBM patients treated with Prophage. In December 2013, wepublished 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 compared favorably to historical controldata with expected median survival for recurrent GBM patients of three to nine months. The data were published in a manuscript in Neuro-Oncology, theofficial journal of the Society of Neuro-Oncology. In addition, the Alliance for Clinical Trials in Oncology, a cooperative group of the NCI, was conducting arandomized Phase 2 clinical trial of the Prophage vaccine in combination with bevacizumab in 222 patients with surgically resectable, recurrent GBM. Thisstudy was recently closed following an interim analysis that determined the study was unlikely to demonstrate that the vaccine in combination withbevacizumab would lead to a better survival than bevacizumab as a monotherapy. For additional information regarding regulatory risks and uncertainties,please read the risks identified under Part I-Item 1A. “Risk Factors” of this Annual Report on Form 10-K.ASV Vaccine PlatformIn June 2014, we reported positive results from a Phase 2 clinical trial with our synthetic HerpV vaccine candidate for genital herpes. This candidatewas the first potential recombinant, off-the-shelf application of our HSP technology. The study demonstrated that the HSP70-peptide-QS21 vaccine producedsignificant CD4 and CD8 positive T-cell responses to antigenic peptides, and that the side effects were mild to moderate and tolerable. We decided not toadvance with this technology in herpes but, based on our findings, we launched our ASV synthetic cancer vaccine program in 2015. We remain on target toinitiate a clinical trial for this program in the first half of 2017.The objective of our ASV program is to develop a fully synthetic, yet individualized patient specific vaccine targeting the neo-epitope landscape ofeach patient’s cancer. Mutation-based neo-epitopes, which will form the basis for the immunogens used in ASV, are almost always particular to a givenpatient. 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 toutilize next generation sequencing technologies coupled with highly 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 recombinantHSP70 and deliver a fully synthetic polyvalent vaccine to the patient. We believe that the HSP70 platform will shuttle the mutated peptides to sites wherethey are recognized by the immune system and elicit a cytotoxic and helper T cell response in patients with cancer. We expect that once identified, thesetumor cells will be killed and cleared by the immune system. For additional information regarding HerpV and AutoSynVax, please read Part I-Item 1.“Business” of this Annual Report on Form 10-K.PSV Vaccine PlatformPSV is a vaccine candidate designed to induce immunity against a novel class of tumor specific neoepitopes: those arising from dysregulatedphosphorylation of various proteins in malignant cells, rather than from tumor-specific mutations producing abnormal protein sequences. In all cells, proteinsequences can have post-translational modifications, such as becoming phosphorylated (a phosphate group is added to particular amino acid residues) thatcan be associated with cellular functions such as signaling. In cancer45Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.cells this process can become dysregulated and proteins that are not normally phosphorylated can become phosphorylated and proteins that arephosphorylated can become phosphorylated at alternative sites. Some of these mis-phosphorylated peptides can be processed by the cellular machinery thatleads to antigen presentation on the surface of cells, and there they can potentially be recognized by specific cytotoxic T cells. Such phosphoproteinneoepitopes have been associated with different forms of cancer, including but not limited to lung cancer, specific leukemias, ovarian cancer, colon cancerand others. PSV is intended to induce cellular immunity to abnormal phosphopeptide neoepitopes that are characteristic of these various forms of cancer.Phosphopeptides (or phosphopeptide analogues) can be synthesized and complexed with HSP70, using an approach analogous to that used in the generationof Agenus’ previous HerpV vaccine candidate. HerpV demonstrated good cellular and humoral responses to synthetic peptide immunogens complexed withHSP70 in a placebo-controlled Phase 2 study. We believe that similar responses can be obtained to phosphopeptide or phosphopeptide analogues bound toHSP70 when used as vaccines. Phosphorylation-based neoepitopes can apparently be found on specific types of cancer in many patients, suggesting that theimmunogens used in PSV, while tailored to a particular patient, will be useful in other patients with related forms of cancer. Studies to optimize theimmunogens to be used in PSV are ongoing. For additional information regarding PhosphoSynVax, please read Part I-Item 1. “Business” of this AnnualReport on Form 10-K.QS-21 Stimulon AdjuvantQS-21 Stimulon is an adjuvant, which is a substance added to a vaccine or other immunotherapy that is intended to enhance an immune response tothe target antigens. QS-21 Stimulon is a natural product, a triterpene glycoside, or saponin, purified from the bark of the Chilean soapbark tree, Quillajasaponaria. QS-21 Stimulon has the ability to stimulate an antibody-mediated immune response and has also been shown to activate cellular immunity. It hasbecome a key component in the development of investigational preventive vaccine formulations across a wide variety of diseases. These studies have beencarried out by academic institutions and pharmaceutical companies in the United States and internationally. A number of these studies have shown QS-21Stimulon to be significantly more effective in stimulating immune responses than aluminum hydroxide or aluminum phosphate, the adjuvants mostcommonly used in approved vaccines in the United States today. For additional information regarding QS-21 Stimulon, please read Part I-Item 1. “Business”of this Annual Report on Form 10-K.Liquidity and Capital ResourcesWe have incurred annual operating losses since inception, and we had an accumulated deficit of $905.3 million as of December 31, 2016. We expectto incur significant losses over the next several years as we continue development of our technologies and product candidates, manage our regulatoryprocesses, initiate and continue clinical trials, and prepare for potential commercialization of products. To date, we have financed our operations primarilythrough the sale of equity and debt securities, and interest income earned on cash, cash equivalents, and short-term investment balances. From our inceptionthrough December 31, 2016, we have raised aggregate net proceeds of approximately $842.3 million through the sale of common and preferred stock, theexercise of stock options and warrants, proceeds from our employee stock purchase plan, and the issuance of convertible and other notes.We also maintain an effective registration statement (the "Shelf Registration Statement"), which originally covered the offering of up to $150.0million of common stock, preferred stock, warrants, debt securities and units. The Shelf Registration was used to complete the May 2015 Public Offering, andas of December 31, 2016, $68.1 million remained available thereunder. The Shelf Registration Statement includes a prospectus covering the offering,issuance and sale of up to ten million shares of our common stock from time to time in “at the market offerings” pursuant to an At Market Sales IssuanceAgreement (the “Sales Agreement”) entered into with MLV & Co. LLC (the “Sales Agent”). Pursuant to the Sales Agreement, sales will be made only uponinstructions by us to the Sales Agent, and we cannot provide any assurances that we will issue any shares pursuant to the Sales Agreement. During the quarterended December 31, 2016, we sold 496,520 shares of our common stock pursuant to the Sales Agreement. As of December 31, 2016, we had 9.5 millionshares available for sale under the Sales Agreement.As of December 31, 2016, we had debt outstanding of $114.1 million in principal. We did not enter into any new debt arrangements during the yearended December 31, 2016.Our cash, cash equivalents, and short-term investments at December 31, 2016 were $76.4 million, a decrease of $95.2 million from December 31, 2015,principally as a result cash used in operations. We believe that, based on our current plans and activities, our cash, cash equivalents, and short-terminvestments of $76.4 million as of December 31, 2016, along with the net proceeds of approximately $80 million from Incyte in February 2017 in connectionwith amending our collaboration agreement, and issuing additional shares pursuant to a share purchase agreement, will be sufficient to satisfy our liquidityrequirements through the first half of 2018. We continue to monitor the likelihood of success of our key initiatives and are prepared to discontinue funding ofsuch activities if they do not prove to be feasible, restrict capital expenditures and/or reduce the scale of our operations.We expect to attempt to raise additional funds in advance of depleting our current funds. We may attempt to raise funds by: (1) pursuingcollaboration, 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-termliquidity needs may require the successful commercialization and/or substantial out-licensing or46Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.partnering arrangements for our antibody discovery platforms, CPM antibody programs, HSP-based vaccines, and vaccines containing QS-21 Stimulon underdevelopment by our licensees. Our long-term success will also be dependent on the successful identification, development and commercialization ofpotential other product candidates, each of which will require additional capital with no certainty of timing or probability of success. If we incur operatinglosses 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.Our future cash requirements include, but are not limited to, supporting clinical trial and regulatory efforts and continuing our other research anddevelopment programs. Since inception, we have entered into various agreements with contract manufacturers, institutions, and clinical researchorganizations (collectively "third party providers") to perform pre-clinical activities and to conduct and monitor our clinical studies. Under these agreements,subject to the enrollment of patients and performance by the applicable third party provider, we have estimated our total payments to be $128.7 million overthe term of the related activities. Through December 31, 2016, we have expensed $94.4 million as research and development expenses and $82.1 million hasbeen paid under these agreements. The timing of expense recognition and future payments related to these agreements is subject to the enrollment of patientsand performance by the applicable third party provider. We have also entered into sponsored research agreements related to our product candidates thatrequired payments of $8.5 million, $7.1 million of which have been paid as of December 31, 2016. We plan to enter into additional agreements with thirdparty providers as well as sponsored research agreements, and we anticipate significant additional expenditures will be required to initiate and advance ourvarious programs.Part of our strategy is to develop and commercialize some of our product candidates by continuing our existing collaboration arrangements withacademic and collaboration partners and licensees and by entering into new collaborations. As a result of our collaboration agreements, we will notcompletely control the efforts to attempt to bring those product candidates to market. For example, our collaboration with Incyte for the development,manufacture and commercialization of CPM antibodies against certain targets is managed by a joint steering committee with equal representation fromAgenus and Incyte. We also have agreements with licensees that allow the use of our QS-21 Stimulon adjuvant in numerous vaccines, which grant exclusiveworldwide rights in some fields of use and co-exclusive or non-exclusive rights in others. These agreements generally call for royalties to be paid to us onfuture sales of licensed products that result from these agreements, which may or may not be achieved. As noted above, in September 2015, we monetized theanticipated royalties related to GSK’s shingles and malaria vaccines through our NPA with Oberland and the other purchasers.Net cash used in operating activities for the years ended December 31, 2016 and 2015 was $80.0 million and $47.2 million, respectively. We continueto support and develop our QS-21 Stimulon partnering collaborations. If applications for marketing approval of vaccines that are submitted by our licenseesare approved, the first products containing QS-21 Stimulon are anticipated to be launched in 2018. We are generally entitled to royalties on sales by ourlicensees of vaccines using QS-21 Stimulon for at least ten years after commercial launch, with some exceptions. Our future ability to generate cash fromoperations will depend on achieving regulatory approval and market acceptance of our product candidates, achieving benchmarks as defined in existingcollaboration agreements, and our ability to enter into new collaborations. Please see the “Note Regarding Forward-Looking Statements” of this AnnualReport on Form 10-K and the risks highlighted under Part I-Item 1A. “Risk Factors” of this Annual Report on Form 10-K.The table below summarizes our contractual obligations as of December 31, 2016 (in thousands). Payments by Period Total Less than1 Year 1-3 Years 3-5 Years More than5 Years Long-term debt (1) $115,477 $1,322 $14,155 $100,000 $— Operating leases (2) 16,923 3,452 5,711 3,895 3,864 Capital lease 1,008 288 576 144 — Total (3) $133,409 $5,062 $20,442 $104,039 $3,864 (1)Includes fixed interest payments. Under the terms of the NPA, interest accrues as 13.5%, compounded quarterly and may vary based on the timing ofthe royalty stream under our contract with GSK and therefore the table above excludes such interest which was approximately $19.4 million as ofDecember 31, 2016.(2)The leases and subleases for our properties expire at various times between 2017 and 2025.(3)Excluded from our contractual obligations table is our required contributions of $162,000 in 2016 to our multiple employer benefit plan; our requiredcontributions for the years beyond 2016 to our multiple employer benefit plan are unknown at this time and cannot be reasonably estimated.Off-Balance Sheet ArrangementsAt December 31, 2016, we had no off-balance sheet arrangements.47Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Critical Accounting Policies and EstimatesThe SEC defines “critical accounting policies” as those that require the application of management’s most difficult, subjective, or complex judgments,often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimatesand assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the reporting period. We base those estimates on historical experience and on variousassumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.The following listing is not intended to be a comprehensive list of all of our accounting policies. Our significant accounting policies are described inNote 2 of the notes to our consolidated financial statements contained elsewhere in this Annual Report on Form 10-K. In many cases, the accountingtreatment of a particular transaction is dictated by U.S. generally accepted accounting principles, with no need for our judgment in its application. There arealso areas in which our judgment in selecting an available alternative would not produce a materially different result. We have identified the following as ourcritical accounting policies.Share-Based CompensationIn accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification(“ASC”) 718, Compensation—Stock Compensation, we recognize share-based compensation expense net of an estimated forfeiture rate and only recognizecompensation expense for those share-based awards expected to vest. Compensation expense is recognized on a straight-line basis over the requisite serviceperiod of the award.Share-based awards granted to certain non-employees have been accounted for based on the fair value method of accounting in accordance with ASC505-50, Equity- Equity-Based Payments to Non-Employees. As a result, the non-cash charge to operations for non-employee awards with vesting or otherperformance criteria is affected each reporting period by changes in the fair value of our common stock. Under the provisions of ASC 505-50, the change infair value of vested awards issued to non-employees is reflected in the statement of operations each reporting period, until the options are exercised or expire.Determining the appropriate fair value model and calculating the fair value of share-based awards requires the use of highly subjective assumptions,including the expected life of the share-based awards and stock price volatility. The assumptions used in calculating the fair value of share-based awardsrepresent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factorschange and we use different assumptions, our share-based compensation expense could be materially different in the future. For performance conditionawards, we estimate the probability that the performance condition will be met. In addition, if our actual forfeiture rate is materially different from ourestimate, the share-based compensation expense could be significantly different from what we have recorded in the current period. See Note 11 of the notes toour consolidated financial statements contained elsewhere in this Annual Report on Form 10-K for a further discussion on share-based compensation.Revenue RecognitionRevenue recognized from collaborative agreements is based upon the provisions of ASC 605-25, Revenue Recognition—Multiple ElementArrangements, as amended by Accounting Standards Update 2009-13. License fees and royalties are recognized as they are earned. Non-refundable milestonepayments that represent the completion of a separate earnings process are recognized as revenue when earned. Revenue for services under research anddevelopment contracts are recognized as the services are performed, or as clinical trial materials are provided.Fair Value MeasurementsIn accordance with ASC 820, Fair Value Measurements and Disclosures, we measure fair value based on a hierarchy for inputs used in measuring fairvalue that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available.The fair value hierarchy is broken down into three levels based on the source of inputs.We measure our contingent purchase price considerations at fair value in accordance with ASC 825, Financial Instruments. The fair value contingentpurchase price considerations are based on significant inputs not observable in the market, which require them to be reported as a Level 3 liability within thefair value hierarchy. The fair values of our 4-AB and PhosImmune contingent purchase price considerations are based on estimates from a Monte Carlosimulation of our market capitalization and share price, respectively.48Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Market capitalization and share price were evolved using a geometric brownian motion, calculated daily for the life of the contingent purchase priceconsideration. Business CombinationsIn February 2014 and December 2015, we acquired all of the outstanding capital stock of 4-AB and PhosImmune, respectively in businesscombination transactions. In December 2015, we also acquired an antibody manufacturing pilot facility from XOMA Corporation which under the applicableaccounting guidance is being accounted for as a business combination. The acquisition method of accounting requires that the assets acquired and liabilitiesassumed be recorded as of the date of the merger or acquisition at their respective fair values with limited exceptions. Assets acquired and liabilities assumedin a business combination that arise from contingencies are recognized at fair value if fair value can reasonably be estimated. If the acquisition date fair valueof an asset acquired or liability assumed that arises from a contingency cannot be determined, the asset or liability is recognized if probable and reasonablyestimable; if these criteria are not met, no asset or liability is recognized. Fair value is defined as the exchange price that would be received for an asset orpaid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between marketparticipants on the measurement date. Accordingly, we may be required to value assets at fair value measures that do not reflect our intended use of thoseassets. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. In the eventthe value of the net assets acquired exceeds the purchase price consideration, then a bargain purchase has occurred. The resulting bargain purchase on thetransaction will be recognized as a gain in the period in which the acquisition was executed. The operating results of the acquired businesses are reflected inour consolidated financial statements after the date of the merger or acquisition. If we determine the assets acquired do not meet the definition of a businessunder the acquisition method of accounting, the transaction will be accounted for as an acquisition of assets rather than a business combination and,therefore, no goodwill will be recorded. The fair values of intangible assets, including acquired in-process research and development (“IPR&D”), aredetermined utilizing information available near the merger or acquisition date based on expectations and assumptions that are deemed reasonable bymanagement. The judgments made in determining estimated fair values assigned to assets acquired and liabilities assumed in a business combination, as wellas asset lives, can materially affect the Company’s results of operations.Acquired Intangible Assets, including IPR&DIPR&D acquired in a business combination represents the fair value assigned to research and development assets that have not reached technologicalfeasibility. The value assigned to acquired IPR&D is determined by estimating the costs to develop the acquired technology into commercially viableproducts, estimating the resulting revenue from the projects, and discounting the net cash flows to present value. The revenue and costs projections used tovalue acquired IPR&D are, as applicable, reduced based on the probability of success of developing a new drug. Additionally, the projections consider therelevant market sizes and growth factors, expected trends in technology, and the nature and expected timing of new product introductions by us and ourcompetitors. The rates utilized to discount the net cash flows to their present value are commensurate with the stage of development of the projects anduncertainties in the economic estimates used in the projections. Upon the acquisition of IPR&D, we complete an assessment of whether our acquisitionconstitutes the purchase of a single asset or a group of assets. We consider multiple factors in this assessment, including the nature of the technologyacquired, the presence or absence of separate cash flows, the development process and stage of completion, quantitative significance and our rationale forentering into the transaction.We review amounts capitalized as acquired IPR&D for impairment at least annually, as of October 31, and whenever events or changes incircumstances indicate that the carrying value of the assets might not be recoverable. When performing our impairment assessment, we have the option to firstassess qualitative factors to determine whether it is necessary to recalculate the fair value of our acquired IPR&D. If we elect this option and believe, as aresult of the qualitative assessment, that it is more-likely-than-not that the fair value of our acquired IPR&D is less than its carrying amount, we calculate thefair value using the same methodology as described above. If the carrying value of our acquired IPR&D exceeds its fair value, then the intangible asset iswritten-down to its fair value. Alternatively, we may elect to bypass the qualitative assessment and immediately recalculate the fair value of our acquiredIPR&D.Finite-lived intangible asset are amortized over their useful life. We review finite-lived intangible assets for impairment whenever events or changes incircumstances indicate that the carrying value of the assets might not be recoverable.GoodwillGoodwill was $22.4 million at December 31, 2016. Goodwill is tested at least annually for impairment on a reporting unit basis. We have concludedthat we consist of a single operating segment and one reporting unit. We assess goodwill for impairment by performing a quantitative analysis to determinewhether the fair value of our single reporting unit exceeds its carrying value. We perform our annual impairment test as of October 31 of each year and thefirst step of our impairment analysis compares the fair value49Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.to our net book value to determine if there is an indicator of impairment. Fair value is based on the quoted market price of our common stock to derive themarket capitalization as of the date of the impairment test.Recent Accounting PronouncementsIn May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, ("ASU 2014-09"). ASU 2014-09 amends revenuerecognition principles and provides a single set of criteria for revenue recognition among all industries. This new standard provides a five step frameworkwhereby revenue is recognized when promised goods or services are transferred to a customer at an amount that reflects the consideration to which the entityexpects to be entitled in exchange for those goods or services. The standard also requires enhanced disclosures pertaining to revenue recognition in bothinterim and annual periods. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. We are currently evaluating thepotential impact that ASU 2014-09 may have on our financial position and results of operations.In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 requires management to evaluate, at each annual or interim reporting period, whether there are conditions or events that exist that raisesubstantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued and providerelated disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and earlier application is permitted. The adoption of ASU2014-15 did not have an effect on the Company’s consolidated financial statements or disclosures as the Company concluded there were no conditions orevents that existed at the time these consolidated financial statements were issued that raise substantial doubt about the Company’s ability to continue as agoing concern. In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt IssuanceCosts, (“ASU 2015-03”). ASU 2015-03 simplifies the presentation of debt issuance costs, as this new standard requires that debt issuance costs related to arecognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debtdiscounts. The recognition and measurement guidance for debt issuance costs are not affected by this update. This guidance is effective for annual reportingbeginning after December 15, 2015, including interim periods within the year of adoption, and calls for retrospective application, with early applicationpermitted. We adopted ASU 2015-03 with the interim period ended September 30, 2015. During the year ended December 31, 2015, in connection with theexecution of the NPA as described in Note 16, the Company incurred approximately $1.5 million in debt issuance costs that are classified as a reduction tolong-term debt in our consolidated balance sheet. No debt issuance costs required retrospective application as the result of the adoption of ASU 2015-03. Theamortization of the debt issuance costs for the year ended December 31, 2015 was not material. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-2”) which supersedes Topic 840, Leases. ASU2016-02 requireslessees to recognize a right-of-use asset and a lease liability on their balance sheets for all leases with terms greater than twelve months. Based on certaincriteria, leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the income statement. Forleases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assetsand lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term.ASU 2016-2 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. Intransition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospectiveapproach. The modified retrospective approach includes a number of optional practical expedients primarily focused on leases that commenced before theeffective date of Topic 842, including continuing to account for leases that commence before the effective date in accordance with previous guidance, unlessthe lease is modified. We are evaluating the impact of the adoption of the standard on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based PaymentAccounting, (“ASU 2016-09”). ASU 2016-09 provides for the simplification of the accounting for share-based payment transactions, including the incometax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 applies to all entitiesand is effective for the annual effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlyadoption is permitted for any entity in any interim or annual period. We do not expect the impact of ASU 2016-09 to be material to our financial position andresults of operations.50Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which providesguidance regarding the definition of a business, with the objective of adding guidance to assist entities with evaluating whether transactions should beaccounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for the Company in the first quarter of 2018, with early adoptionpermitted, and prospective application required. We are currently evaluating the potential impact that ASU 2016-09 may have on our financial position andresults of operations. 51Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 7A.Quantitative and Qualitative Disclosures About Market RiskOur primary market risk exposure is foreign currency exchange rate risk. International revenues and expenses are generally transacted by our foreignsubsidiary and are denominated in local currency. Approximately 4% and 32% of our cash used in operations for the years ended December 31, 2016 and2015, respectively, was from a foreign subsidiary. Additionally, in the normal course of business, we are exposed to fluctuations in interest rates as we seekdebt financing and invest excess cash. We are also exposed to foreign currency exchange rate fluctuation risk related to our transactions denominated inforeign currencies. We do not currently employ specific strategies, such as the use of derivative instruments or hedging, to manage these exposures. Ourcurrency exposures vary, but are primarily concentrated in the Euro, pound sterling, and Swiss Franc, in large part due to our wholly-owned subsidiaries,Agenus Switzerland Inc. (formerly known as 4-Antibody AG), a company with operations in Switzerland, and Agenus UK Limited, a company withoperations in the United Kingdom. During the year ended December 31, 2016, there has been no material change with respect to our approach toward thoseexposures.We had cash, cash equivalents and short-term investments at December 31, 2016 of $76.4 million, which are exposed to the impact of interest andforeign currency exchange rate changes, and our interest income fluctuates as interest rates change. Due to the short-term nature of our investments in moneymarket funds and US Treasury Securities, our carrying value approximates the fair value of these investments at December 31, 2016, however, we are subjectto investment risk.We invest our cash and cash equivalents in accordance with our investment policy. The primary objectives of our investment policy are to preserveprincipal, maintain proper liquidity to meet operating needs, and maximize yields. We review our investment policy annually and amend it as deemednecessary. Currently, the investment policy prohibits investing in any structured investment vehicles and asset-backed commercial paper. Although ourinvestments are subject to credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit exposurefrom any single issue, issuer, or type of investment. We do not invest in derivative financial instruments. Accordingly, we do not believe that there iscurrently any material market risk exposure with respect to derivatives or other financial instruments that would require disclosure under this item. 52Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 8.Financial Statements and Supplementary Data INDEX TO FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm 54Consolidated Balance Sheets 55Consolidated Statements of Operations and Comprehensive Loss 56Consolidated Statements of Stockholders’ (Deficit) Equity 57Consolidated Statements of Cash Flows 60Notes to Consolidated Financial Statements 62 53Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Report of Independent Registered Public Accounting FirmThe Board of Directors and StockholdersAgenus Inc.:We have audited the accompanying consolidated balance sheets of Agenus Inc. and subsidiaries (the Company) as of December 31, 2016 and 2015,and the related consolidated statements of operations and comprehensive loss, stockholders’ (deficit) equity, and cash flows for each of the years in the three-year period ended December 31, 2016. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is toexpress an opinion on these consolidated financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe thatour audits provide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Agenus Inc. andsubsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the years in the three-year period endedDecember 31, 2016, in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Agenus Inc. andsubsidiaries’ internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 16, 2017 expressed anunqualified opinion on the effectiveness of the Company’s internal control over financial reporting./s/ KPMG LLPBoston, MassachusettsMarch 16, 2017 54Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.AGENUS INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS December 31, 2016 December 31, 2015 ASSETS Cash and cash equivalents $71,448,016 $136,702,873 Short-term investments 4,988,751 34,964,730 Inventories 88,200 88,200 Accounts Receivable 11,352,022 9,800,342 Prepaid expenses 2,596,675 1,956,941 Other current assets 838,538 582,280 Total current assets 91,312,202 184,095,366 Property, plant and equipment, net of accumulated amortization and depreciation of $31,243,967 and $29,488,793 at December 31, 2016 and 2015, respectively 25,633,985 15,310,623 Goodwill 22,392,411 22,792,778 Acquired intangible assets, net of accumulated amortization of $3,193,092 and $987,394 at December 31, 2016 and 2015, respectively 16,364,726 18,759,662 Other long-term assets 1,282,662 1,270,055 Total assets $156,985,986 $242,228,484 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current portion, long-term debt $146,061 $146,061 Current portion, deferred revenue 2,610,719 3,829,371 Accounts payable 5,428,452 4,488,561 Accrued liabilities 27,874,703 14,165,816 Other current liabilities 4,791,265 6,304,281 Total current liabilities 40,851,200 28,934,090 Long-term debt 130,542,424 114,326,489 Deferred revenue 12,344,782 15,065,754 Contingent purchase price consideration 7,561,000 5,608,000 Other long-term liabilities 4,812,846 7,566,601 Commitments and contingencies (Notes 15 and 18) STOCKHOLDERS’ (DEFICIT) EQUITY Preferred stock, par value $0.01 per share; 5,000,000 shares authorized: Series A-1 convertible preferred stock; 31,620 shares designated, issued, and outstanding at December 31, 2016 and 2015; liquidation value of $32,419,678, and $32,215,432 at December 31, 2016, and 2015, respectively 316 316 Common stock, par value $0.01 per share; 240,000,000 shares authorized; 87,794,933 shares and 86,390,697 shares issued at December 31, 2016 and 2015, respectively 877,949 863,907 Additional paid-in capital 866,854,348 851,103,934 Accumulated other comprehensive loss (1,529,559) (2,053,143)Accumulated deficit (905,329,320) (779,187,464)Total stockholders’ (deficit) equity (39,126,266) 70,727,550 Total liabilities and stockholders’ (deficit) equity $156,985,986 $242,228,484 See accompanying notes to consolidated financial statements. 55Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.AGENUS INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSFor the Years Ended December 31, 2016, 2015, and 2014 2016 2015 2014 Revenue: Grant revenue $32,404 $24,118 $504,228 Service revenue 147,456 — — Research and development 22,393,443 24,792,907 6,473,227 Total revenues 22,573,303 24,817,025 6,977,455 Operating expenses: Research and development (94,971,379) (70,444,259) (22,349,327)General and administrative (33,125,690) (28,370,001) (21,249,710)Contingent purchase price consideration fair value adjustment (1,953,000) (6,703,700) (6,699,300)Operating loss (107,476,766) (80,700,936) (43,320,882)Other (expense) income: Non-operating (expense) income (2,202,336) (5,968,170) 2,096,334 Interest expense, net (17,316,073) (6,599,083) (1,261,626)Loss before taxes (126,995,175) (93,268,188) (42,486,174)Income tax benefit — 5,387,067 — Net loss (126,995,175) (87,881,121) (42,486,174)Dividends on Series A-1 convertible preferred stock (204,246) (202,960) (203,832)Net loss attributable to common stockholders $(127,199,421) $(88,084,081) $(42,690,006)Per common share data: Basic and diluted net loss attributable to common stockholders $(1.46) $(1.13) $(0.71)Weighted average number of common shares outstanding: Basic and diluted 87,070,189 78,212,094 59,753,552 Other comprehensive income (loss): Foreign currency translation gain (loss) $677,536 $164,150 $(1,778,184)Unrealized (loss) gain on investments — (1,690) 1,764 Pension liability (153,952) (245,183) (194,000)Other comprehensive income (loss) 523,584 (82,723) (1,970,420)Comprehensive loss $(126,675,837) $(88,166,804) $(44,660,426) See accompanying notes to consolidated financial statements. 56Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.AGENUS INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITYFor the Years Ended December 31, 2016, 2015, and 2014 Series A-1 Series B2 Convertible Convertible Preferred Stock Preferred Stock Common Stock Treasury Stock Number ofShares ParValue Number ofShares ParValue Number ofShares ParValue AdditionalPaid-InCapital Numberof Shares Amount AccumulatedOtherComprehensiveLoss AccumulatedDeficit Total Balance atDecember 31, 2013 31,620 $316 3,105 $31 36,391,191 $363,912 $644,571,866 43,490 $(324,792) $— $(649,092,036) $(4,480,703)Net loss — — — — — — — — — — (42,486,174) (42,486,174)Othercomprehensive loss — — — — — — — — — (1,970,420) — (1,970,420)Shares sold at themarket — — — — 215,489 2,155 598,504 — — — — 600,659 Shares sold inregistered direct offering — — — — 22,236,000 222,360 55,969,233 — — — — 56,191,593 Share-basedcompensation — — — — — — 4,604,713 — — — — 4,604,713 Reclassification ofliability classified optiongrants — — — — — — (487,227) — — — — (487,227)Vesting ofnonvested shares — — — — 48,239 483 (483) — — — — — Issuance of stockfor 4AB acquisition — — — — 3,334,079 33,341 10,068,918 — — — — 10,102,259 Shares issued toCEO in lieu of cashcompensation — — — — 25,989 260 78,940 — — — — 79,200 Shares issued foracquisition liability — — — — 35,124 351 119,423 — — — — 119,774 Retirement oftreasury shares — — — — (43,490) (435) (596,224) (43,490) 324,792 — 271,867 — Retirement ofpreferred shares — — (3,105) (31) — — 31 — — — — — Shares issued tosettle convertiblenotes — — — — 383,038 3,830 949,935 — — — — 953,765 Exercise of stockoptions — — — — 48,381 484 144,830 — — — — 145,314 Employee sharepurchases — — — — 46,025 460 106,137 — — — — 106,597 Dividends on seriesA convertible preferred stock($14.58 per share) — — — — — — (460,963) — — — — (460,963)Balance atDecember 31, 2014 31,620 $316 — $— 62,720,065 $627,201 $715,667,633 — $— $(1,970,420) $(691,306,343) $23,018,387 See accompanying notes to consolidated financial statements.57Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.AGENUS INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY(Continued)For the Years Ended December 31, 2016, 2015, and 2014 Series A-1 Series B2 Convertible Convertible Preferred Stock Preferred Stock Common Stock Treasury Stock Number ofShares ParValue Number ofShares ParValue Number ofShares ParValue AdditionalPaid-InCapital Numberof Shares Amount AccumulatedOtherComprehensiveLoss AccumulatedDeficit Total Net loss (87,881,121) (87,881,121)Other comprehensiveloss — — — — — — — — — (82,723) — (82,723)Shares sold inunderwritten public offering — — — — 12,650,000 126,500 74,543,480 — — — — 74,669,980 Share-basedcompensation — — — — — — 8,098,650 — — — — 8,098,650 Reclassification ofliability classified optiongrants — — — — — — (495,742) — — — — (495,742)Vesting of nonvestedshares — — — — 35,332 353 (353) — — — — — Issuance of stock foracquisition of SECANT yeastdisplay technology — — — — 574,140 5,741 2,994,259 — — — — 3,000,000 Shares sold underStock Purchase Agreement — — — — 7,763,968 77,640 34,922,361 — — — — 35,000,001 Issuance of sharesrelated to milestone achievement — — — — 80,493 805 343,736 — — — — 344,541 Issuance of warrants — — — — — — 3,038,438 3,038,438 Issuance of stock inconnection with XOMA antibodymanufacturing facility acquisition — — — — 109,211 1,092 498,908 — — — — 500,000 Issuance of stock inconnection with PhosImmuneacquisition — — — — 1,631,521 16,315 7,383,685 — — — — 7,400,000 Issuance of stock forsettlement of contingent royaltyobligation — — — — 300,000 3,000 2,139,000 — — — — 2,142,000 Exercise of stockoptions — — — — 462,428 4,624 1,762,237 — — — — 1,766,861 Employee sharepurchases — — — — 63,539 636 207,642 — — — — 208,278 Balance at December31, 2015 31,620 $316 — $— 86,390,697 $863,907 $851,103,934 — $— $(2,053,143) $(779,187,464) $70,727,550 See accompanying notes to consolidated financial statements.58Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.AGENUS INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY(Continued)For the Years Ended December 31, 2016, 2015, and 2014 Series A-1 Series B2 Convertible Convertible Preferred Stock Preferred Stock Common Stock Treasury Stock Number ofShares ParValue Number ofShares ParValue Number ofShares ParValue AdditionalPaid-InCapital Numberof Shares Amount AccumulatedOtherComprehensiveIncome (Loss) AccumulatedDeficit Total Net loss (126,995,175) (126,995,175)Othercomprehensiveincome — — — — — — — — — 523,584 — 523,584 Share-basedcompensation — — — — — — 13,323,616 — — — — 13,323,616 Reclassification ofliability classified optiongrants — — — — — — (318,677) — — — — (318,677)Vesting ofnonvested shares — — — — 570,037 5,701 (5,701) (185,117) (768,236) — — (768,236)Shares sold at themarket — — — — 496,520 4,965 2,162,105 — — — — 2,167,070 Issuance of directorshares forcompensation — — — — 23,110 231 161,332 — — — — 161,563 Retirement oftreasury shares — — — — (188,184) (1,882) (1,632,554) 188,184 781,117 853,319 — Issuance of sharesfor milestones — — — — 157,513 1,575 885,223 — — — — 886,798 Exercise of stockoptions — — — — 224,012 2,240 740,445 (3,067) (12,881) — — 729,804 Employee sharepurchases — — — — 121,228 1,212 434,625 — — — — 435,837 Balance atDecember 31, 2016 31,620 $316 — $— 87,794,933 $877,949 $866,854,348 — $— $(1,529,559) $(905,329,320) $(39,126,266) See accompanying notes to consolidated financial statements. 59Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.AGENUS INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFor the Years Ended December 31, 2016, 2015, and 2014 2016 2015 2014 Cash flows from operating activities: Net loss $(126,995,175) $(87,881,121) $(42,486,174)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 4,947,787 1,957,591 1,583,960 Share-based compensation 13,188,364 7,438,308 4,672,256 Non-cash interest expense 16,530,437 5,626,918 619,846 Loss on disposal of assets 14,733 — 4,583 Change in fair value of contingent obligations 1,953,000 13,567,000 3,579,159 In-process research and development purchase — 12,245,231 — Loss on extinguishment of debt — 154,117 — Bargain purchase — (1,522,377) — Deferred tax benefit — (5,387,067) — Change in fair value of assumed convertible notes — — (201,092)Changes in operating assets and liabilities: Accounts receivable (1,549,798) (9,331,622) 1,200 Inventories — 7,500 (95,700)Prepaid expenses (650,824) (703,424) (254,045)Accounts payable 419,708 2,668,064 (45,902)Deferred revenue (3,939,619) 15,957,820 (3,610,811)Accrued liabilities and other current liabilities 18,275,940 9,565,639 (1,316,169)Other operating assets and liabilities (2,155,364) (11,538,019) (685,696)Net cash used in operating activities (79,960,811) (47,175,441) (38,234,585)Cash flows from investing activities: Cash paid for acquisitions — (7,182,069) — Cash acquired in acquisition — — 514,470 Purchases of plant and equipment (12,519,738) (3,591,335) (2,819,764)Purchases of available-for-sale securities (54,884,101) (34,993,100) (14,507,806)Proceeds from sale of available-for-sale securities 85,000,000 14,534,486 — Net cash provided by (used in) investing activities 17,596,161 (31,232,018) (16,813,100)Cash flows from financing activities: Net proceeds from sale of equity 2,167,070 109,669,980 56,792,252 Proceeds from employee stock purchases and option exercises 1,183,598 1,975,139 251,911 Purchase of treasury shares to satisfy tax withholdings (667,050) — — Financing of plant and equipment — — (39,156)Proceeds from issuance of long-term debt — 109,000,000 — Debt issuance costs — (1,774,323) — Payments of debt — (1,111,111) (3,333,334)Payment of contingent purchase price consideration — (8,180,000) — Payment under a purchase agreement for in-process research and development (5,000,000) — — Payment of preferred stock dividends — — (460,963)Payment of contingent royalty obligation — (20,000,000) (400,000)Payment of capital lease obligation (144,658) — — Net cash (used in) provided by financing activities (2,461,040) 189,579,685 52,810,710 Effect of exchange rate changes on cash (429,167) (183,873) 599,525 Net (decrease) increase in cash and cash equivalents (65,254,857) 110,988,354 (1,637,450)Cash and cash equivalents, beginning of period 136,702,873 25,714,519 27,351,969 Cash and cash equivalents, end of period $71,448,016 $136,702,873 $25,714,519 Supplemental cash flow information: Cash paid for interest $1,120,000 $1,053,447 $675,391 Supplemental disclosures - non-cash activities: 60Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Purchases of plant and equipment in accounts payable and accrued liabilities $695,466 $105,245 $— Issuance of common stock, $0.01 par value, issued in connection with the settlement of milestone obligation 886,798 — — Issuance of common stock, $0.01 par value, issued to directors as compensation 161,332 — — Issuance of common stock, $0.01 par value, issued in connection with the settlement of the contingent royalty obligation — 2,142,000 — Issuance of common stock, $0.01 par value, in connection with acquisition of PhosImmune — 7,400,000 — Issuance of common stock, $0.01 par value, in connection with the acquisition the XOMA antibody manufacturing facility — 500,000 — Issuance of common stock, $0.01 par value, in connection with the acquisition of the SECANT yeast display technology — 3,000,000 — Issuance of common stock, $0.01 par value, in connection with the acquisition of 4-Antibody AG — — 10,102,259 Issuance of common stock, $.01 par value, in connection with payment of the contingent purchase price obligation — 344,541 — Contingent purchase price consideration in connection with the acquisition of PhosImmune — 2,484,000 — Contingent purchase price consideration in connection with the acquisition of 4-Antibody AG — — 9,721,000 Issuance of common stock, $0.01 par value, as payment of long-term debt including accrued and unpaid interest — — 953,765See accompanying notes to consolidated financial statements. 61Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.AGENUS INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Description of BusinessAgenus Inc. (including its subsidiaries, collectively referred to as “Agenus,” the “Company,” “we,” “us,” and “our”) is a clinical stage immuno-oncology company focused on the discovery and development of therapies that engage the body’s immune system to fight cancer. Our approach to cancerimmunotherapy involves a diverse portfolio of antibody-based therapeutics, adjuvants and 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 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 pipelineconsists of a number of proprietary checkpoint modulating (“CPM”) antibodies against innovative targets such as TIGIT and 4-1BB (also known asCD137). We believe that tailored combination therapies are essential to combat some of the most resistant cancers. Accordingly, our immune educationstrategy focuses on pursing antibodies as well as vaccine candidates in conjunction with adjuvants. We are developing a comprehensive immuno-oncologyportfolio driven by the following platforms and programs, which we intend to utilize individually and in combination: •our antibody discovery platforms, including our Retrocyte Display™, SECANT® yeast display, and phage display technologies designed toproduce quality human antibodies; •our antibody candidate programs, including our CPM programs; •our vaccine programs, including Prophage™, AutoSynVax™ and PhosPhoSynVaxTM ; andour saponin-based vaccine adjuvants, principally our QS-21 Stimulon® adjuvant, or QS-21 Stimulon.Our business activities have included product research and development, intellectual property prosecution, manufacturing, regulatory and clinicalaffairs, corporate finance and development activities, and support of our collaborations. Our product candidates require clinical trials and approvals fromregulatory agencies, as well as acceptance in the marketplace. Part of our strategy is to develop and commercialize some of our product candidates bycontinuing our existing arrangements with academic and corporate collaborators and licensees and by entering into new collaborations.Our cash, cash equivalents, and short-term investments at December 31, 2016 were $76.4 million, a decrease of $95.3 million from December 31, 2015. Quarter Ended March 31,2016 June 30,2016 September 30,2016 December 31,2016 Cash, cash equivalents and short-term investments $148.2 $123.3 $95.4 $76.4 Decrease in cash, cash equivalents and short-term investments $23.5 $24.9 $27.9 $19.0 Cash used in operating activities $21.5 $18.5 $23.8 $16.0 Reported net loss $31.8 $28.3 $40.8 $26.1 We have incurred significant losses since our inception. As of December 31, 2016 we had an accumulated deficit of $905.3 million. Since ourinception, we have financed our operations primarily through the sale of equity and convertible and other notes, and interest income earned on cash, cashequivalents, and short-term investment balances. We believe that, based on our current plans and activities, our cash, cash equivalents and short-terminvestments balance of $76.4 million as of December 31, 2016, along with the $80.0 million received from Incyte Corporation (“Incyte”) in February 2017 inconnection with amending our collaboration agreement, and issuing additional shares pursuant to a share purchase agreement, will be sufficient to satisfy ourliquidity requirements for more than one year from when these financial statements were issued. We continue to monitor the likelihood of success of our keyinitiatives and are prepared to discontinue funding of such activities if they do not prove to be feasible, restrict capital expenditures and/or reduce the scaleof our operations.Research and development program costs include compensation and other direct costs plus an allocation of indirect costs, based on certainassumptions, and our review of the status of each program. Our product candidates are in various stages of development and significant additionalexpenditures will be required if we start new trials, encounter delays in our programs, apply for regulatory approvals, continue development of ourtechnologies, expand our operations, and/or bring our product candidates to market. The eventual total cost of each clinical trial is dependent on a number offactors such as trial design, length of the trial, number of clinical sites, and number of patients. The process of obtaining and maintaining regulatoryapprovals for new therapeutic products is lengthy, expensive, and uncertain. Because our CPM antibody programs are pre-clinical, we are unable to reliablyestimate the cost of62Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.completing research and development programs, the timing of bringing such programs to various markets, or substantial partnering or out-licensingarrangements, and, therefore, are unable to determine when, if ever, material cash inflows from operating activities are likely to commence. We will continueto adjust our spending as needed in order to preserve liquidity. (2) Summary of Significant Accounting Policies(a) Basis of Presentation and Principles of ConsolidationThe consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include the accountsof Agenus and our wholly-owned subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation. Certainreclassifications have been made to previously reported amounts to conform to the current presentation.(b) Segment InformationWe are managed and operated as one business segment. The entire business is managed by a single executive operating committee that reports to thechief executive officer. We do not operate separate lines of business with respect to any of our product candidates or geographic locations. Accordingly, wedo not prepare discrete financial information with respect to separate product areas or by location and do not have separately reportable segments as definedby Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting.(c) Use of EstimatesThe preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimatesand assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidatedfinancial statements and the reported amounts of revenues and expenses during the reporting period. We base those estimates on historical experience and onvarious assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.(d) Cash and Cash EquivalentsWe consider all highly liquid investments purchased with maturities at acquisition of three months or less to be cash equivalents. Cash equivalentsconsist primarily of money market funds and U.S. Treasury Bills.(e) InvestmentsWe classify investments in marketable securities at the time of purchase. At December 31, 2016 and 2015, all marketable securities are classified asavailable for sale and as such, the investments are recorded at fair value. Gains and losses on the sale of marketable securities are recognized in operationsbased on the specific identification method. At December 31, 2016 and 2015, our investments consisted of institutional money market funds and U.S.Treasury Bills.(f) Concentrations of Credit RiskFinancial instruments that potentially subject us to concentrations of credit risk are primarily cash equivalents, investments, and accounts receivable.We invest our cash, cash equivalents and short-term investments in accordance with our investment policy, which specifies high credit quality standards andlimits the amount of credit exposure from any single issue, issuer, or type of investment. We carry balances in excess of federally insured levels, however, wehave not experienced any losses to date from this practice.(g) InventoriesInventories are stated at the lower of cost or market. Cost has been determined using standard costs that approximate the first-in, first-out method.Inventory as of December 31, 2016 and 2015 consisted solely of finished goods.(h) Accounts ReceivableAccounts receivable are primarily amounts due from our collaboration partner as a result of research and development services provided andreimbursements under co-funded research and development programs. We considered the need for an allowance for doubtful accounts and have concludedthat no allowance was needed as of December 31, 2016 and 2015, as the estimated risk of loss on our accounts receivable was determined to be minimal.63Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(i) Property, Plant and EquipmentProperty, plant and equipment, including software developed for internal use, are carried at cost. Depreciation is computed using the straight-linemethod over the estimated useful lives of the assets. Amortization of leasehold improvements is computed over the shorter of the lease term or estimateduseful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are charged to expense as incurred. Amortization anddepreciation of plant and equipment was $2.7 million, $1.4 million, and $1.1 million, for the years ended December 31, 2016, 2015, and 2014, respectively.(j) Fair Value of Financial InstrumentsThe estimated fair values of all of our financial instruments, excluding debt, approximate their carrying amounts in the consolidated balance sheets.The fair value of our outstanding debt is based on a present value methodology. The outstanding principal amount of our debt, including the current portion,was $114.1 million and $114.1 million at December 31, 2016 and 2015, respectively.(k) Revenue RecognitionRevenue for services under research and development contracts are recognized as the services are performed, or as clinical trial materials are provided.Non-refundable milestone payments that represent the completion of a separate earnings process are recognized as revenue when earned. License fees androyalties are recognized as they are earned. Grant revenue is recognized when the related expense is recorded. Revenue recognized from collaborativeagreements is based upon the provisions of ASC 605-25, Revenue Recognition – Multiple-Element Arrangements, as amended by Accounting StandardsUpdate (“ASU”) 2009-13 (“Topic 605”). For the years ended December 31, 2016 and 2015, 87% and 95%, respectively, of our revenue was earned from onecollaboration partner. For the year ended December 31, 2014, 48% of our revenue was earned from one research partner.(l) Foreign Currency TransactionsGains and losses from our foreign currency based accounts and transactions, such as those resulting from the translation and settlement of receivablesand payables denominated in foreign currencies, are included in the consolidated statements of operations within other (expense) income. We do notcurrently use derivative financial instruments to manage the risks associated with foreign currency fluctuations. We recorded foreign currency losses of $2.1million, $866,000, and $773,000, for the years ended December 31, 2016, 2015, and 2014, respectively.(m) Research and DevelopmentResearch and development expenses include the costs associated with our internal research and development activities, including salaries andbenefits, share-based compensation, occupancy costs, clinical manufacturing costs, related administrative costs, and research and development conducted forus by outside advisors, such as sponsored university-based research partners and clinical study partners. We account for our clinical study costs by estimatingthe total cost to treat a patient in each clinical trial and recognizing this cost based on estimates of when the patient receives treatment, beginning when thepatient enrolls in the trial. Research and development expenses also include the cost of clinical trial materials shipped to our research partners. Research anddevelopment costs are expensed as incurred.(n) Share-Based CompensationWe account for share-based compensation in accordance with the provisions of ASC 718, Compensation—Stock Compensation and ASC 505-50,Equity-Based Payments to Non-Employees. Share-based compensation expense is recognized based on the estimated grant date fair value, and is recognizednet of an estimated forfeiture rate such that we recognize compensation cost for those shares expected to vest. Compensation cost is recognized on a straight-line basis over the requisite service period of the award. The non-cash charge to operations for non-employee awards with vesting or other performancecriteria is affected each reporting period by changes in the fair value of our common stock. Under the provisions of ASC 505-50, the change in fair value ofvested options issued to non-employees is reflected in the statement of operations each reporting period, until the options are exercised or expire. See Note11 for a further discussion on share-based compensation.64Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(o) Income TaxesIncome taxes are accounted for under the asset and liability method with deferred tax assets and liabilities recognized for the future tax consequencesattributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and net operatingloss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years inwhich such items are expected to be reversed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in theconsolidated statement of operations in the period that includes the enactment date. Deferred tax assets are recognized when they are more likely than notexpected to be realized.(p) Net Loss Per ShareBasic income and loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted average numberof common shares outstanding (including common shares issuable under our Directors’ Deferred Compensation Plan). Diluted income per common share iscalculated by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding (including commonshares issuable under our Directors’ Deferred Compensation Plan) plus the dilutive effect of outstanding instruments such as warrants, stock options,nonvested shares, convertible preferred stock, and convertible notes. Because we reported a net loss attributable to common stockholders for all periodspresented, diluted loss per common share is the same as basic loss per common share, as the effect of utilizing the fully diluted share count would havereduced the net loss per common share. Therefore, the following potentially dilutive securities have been excluded from the computation of diluted weightedaverage shares outstanding as of December 31, 2016, 2015, and 2014, as they would be anti-dilutive: Year Ended 2016 2015 2014 Warrants 4,351,450 4,351,450 2,951,450 Stock options 11,693,400 8,345,835 6,525,724 Nonvested shares 1,942,476 1,730,604 78,828 Convertible preferred stock 333,333 333,333 333,333 (q) GoodwillGoodwill represents the excess of cost over the fair value of net assets of businesses acquired. Goodwill is not amortized, but instead tested forimpairment at least annually. Annually we assess whether there is an indication that goodwill is impaired, or more frequently if events and circumstancesindicate that the asset might be impaired during the year. We perform our annual impairment test as of October 31 of each year. The first step of ourimpairment analysis compares our fair value to our net book value to determine if there is an indicator of impairment. We operate as a single operatingsegment and single reporting unit and our fair value is based on our quoted market price of our common stock to derive the market capitalization as of thedate of the impairment test. ASC 350, Intangibles, Goodwill and Other states that if the carrying value of the reporting unit is negative, the second step ofthe impairment test shall be performed to measure the amount of impairment loss, if any, if qualitative factors indicate that it is more likely than not that agoodwill impairment exists. No goodwill impairment has been recognized for the periods presented.(r) In-process Research and DevelopmentAcquired in-process research and development (“IPR&D”) represents the fair value assigned to research and development assets that have not reachedtechnological feasibility. The value assigned to acquired IPR&D is determined by estimating the costs to develop the acquired technology into commerciallyviable products, estimating the resulting revenue from the projects, and discounting the net cash flows to present value. The revenue and costs projectionsused to value acquired IPR&D are, as applicable, reduced based on the probability of success of developing a new drug. Additionally, the projectionsconsider the relevant market sizes and growth factors, expected trends in technology, and the nature and expected timing of new product introductions by usand our competitors. The rates utilized to discount the net cash flows to their present value are commensurate with the stage of development of the projectsand uncertainties in the economic estimates used in the projections. Upon the acquisition of IPR&D, we complete an assessment of whether our acquisitionconstitutes the purchase of a single asset or a group of assets. We consider multiple factors in this assessment, including the nature of the technologyacquired, the presence or absence of separate cash flows, the development process and stage of completion, quantitative significance and our rationale forentering into the transaction.If we acquire an asset or group of assets that do not meet the definition of a business under applicable accounting standards, then the acquired IPR&Dis expensed on its acquisition date. Future costs to develop these assets are recorded to research and development expense as they are incurred.65Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We review amounts capitalized as acquired IPR&D for impairment at least annually, as of October 31, and whenever events or changes incircumstances indicate that the carrying value of the assets might not be recoverable. When performing our impairment assessment, we have the option to firstassess qualitative factors to determine whether it is necessary to recalculate the fair value of our acquired IPR&D. If we elect this option and believe, as aresult of the qualitative assessment, that it is more-likely-than-not that the fair value of our acquired IPR&D is less than its carrying amount, we calculate thefair value using the same methodology as described above. If the carrying value of our acquired IPR&D exceeds its fair value, then the intangible asset iswritten-down to its fair value. Alternatively, we may elect to not first assess qualitative factors and immediately recalculate the fair value of our acquiredIPR&D. No IPR&D impairments were recognized for the years presented.(s) Accounting for Asset Retirement ObligationsWe record the fair value of an asset retirement obligation as a liability in the period in which we incur a legal obligation associated with the retirementof tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the assets. A legal obligation is a liability that aparty is required to settle as a result of an existing or enacted law, statute, ordinance, or contract. We are also required to record a corresponding asset that isdepreciated over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation will be adjusted at the end ofeach period to reflect the passage of time (accretion) and changes in the estimated future cash flows underlying the obligation. Changes in the liability due toaccretion are charged to the consolidated statement of operations, whereas changes due to the timing or amount of cash flows are an adjustment to thecarrying amount of the related asset. Our asset retirement obligations primarily relate to the expiration of our facility lease and anticipated costs to beincurred based on our lease terms.(t) Long-lived AssetsIf required based on certain events and circumstances, recoverability of assets to be held and used, other than goodwill and intangible assets not beingamortized, is measured by a comparison of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by the asset orasset group. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized for the amount bywhich the carrying amount of the asset exceeds the fair value of the asset. Authoritative guidance requires companies to separately report discontinuedoperations and extends that reporting to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or isclassified as held for sale. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.(u) Recent Accounting PronouncementsIn May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, ("ASU 2014-09"). ASU 2014-09 amends revenuerecognition principles and provides a single set of criteria for revenue recognition among all industries. This new standard provides a five step frameworkwhereby revenue is recognized when promised goods or services are transferred to a customer at an amount that reflects the consideration to which the entityexpects to be entitled in exchange for those goods or services. The standard also requires enhanced disclosures pertaining to revenue recognition in bothinterim and annual periods. In March 2016, the FASB issued an amendment to the standard, ASU 2016-8, Revenue from Contracts with Customers (Topic606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”), which clarifies the implementation guidance onprincipal versus agent considerations. In April 2016, the FASB issued an additional amendment to the standard, ASU 2016-10, Revenue from Contracts withCustomers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”), which clarifies the guidance on identifying performanceobligations and the implementation guidance on licensing. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date by one yearto December 15, 2017 for annual reporting periods beginning after that date, including interim periods within those periods. The FASB also approvedpermitting early adoption of the standard, but not before the original effective date of December 15, 2016. ASU 2014-09 is effective for interim and annualperiods beginning after December 15, 2017. Two adoption methods are permitted: retrospectively to all prior reporting periods presented, with certainpractical expedients permitted; or retrospectively with the cumulative effect of initially adopting the ASU recognized at the date of initial application. TheCompany has not yet determined which method will be used. We are currently evaluating the potential impact that ASU 2014-09 may have on our financialposition and results of operations. To date, the Company’s sources of collaboration and other revenue have primarily been collaboration agreements. Themost significant differences between Topic 606 and previous guidance for license and collaboration revenue are: (i) allocating consideration to performanceobligations; and (ii) estimating and determining the timing of recognition of variable consideration received from licensees, including up-front licensepayments, contingent milestones and royalties. Revenues from contingent milestone payments may be recognized earlier under Topic 606 than under Topic605, based on an assessment of the probability of a significant reversal of such milestone revenue at each reporting date. This assessment may result inrecognizing milestone revenue before the milestone event has been achieved. Under previous guidance, milestone revenue was typically recognized whenthe milestone event was achieved. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 requires management to evaluate, at each annual or interim reporting period, whether there66Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.are conditions or events that exist that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date thefinancial statements are issued and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and earlierapplication is permitted. The adoption of ASU 2014-15 did not have an effect on the Company’s consolidated financial statements or disclosures as theCompany concluded there were no conditions or events that existed at the time these consolidated financial statements were issued that raise substantialdoubt about the Company’s ability to continue as a going concern.In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt IssuanceCosts, (“ASU 2015-03”). ASU 2015-03 simplifies the presentation of debt issuance costs, as this new standard requires that debt issuance costs related to arecognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debtdiscounts. The recognition and measurement guidance for debt issuance costs are not affected by this update. This guidance is effective for annual reportingbeginning after December 15, 2015, including interim periods within the year of adoption, and calls for retrospective application, with early applicationpermitted. We adopted ASU 2015-03 with the interim period ended September 30, 2015. During the quarter ended September 30, 2015, in connection withthe execution of the Note Purchase Agreement as described in Note 16, the Company incurred approximately $1.5 million in debt issuance costs that areclassified as a reduction to long-term debt in our consolidated balance sheet. No debt issuance costs required retrospective application as the result of theadoption of ASU 2015-03. The amortization of the debt issuance costs for the year ended December 31, 2016 was $135,000. The amortization of debtissuance costs for the year ended December 31, 2015 was not material. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-2”) which supersedes Topic 840, Leases. ASU 2016-02 requireslessees to recognize a right-of-use asset and a lease liability on their balance sheets for all leases with terms greater than twelve months. Based on certaincriteria, leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the income statement. Forleases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assetsand lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term.ASU 2016-2 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. Intransition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospectiveapproach. The modified retrospective approach includes a number of optional practical expedients primarily focused on leases that commenced before theeffective date of Topic 842, including continuing to account for leases that commence before the effective date in accordance with previous guidance, unlessthe lease is modified. Footnote 15 provides details on our current lease arrangements. While we continue to evaluate the provisions of ASC 842 to determinehow it will be affected, the primary effect of adopting the new standard will be to record assets and obligations for current operating leases. Upon adoption,based on leases in place as of December 31, 2016, the we expect to recognize assets and liabilities of approximately $13.8 million related to our operatingleases. The adoption of ASC 842 is not expected to have a material impact on the Company’s results of operations or cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based PaymentAccounting, (“ASU 2016-09”). ASU 2016-09 provides for the simplification of the accounting for share-based payment transactions, including the incometax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 applies to all entitiesand is effective for the annual effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlyadoption is permitted for any entity in any interim or annual period. We do not expect the impact of ASU 2016-09 to be material to our financial position andresults of operations. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which providesguidance regarding the definition of a business, with the objective of adding guidance to assist entities with evaluating whether transactions should beaccounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for the Company in the first quarter of 2018, with early adoptionpermitted, and prospective application required. We will apply the provisions of ASU 2016-09 to any relevant transactions no later than the first quarter of2018 and may consider earlier adoption for relevant transactions which occur in 2017. 67Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(3) Business Acquisitions 4-AntibodyOn January 10, 2014, we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) providing for our acquisition of all of theoutstanding capital stock of Agenus Switzerland Inc. (formerly known as 4-Antibody AG) (“4-AB”), from the shareholders of 4-AB (the “4-ABShareholders”). The transaction closed on February 12, 2014 (the “Closing Date”). In exchange for their shares, the 4-AB Shareholders received an aggregateof 3,334,079 shares of our common stock paid upon closing and valued at $10.1 million. Contingent milestone payments of up to $40.0 million (the“contingent purchase price consideration”), payable in cash or shares of our common stock at our option, are due to the 4-AB Shareholders as follows: (i)$20.0 million upon our market capitalization exceeding $300.0 million for 10 consecutive trading days prior to the earliest of (a) the fifth anniversary of theClosing Date (b) the sale of the 4-AB or (c) the sale of Agenus; (ii) $10.0 million upon our market capitalization exceeding $750.0 million for 30 consecutivetrading days prior to the earliest of (a) the tenth anniversary of the Closing Date (b) the sale of 4-AB, or (c) the sale of Agenus, and (iii) $10.0 million upon ourmarket capitalization exceeding $1.0 billion for 30 consecutive trading days prior to the earliest of (a) the tenth anniversary of the Closing Date, (b) the saleof 4-AB, or (c) the sale of Agenus. We assigned an acquisition date fair value of $9.7 million to the contingent purchase price consideration. During January2015, the first milestone noted above was achieved. This acquisition provided us with the Retrocyte Display technology platform for the rapid discovery andoptimization of fully-human and humanized monoclonal antibodies against a wide array of molecular targets and a portfolio of CPM antibodies. PhosImmune Inc. On December 23, 2015 (the “PhosImmune Closing Date”), we entered into a Purchase Agreement with PhosImmune Inc., a privately-held Virginiacorporation (“PhosImmune”), the securityholders of PhosImmune (the “PhosImmune Securityholders”) and Fanelli Haag PLLC, as representative of thePhosImmune Securityholders providing for the acquisition of all outstanding securities of PhosImmune. On the PhosImmune Closing Date, in exchange fortheir shares, the PhosImmune Securityholders received $2.5 million in cash and an aggregate of 1,631,521 of our common stock paid upon closing andvalued at $7.4 million. Contingent milestone payments up to $35.0 million payable in cash and/or stock at our option are due as follows: (i) $5.0 millionupon the closing trading price of our common stock equals or exceeds $8.00 for 60 consecutive trading days prior to the earlier of (a) the fifth anniversary ofthe PhosImmune Closing Date or (b) the sale of Agenus; (ii) $15.0 million if the closing trading price of our common stock equals or exceeds $13.00 for 60consecutive trading days prior to the earlier of (a) the tenth anniversary of the PhosImmune Closing Date or (b) the sale of Agenus; and (iii) $15.0 million ifthe closing trading price of our common stock equals or exceeds $19.00 for 60 consecutive trading days prior to the earlier of (a) the tenth anniversary of thePhosImmune Closing Date or (b) the sale of Agenus. We assigned an acquisition date fair value of $2.5 million to the contingent purchase priceconsideration. This acquisition expands our immuno-oncology pipeline and strengthens our neoantigen capabilities to enable the development of best-in-class cancer vaccines and other novel therapies. Antibody Manufacturing Facility On November 5, 2015, we entered into Asset Purchase Agreement (the “Asset Purchase Agreement”) providing for our acquisition of an antibodymanufacturing pilot plant and related capabilities from XOMA Corporation (“XOMA”). The transaction closed on December 31, 2015. As consideration forthe purchased assets, we paid XOMA $4.7 million in cash and issued XOMA 109,211 shares of our common stock valued at $500,000. XOMA is entitled toreceive an additional 109,211 shares of our common stock subject to the satisfaction of conditions set forth in the Asset Purchase Agreement. We do notbelieve it is probable that XOMA will satisfy these conditions and therefore have not ascribed a value to the contingent consideration. The transaction withXOMA provides us with an antibody pilot manufacturing facility enabling the production and manufacture of CPM antibodies under our programs and thoseof our collaborations. In accordance with the guidance of ASC 805 Business Combinations, when the fair value of the assets acquired exceed the total purchaseconsideration, a bargain purchase has occurred and the resulting gain is to be recognized in earning as of the date of the transaction. In July 2015, XOMAexperienced a set-back in a late-stage clinical trial and as a result of the setback, began the immediate divestiture of their antibody body productioncapabilities at values less than the prevailing market rates for the assets. For the year ended December 31, 2015, we recorded the gain of approximately $1.5million on the acquisition of the antibody manufacturing pilot facility and related capabilities in non-operating (expense) income in our consolidatedstatements of operations and comprehensive loss. 68Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(4) Asset Purchase Agreements Celexion, LLCOn April 7, 2015 (the “Celexion Closing Date”), we entered into an Asset Purchase Agreement (the “Celexion Purchase Agreement”) with Celexion,LLC (“Celexion”) and each of the members of Celexion, pursuant to which, we acquired Celexion’s SECANT yeast display antibody discovery platform, itsfull-length IgG antibody library, its technology for the discovery of molecules targeting cell membrane-associated antigens, and certain other relatedintellectual property assets (collectively, the “Purchased Assets”). As consideration for the Purchased Assets, on the Celexion Closing Date we paid Celexion$1.0 million in cash and issued Celexion 574,140 shares of our common stock valued at approximately $5.23 per share. As additional consideration for thePurchased Assets, we agreed under the Celexion Purchase Agreement to pay to Celexion (i) $1.0 million in cash payable on each of the 9-month and 18-month anniversaries of the Celexion Closing Date and (ii) $4.0 million on each of the 12-month and 24-month anniversaries of the Celexion Closing Datepayable at our discretion in cash, shares of our common stock, or any combination thereof. If we elect to pay any of the additional consideration in shares ofour common stock, such shares will be issued at a price per share equal to the simple average of the daily closing volume weighted average price over the 20trading days preceding the date of issuance. We agreed to file one or more registration statements under the Securities Act to cover the resale of all sharesissued as consideration under the Celexion Purchase Agreement. In May 2015, we filed a registration statement covering the resale of the 574,140 sharesissued to Celexion on the Celexion Closing Date, and the SEC declared the registration statement effective in June 2015. This transaction was accounted foras an asset acquisition in accordance with ASC 805 Business Combinations. In accordance with ASC 730 Research and Development, the purchase price ofapproximately $13.2 million was recorded as research and development expense in our consolidated statement of operations and comprehensive loss for theyear December 31, 2015 as the IPR&D was deemed to have no future alternative use. (5) Goodwill and Acquired Intangible AssetsThe following table sets forth the changes in the carrying amount of goodwill for year ended December 31, 2016 (in thousands): Balance, December 31, 2015 $22,793 Effect of foreign currency (401)Balance, December 31, 2016 $22,392 Acquired intangible assets consisted of the following at December 31, 2016 and 2015 (in thousands): As of December 31, 2016 Amortizationperiod(years) Gross carryingamount Accumulatedamortization Net carryingamount Intellectual Property 7-15 years $16,358 $(2,384) $13,973 Trademarks 4.5 years 791 (505) 286 Other 2-6 years 563 (303) 260 In-process research and development Indefinite 1,846 — 1,846 Total $19,558 $(3,193) $16,365 As of December 31, 2015 Amortizationperiod(years) Gross carryingamount Accumulatedamortization Net carryingamount Intellectual Property 15 years $16,472 $(542) $15,931 Trademarks 4.5 years 812 (339) 473 Other 3 years 567 (107) 460 In-process research and development Indefinite 1,896 — 1,896 Total $19,747 $(987) $18,760The weighted average amortization period of our finite-lived intangible assets is approximately 9 years. Amortization expense for the years endedDecember 31, 2016, 2015, and 2014 was $2.2 million, $525,000, and $462,000, respectively. Amortization expense related to acquired intangibles isestimated at $2.2 million for 2017, $2.0 million for 2018, and $1.9 million for each of 2019, 2020, and 2021.69Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The acquired IPR&D asset relates to the six pre-clinical CPM antibody programs acquired in the Agenus Switzerland transaction. IPR&D acquired in abusiness combination is capitalized at fair value until the underlying project is completed and is subject to impairment testing. Once the project iscompleted, the carrying value of IPR&D is amortized over the estimated useful life of the asset. Post-acquisition research and development expenses relatedto the acquired IPR&D are expensed as incurred. (6) InvestmentsCash Equivalents and Short-term InvestmentsCash equivalents and short-term investments consisted of the following as of December 31, 2016 and 2015 (in thousands): December 31, 2016 December 31, 2015 Cost EstimatedFair Value Cost EstimatedFair Value Institutional Money Market Funds $38,913 $38,913 $106,370 $106,370 U.S. Treasury Bills 14,978 14,978 54,945 54,961 Total $53,891 $53,891 $161,315 $161,331 We received proceeds of approximately $85.0 million, $14.5 million, and $0 from the maturity of U.S. Treasury Bills classified as short-terminvestments for the years ended December 31, 2016, 2015, and 2014, respectively. No securities were sold before their maturity in 2016. As a result of theshort-term nature of our investments, there were minimal unrealized holding gains or losses as of December 31, 2016 and 2015, and 2014.Of the investments listed above, $48.9 million and $126.4 million have been classified as cash equivalents on our consolidated balance sheet as ofDecember 31, 2016 and 2015, respectively. Approximately $5.0 million and $35.0 million were classified as short-term investments as of December 31, 2016and 2015, respectively. (7) Property, Plant and EquipmentProperty, plant and equipment, net as of December 31, 2016 and 2015 consist of the following (in thousands): 2016 2015 EstimatedDepreciableLivesLand $2,230 $2,230 IndefiniteBuilding and building improvements 4,605 2,900 35 yearsFurniture, Fixtures, and other 3,993 2,168 3 to 10 yearsLaboratory and manufacturing equipment 16,107 12,241 4 to 10 yearsLeasehold improvements 23,154 18,938 2 to 12 yearsSoftware and computer equipment 6,789 6,323 3 years 56,878 44,800 Less accumulated depreciation and amortization (31,244) (29,489) Total $25,634 $15,311 (8) Income TaxesWe are subject to taxation in the U.S. and in various state, local, and foreign jurisdictions. We remain subject to examination by U.S. Federal, state,local, and foreign tax authorities for tax years 2013 through 2016. With a few exceptions, we are no longer subject to U.S. Federal, state, local, and foreignexaminations by tax authorities for the tax year 2012 and prior. However, net operating losses from the tax year 2012 and prior would be subject toexamination if and when used in a future tax return to offset taxable income. Our policy is to recognize income tax related penalties and interest, if any, in ourprovision for income taxes and, to the extent applicable, in the corresponding income tax assets and liabilities, including any amounts for uncertain taxpositions.70Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.As of December 31, 2016, we had available net operating loss carryforwards of $682.2 million and $178.1 million for Federal and state income taxpurposes, respectively, which are available to offset future Federal and state taxable income, if any, and expire between 2017 and 2036. At December 31,2016, the Company had additional federal and state net operating loss carryforwards of $0.9 million related to excess stock based compensation tax benefitsfor which the benefit will be recorded to additional paid-in capital when recognized. Our ability to use these net operating losses is limited by change ofcontrol provisions under Internal Revenue Code Section 382 and may expire unused. In addition, we have $8.9 million and $13.4 million of Federal andstate research and development credits, respectively, available to offset future taxable income. These Federal and state research and development creditsexpire between 2018 and 2033 and 2017 and 2029, respectively. We also have foreign income tax net operating loss carryforwards of approximately $58.7million which are available to offset future foreign taxable income, if any, and expire between 2017 and 2023. The potential impacts of such provisions areamong the items considered and reflected in management’s assessment of our valuation allowance requirements.The tax effect of temporary differences and net operating loss and tax credit carryforwards that give rise to significant portions of the deferred taxassets and deferred tax liabilities as of December 31, 2016 and 2015 are presented below (in thousands). 2016 2015 Deferred tax assets: U.S. Federal and State net operating loss carryforwards $241,572 $221,139 Foreign net operating loss carryforwards 13,075 8,412 Research and development tax credits 17,723 19,475 Share-based compensation 13,165 10,339 Other 15,513 7,123 Total deferred tax assets 301,048 266,488 Less: valuation allowance (295,502) (260,057)Net deferred tax assets 5,546 6,431 Deferred tax liabilities (6,197) (7,093)Net deferred tax liability $(651) $(662) In assessing the realizablility of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets willnot be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the netoperating loss and tax credit carryforwards can be utilized or the temporary differences become deductible. We consider projected future taxable income andtax planning strategies in making this assessment. In order to fully realize the deferred tax asset, we will need to generate future taxable income sufficient toutilize net operating losses prior to their expiration. Based upon our history of not generating taxable income due to our business activities focused onproduct development, we believe that it is more likely than not that deferred tax assets will not be realized through future earnings. Accordingly, a valuationallowance has been established for deferred tax assets which will not be offset by the reversal of deferred tax liabilities. The valuation allowance on thedeferred tax assets increased by $35.3 million and $25.9 million during the years ended December 31, 2016 and 2015, respectively. The net operating lossincludes amounts pertaining to tax deductions relating to stock exercises for which any subsequently recognized tax benefit will be recorded as an increaseto additional paid-in capital.Income tax benefit was $5.4 million for the year ended December 31, 2015 and nil for each of the years ended December 31, 2016 and 2014,respectively. The income tax benefit of $5.4 million for the year ended December 31, 2015 was entirely related to a deferred tax benefit recognized as a resultof deferred tax liabilities recorded in connection with our acquisitions of PhosImmune and certain assets from XOMA. Income taxes recorded differed fromthe amounts computed by applying the U.S. Federal income tax rate of 34% to loss before income taxes as a result of the following (in thousands). 2016 2015 2014 Computed “expected” Federal tax benefit $(42,781) $(31,669) $(14,445)(Increase) reduction in income taxes benefit resulting from: Change in valuation allowance 35,471 25,908 14,043 (Decrease) increase due to uncertain tax positions (203) 203 117 State and local income benefit, net of Federal income tax benefit (3,452) (3,869) (642)Net operating loss expirations — — 996 Foreign rate differential 4,398 (314) 726 Other, net 6,567 4,354 (795)Income tax benefit $— $(5,387) $— 71Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands): 2016 2015 2014 Balance, January 1 $5,481 $5,778 $5,649 Increase related to current year positions — 203 90 (Decrease) increase related to previouslyrecognized positions (203) (500) 39 Balance, December 31 $5,278 $5,481 $5,778 These unrecognized tax benefits would all impact the effective tax rate if recognized. There are no positions which we anticipate could change withinthe next twelve months. (9) Accrued and Other Current LiabilitiesAccrued liabilities consist of the following as of December 31, 2016 and 2015 (in thousands): December 31,2016 December 31,2015 Payroll $6,504 $4,600 Professional fees 2,373 3,343 Contract manufacturing costs 10,492 3,886 Research services 5,639 1,698 Leasehold improvements 1,280 — Other 1,587 638 Total $27,875 $14,166 Other current liabilities consisted of the following as of December 31, 2016 and 2015 (in thousands): December 31,2016 December 31,2015 Current portion of deferred purchase price (Note 4) $3,948 $5,906 Other 843 398 Total $4,791 $6,304 (10) EquityEffective June 14, 2016, our certificate of incorporation was amended to increase the number of authorized shares of common stock from 140,000,000to 240,000,000.Under the terms and conditions of the Certificate of Designation creating the Series A-1 Preferred Stock, this stock is convertible by the holder at anytime into our common stock, is non-voting, has an initial conversion price of $94.86 per common share, subject to adjustment, and is redeemable by us at itsface amount ($31.6 million), plus any accrued and unpaid dividends, on or after September 24, 2013. The Certificate of Designation does not contemplate asinking fund. The Series A-1 Preferred Stock ranks senior to our common stock. In a liquidation, dissolution, or winding up of the Company, the Series A-1Preferred Stock’s liquidation preference must be fully satisfied before any distribution could be made to the holders of the common stock. Other than in sucha liquidation, no terms of the Series A-1 Preferred Stock affect our ability to declare or pay dividends on our common stock as long as the Series A-1 PreferredStock’s dividends are accruing. The liquidation value of this Series A-1 Preferred stock is equal to $1,000 per share outstanding plus any accrued unpaiddividends. Dividends in arrears with respect to the Series A-1 Preferred Stock were approximately $800,000 or $25.29 per share, and $595,000, or $18.82 pershare, at December 31, 2016 and 2015, respectively.In September 2007, we issued 270,562 shares of our common stock at a price of $18.48 per share to a single institutional investor. In conjunction withthis transaction, we also issued to the investor 10,000 shares of our new series B1 convertible preferred stock and 5,250 shares of our new series B2convertible preferred stock. All shares of the series B1 convertible preferred stock have been converted. Shares of the series B2 convertible preferred stockpermit the investor to purchase common shares for consideration of up to 35% of the total dollar amount previously invested pursuant to the agreement withthe investor, including conversions of the series B1 convertible preferred stock, at a purchase price equal to the lesser of $24.96 per common share or a pricecalculated based on the then-prevailing price of our common stock, with such right expiring seven years from the date of issuance. In April 2009, we issued988,202 shares of our common stock upon conversion of 2,145 shares of our series B2 convertible preferred stock via cashless72Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.conversions. Upon completion of the conversions, 3,105 shares of our series B2 convertible preferred stock were still outstanding although no further sharescould be converted into shares of common stock (other than in the event of a change of control) as the maximum number of shares (as defined in theagreement) had been issued. The total number of shares of common stock issued or issuable to the holder of the class B convertible preferred stock cannotexceed 19.9% of our outstanding common stock. No dividends are paid on the class B convertible preferred stock and there are no liquidation preferences.On September 7, 2014, all 3,105 shares of our issued and outstanding Series B2 Convertible Preferred Stock remained unconverted and were canceled andextinguished in accordance with the Certificate of Designation.In January 2008, we entered into a private placement agreement (the “January 2008 private placement”) pursuant to which we sold 1,451,450 shares ofcommon stock for $18.00 for each share sold. Investors also received (i) 10-year warrants to purchase, at an exercise price of $18.00 per share, up to 1,451,450shares of common stock and (ii) unit warrants to purchase, at an exercise price of $18.00 per unit, contingent upon a triggering event as defined in the January2008 private placement documents, (a) up to 1,451,450 shares of common stock and (b) additional 10-year warrants to purchase, at an exercise price of$18.00 per share, up to 1,451,450 additional shares of common stock. In accordance with the terms of the January 2008 private placement, the 10-yearwarrants became exercisable for a period of 9.5 years as of July 9, 2008. Our private placement in April 2008 qualified as a triggering event, and therefore theunit warrants became exercisable for a period of eighteen months as of July 9, 2008. The unit warrants expired unexercised in January 2010. In February2008, we filed a registration statement covering the resale of the 1,451,450 shares of common stock issued and the 1,451,450 shares issuable upon theexercise of the 10-year warrants issued in the January 2008 private placement. The Securities and Exchange Commission (the “SEC”) declared the resaleregistration statement effective on February 14, 2008. In connection with the January 2008 private placement, of the 1,451,450 warrants issued, 284,785 ofthe warrants were issued to Garo Armen, our CEO.In August 2009, we entered into a private placement agreement under which we issued and sold (i) 730,994 shares of our common stock, (ii) six-monthwarrants to purchase up to 365,495 additional shares of common stock at an exercise price of $13.86 per share, and (iii) four-year warrants to purchase up to328,946 additional shares of common stock at an exercise price of $15.00 per share, for $13.68 for each share sold generating gross proceeds of $10.0 million.The warrants were not exercisable for the first six months following the closing, which occurred on August 4, 2009. Subsequently, we filed, and the SECdeclared effective, a registration statement covering the resale of the 730,994 shares of our common stock issued and the 694,441 shares issuable upon theexercise of the related warrants issued in this private placement. The six-month and four-year warrants expired unexercised in July 2010 and February 2014,respectively.As part of all private placement agreements, we agreed to register the shares of common stock and the shares of common stock underlying the warrants(with the exception of the unit warrants from the January 2008 private placement) issued to the investors with the SEC within contractually specified timeperiods. As noted above, we filed registration statements covering all required shares.In December 2012, we entered into an Amended and Restated At Market Sales Issuance Agreement (the “2012 ATM Program”) with MLV & Co. LLC,(“MLV”) to increase the number of shares of common stock available for offer and sale under the 2012 ATM Program to an aggregate of ten million shares.During the year ended December 31, 2014, we sold an aggregate of 215,000 shares of our common stock in at the market offerings under the 2012ATM Program and received net proceeds of $601,000 after deducting offering costs of approximately $20,000. These offerings were made under effectiveshelf registration statements and proceeds from the offerings were used for general corporate purposes.During September 2013, we sold approximately 3,333,000 shares of our common stock and warrants to purchase 1,000,000 shares of our commonstock in a registered direct public offering raising net proceeds of approximately $9.5 million, after deducting offering expenses. The common stock andwarrants were sold in units, with each unit consisting of one share of common stock and a warrant to purchase 0.3 of a share of common stock. Subject tocertain ownership limitations, the warrants became exercisable beginning 6 months following issuance and will expire five years from the date they becomeexercisable, at an exercise price of $3.75 per share. The number of shares issuable upon exercise of the warrants and the exercise price of the warrants areadjustable in the event of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.In February 2014, we issued and sold 22,236,000 shares of our common stock in a public underwritten offering. Net proceeds after deducting offeringexpenses were approximately $56.0 million. This offering was made under an effective shelf registration statement and proceeds from the offering are beingused for general corporate purposes.In February 2014, our Board of Directors retired 43,490 shares of our treasury stock then outstanding and returned those shares to authorized andunissued shares of our common stock.73Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.In October 2014, we filed a Registration Statement on Form S-3, declared effective by the SEC on October 23, 2014 (the “2014 RegistrationStatement”), covering the offering of up to $150.0 million of common stock, preferred stock, warrants, debt securities and units. The 2014 RegistrationStatement included a prospectus covering the offering, issuance and sale of up to 10 million shares of our common stock from time to time in “at the marketofferings” pursuant to an At Market Sales Issuance Agreement entered into with MLV on October 10, 2014 (the “2014 ATM Program”). On October 10, 2014,we exercised our right under 2012 ATM Program to terminate the 2012 ATM Program upon effectiveness of the 2014 Registration Statement. During theyear ended December 31, 2016 we sold an aggregate of 497,000 shares of our common stock in at the market offerings under the 2014 ATM Program andreceived net proceeds of $2.2 million after deducting offering costs of approximately $67,000.On January 9, 2015, in connection with the execution of the Collaboration Agreement, we also entered into the Stock Purchase Agreement (the “StockPurchase Agreement”) with Incyte Corporation, pursuant to which Incyte purchased approximately 7.76 million shares of our common stock (the “Shares”) inFebruary 2015 for an aggregate purchase price of $35.0 million, or approximately $4.51 per share. Under the Stock Purchase Agreement we agreed to registerthe Shares for resale under the Securities Act of 1933, as amended (the "Securities Act"). Subsequently, we filed, and the SEC declared effective, a registrationstatement covering the resale of the 7,760,000 shares of our common stock issued. On February 14, 2017, we entered into an additional Stock PurchaseAgreement with Incyte, pursuant to which Incyte purchased 10 million shares of our common stock at a price of $6.00 per share. See Note 22 for furtherdetails.In connection with the January 2015 achievement of the first contingent milestone, pursuant to the Agenus Switzerland Share Exchange Agreement,we issued a total of 80,493 shares of our common stock valued at approximately $345,000 as payment of a portion of our obligation.In May 2015, we issued and sold 12,650,000 shares of our common stock in an underwritten public offering. Net proceeds after deducting offeringexpenses were approximately $75.0 million.In September 2015, in accordance with the terms of the Assignment and Termination Agreement detailed in Note 16, we issued 300,000 shares of ourcommon stock to Ingalls valued at $2.1 million.In September 2016, in accordance with the terms of the Technology Transfer and License Agreement with Iontas Limited (“Iontas”), we issued157,313 shares of our common stock to Iontas valued at approximately $887,000. (11) Share-based Compensation PlansOur 1999 Equity Incentive Plan, as amended (the “1999 EIP”) authorized awards of incentive stock options within the meaning of Section 422 of theInternal Revenue Code (the “Code”), non-qualified stock options, nonvested (restricted) stock, and unrestricted stock for up to 2.0 million shares of commonstock (subject to adjustment for stock splits and similar capital changes and exclusive of options exchanged at the consummation of mergers) to employeesand, in the case of non-qualified stock options, nonvested (restricted) stock, and unrestricted stock, to consultants and directors as defined in the 1999 EIP.The plan terminated on November 15, 2009. On March 12, 2009, our Board of Directors adopted, and on June 10, 2009, our stockholders approved, our 2009Equity Incentive Plan (the “2009 EIP”). The 2009 EIP provides for the grant of incentive stock options intended to qualify under Section 422 of the Code,nonstatutory stock options, restricted stock, unrestricted stock and other equity-based awards, such as stock appreciation rights, phantom stock awards, andrestricted stock units, which we refer to collectively as Awards, for up to 20.2 million shares of our common stock (subject to adjustment in the event of stocksplits and other similar events). The Board of Directors appointed the Compensation Committee to administer the 1999 EIP and the 2009 EIP. No awards willbe granted under the 2009 EIP after June 10, 2019.On March 12, 2009, our Board of Directors adopted, and on June 10, 2009, our stockholders approved, the 2009 Employee Stock Purchase Plan (the“2009 ESPP”) to provide eligible employees the opportunity to acquire our common stock in a program designed to comply with Section 423 of the Code.There are currently 166,666 shares of common stock reserved for issuance under the 2009 ESPP. Rights to purchase common stock under the 2009 ESPP aregranted at the discretion of the Compensation Committee, which determines the frequency and duration of individual offerings under the plan and the dateswhen stock may be purchased. Eligible employees participate voluntarily and may withdraw from any offering at any time before the stock is purchased.Participation terminates automatically upon termination of employment. The purchase price per share of common stock in an offering is 85% of the lesser ofits fair value at the beginning of the offering period or on the applicable exercise date and may be paid through payroll deductions, periodic lump sumpayments, the delivery of our common stock, or a combination thereof. Unless otherwise permitted by the Board of Directors, no participant may acquiremore than 3,333 shares of stock in any offering period. No participant is allowed to purchase shares under the 2009 ESPP if such employee would own orwould be deemed to own stock possessing 5% or more of the total combined voting power or value of the Company. No offerings will be made under the2009 ESPP after June 10, 2019.74Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Our Director’s Deferred Compensation Plan, as amended, permits each outside director to defer all, or a portion of, their cash compensation until theirservice as a director ends or until a specified date into a cash account or a stock account. There are 325,000 shares of our common stock reserved for issuanceunder this plan. As of December 31, 2016, 72,081 shares had been issued. Amounts deferred to a cash account will earn interest at the rate paid on one-yearTreasury bills with interest added to the account annually. Amounts deferred to a stock account will be converted on a quarterly basis into a number of unitsrepresenting shares of our common stock equal to the amount of compensation which the participant has elected to defer to the stock account divided by theapplicable price for our common stock. The applicable price for our common stock has been defined as the average of the closing price of our common stockfor all trading days during the calendar quarter preceding the conversion date as reported by The Nasdaq Capital Market. Pursuant to this plan, a total of246,627 units, each representing a share of our common stock at a weighted average common stock price of $5.45, had been credited to participants’ stockaccounts as of December 31, 2016. The compensation charges for this plan were immaterial for all periods presented.On November 4, 2015, our Board of Directors adopted and approved our 2015 Inducement Equity Plan (the “2015 IEP”) in compliance with and inreliance on NASDAQ Listing Rule 5635(c)(4), which exempts inducement grants from the general requirement of the NASDAQ Listing Rules that equity-based compensation plans and arrangements be approved by stockholders. There are 1,500,000 shares of our common stock reserved for issuance under the2015 IEP. We use the Black-Scholes option pricing model to value options granted to employees and non-employees, as well as options granted to members ofour Board of Directors. All stock option grants have 10-year terms and generally vest ratably over a 3 or 4-year period. The non-cash charge to operations forthe non-employee options with vesting or other performance criteria is affected each reporting period, until the non-employee options vest, by changes in thefair value of our common stock.The fair value of each option granted during the periods was estimated on the date of grant using the following weighted average assumptions: 2016 2015 2014 Expected volatility 65% 77% 84%Expected term in years 4 6 6 Risk-free interest rate 1.0% 1.6% 1.7%Dividend yield 0% 0% 0% Expected volatility is based exclusively on historical volatility data of our common stock. The expected term of stock options granted is based onhistorical data and other factors and represents the period of time that stock options are expected to be outstanding prior to exercise. The risk-free interestrate is based on U.S. Treasury strips with maturities that match the expected term on the date of grant.A summary of option activity for 2016 is presented below: Options WeightedAverageExercisePrice WeightedAverageRemainingContractualTerm(in years) AggregateIntrinsicValue Outstanding at December 31, 2015 8,345,835 $4.40 Granted 4,572,489 4.28 Exercised (224,012) 3.32 Forfeited (206,426) 5.99 Expired (794,486) 5.99 Outstanding at December 31, 2016 11,693,400 $4.51 7.52 $3,750,615 Vested or expected to vest at December 31, 2016 10,837,540 $4.53 7.38 $3,637,128 Exercisable at December 31, 2016 5,835,130 $4.64 6.02 $2,950,330 The weighted average grant-date fair values of options granted during the years ended December 31, 2016, 2015, and 2014, was $4.65, $3.55, and$1.87, respectively.75Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The aggregate intrinsic value in the table above represents the difference between our closing stock price on the last trading day of fiscal 2016 and theexercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised theiroptions on December 31, 2016 (the intrinsic value is considered to be zero if the exercise price is greater than the closing stock price). This amount changesbased on the fair market value of our stock. The total intrinsic value of options exercised during the years ended December 31, 2016, 2015, and 2014,determined on the dates of exercise, was $445,000, $1.2 million, and $45,000, respectively. During 2016, 2015, and 2014, all options were granted with exercise prices equal to the market value of the underlying shares of common stock on thegrant date other than awards dated February 14, 2014. In February 2014, our Board of Directors approved awards subject to forfeiture in the eventshareholder approval was not obtained to increase the shares available under our 2009 EIP. This approval was obtained in April 2014. Accordingly, theseawards have a grant date of April 2014 with an exercise price as of the date the Board of Director's approved the awards in February 2014.As of December 31, 2016, there was $10.0 million of total unrecognized compensation cost related to stock options granted to employees anddirectors expected to be recognized over a weighted average period of 2.3 years.As of December 31, 2016, unrecognized expense for options granted to outside advisors for which performance (vesting) has not yet been completedbut the exercise price of the option was known was $243,000. Such amount is subject to change each reporting period based upon changes in the fair value ofour common stock, expected volatility, and the risk-free interest rate, until the outside advisor completes his or her performance under the option agreement.Certain employees and consultants have been granted nonvested stock. The fair value of nonvested stock is calculated based on the closing sale priceof our common stock on the date of issuance.A summary of nonvested stock activity for 2016 is presented below: NonvestedShares WeightedAverageGrant DateFair Value Outstanding at December 31, 2015 1,730,604 $8.55 Granted 996,938 3.14 Vested (570,037) 8.52 Forfeited (215,029) 8.15 Outstanding at December 31, 2016 1,942,476 $6.45 As of December 31, 2016, there was $3.8 million of unrecognized share-based compensation expense related to these nonvested shares whichpertained primarily to performance based awards for which, if all milestones are achieved, will be recognized over a period of 1.7 years. The total intrinsicvalue of shares vested during the years ended December 31, 2016, 2015, and 2014, was $2.4 million, $140,000, and $205,000, respectively.Cash received from option exercises and purchases under our 2009 ESPP for the years ended December 31, 2016, 2015, and 2014, was $1.2 million,$2.0 million, and $252,000, respectively. We issue new shares upon option exercises, purchases under our 2009 ESPP, vesting of nonvested stock, and underthe Director’s Deferred Compensation Plan. During the years ended December 31, 2016, 2015, and 2014, 121,228 shares, 63,539 shares, and 46,025 shares,were issued under the 2009 ESPP, respectively. During the years ended December 31, 2016, 2015, and 2014, 570,037 shares, 35,332 shares, and 48,239shares, respectively, were issued as a result of the vesting of nonvested stock.The impact on our results of operations from share-based compensation for the years ended December 31, 2016, 2015, and 2014, was as follows (inthousands). Year Ended 2016 2015 2014 Research and development $6,507 $2,654 $1,272 General and administrative 6,681 4,784 3,400 Total share-based compensation expense $13,188 $7,438 $4,672 76Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(12) License, Research, and Other AgreementsIn May 2001, we entered into a license agreement with the University of Connecticut Health Center (“UConn”) which was amended in March 2003and June 2009. Through the license agreement, we obtained an exclusive license to patent rights resulting from inventions discovered under a researchagreement that was effective from February 1998 until December 2006. The term of the license agreement ends when the last of the licensed patents expires(2024) 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 anypayments 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 todeclare bankruptcy. We may terminate the agreement upon 90 days written notice. We are still required to make royalty payments on any obligations createdprior 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 tocontinue to manufacture and sell products covered under the license agreement which are considered to be works in progress for a period of 6 months. Thelicense agreement contains aggregate milestone payments of $1.2 million for each product we develop covered by the licensed patent rights. These milestonepayments are contingent upon regulatory filings, regulatory approvals and commercial sales of products. We have also agreed to pay UConn a royalty on thenet sales of products covered by the license agreement as well as annual license maintenance fees beginning in May 2006. Royalties otherwise due on the netsales of products covered by the license agreement may be credited against the annual license maintenance fee obligations. As of December 31, 2016, we hadpaid $850,000 to UConn under the license agreement. The license agreement gives us complete discretion over the commercialization of products coveredby the licensed patent rights, but also requires us to use commercially reasonable diligent efforts to introduce commercial products within and outside theUnited States. If we fail to meet these diligence requirements, UConn may be able to terminate the license agreement.In March 2003, we entered into an amendment agreement that amended certain provisions of the license agreement with UConn. The amendmentagreement granted us a license to additional patent rights. In consideration for execution of the amendment agreement, we agreed to pay UConn an upfrontpayment and to make future payments for licensed patents or patent applications. Through December 31, 2016, we have paid approximately $100,000 toUConn under the license agreement, as amended.On December 5, 2014, Agenus Switzerland, entered into a license agreement with the Ludwig Institute for Cancer Research Ltd., or Ludwig, whichreplaced and superseded a prior agreement entered into between the parties in May 2011. Pursuant to the terms of the license agreement, Ludwig grantedAgenus Switzerland an exclusive, worldwide license under certain intellectual property rights of Ludwig and Memorial Sloan Kettering Cancer Centerarising from the prior agreement to further develop and commercialize GITR, OX40 and TIM-3 antibodies. On January 25, 2016, we and Agenus Switzerlandentered into a second license agreement with Ludwig, on substantially similar terms, to develop CTLA-4 and PD-1 antibodies. Pursuant to the December2014 license agreement, Agenus Switzerland made an upfront payment of $1.0 million to Ludwig. The December 2014 license agreement also obligatesAgenus Switzerland to make potential milestone payments of up to $20.0 million for events prior to regulatory approval of licensed GITR, OX40 and TIM-3products, and potential milestone payments in excess of $80.0 million if such licensed products are approved in multiple jurisdictions, in more than oneindication, and certain sales milestones are achieved. Under the January 2016 license agreement, we are obligated to make potential milestone payments ofup 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 ifcertain sales milestones are achieved. Under each of these license agreements, we and/or Agenus Switzerland will also be obligated to pay low to mid-singledigit 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 lowto mid-double digit percentage depending on various factors. The license agreements may each be terminated as follows: (i) by either party if the other partycommits a material, uncured breach; (ii) by either party if the other party initiates bankruptcy, liquidation or similar proceedings; or (iii) by AgenusSwitzerland or us (as applicable) for convenience upon 90 days’ prior written notice. The license agreements also contain customary representations andwarranties, mutual indemnification, confidentiality and arbitration provisions.In connection with the December 2015 acquisition of PhosImmune, we obtained exclusive rights to a portfolio of patent applications and one issuedpatent relating to phosphopeptide tumor targets (PTTs) under a patent license agreement with the University of Virginia (UVA). The UVA license gives usexclusive rights to develop and commercialize the PTT technology and an exclusive option to license any further PTT technology arising from ongoingresearch 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 amodest 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 alicensed PTT product to complete clinical trials and achieve certain sales thresholds. If we fail to meet certain diligence milestones, we may also be requiredto pay penalties in excess of $150,000. The term of the UVA license agreement ends when the last of the licensed patents expires or becomes no longer valid.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 beterminated 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 amaterial, uncured breach or (iii) by us for our convenience on 180 days written notice.77Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We have entered into various agreements with contract manufacturers, institutions, and clinical research organizations (collectively "third partyproviders") to perform pre-clinical activities and to conduct and monitor our clinical studies. Under these agreements, subject to the enrollment of patientsand performance by the applicable third party provider, we have estimated our total payments to be $128.7 million over the term of the studies. For the yearsended December 31, 2016, 2015, and 2014, $23.1 million, $19.9 million, and $0.9 million, respectively, have been expensed in the accompanyingconsolidated statements of operations related to these third party providers. Through December 31, 2016, we have expensed $94.4 million as research anddevelopment expenses and $82.1 million of this estimate has been paid. The timing of expense recognition and future payments related to these agreementsis subject to the enrollment of patients and performance by the applicable third party provider. We have various comprehensive agreements with collaborative partners that allow for the use of QS-21 Stimulon, an investigational adjuvant used innumerous vaccines under development for a variety of diseases including, but not limited to, hepatitis, HIV, influenza, cancer, Alzheimer’s disease, malaria,and tuberculosis. These agreements grant exclusive worldwide rights in some fields of use, and co-exclusive or non-exclusive rights in others. Theagreements call for royalties to be paid to us by the collaborative partner on the future sales of licensed vaccines that include QS-21 Stimulon.In July 2006, we entered into a license agreement and a supply agreement with GlaxoSmithKline (“GSK”) for the use of QS-21 Stimulon (the “GSKLicense Agreement” and the “GSK Supply Agreement”, respectively). In January 2009, we entered into an Amended and Restated ManufacturingTechnology Transfer and Supply Agreement (the “Amended GSK Supply Agreement”) under which GSK has the right to manufacture all of its requirementsof commercial grade QS-21 Stimulon. GSK is obligated to supply us (or our affiliates, licensees, or customers) certain quantities of commercial grade QS-21Stimulon for a stated period of time. In March 2012 we entered into a First Right to Negotiate and Amendment Agreement amending the GSK LicenseAgreement and the Amended GSK Supply Agreement to clarify and include additional rights for the use of QS-21 Stimulon (the “GSK First Right toNegotiate Agreement”). In addition, we granted GSK the first right to negotiate for the purchase of the Company or certain of our assets. The first right tonegotiate will expire after five years. As consideration for entering into the GSK First Right to Negotiate Agreement, GSK paid us an upfront, non-refundablepayment of $9.0 million, $2.5 million of which is creditable toward future royalty payments. We sometimes refer to the GSK License Agreement, theAmended GSK Supply Agreement and the GSK First Right to Negotiate Agreement, the “GSK Agreements”. As of December 31, 2016, we had received $23.3million of a potential $24.3 million in upfront and milestone payments related to the GSK Agreements. We are generally entitled to receive 2% royalties onnet sales of prophylactic vaccines for a period of 10 years after the first commercial sale of a resulting GSK product, with some exceptions. The GSK Licenseand 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 therespective agreement. The termination or expiration of the GSK License Agreement does not relieve either party from any obligation which accrued prior tothe termination or expiration. Among other provisions, the milestone payment obligations survive termination or expiration of the GSK Agreements for anyreason, and the license rights granted to GSK survive expiration of the GSK License Agreement. The license rights and payment obligations of GSK under theAmended GSK Supply Agreement survive termination or expiration, except that GSK's license rights and future royalty obligations do not survive if weterminate due to GSK's material breach unless we elect otherwise.For the years ended December 31, 2016, and 2015, no revenue was recognized under our GSK License and Amended GSK Supply Agreements. For theyear ended December 31, 2014, we recognized revenue of $3.3 million, respectively, related to payments received under our GSK License and Amended GSKSupply Agreements. Deferred revenue of $2.5 million related to the GSK Agreements is included in deferred revenue on our consolidated balance sheet as ofDecember 31, 2016. (13) Collaboration AgreementIncyte CorporationOn January 9, 2015 and effective February 19, 2015, we entered into a global license, development and commercialization agreement (the“Collaboration Agreement”) with Incyte Corporation pursuant to which the parties plan to develop and commercialize novel immuno-therapeutics using ourantibody discovery platforms. The Collaboration Agreement was initially focused on four checkpoint modulator programs directed at GITR, OX40, LAG-3and TIM-3. In addition to the four identified antibody programs, the parties have an option to jointly nominate and pursue the development andcommercialization of antibodies against additional targets during a five year discovery period which, upon mutual agreement of the parties for no additionalconsideration, can be extended for an additional three years. In November 2015, we and Incyte jointly nominated and agreed to pursue the development andcommercialization of three additional undisclosed CPM targets.On January 9, 2015, we also entered into the Stock Purchase Agreement with Incyte Corporation whereby, for an aggregate purchase price of $35.0million, Incyte purchased approximately 7.76 million shares of our common stock; see Note 10 for more details.78Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Agreement StructureUnder the terms of the Collaboration Agreement, we received non-creditable, nonrefundable upfront payments totaling $25.0 million. In addition, theparties will share all costs and profits for the GITR, OX40 and two of the additional antibody programs on a 50:50 basis (profit-share products), and we areeligible to receive up to $20.0 million in future contingent development milestones under these programs. Incyte is obligated to reimburse us for alldevelopment costs that we incur in connection with the TIM-3, LAG-3 and one of the additional antibody programs (royalty-bearing products) and we areeligible to receive (i) up to $155.0 million in future contingent development, regulatory, and commercialization milestone payments and (ii) tiered royaltieson global net sales at rates generally ranging from 6% to 12%. For each royalty-bearing product, we will also have the right to elect to co-fund 30% ofdevelopment costs incurred following initiation of pivotal clinical trials in return for an increase in royalty rates. Additionally, we retain co-promotionparticipation rights in the United States on any profit-share product. Through the direction of a joint steering committee, the parties anticipate that, for eachprogram, we will serve as the lead for pre-clinical development activities through investigational new drug application filing, and Incyte will serve as thelead for clinical development activities. The parties initiated the first clinical trials of antibodies arising from these programs in 2016. For each additionalprogram beyond GITR, OX40, TIM-3 and LAG-3 that the parties elect to bring into the collaboration, we will have the option to designate it as a profit-shareproduct or a royalty-bearing product.The Collaboration Agreement will continue as long as (i) any product is being developed or commercialized or (ii) the discovery period remains ineffect. After the first anniversary of the effective date of the Collaboration Agreement, Incyte may terminate the Collaboration Agreement or any individualprogram for convenience upon 12 months’ notice. The Collaboration Agreement may also be terminated by either party upon the occurrence of an uncuredmaterial breach of the other party or by us if Incyte challenges patent rights controlled by us. In addition, either party may terminate the CollaborationAgreement as to any program if the other party is acquired and the acquiring party controls a competing program.Collaboration RevenueFor the years ended December 31, 2016, and 2015, we recognized revenue of approximately $19.7 million, and $23.5 million, respectively, under theCollaboration Agreement, of which, $3.5 million and $9.1 million, respectively, was related to the amortization of the $25.0 million non-creditable,nonrefundable upfront payment. No revenue was recognized under the Collaboration Agreement for the year ended December 31, 2014. As of December 31,2016, we had deferred revenue remaining under the Collaboration Agreement of approximately $12.4 million, of which approximately $2.6 million and $9.8million are classified as current and long-term, respectively, on our consolidated balance sheet. As of December 31, 2015, we had deferred revenue remainingunder the Collaboration Agreement of approximately $15.8 million, of which approximately $3.6 million and $12.2 million are classified as current andlong-term, respectively, on our consolidated balance sheet.On February 14, 2017, the parties amended the Collaboration Agreement by entering into a First Amendment to License, Development andCommercialization Agreement (the “Amendment”). On February 14, 2017, the parties also entered into an additional Stock Purchase Agreement pursuant towhich Incyte purchased 10 million shares of our common stock at a price of $6.00 per share. See Note 22 for further details. (14) Certain Related Party TransactionsEffective February 12, 2014, in connection with our acquisition of the capital stock of 4-Antibody and pursuant to the Share Exchange Agreement,our Board of Directors elected Shahzad Malik, M.D. as a director. Dr. Malik is a General Partner of Advent Venture Partners LLP (“Advent”). Advent, throughits affiliated entities, was Agenus Switzerland’s largest shareholder prior to the completion of the acquisition. Upon completion of the acquisition, Adventand its affiliates received 996,088 shares of our common stock, having a value of approximately $3.0 million. In connection with the achievement of the firstmilestone in January 2015 under the Share Exchange Agreement, Advent and its affiliates received consideration of approximately $6.2 million. The abovelisted consideration was received by Advent and its affiliated entities, not Dr. Malik in his individual capacity.In May 2015, we issued and sold 12,650,000 shares of our common stock in an underwritten public offering for net proceeds of approximately $75.0million. Of the 12,650,000 shares of our common stock issued and sold, 1,587,302 of these shares of common stock were issued and sold to Advent.Our Audit and Finance Committee approved a charitable contribution to the Children of Armenia Fund (“COAF”) totaling $100,000 for 2016.Dr. Garo H. Armen, our CEO, is the founder and chairman of COAF. The 2016 charitable contribution was comprised of a cash component and a non-cashcomponent. The cash component was $50,000, which we paid in quarterly installments. The non-cash component was $50,000, which was the estimatedvalue of a portion of office space made available to COAF employees.79Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We also consider our transactions with Incyte, as disclosed in Footnote 13 and Footnote 22, to be related party transactions. (15) LeasesWe lease manufacturing, research and development, and office facilities under various lease arrangements. Rent expense (before sublease income) was$3.3 million, $2.3 million, and $2.1 million, for the years ended December 31, 2016, 2015, and 2014, respectively.We lease a facility in Lexington, Massachusetts for our manufacturing, research and development, and corporate offices. During December 2012 weentered into a commercial lease for approximately 5,600 square feet of office space in New York, New York for use as corporate offices. Through ouracquisition of Agenus Switzerland, we lease facilities Basel, Switzerland for manufacturing, research and development and corporate offices.In December 2015, in connection with the XOMA antibody manufacturing facility asset acquisition, we executed lease agreements in Berkeley,California for manufacturing and corporate offices. In December 2015, we additionally executed a lease for research and development, and corporate officesin Cambridge, United Kingdom.In February 2016, we executed a lease agreement in Charlottesville, Virginia for research and development and corporate offices.The future minimum rental payments under our facility lease agreements, which expire at various times between 2017 and 2025, are as follows (inthousands): Year ending December 31, 2017 $3,530 2018 3,226 2019 2,492 2020 2,133 2021 1,762 Thereafter 3,865 Total $17,008 In connection with the Lexington facility, we maintain a fully collateralized letter of credit of $1.0 million. No amounts had been drawn on the letterof credit as of December 31, 2016. In addition, for our properties, we are required to have an aggregate deposit of $270,000 with the landlords as interest-bearing security deposits pursuant to our obligation under the leases.We sublet a portion of our facilities and received rental payments of $733,000, $780,000, and $365,000 for the years ended December 31, 2016, 2015,and 2014, respectively. We are contractually entitled to receive rental payments of $529,000 in 2017. During 2016, we entered into an agreement which is classified as a capital lease for a piece of laboratory equipment. No such agreement existed during2015. It is included in our property and equipment as follows (in thousands): 2016 EstimatedDepreciableLivesLaboratory and manufacturing equipment $1,021 4 yearsLess accumulated depreciation and amortization (51) Total $970 Under the terms of the capital lease agreement, we will remit payments to the lessor of $288,000 for each of the years 2017 through 2019 and$144,000 for the year ending December 31, 2020. 80Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(16) DebtDebt obligations consisted of the following as of December 31, 2016 and 2015 (in thousands): Debt instrument Principal atDecember 31,2016 Non-cashInterest UnamortizedDebt IssuanceCosts UnamortizedDebt Discount Balance atDecember 31,2016 Current Portion: Debentures $146 $— $— $— $146 Long-term Portion: 2015 Subordinated Notes 14,000 — — (1,311) 12,689 Note Purchase Agreement 100,000 19,421 (1,345) (222) 117,853 Total long-term $114,000 $19,421 $(1,345) $(1,533) $130,542 Total $114,146 $19,421 $(1,345) $(1,533) $130,688 Debt instrument Principal atDecember 31,2015 Non-cashInterest UnamortizedDebt IssuanceCosts UnamortizedDebt Discount Balance atDecember 31,2015 Current Portion: Debentures $146 $— $— $— $146 Long-term Portion: 2015 Subordinated Notes 14,000 — — (2,292) 11,708 Note Purchase Agreement 100,000 4,342 (1,481) (243) 102,619 Total long-term $114,000 $4,342 $(1,481) $(2,535) $114,326 Total $114,146 $4,342 $(1,481) $(2,535) $114,473 Subordinated NotesOn February 20, 2015, we, certain existing investors and certain additional investors entered into an Amended and Restated Note Purchase Agreement,pursuant to which we (i) canceled our senior subordinated promissory notes issued in April 2013 (the “2013 Notes”) in exchange for new senior subordinatedpromissory notes (the “2015 Subordinated Notes”) in the aggregate principal amount of $5.0 million, (ii) issued additional 2015 Subordinated Notes in theaggregate principal amount of $9.0 million and (iii) issued five year warrants (the “2013 Warrants”) to purchase 1,400,000 shares of our common stock at anexercise price of $5.10 per share.The 2015 Subordinated Notes bear interest at a rate of 8% per annum, payable in cash on the first day of each month in arrears. Among other defaultand acceleration terms customary for indebtedness of this type, the 2015 Subordinated Notes include default provisions which allow for the noteholders toaccelerate the principal payment of the 2015 Subordinated Notes in the event we become involved in certain bankruptcy proceedings, become insolvent, failto make a payment of principal or (after a grace period) interest on the 2015 Subordinated Notes, default on other indebtedness with an aggregate principalbalance of $13.5 million or more if such default has the effect of accelerating the maturity of such indebtedness, or become subject to a legal judgment orsimilar order for the payment of money in an amount greater than $13.5 million if such amount will not be covered by third-party insurance. The 2015Subordinated Notes are not convertible into shares of our common stock and will mature on February 20, 2018, at which point we must repay the outstandingbalance in cash. The Company may prepay the 2015 Subordinated Notes at any time, in part or in full, without premium or penalty.The exchange of the 2013 Notes for the 2015 Subordinated Notes was accounted for as a debt extinguishment under the guidance of ASC 470 Debt.For the year ended December 31, 2015, we recorded a loss on debt extinguishment of approximately $154,000 in non-operating (expense) income in ourconsolidated statements of operations and comprehensive loss. The debt discount of approximately $3.0 million, which relates to the warrants issued inconnection with the 2015 Subordinated Notes, is being amortized using the effective interest method over three years, the expected life of the 2015Subordinated Notes.The warrants to purchase 500,000 shares of the Company’s common stock issued in connection with the 2013 Notes (the “2013 Warrants”) have anexercise price of $4.41 per share, and are scheduled to expire on April 15, 2017. In March 2017, we and the holders of the 2015 Subordinated Notes enteredinto an Amendment to Notes and Warrants, pursuant to which we (i) extended the term of the 2013 Warrants by two years from April 15, 2017 to April 15,2019 and (ii) extended the maturity date of the 2015 Notes by two years from February 20, 2018 to February 20, 2020. The 2013 Warrants and 2015 Notesare otherwise unchanged. See Note 22 for further details.81Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Note Purchase Agreement Related to Future RoyaltiesOn September 4, 2015, we and our wholly-owned subsidiaries, Antigenics LLC (“Antigenics”) and Aronex Pharmaceuticals, Inc. (“Aronex”), enteredinto a Note Purchase Agreement (the “NPA”) with Oberland Capital SA Zermatt LLC, as collateral agent (“Oberland”), an affiliate of Oberland as the leadpurchaser and other purchasers. Pursuant to the terms of the NPA, on September 8, 2015 (the “Closing Date”), Antigenics issued $100.0 million aggregateprincipal amount of limited recourse notes (the “Notes”) to the purchasers. Antigenics has the option to issue an additional $15.0 million aggregate principalamount of Notes (the “Additional Notes”) to the purchasers within 15 days after approval of GSK’s shingles vaccine, HZ/su, by the Food and DrugAdministration, provided such approval occurs on or before June 30, 2018.The Notes accrue interest at a rate of 13.5% per annum, compounded quarterly, from and after the Closing Date computed on the basis of a 360-dayyear and the actual number of days elapsed. Principal and interest payments are due on each of March 15, June 15, September 15 and December 15, and shallbe made solely from the royalties paid from GSK to Antigenics on sales of GSK’s shingles and malaria vaccines. The Notes are limited recourse and securedsolely by a first priority security interest in the royalties and accounts and payment intangibles relating thereto plus various rights of Antigenics related to theroyalties under its contracts with GSK (the “Collateral”). GSK will send all royalty payments to a segregated bank account, and to the extent there areinsufficient royalties deposited into the account to fund a quarterly interest payment, the interest will be capitalized and added to the aggregate principalbalance of the loan. As of December 31, 2016 we have capitalized interest of $19.4 million. The final legal maturity date of the Notes is the earlier of (i) the10th anniversary of the first commercial sale of GSK’s shingles or malaria vaccines and (ii) September 8, 2030 (the “Maturity Date”). Antigenics’ obligationto repay all principal and accrued and unpaid interest by the Maturity Date is secured only by the Collateral.At our option, we may redeem all, but not less than all, of the Notes at any time prior to the Maturity Date. The redemption price is equal to theoutstanding principal amount of the Notes, plus all accrued and unpaid interest thereon, plus a premium payment that would yield an aggregate internal rateof return (“IRR”) for the purchasers as follows: (i) an IRR of 20% if the redemption occurs within 24 months of the Closing Date, (ii) an IRR of 17.5% if theredemption occurs after 24 months but within 48 months of the Closing Date, and (iii) an IRR of 15% if the redemption occurs more than 48 months after theClosing Date (the “Redemption Payment”).On September 8, 2018, each purchaser has the option to require Antigenics to repurchase up to 15% of the Notes issued to such purchaser on theClosing Date (the “Put Notes”) at a purchase price equal to the principal amount thereof plus accrued and unpaid interest thereon (the “Put Payment”).Antigenics is required to complete any such repurchase within 90 days after September 8, 2018.On the earlier of (i) September 8, 2027 and (ii) the Maturity Date, Antigenics is required to pay the purchasers an amount equal to the following (the“Make-Whole Payment”): $100.0 million (or $115.0 million if the Additional Notes are sold) minus the aggregate amount of all payments made in respect ofthe Notes (regardless of whether characterized as principal or interest at the time of payment), including the original principal amount of any repaid PutNotes.The NPA specifies a number of events of default (some of which are subject to applicable cure periods), including (i) failure to cause royalty paymentsto be deposited into the segregated bank account, (ii) payment defaults, (iii) breaches of representations and warranties made at the time the Notes wereissued, (iv) covenant defaults, (v) a final and unappealable judgment against Antigenics for the payment of money in excess of $1.0 million, (vi) bankruptcyor insolvency defaults, (vii) the failure to maintain a first-priority perfected security interest in the Collateral in favor of the collateral agent and (viii) theoccurrence of a change of control of Agenus. Upon the occurrence of an event of default, subject to cure periods in certain circumstance and some limitedexceptions, Oberland may declare the Notes immediately due and payable, in which case Antigenics would owe a payment equal to the Redemption Payment(the “Accelerated Default Payment”). Upon the occurrence and during the continuance of any event of default, interest on the Notes also increases by 2.5%per annum.Agenus and Aronex (together, the “Guarantors”), are parties to the NPA as guarantors of certain of Antigenics’ obligations under the NPA. TheGuarantors generally guarantee the Put Payment, the Make-Whole Payment, the Redemption Payment and the Accelerated Default Payment.In accordance with the guidance of ASC 470 Debt, we determined the NPA represents a debt transaction and does not purport to be a sale; the balanceof the outstanding notes and interest will be repaid over the estimated term of the NPA.82Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We will periodically assess the expected royalties using a combination of historical results, internal projections and forecasts from external sources. Tothe extent such payments are greater or less than our initial estimates or the timing of such payments is materially different than our original estimates, wewill prospectively adjust the estimated time period over which the debt and interest will be repaid. There are a number of factors that could materially affectthe amount and timing of royalty payments from GSK, all of which are not within our control. Such factors include, but are not limited to, changing standardsof care, the introduction of competing products, manufacturing or other delays, biosimilar competition, patent protection, adverse events that result ingovernmental health authority imposed restrictions on the use of the drug products, significant changes in foreign exchange rates, and other events orcircumstances that could result in reduced royalty payments from GSK, all of which would result in a reduction of royalty revenues and the interest expenseover the life of the NPA.As royalties are remitted to the purchasers, we will record non-cash royalty revenues and non-cash interest expense within our consolidated statementsof operations and comprehensive loss over the term of the NPA as interest accrues and royalties are generated. We have not recognized any royalty revenue todate, and recorded $15.1 million and $4.3 million in non-cash interest expense for the years ended December 31, 2016 and 2015, respectively, within ourconsolidated statement of operations and comprehensive loss.In connection with the execution of the NPA, we reimbursed the purchasers for legal fees of $250,000 and incurred debt issuance costs ofapproximately $1.5 million. Under the relevant accounting guidance, legal fees and debt issuance costs have been recorded as a reduction to the grossproceeds. These amounts are being amortized over 12 years, the expected term of the Notes, using the effective interest rate method.OtherIn June 2016, we executed a capital lease agreement that expires in June 2020 for equipment with a carrying value of approximately $1.0 million,which is included in property, plant and equipment, net on our consolidated balance sheets as of December 31, 2016. As of December 31, 2016, ourremaining obligations under the capital lease agreement are approximately $0.9 million, of which $289,000 and $599,000 are classified as other current andother long-term liabilities, respectively, on our condensed consolidated balance sheets.At December 31, 2016, approximately $146,000 of debentures we assumed in our merger with Aquila Biopharmaceuticals are outstanding. Thesedebentures carry interest at 7% and are callable by the holders. Accordingly, they are classified as short-term debt.Revenue Interest Assignment TerminationOn April 15, 2013, we and Antigenics entered into a Revenue Interests Assignment Agreement (the “Original Agreement”) with Ingalls & SnyderValue Partners, L.P. and Arthur Koenig (together, “Ingalls”), pursuant to which we and Antigenics sold to Ingalls 20% of all the royalties Antigenics wasentitled to receive from GSK and Janssen Sciences Ireland Uc on products associated with Agenus’s QS-21 Stimulon (collectively, the “Assigned Interests”).On September 4, 2015, we and Antigenics entered into a Revenue Interest Assignment and Termination Agreement (the “Assignment and TerminationAgreement”) with Ingalls, pursuant to which we terminated the Original Agreement and repurchased the Assigned Interests in exchange for (i) $20.0 millionin cash and (ii) 300,000 shares of Agenus common stock for total consideration of approximately $22.1 million. The closing under the Assignment andTermination Agreement took place on September 8, 2015 immediately prior to the closing under the NPA. Effective September 8, 2015, we have no furtherobligations under the Original Agreement.During the year ended December 31, 2015, we recorded a fair value adjustment of approximately $6.9 million recorded within non-operating(expense) income in our consolidated statement of operations and comprehensive loss. (17) Fair Value MeasurementsWe measure our cash equivalents and short-term investments, contingent purchase price considerations and in the past, our contingent royaltyobligation, at fair value. Our cash equivalents and short-term investments are comprised solely of U.S. Treasury Bills that are valued using quoted marketprices with no valuation adjustments applied. Accordingly, these securities are categorized as Level 1 assets.83Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We measure our contingent purchase price consideration at fair value. The fair values of our Agenus Switzerland and PhosImmune contingentpurchase price consideration, $3.9 million and $3.6 million, respectively, are based on significant inputs not observable in the market, which require them tobe reported as Level 3 liabilities within the fair value hierarchy. The valuation of the liabilities uses assumptions we believe would be made by a marketparticipant. The fair value of our Agenus Switzerland and PhosImmune contingent purchase price consideration is based on estimates from a Monte Carlosimulation of our market capitalization and share price, respectively, and other factors impacting the probability of triggering the milestone payments.Market capitalization and share price were evolved using a geometric brownian motion, calculated daily for the life of the contingent purchase priceconsideration.Assets and liabilities measured at fair value are summarized below (in thousands): Description December 31,2016 Quoted Prices inActiveMarkets forIdentical Assets(Level 1) SignificantOtherObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) Assets: Cash equivalents $9,990 $9,990 $— $— Short-term investments 4,988 4,988 — — Total $14,978 $14,978 $— $— Liabilities: Contingent purchase price consideration 7,561 — — 7,561 Total $7,561 $— $— $7,561 Description December 31,2015 Quoted Prices inActiveMarkets forIdentical Assets(Level 1) SignificantOtherObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) Assets: Cash equivalents $19,996 $19,996 Short-term investments 34,965 34,965 — — Total $54,961 $54,961 $— $— Liabilities: Contingent purchase price consideration 5,608 — — 5,608 Total $5,608 $— $— $5,608 The following table presents our liabilities measured at fair value using significant unobservable inputs (Level 3), as of December 31, 2016 (amountsin thousands): Balance, December 31, 2015 $5,608 Change in fair value of contingent purchase price consideration during the period 1,953 Balance, December 31, 2016 $7,561 There were no changes in the valuation techniques during the period and there were no transfers into or out of Levels 1 and 2.The fair value of our outstanding debt balance at December 31, 2016 and 2015 was $129.2 million and $115.9 million, respectively, based on theLevel 2 valuation hierarchy of the fair value measurements standard using a present value methodology which was derived by evaluating the nature andterms of each note and considering the prevailing economic and market conditions at the balance sheet date. The principal amount of our outstanding debtbalance at both December 31, 2016 and 2015 was $114.1 million. (18) ContingenciesWe may currently be, or may become, a party to legal proceedings. While we currently believe that the ultimate outcome of any of these proceedingswill not have a material adverse effect on our financial position, results of operations, or liquidity, litigation is subject to inherent uncertainty. Furthermore,litigation consumes both cash and management attention. 84Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (19) Benefit PlansWe sponsor a defined contribution 401(k) savings plan for all eligible employees, as defined in the savings plan. Participants may contribute up to60% of their compensation, as defined in the savings plan, with a maximum annual contribution of $18,000 for individuals under 50 years old and $24,000for individuals 50 years old and older in 2016. Each participant is fully vested in his or her contributions and related earnings and losses. During the yearsended December 31, 2016 and 2015, we made discretionary contributions of $302,000 and $307,000, respectively; no discretionary contributions or expensewas recorded for the year ended December 31, 2014. For the years ended December 31, 2016, and 2015, we expensed $302,000 and $307,000, respectively,related to the discretionary contribution. No expense was recorded for the year ended December 31, 2014.We also have a multiple employer benefit plan that covers certain international employees. The annual measurement date for this plan is December 31.Benefits are based upon years of service and compensation. We are required to recognize the funded status (the difference between the fair value of planassets and the projected benefit obligations) of our multiple employer plan in our consolidated balance sheets which, for the years ended December 31, 2016,and 2015 amounted to a liability of approximately $1.2 million and $944,000, respectively, with a corresponding adjustment to accumulated othercomprehensive loss of $154,000 and $245,000 for the years ended December 31, 2016 and 2015, respectively. During the years ended December 31, 2016,and 2015, we contributed approximately $153,000 and $119,000, respectively, to our international benefit plan and we expect to contribute approximately$162,000 to that plan during 2017. As of December 31, 2016, the benefits expected to be paid under this plan in the next five years and in the aggregate forthe five years thereafter are as follows, $136,000 in 2017, $125,000 in 2018, $116,000 in 2019, $107,000 in 2020, $100,000 in 2021 and $452,000 for theyears 2022-2026. (20) Geographic InformationThe following is geographical information regarding our revenues for the years ended December 31, 2016, 2015 and 2014 and our long-lived assets asof December 31, 2016 and 2015 (in thousands): 2016 2015 2014 Revenue: United States $20,332 $23,668 $3,664 Europe 2,242 1,149 3,313 $22,573 $24,817 $6,977 Revenue by geographic region is allocated based on the domicile of our respective business operations. 2016 2015 Long-lived Assets: United States $22,360 $14,434 Europe 4,557 2,147 Total $26,917 $16,581 Long-lived assets include “Property, plant and equipment, net” and “Other long-term assets” from the consolidated balance sheets, by the geographiclocation where the asset resides. 85Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(21) Quarterly Financial Data (Unaudited) Quarter Ended March 31, June 30, September 30, December 31, 2016 Revenue $5,959 $6,592 $4,446 $5,576 Net loss (31,779) (28,320) (40,774) (26,122)Net loss attributable to common shareholders (31,829) (28,371) (40,825) (26,174)Per common share, basic and diluted: Basic and diluted net loss attributable to common stockholders (0.37) (0.33) (0.47) (0.30)2015 Revenue $3,953 $6,377 $6,848 $7,639 Net loss (18,741) (40,410) (13,122) (15,607)Net loss attributable to common shareholders (18,792) (40,461) (13,173) (15,658)Per common share, basic and diluted: Basic and diluted net loss attributable to common stockholders (0.28) (0.53) (0.16) (0.18) Net loss attributable to common stockholders per share is calculated independently for each of the quarters presented. Therefore, the sum of thequarterly net loss per share amounts will not necessarily equal the total for the full fiscal year. (22) Subsequent Events On February 14, 2017, the Agenus and Incyte amended the Collaboration Agreement by entering into a First Amendment to License, Developmentand Commercialization Agreement (the “Amendment”). Pursuant to the terms of the Amendment, the GITR and OX40 programs immediately converted fromprofit-share programs to royalty-bearing programs with Agenus now eligible to receive a flat 15% royalty on global net sales should any candidates fromeither of these two programs be approved. Incyte is now responsible for global development and commercialization and all associated costs for theseprograms. In addition, the profit-share programs relating to the two undisclosed targets were removed from the collaboration, with one reverting to Incyte andone to Agenus. Should any of those programs be successfully developed by a party, the other party will be eligible to receive the same milestone payments asthe royalty-bearing programs and royalties at a 15% rate on global net sales. The terms for the remaining three royalty-bearing programs targeting TIM-3,LAG-3 and one undisclosed target remain unchanged, with Incyte being responsible for global development and commercialization and all associated costs.The Amendment gives Incyte exclusive rights and all decision-making authority for manufacturing, development, and commercialization with respect to allroyalty-bearing programs.In connection with the Amendment, Incyte paid Agenus $20.0 million in accelerated milestones related to the clinical development of the antibodycandidates targeting GITR and OX40. Agenus is now eligible to receive up to an additional $510.0 million in future potential development, regulatory andcommercial milestones across all programs in the collaboration.On February 14, 2017, Agenus and Incyte also entered into a Stock Purchase Agreement (the “Stock Purchase Agreement” and together with theAmendment, the “Agreements”), pursuant to which Incyte purchased 10 million shares of Agenus’ common stock (the “Shares”) at a purchase price of $6.00per share. Immediately following the transaction, Incyte owned approximately 18.1% of the outstanding shares of Agenus. Under the Stock PurchaseAgreement, Incyte agreed not to dispose of any of the Shares for a period of 12 months and to vote the Shares in accordance with the recommendations of theAgenus board of directors in connection with certain equity incentive plan or compensation matters for a period of 18 months, and Agenus has agreed tocertain registration rights with respect to the Shares. Under the Amendment, the parties also revised the existing standstill provision to permit Incyte’sacquisition of the Shares, but Incyte is precluded from acquiring any additional shares of Agenus’ voting stock until December 31, 2019.In March 2017, Agenus and the holders of the 2015 Subordinated Notes entered into an Amendment to Notes and Warrants, pursuant to which theparties (i) extended the term of the 2013 Warrants by two years from April 15, 2017 to April 15, 2019 and (ii) extended the maturity date of the 2015 Notes bytwo years from February 20, 2018 to February 20, 2020. The 2013 Warrants and 2015 Notes are otherwise unchanged. 86Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 9.Changes in and Disagreements With Accountants on Accounting and Financial DisclosureNot applicable. Item 9A.Controls and ProceduresConclusion Regarding the Effectiveness of Disclosure Controls and ProceduresUnder the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, weconducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under theExchange Act. Based on this evaluation, our Chief Executive Officer and our Principal Financial Officer concluded that our disclosure controls andprocedures were functioning effectively as of the end of the period covered by this Annual Report on Form 10-K to provide reasonable assurance that theCompany can meet its disclosure obligations.Management’s Annual Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined inExchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and PrincipalFinancial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under theframework, our management concluded that our internal control over financial reporting was effective as of December 31, 2016.KPMG LLP, our independent registered public accounting firm, has issued their report, included herein, on the effectiveness of our internal controlover financial reporting.Changes in Internal Control Over Financial ReportingThere was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) thatoccurred during the fourth quarter 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financialreporting. 87Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Report of Independent Registered Public Accounting FirmThe Board of Directors and StockholdersAgenus Inc.:We have audited Agenus Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2016, based on criteria established in InternalControl – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Agenus Inc.’smanagement is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal controlover financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is toexpress an opinion on the Company’s internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, andtesting and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such otherprocedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.In our opinion, Agenus Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016,based on Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheetsof Agenus Inc. and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of operations and comprehensive loss,stockholders’ (deficit) equity, and cash flows for each of the years in the three-year period ended December 31, 2016, and our report dated March 16, 2017expressed an unqualified opinion on those consolidated financial statements./s/ KPMG LLPBoston, MassachusettsMarch 16, 2017 88Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 9B.Other InformationAmendment to 2013 Warrants and 2015 NotesAs previously disclosed, the Company is party to a Note Purchase Agreement dated April 15, 2013, pursuant to which the Company issued to certaininvestors (the “Original Investors”) (i) senior subordinated promissory notes in the aggregate principal amount of $5.0 million that were scheduled to matureon April 14, 2015 (the “2013 Notes”) and (ii) warrants to purchase 500,000 shares of the Company’s common stock that have an exercise price of $4.41 pershare and are scheduled to expire on April 15, 2017 (the “2013 Warrants”).As previously disclosed, the Company is also party to an Amended and Restated Note Purchase Agreement, pursuant to which the Company (i)cancelled the 2013 Notes in exchange for new senior subordinated promissory notes (the “2015 Notes”) in the aggregate principal amount of $5.0 million,(ii) issued additional 2015 Notes in the aggregate principal amount of $9.0 million to additional investors (the “Additional Investors”) and (iii) issuedwarrants to purchase 1,400,000 shares of the Company’s common stock. The 2015 Notes bear interest at a rate of 8% per annum, payable in cash on the firstday of each month in arrears. Among other default and acceleration terms customary for indebtedness of this type, the 2015 Notes include default provisionswhich allow for the acceleration of the principal payment of the 2015 Notes in the event the Company becomes involved in certain bankruptcy proceedings,becomes insolvent, fails to make a payment of principal or (after a grace period) interest on the 2015 Notes, defaults on other indebtedness with an aggregateprincipal balance of $13.5 million or more if such default has the effect of accelerating the maturity of such indebtedness, or becomes subject to a legaljudgment or similar order for the payment of money in an amount greater than $13.5 million if such amount will not be covered by third-party insurance. The2015 Notes are not convertible, and the Company may prepay the 2015 Notes at any time, in part or in full, without premium or penalty.On March 15, 2017, the Company, the Original Investors and the Additional Investors entered into an Amendment to Notes and Warrants, pursuant towhich the Company (i) extended the term of the 2013 Warrants by two years from April 15, 2017 to April 15, 2019 and (ii) extended the maturity date of the2015 Notes by two years from February 20, 2018 to February 20, 2020. The 2013 Warrants and 2015 Notes are otherwise unchanged. The Amendment toNotes and Warrants is filed as Exhibit 4.27 to this Annual Report on Form 10-K and is incorporated herein by reference. Jean-Marie Cuillerot Employment AgreementOn March 10, 2017, the Company entered into an employment agreement with Dr. Jean-Marie Cuillerot, pursuant to which Dr. Cuillerot will continueto serve as the Company’s Chief Medical Officer. Pursuant to his agreement, Dr. Cuillerot’s annual base salary was increased to $400,000 and his annualperformance bonus target remains unchanged at 40% of his annual base salary, with the actual amount of such bonus, if any, to be determined by the Board ofDirectors. Dr. Cuillerot will also be entitled to continue to participate in the benefits and insurance programs generally available to all Company employees.The agreement with Dr. Cuillerot will remain in effect until either party terminates. In the event Dr. Cuillerot desires to terminate the agreement otherthan for a material reduction in his compensation, he must give the Company 120 days’ prior notice. Dr. Cuillerot’s agreement provides further that if he isterminated other than for cause or he quits as the result of a material reduction in compensation, he will be entitled to severance as follows: (i) continuation ofbase salary for 12 months; (ii) continuation of medical and dental benefits for 12 months; (iii) a lump sum bonus equal to the higher of (x) Dr. Cuillerot’starget incentive bonus for that year and (y) the actual incentive bonus paid to Dr. Cuillerot in the last full fiscal year; and (iv) $15,000 for outplacementservices.Upon a change of control, 50% of any unvested stock options or shares of restricted stock of the Company previously granted to Dr. Cuillerotimmediately vest and become exercisable.Dr. Cuillerot’s agreement provides further that if he is terminated other than for cause or he quits for good reason, in either case, within 18 monthsfollowing a change of control, then he will be entitled to severance as follows: (i) a lump sum payment equal to (x) 18 months of base salary plus (y) 150% ofthe higher of (A) Dr. Cuillerot’s target incentive bonus for that year and (B) the actual incentive bonus paid to Dr. Cuillerot in the last full fiscal year; (ii)continuation of medical and dental benefits for 18 months; (iii) $15,000 for outplacement services; and (iv) 100% of any stock options or shares of restrictedstock of the Company previously granted to Dr. Cuillerot immediately vest and become exercisable.The agreement also includes non-compete and confidentiality provisions that will continue for at least 12 months following termination ofemployment.The above description of Dr. Cuillerot’s employment agreement is a summary and is qualified in its entirety by the employment agreement itself,which is filed as Exhibit 10.16 to this Annual Report on Form 10-K and is incorporated herein by reference. 89Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.PART III Item 10.Directors, Executive Officers and Corporate GovernanceExecutive Officers of the RegistrantSet forth below is certain information regarding our current executive officers, including their age, as of March 1, 2017: Name Age TitleGaro H. Armen, PhD 64 Chairman of the Board and Chief Executive OfficerChristine M. Klaskin 51 Vice President, FinanceOzer Baysal 61 Chief Business OfficerJean-Marie Cuillerot, MD 51 Chief Medical OfficerRobert Stein, MD PhD 66 President, Research and DevelopmentKaren H. Valentine 45 Chief Legal Officer and General CounselGaro H. Armen, PhD—Garo Armen has been Chairman and CEO since the Company's founding in 1994. From mid-2002 through 2004, he wasChairman of the Board of Directors for the biopharmaceutical company Elan Corporation, plc, which he helped restructure. Dr. Armen is also the founder andChairman of the Children of Armenia Fund, a philanthropic organization established in 2000 that is dedicated to the positive development of the childrenand youth of rural Armenia. He holds a PhD degree in physical organic chemistry from the City University of New York.Christine M. Klaskin—Christine M. Klaskin has been Vice President, Finance since October 2006. Since joining Agenus Inc. in 1996 as financemanager, Ms. Klaskin has held various positions within the finance department and has been involved in all equity and debt offerings of the Companyincluding its IPO. Ms. Klaskin is currently a member of the board of directors of American DG Energy Inc. Prior to joining Agenus, Ms. Klaskin was employedby Arthur Andersen as an audit manager. Ms. Klaskin received her Bachelor of Accountancy from The George Washington University.Ozer Baysal —Ozer Baysal has been Chief Business Officer since January 2013. His principal role is to lead Agenus' efforts in establishing commercialcapability and accelerating Agenus' transition to becoming a fully integrated biopharmaceutical company. Prior to joining Agenus Mr. Baysal spent morethan 30 years with Pfizer in a broad number of functional and geographic areas, most recently serving as President of Europe, Emerging Markets Region.While at Pfizer, he held key leadership positions in Marketing, Sales, and Manufacturing, and was actively involved with numerous licensing and M&Aactivities. Mr. Baysal holds a bachelor's degree from Bosphorus University in Industrial Engineering and has completed the Programs for Leadership andManagement Development at Harvard Business School.Jean-Marie Cuillerot, MD— Jean-Marie Cuillerot joined the Company as Vice President and Global Head of Clinical Development in July 2016 andbecame Chief Medical Officer in January 2017. Dr. Cuillerot joined the Company with 16 years of experience in oncology clinical research and drugdevelopment. From July 2012 until joining the Company, he served as the Global Head of Clinical Development, Immuno-Oncology, and Vice President ofClinical Immunotherapy/Immuno-Oncology at EMD Serono Research and Development Institute, an affiliate of Merck Serono. At Merck Serono he oversawthe development of the company’s immuno-oncology portfolio, which included two checkpoint inhibitors and two immuno-cytokines. He also advanced thePD-L1 antibody avelumab from pre-IND to filing and was responsible for delivering the dataset leading to the co-development deal with Pfizer. Dr. Cuillerotled the Global Clinical Research team in all interactions with health authorities, including the FDA and EMA. Prior to his time at EMD Serono Research andDevelopment Institute, Dr. Cuillerot was the medical lead for ipilimumab life cycle management at Bristol-Myers Squibb from February 2010 to July 2012.Dr. Cuillerot received his B.S. in biochemistry, M.D., and M.Sc. in cellular and molecular biology at the University Louis Pasteur. He is board certified inhematology and immunology.Robert Stein, MD, PhD—Bob Stein has been President, Research and Development since September 2015. Dr. Stein joined the Company as ChiefScientific Officer in February 2014. Dr. Stein leads our Research, Preclinical Development and Translational Medicine functions and leads our globalresearch and development efforts. Dr. Stein brings over 30 years of experience and accomplishments in the pharmaceutical and biotech industry to theAgenus leadership team. Over the course of his career Dr. Stein has played a pivotal role in bringing eight drugs to the market including Sustiva®, Fablyn®,Viviant®, PanRetin®, TargRetin®, Promacta®, & Eliquis®. Prior to joining Agenus he held a number of senior management positions including ChiefScientific Officer & Senior Vice President of Research for Ligand Pharmaceuticals, Executive Vice President of Research & Preclinical Development forDupont Merck, President and Chief Scientific Officer for Incyte Pharmaceuticals, President of Roche Palo Alto and CEO of KineMed. Dr. Stein spent the earlypart of his career at Merck, Sharp and Dohme Research Laboratories. He holds an MD and a PhD in Physiology & Pharmacology from Duke University. Dr.Stein filed a personal voluntary bankruptcy petition under Chapter 7 in August of 2012 and the bankruptcy was discharged in May 2013.90Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Karen H. Valentine—Karen Higgins Valentine has been Chief Legal Officer and General Counsel since September 2015. From January 2008 toSeptember 2015, Ms. Valentine was Vice President and General Counsel and also has served as Secretary since 2007 and Chief Compliance Officer of theCompany since 2008. Prior to joining Agenus Inc. in 2004, Ms. Valentine was an associate in the biotechnology practice of Palmer & Dodge LLP (nowLocke Lorde). Ms. Valentine is currently a member of the board of directors of the Northeast Chapter of the Association of Corporate Counsel. Ms. Valentinegraduated cum laude with a bachelor’s degree in neuroscience from Colgate University, and received her law degree, magna cum laude, from BostonUniversity School of Law.The names, ages and biographies of our directors are as follows:CLASS I DIRECTORS—TERMS TO EXPIRE IN 2019 Brian CorveseAge: 59President and Founder ofVencor Capital Director since 2007(a) Audit and FinanceCommittee (Chair)(b) Compensation CommitteeSince 1999, Mr. Corvese has been the President and Founder of Vencor Capital, a private equity firm withtelecommunications and technology investments in the Middle East and Mediterranean regions. Prior toworking at Vencor, Mr. Corvese worked on investments in the U.S. and global equity markets as a ManagingDirector and partner at Soros Fund Management, the largest hedge fund in the world at the time. From 1988to 1996, Mr. Corvese was a partner at Chancellor Capital Management (“Chancellor”), a $25 billion moneymanagement firm. While at Chancellor, Mr. Corvese was a Portfolio Manager with responsibility forinvestments made in basic industries, restructurings, and special situations, corporate governanceinvestments, as well as founded and managed his own hedge fund. From 1981 to 1988, Mr. Corvese was withDrexel Burnham Lambert (“Drexel”) as an equity analyst following the chemical and specialty chemicalindustries and participated in a significant number of merger and acquisition activities. While at Drexel, Mr.Corvese was a member of the top chemical and specialty chemical research team, as ranked by InstitutionalInvestor. Mr. Corvese currently serves on the Board of Directors of the National TelecommunicationsCorporation, based in Cairo, Egypt. Mr. Corvese earned degrees in finance and political science from TheUniversity of Rhode Island and attended New York University Graduate School. With over 30 years ofexperience in the financial industry, Mr. Corvese brings substantial financial expertise to our Board. Timothy R. WrightAge: 59Executive Vice President, BusinessDevelopment, Strategy and Innovation,Teva Pharmaceuticals Industries Ltd. Director since 2006, LeadDirector since 2009(a) Compensation Committee(b) Corporate Governanceand Nominating Committee(Chair)(c) Audit and FinanceCommittee(d) Business & DevelopmentAdvisory CommitteeMr. Wright is Executive Vice President, Business Development, Strategy and Innovation at TevaPharmaceuticals Industries Ltd. Currently, Mr. Wright serves as chairman of The Ohio State UniversityComprehensive Cancer Center Drug Development Institute, and director of the Ohio State UniversityInnovation Foundation. From July 2011 to July 2012, Mr. Wright served as Chairman, Interim CEO, and amember of the Board of Directors of Curaxis Pharmaceuticals Corporation, a research based companydedicated to finding cures for age-related diseases, including Alzheimer’s disease and cancer. Prior to Mr.Wright’s tenure at Curaxis, the company had been experiencing financial difficulties and, as a result,Curaxis filed for Chapter 11 bankruptcy in July 2012. Prior to that, Mr. Wright served as President of theImaging Solutions and Pharmaceutical Products Sector of Covidien. Mr. Wright brings to our Board over 29years of global pharmaceutical industry experience in general management, product development, andcommercialization as well as business restructuring and transaction experience. Beginning in April 2004,Mr. Wright was interim CEO, President and a member of the Board of Directors of AAI Pharma, a hybridpharmaceutical, drug delivery/manufacturing, and global clinical research organization. Upon the sale ofAAI Pharma’s pharmaceutical assets to Xanodyne Pharmaceuticals Inc., Mr. Wright transitioned to ChiefOperating Officer at Xanodyne Pharmaceuticals Inc., a role he maintained until May 2006. Mr. Wright wasalso President of Elan Bio-Pharmaceuticals and has held several senior management positions with CardinalHealth Inc. and Dupont Merck Pharmaceutical Company. Over his career, Mr. Wright has served on nineBoards of Directors, five in North America and four in Europe and Asia. Mr. Wright earned his bachelor’sdegree from The Ohio State University.NOMINEES FOR CLASS II DIRECTORS—TERMS TO EXPIRE IN 2017 91Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Garo H. Armen, Ph.D.Age: 64Founder, Chairman, andChief Executive Officer ofAgenus Inc. Director since 1999(a) Business & DevelopmentAdvisory Committee (Chair)(b) Non-Executive EquityAward Committee (SoleMember) Dr. Armen is Chairman and Chief Executive Officer of Agenus Inc., which he co-founded in 1994. Dr. Armenbrings to our Board a deep historical and practical knowledge of the business of the Company and itstechnologies, as well as years of expertise in the financial and biopharmaceutical arenas. From mid-2002through 2004, he was Chairman of the Board of Directors for the biopharmaceutical company ElanCorporation, plc which he helped restructure. Dr. Armen currently serves as non-executive Chairman of theBoard of Directors of Protagenic Therapeutics, Inc., a publicly held biotechnology company. Dr. Armen isalso the founder and Chairman of the Children of Armenia Fund, a philanthropic organization established in2000 that is dedicated to the positive development of the children and youth of rural Armenia. He holds aPh.D. degree in physical organic chemistry from the City University of New York. Shahzad Malik, M.D.Age: 50General Partner at AdventLife Sciences Director since 2014(a) Business & DevelopmentAdvisory Committee(b) Audit and FinanceCommitteeDr. Malik is a General Partner at Advent Life Sciences and has been at Advent since 1999. Dr. Malik bringsto our Board historical knowledge of the operations of 4-Antibody AG, our wholly-owned subsidiary (“4-Antibody”), as well as broad experiences in the life sciences and medical industries. During his time withAdvent, he has been actively involved with numerous investments in Europe and the United States in thebiopharmaceutical and medical device arenas in a variety of therapeutic areas. A number of these companiesthat Advent invested in are now publicly traded or have been acquired. Dr. Malik currently serves on theBoard of Directors of Versartis, Inc., a life sciences company. Prior to joining Advent, Dr. Malik spent sixyears practicing medicine before joining the London office of McKinsey & Company, a managementconsulting firm. While there he served international clients in the Healthcare and Investment Bankingsectors. Dr. Malik holds an M.A. from Oxford University and a M.D. from Cambridge University. Hesubsequently specialized in interventional cardiology while also pursuing research interests in heart muscledisorders both in the clinic and basic science laboratory.CLASS III DIRECTORS—TERMS TO EXPIRE IN 2018 Wadih JordanAge: 82 Director since 2003(a) Compensation Committee(Chair)Mr. Jordan was the founder and President of NearEast Enterprise, L.L.C. from 2011 to April 2015, a companythat marketed pharmaceuticals in Near East markets, including Lebanon, Turkey, Saudi Arabia, Egypt, andthe Gulf countries. From 1995 to 2011, Mr. Jordan served as President of NearEast Pharma LLC, a companythat provided pharmaceutical, biotechnology and equipment for pharmaceutical industries to the Near Eastand Middle East markets. From 1993 to 1995, Mr. Jordan served as a Vice President of CyanamidInternational, a research-based life sciences company, and from 1976 to 1993, Mr. Jordan served as aManaging Director within Cyanamid International. Since December 2003, Mr. Jordan has been a trustee ofthe Board of Directors of the Lebanese American University, located in Beirut, Lebanon, and incorporatedunder the Board of Regents in New York State. Mr. Jordan received a bachelor’s degree in agriculture at theAmerican University of Beirut, Lebanon, and a certificate in international business from ColumbiaUniversity. Mr. Jordan brings to our Board years of expertise in both the biotechnology/pharmaceutical andinternational arenas. Shalini SharpAge: 42Chief Financial Officer andExecutive Vice President, UltragenyxPharmaceutical Inc. Director since 2012(a) Business & DevelopmentAdvisory Committee(b) Corporate Governanceand Nominating CommitteeMs. Sharp is Chief Financial Officer and Executive Vice President of Ultragenyx Pharmaceutical Inc. and amember of the Board of the TB Alliance. Ms. Sharp served as Chief Financial Officer of Agenus from 2006 toMay 2012, and was appointed a member of the Board in May 2012. She joined Agenus in 2003 and heldincreasing roles of responsibility spanning strategic planning, corporate development, investor relations,corporate finance and business development activities. Prior to Agenus, Ms. Sharp held similar roles at ElanPharmaceuticals from 1998 to 2003, including serving as chief of staff to the Chairman of the Board ofDirectors during that company’s restructuring. Prior to Elan, Ms. Sharp was a management consultant atMcKinsey & Company as well as an investment banker at Goldman Sachs, specializing in pharmaceuticalsand medical devices. Ms. Sharp holds both a bachelor’s degree and a master’s degree in businessadministration from Harvard University. Ms. Sharp brings to our Board over a decade of institutionalknowledge of Agenus as well as her expertise in biotechnology, corporate strategy, and finance. 92Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Ulf WiinbergAge: 59 Director since 2016(a) Business & DevelopmentAdvisory Committee(b) Corporate Governanceand Nominating CommitteeMr. Wiinberg has almost 20 years of senior leadership experience, most recently serving as Chief ExecutiveOfficer of H. Lundbeck A/S, a global pharmaceutical company developing and marketing treatments forpsychiatric and neurological disorders. He previously served on the boards of several health care industryassociations and held multiple executive roles at Wyeth, one of the world’s largest research-drivenpharmaceutical companies that was acquired by Pfizer in 2009. He served as President of Wyeth Europe,Africa and Middle East; President of Consumer Healthcare; Managing Director of Wyeth UK, and in variouscommercial positions. Mr. Wiinberg currently serves on the boards of UCB SA, a global biopharmaceuticalcompany based in Belgium, Avillion LLP (Chairman), a London-baseddrug development company, Hansa Medical AB (Chairman), a Swedish biopharmaceutical company, andAlfa Laval AB, a Swedish industrial company. Code of Business Conduct and EthicsThe Board originally adopted our Code of Business Conduct and Ethics (the “Code of Ethics”) in 2003. The Board reviewed, revised, and updated theCode of Ethics most recently in December 2015. The Code of Ethics applies to all members of the Board and all employees of Agenus, including our ChiefExecutive Officer and Principal Financial and Accounting Officer. Among other matters, our Code of Ethics prohibits the members of the Board and allemployees of Agenus from buying or selling our securities while in possession of material, non-public information about the Company. Our Code of Ethics isposted on the corporate governance section of our website at http://investor.agenusbio.com/corporate-governance. No material on our website is part of thisAnnual Report on Form 10-K. We intend to post on our website all disclosures that are required by law or NASDAQ listing rules concerning any amendmentsto, or waivers from, our Code of Ethics. Stockholders may request a free copy of our Code of Ethics by writing to Investor Relations, Agenus Inc., 3 ForbesRoad, Lexington, MA 02421.Section 16(a) Beneficial Ownership Reporting ComplianceOur executive officers, directors, and 10% stockholders are required under Section 16(a) of the 1934 Act, to file reports of ownership and changes inownership of our securities with the SEC. Based solely on a review of the copies of reports furnished to us, we believe that during our 2016 fiscal year, ourdirectors, executive officers, and 10% stockholders complied with all applicable Section 16(a) filing requirements.Audit and Finance CommitteeThe Audit and Finance Committee consists entirely of independent directors within the meaning of the NASDAQ listing rules and the requirementscontemplated by Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “1934 Act”). During 2016, the Audit and Finance Committeeconsisted of Mr. Corvese (Chair), Dr. Malik and Mr. Wright. The Board has determined that Mr. Corvese and Dr. Malik each qualify as audit committeefinancial experts. For a description of Mr. Corvese and Dr. Malik’s relevant experiences that qualify them as audit committee financial experts, please seetheir biographies on page 91 and page 92, respectively. The Audit and Finance Committee’s primary function is to assist the Board in monitoring theintegrity of our consolidated financial statements and our system of internal control. The Audit and Finance Committee has direct responsibility for theappointment, independence, and monitoring of the performance of our independent registered public accounting firm. The committee is responsible for pre-approving any engagements of our independent registered public accounting firm. The committee also reviews our risk management practices, strategic taxplanning, preparation of quarterly and annual financial reports, and compliance processes.The Audit and Finance Committee members meet regularly with our independent registered public accounting firm, without management present andwith members of management in separate private sessions, to discuss any matters that the committee or these individuals believe should be discussedprivately with the committee, including any significant issues or disagreements concerning our accounting practices or consolidated financial statements.The committee also reviews the Code of Ethics annually, and periodically meets with our Chief Compliance Officer. The committee conducts a meeting eachquarter to review our consolidated financial statements prior to the public release of earnings. The committee has the authority to engage special legal,accounting or other consultants to advise the committee. The committee also has the authority to delegate to subcommittees any responsibilities of the fullcommittee. The Audit and Finance Committee charter is posted on the corporate governance section of our website athttp://investor.agenusbio.com/corporate-governance. No material on our website is part of this Annual Report on Form 10-K. Item 11.Executive Compensation COMPENSATION DISCUSSION AND ANALYSISThis section discusses the principles underlying our policies and decisions with respect to the compensation of our executive officers who are namedin the “Summary Compensation Table” below, who are referred to throughout this Annual Report on Form 10-K as our “named executive officers,” and thematerial factors relevant to an analysis of these policies and decisions. Our named executive officers for 2016 are: •Dr. Garo H. Armen—Chairman and Chief Executive Officer •C. Evan Ballantyne—Former Chief Financial Officer(1) •Christine M. Klaskin—Vice President, Finance(1)93Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. •Ozer Baysal—Chief Business Officer •Dr. Robert B. Stein—President, Research & Development •Karen H. Valentine—Chief Legal Officer and General Counsel (1)Mr. Ballantyne served as our Chief Financial Officer until resigning effective July 29, 2016. Since that time, Ms. Klaskin has served in the capacity ofour principal financial officer.Executive SummaryOur executive compensation program is designed to attract and retain the highest caliber talent, reward strong performance and align incentives withthe creation of long-term stockholder value, taking into consideration the Company’s resource constraints. The short-term compensation (base salary andtarget incentive bonuses) of our named executive officers is positioned at approximately the 50th percentile of our compensation peer group, and our long-term incentive programs are designed to preserve our cash resources, promote long-term decision-making and value creation and reward stock priceappreciation.Our performance in 2016 met our annual goals in the aggregate, despite challenging circumstances, including limited financial and human resources,aggressive timelines and third-party competition. As more specifically described below, during 2016 we: •Initiated Phase 1 clinical trials for antibody candidates targeting CTLA-4, GITR (with Incyte) and OX40 (with Incyte); •Advanced our autologous synthetic vaccine candidate, ASV, towards the clinic, which is expected to initiate Phase 1 in the first half of 2017; •Advanced our partnership with Merck Sharpe & Dohme (“Merck”) with the selection of a lead product candidate; •Completed the integration of our antibody manufacturing pilot plant acquired from Xoma Corporation; and •Continued to build our team and expand our internal capabilities by recruiting top-tier talent across the broad spectrum of our business.We believe that our incentive compensation programs were administered in a manner consistent with our operating performance, long-term objectives,and compensation philosophy. Given the Company’s overall performance in 2016, the annual cash bonuses awarded to our named executive officers(excluding Mr. Ballantyne) for 2016 performance ranged from 114% to 154% of their target bonus amounts, and the remaining 50% of the performance-vesting stock options granted to our named executive officers in 2015 vested during 2016 based on the achievement of the pre-established regulatorymilestones discussed below.Compensation PhilosophyOur executive compensation program is designed to attract and retain the highest caliber executive talent and reward and align incentives with thecreation of long-term stockholder value, while effectively managing the risks and challenges inherent to a biotechnology company of our size and stage ofdevelopment. We offer a compensation package that combines short- and long-term components, cash and equity, and fixed and variable payments, in theproportions we believe appropriately incentivize our executives to achieve the following goals: •create long-term stockholder value; •build a creative and high-performing team whose members understand and share our business objectives and ethical and cultural values andretain these key team members; •demonstrate leadership and innovation in the identification, development, and commercialization of product candidates that fit our strategicobjectives; •effectively manage the multiple dimensions of our business, from research and development, through clinical trials, manufacturing, strategicalliances, and all aspects of our operations in order to maximize the value of each dollar deployed; and •identify and address our short- and long-term financing requirements in a highly strategic and creative manner, and deploy available funds forthe maximum benefit to our stockholders.Our general philosophy is to emphasize equity over cash compensation and long-term over short-term compensation. Our executive compensationprogram not only aims to be competitive in our industry, but also to be fair relative to other professionals within our organization. Our executives’ basesalary, target annual bonus levels, and target annual long-term incentive award values are set at levels that are competitive with those of our peer group.Executives have the opportunity to earn above-market pay for above-market performance as measured against our peer group. See “Competitive MarketReview” below for further information on our peer group.94Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We continually review our executive compensation program in order to ensure that it rewards our executives for achieving our goals and objectives ina manner consistent with our philosophy and values and at levels that are competitive with our peer group. In designing our executive compensationprogram, we also seek to reward executive decisions that are consistent with the Company’s goals and objectives and that deliver positive stockholderreturns. We evaluate and reward our executives based on the Company’s performance, their contribution to the achievement of short- and long-term goals andobjectives, and their ability to take advantage of unique opportunities and overcome difficult challenges within our business. We believe that our mix ofshort-term and long-term incentives, and our process of evaluating performance results, assist us in managing any risk-taking that may result from ourcompensation program and aligning our employees’ behavior with our overall business plan and the interests of our stockholders. Our CompensationCommittee has concluded that our current compensation programs present no risk that is reasonably likely to have a material adverse effect on the Company.At the Company’s 2014 Annual Meeting of Stockholders, our stockholders had the opportunity to cast an advisory vote (a “say-on-pay” vote) on thecompensation of our executive officers as disclosed in our proxy statement for that meeting. Our stockholders approved the say-on-pay proposal by anaffirmative vote of 96.2% of the votes cast on that proposal. The Compensation Committee believes this affirms stockholders’ support of the Company’sapproach to executive compensation, and this approach has not changed since the 2014 Annual Meeting of Stockholders. Our Compensation Committee willcontinue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for our named executive officers. At our2011 Annual Meeting of Stockholders, our stockholders also had the opportunity to cast an advisory vote (a “say-on-frequency” vote) on how often theCompany should include a say-on-pay proposal in its proxy statements for future annual meetings. Our stockholders approved a proposal to hold say-on-payvotes every three years. Accordingly, our Board adopted the policy to hold say-on-pay votes every three years until the next required “say-on-frequency”advisory vote, which is to be held at our 2017 Annual Meeting of Stockholders. As a result, our stockholders will have the opportunity to vote on both “say-on-pay” and “say-on-frequency” proposals later this year at our 2017 Annual Meeting of Stockholders.Competitive Market ReviewThe market for top-tier executive talent in the biotechnology industry is highly competitive. In order to attract and retain a superior leadership teamwe need to draw upon a pool of talent that is highly sought-after by both large and established pharmaceutical and biotechnology companies in and outsideour geographic area and by other life science companies.We believe we have a competitive advantage in our ability to offer significant upside potential through stock options and other equity-based awards.In addition, we offer market-competitive cash compensation levels through base salaries and cash bonus opportunities. We also compete on the basis of ourvision of future success, our culture and values, the cohesiveness and productivity of our teams, and the excellence of our scientists and managementpersonnel.In order to succeed in attracting highly-talented executives, we continuously monitor market trends and draw upon surveys prepared by Radford, ourCompensation Committee’s independent compensation consultant, custom research developed by Radford, and other nationally- recognized surveys. OurCompensation Committee reviews data that analyzes various cross-sections of our industry as well as relevant geographical areas.Market References: How We Define Market and How We Use Market Compensation Data. Our Compensation Committee has engaged Radford since2016 as its independent compensation consultant to evaluate our executive compensation program and compare it to levels in the market. Prior to 2016, ourCompensation Committee engaged Independent Stock Plan Advisors, LLC (“ISP”) as its independent compensation consultant.Defining the Market. For 2016, we used two market references to evaluate our executive compensation program against those in the market: 1.Radford Global Life Sciences Survey conducted by Radford: A national survey of executive compensation levels and practices that coversapproximately 1,900 positions in more than 700 life science organizations. We focused primarily on a pre-determined subset of companies withbetween 150 and 499 employees.95Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 2.Proxy data derived from a peer group of biotechnology companies of a similar size, market capitalization, development stage and therapeuticfocus. On an annual basis, our compensation consultant recommends, and our Compensation Committee approves, a group of comparablecompanies as our peer group. In switching from ISP to Radford in 2016, our Compensation Committee worked closely with Radford to review,evaluate and develop our peer group with an emphasis on biotechnology and pharmaceutical companies with a similar headcount and marketcapitalization. Based on discussions with, and the recommendation of, Radford, the Compensation Committee ultimately selected a peer groupfor 2016 that removed 11 companies from the prior year’s peer group and added six new companies. The 11 companies removed from the 2015peer group had a relatively low headcount and/or market capitalization. Our peer groups for 2015 and 2016 were as follows: 2015 Peer Group 2016 Peer GroupArQule, Inc. Aduro Biotech, Inc.Array BioPharma Inc. Celldex Therapeutics, Inc.AVEO Pharmaceuticals, Inc. Clovis Oncology, Inc.BioCryst Pharmaceuticals, Inc. Dynavax Technologies CorporationCell Therapeutics, Inc. Five Prime Therapeutics, Inc.Curis, Inc. ImmunoGen, Inc.Cytokinetics, Incorporated Inovio Pharmaceuticals, Inc.GTx, Inc. MacroGenics, Inc.Idera Pharmaceuticals, Inc. NewLink Genetics CorporationImmunomedics, Inc. OncoMed Pharmaceuticals, Inc.Infinity Pharmaceuticals, Inc. Rigel Pharmaceuticals, Inc.Omeros Incorporated Zogenix, Inc.Pain Therapeutics, Inc. Peregrine Pharmaceuticals, Inc. Sunesis Pharmaceuticals, Inc. Synta Pharmaceuticals Corp. Vical, Inc. ZIOPHARM Oncology, Inc. Determining Market Levels and Specific Comparisons. We compare our practices and amounts of compensation against our peer group by eachcompensation component (measured at target in the case of annual and long-term incentive opportunities) and by total annual compensation. Thecomparisons made in this process are used to determine our approximate position relative to the appropriate market reference by compensation componentand in total.Total CompensationWe intend to continue our strategy of compensating our named executive officers at competitive levels, with the opportunity to earn above-marketpay for above-market performance. We will continue to emphasize long-term equity incentives and performance-based incentive compensation delivered inthe form of equity-based awards to maintain our competitive pay philosophy.For 2016, the total compensation for our named executive officers generally fell between the 50th and 60th percentile of total compensation paid toexecutives holding equivalent positions in our peer group. For this purpose, total compensation includes annual base salary, target annual incentive bonusand the grant date value of equity awards. We believe that the total compensation for our named executive officers was reasonable in the aggregate given ourcorporate performance and our financial circumstances.The competitive posture of our actual annual compensation paid or earned versus the market references will vary year to year based on Company andindividual performance, as well as the performance of our peer group and their respective level of annual performance bonus awards made to their executives.We expect to continue targeting total compensation at approximately the 50th percentile of our peer group, with an emphasis on performance-based variablecompensation. Further, in light of our compensation philosophy, we believe that the total compensation package for our executives should continue toconsist of base salary, annual incentive bonuses, long-term equity-based incentive compensation, and certain other benefits.Role of Our Compensation CommitteeOur Compensation Committee approves, administers, and interprets our executive compensation and benefit programs, including awards that havebeen made to executives under our 1999 Equity Incentive Plan (as amended) and under our Amended and Restated 2009 Equity Incentive Plan (the “2009Equity Incentive Plan”). Our Compensation Committee is appointed by our Board, and consists entirely of directors who are “outside directors” for purposesof Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and “non-employee directors” for purposes of Rule 16b-3 under the 1934Act. Our Compensation Committee is comprised of Mr. Jordan (Chair), Mr. Corvese and Mr. Wright.96Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Our Compensation Committee ensures that our executive compensation program is consistent with our compensation philosophy and our GovernanceGuidelines, and determines the executive compensation packages offered to our officers.Executive Compensation ProgramComponents of our Compensation ProgramOur compensation program consists of the following four components (each described in more detail below): •Short-term compensation (including base salary and annual incentive bonuses); •Long-term incentives; •Benefits; and •Severance compensation and termination protection.To determine levels of overall executive compensation, the Compensation Committee balances individual, functional area, and company-wide goalsand achievements. For purposes of setting the annual goals under our annual bonus program, each executive participates in establishing the objectives of ourCompany as a whole and offers his or her views as to the goals of each functional area, insofar as those goals impact the individual executive’s ownfunctional area. After the end of the relevant year, we also ask our executives to provide feedback not only on their own performance and that of theirparticular functional area, but also of other functional areas and our entire organization. We see this process both as the optimal way of assembling accurateinformation regarding the expectation and realization of performance, as well as an integral part of our culture of collaborative, team-oriented management.Final goals and objectives for our annual bonus program are approved by the Board.In 2016, our Company goals included: •Initiate randomized clinical trials with Prophage in ndGBM; •Initiate Phase 1 clinical trials for antibody candidates targeting CTLA-4 and GITR (with Incyte); •Initiate Phase 1 clinical trial with ASV; •Advance certain discovery programs through nomination of lead candidates; •Execute strategic partnerships; •Raise funds required to aggressively advance our strategic initiatives and key programs; •Complete the integration of our antibody manufacturing pilot plant acquired from Xoma Corporation; •Close key capability gaps and continue to grow the organization with world class talent; and •Sustain high levels of employee engagement, motivation, communication and retention.At the end of each year, our executives and our Compensation Committee evaluate the achievement of the Company’s goals and objectives and begindiscussions regarding goals and objectives for the next year. Incentive compensation, based on the achievement of goals and objectives, may be awarded inthe form of an annual incentive bonus and/or equity-based awards. Equity-based awards are used to align the interests of our executives with those of ourstockholders and to promote a long-term performance perspective and progress toward achieving our long-term goals and objectives.The general structure of our compensation programs for executive officers is consistent with that of non-executive members of the Agenusmanagement team.Short-Term Compensation.Our short-term compensation program consists of base salary and annual incentive bonuses. Base salary will typically be used to recognize theexperience, skills, knowledge, and responsibilities required of each officer, as well as competitive market conditions.Base Salary: Base salaries for our executives are generally positioned at or around the 50th percentile of our peer group (see “Competitive MarketReview” above for further information on our peer group). In establishing the base salaries of our executive officers, our Compensation Committee (withinput from our Chief Executive Officer, other than with respect to his own base salary) takes into account a number of factors, including the executive’sseniority, position and functional role, and level of responsibility.97Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We also consider the following factors when determining base salary: •For newly-hired personnel, we consider the base salary of the individual at his or her prior employer and any unique personal circumstancesthat motivated the executive to leave that prior position and join Agenus. In addition, we consider the competitive market for correspondingpositions within our peer group. •For individuals who are newly-promoted to a position, we consider the competitive market and their prior salary and experience. Where theseindividuals may not have the same level of experience at the time of promotion as a counterpart hired from outside the Company, we mayimplement a multi-step approach to bringing their base salaries in line with targeted levels. Base salary increases at each of these steps will becontingent on the continued strong performance of the individual.The base salaries of our named executive officers are reviewed on an annual basis, and adjustments are made to reflect performance-based factors, aswell as competitive market conditions. Increases are considered within the context of our overall annual financial position before more specific individualand market competitive factors are considered. We do not apply specific formulas to determine base salary increases. In June 2016, the CompensationCommittee approved a base salary increase for Dr. Stein effective as of July 1, 2016, as described below under “Compensation Actions for our NamedExecutive Officers.” Base salaries for all of our other named executive officers were unchanged in 2016.Annual Incentive Bonuses: Annual incentive bonuses for our named executive officers are based on achievement of the Company’s goals andobjectives as well as individual performance as outlined in our Executive Incentive Plan. Each executive is eligible to receive an annual incentive bonusranging from 0-200% of his or her target bonus based on the Compensation Committee’s evaluation of the achievement of Company goals and objectivesand such individual’s performance. The Company’s annual goals and objectives are set at the beginning of each year and are reviewed and approved by theCompensation Committee and the Board. At the end of the year, our executive management prepares a report outlining the extent to which Company goalsand objectives were achieved and presents that report to the Compensation Committee along with a recommendation on the named executive officers’ annualincentive bonus payout level, as a percentage of their target bonuses. The Compensation Committee evaluates the report, along with any relevant supportingdocumentation, and considers it in the context of any change in facts or circumstances that could have impacted goal attainment throughout the year. Fromtime to time, the Compensation Committee may request supplemental information from management to support its evaluation. Based on this evaluation, aswell as the Company’s available financial resources, the Compensation Committee determines the appropriate level for the named executive officers’ annualincentive bonus payouts. There is no quantifiable formula or weighting of goals. As a result, the Compensation Committee exercises discretion inestablishing the level of the named executive officers’ bonus payout, taking into account the level of achievement of the Company goals as a whole. Oncedetermined, the recommended bonus payout level is applied to each named executive officer’s target bonus percentage to establish his or her annualincentive bonus payout. The Compensation Committee may exercise further discretion to adjust the actual bonus paid to any individual named executiveofficer based on his or her individual performance and impact on the Company’s overall performance (with input from our Chief Executive Officer, other thanwith respect to his own bonus), which it did in 2016.For the 2016 performance year, each of our named executive officers and other members of key management were eligible to receive a target annualincentive bonus, expressed as a percentage of his or her base salary. Target bonus amounts were set based on competitive benchmarks, the Committee’sassessment of overall Company performance and each such individual’s unique contribution to the Company’s overall performance. In March 2016, theCompensation Committee increased Dr. Armen’s annual incentive bonus target from 50% to 60% of his base salary, as described below under “CompensationActions for our Named Executive Officers.” Annual incentive bonus targets for all other named executive officers were unchanged in 2016.In determining the annual incentive bonus payouts for our named executive officers for the 2016 performance year, our Compensation Committeenoted that the majority of the stated goals for 2016, as described above, were accomplished, as well as the following additional key company achievements: •Initiated Phase 1 clinical trial for an antibody candidate targeting OX40 (with Incyte); •Advanced our partnership with Merck, with the selection of a lead product candidate; •GSK filed for regulatory approval of its shingles vaccine candidate containing our QS-21 Stimulon in the United States, Canada and Europe; •Upgraded and expanded our capabilities at our antibody pilot plant manufacturing facility and recruited additional staff; •Established a research center in Cambridge, UK and closed our Jena, Germany facility, consolidating costs and transferring its technology toCambridge; and •Recruited senior leadership in clinical development, including Jean-Marie Cuillerot, MD, our Chief Medical Officer.98Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Our Compensation Committee gave weight to the fact that these accomplishments were made in a challenging economic environment in which themanagement team was under substantial resource constraints, and that the accomplishments in 2016 were critical in advancing the development of ourdiverse portfolio, reducing our reliance on CMOs and effectively managing our cost structure. The range in individual annual incentive bonus payoutsreflects each named executive officer’s unique contribution to the Company’s overall performance, as determined by the Compensation Committee. Thetable below shows the following for each of our named executive officers in 2016: target annual incentive bonus (as a percentage of base salary), actualannual incentive bonus received (as a percentage of base salary) and actual annual incentive bonus received (as a percentage of target). Mr. Ballantyneresigned effective July 29, 2016 and upon his resignation forfeited any entitlement to a 2016 annual incentive bonus. Named Executive Officer 2016 TargetBonus(% of basesalary) 2016 ActualBonus(% of basesalary) 2016 ActualBonus(% of target) Dr. Armen 60% 84% 141%Mr. Ballantyne 40% — — Mr. Baysal 40% 45% 114%Ms. Klaskin 30% 41% 136%Dr. Stein 40% 47% 118%Ms. Valentine 40% 62% 154% Long-Term Incentives.Our long-term incentives consist of time-vesting and performance-vesting stock options, restricted stock grants and performance shares. During 2016,only stock options and performance shares were granted to our named executive officers. Performance shares reward performance and the achievement of keymilestones that are important to our success. Stock options are performance-based because no value is created unless the value of our common stockappreciates after grant. We also grant stock options that are subject to performance-based vesting to further drive the achievement of key business objectives.Time-based restricted stock encourages employee retention by providing some level of value to executives who remain employed during the vesting periodof the award. Equity-based awards also support an ownership culture and thereby encourage our executives to take actions that are best for the Company’slong-term success. Our Compensation Committee grants equity incentives to our executives and employees generally to enable them to participate in thelong-term appreciation of our stockholder value, as well as to share the impact of any business and market setbacks. Unlike many companies in our industry,we have a practice of granting equity-based awards deep in our organization, believing that we will succeed if our employees feel invested in us, our businessand our future.Initial and Promotional Long-Term Incentive Grants:The size of the initial long-term incentive grant made to executive officers upon joining the Company or to current employees being promoted toexecutive officer positions is primarily based on competitive considerations applicable to the executive’s specific position. In addition, the CompensationCommittee considers the number of shares of common stock underlying equity-based awards held by other executives in comparable positions within ourCompany and has, with the assistance of its independent compensation consultant, established long-term incentive guidelines for specified categories ofexecutives. We believe this strategy is consistent with the approach of other companies in our peer group and, in our Compensation Committee’s view, isappropriate for aligning the interests of our executives with those of our stockholders over the long-term.Market Comparisons:We use a number of methodologies to make external comparisons when we determine the number of options, restricted stock and/or performanceshares to be granted to each executive. On an individual basis, we compare: •the fair value of the grant, determined using methods that are consistent with the guidance in Accounting Standards Codification 718,Compensation—Stock Compensation (“ASC 718”), •the face value (i.e., the number of shares multiplied by grant date stock price) of the grant by position, •the face value of the grant as a multiple of base salary, •the number of shares of common stock underlying all options, restricted stock and/or performance shares granted by position, •the number of shares of common stock underlying all options, restricted stock and performance shares, in total, granted, and still held, byposition as a percentage of total shares granted and of total common shares outstanding, and •the proportion of exercisable to non-exercisable awards held in total.99Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.On a total Company basis, we analyze: •total annual equity burn rates, •total number of shares remaining in the approved pool under the 2009 Equity Incentive Plan, and •equity overhang.We believe these comparisons provide important additional context for comparing the competitiveness of our equity-based compensation practicesversus the market.Ultimately, awards to named executive officers are driven by their and our Company’s performance over time, their ability to impact our results thatdrive stockholder value, their level within the organization, their potential to take on roles of increasing responsibility in our Company, and competitiveequity award levels for similar positions and organization levels in our peer group. Equity-based awards are not granted automatically to our executives onan annual basis.Certain Outstanding Awards:In February 2015, the Compensation Committee approved grants of stock options to the Company’s named executive officers and the seniormanagement team that vest according to the following schedule: (i) 70% of each grant vests quarterly over a three-year period from the date of grant and(ii) 30% of each grant vests on the achievement of performance milestones (the “Milestone Portion”), subject, in each case, to the recipient’s continuedemployment with the Company. For each grant, 50% of the Milestone Portion will vest on the achievement of any one of the four performance milestoneslisted below, and the remaining 50% will vest on the achievement of any additional performance milestone listed below. The Milestone Portion of each grantis subject to a term of 30 months, such that any portion of the Milestone Portion of each grant that is not vested before the 30-month anniversary of the grantdate will be forfeited. The performance milestones are as follows: •Completion of IND filings with the FDA for antibodies against any two of the following CPM targets on or before March 31, 2016: GITR,OX40, or CTLA-4. •Filing of a U.S. or European marketing application for GSK’s shingles vaccine. •Execution of a licensing, collaboration or special financing agreement advancing Prophage into a Phase 3 trial in newly diagnosed GBM. •Achieving a market capitalization of $500 million or more for a period of 30 consecutive days.On July 6, 2015, 50% of the Milestone Portion of the February 2015 grants vested when the Company’s market capitalization remained above $500million for the 30th consecutive day.On January 27, 2016, the remaining 50% of the Milestone Portion of the February 2015 grants vested when the Company completed its IND filingwith the FDA for its antibody candidate targeting CTLA-4.In July 2015, the Compensation Committee approved a company-wide performance share grant to all employees at the time, including all of ournamed executive officers, which are eligible to vest in one-third increments over the three-year period beginning on July 1, 2015 based on the achievementof certain key Company milestones that are significant to the success of our business and the recipient’s continued employment through the vesting date. TheCompensation Committee chose as the milestones what it believed to be key drivers of our business that will help create long-term value for ourstockholders. Any portion of each performance share award that does not vest during the applicable year will be forfeited automatically at the end of suchyear.On April 26, 2016, one-third of the July 2015 grant vested when we dosed our first patient in our Phase 1 clinical trial for our antibody candidatetargeting CTLA-4.2016 Grants:On March 31, 2016, as part of a Company-wide award, each of our named executive officers received a grant of stock options, with an exercise priceequal to the closing price of our common stock on the date of grant. These options vest as to one-third of the options on the first anniversary of the grant dateand thereafter in quarterly installments, subject to the recipient’s continued employment. On this same date, the Compensation Committee approved anadditional performance share grant to our named executive officers and the senior management team that are eligible to vest (if at all) in a single tranche onMarch 31, 2019 based upon the 90-day average closing price of our common stock on such date exceeding the thresholds described below, subject to therecipient’s continued employment through that date (the “March 2016 Performance Share Grants”). As part of the March 2016 Performance Share Grants,each recipient was granted a target number of performance shares, with any ultimate vesting to be100Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.achieved as follows: (i) if the 90-day average closing price is less than $10 per share, no portion of the award will vest and the performance share awards willbe forfeited in their entirety; (ii) if the 90-day average closing price is equal to $10 per share, 50% of each individual’s target award will vest immediately;(iii) if the 90-day average closing price is equal to $15 per share, 100% of each individual’s target award will vest immediately; (iv) if the 90-day averageclosing price is $20 per share or greater, 150% of each individual’s target award will vest immediately; and (v) if the 90-day average closing price is between$10 per share and $20 per share, a proportionate number of shares will vest immediately, determined on a straight-line basis. In the event of a change incontrol of the Company prior to March 31, 2019, the March 2016 Performance Share Grants are subject to vesting solely based upon the per share stock pricein the change in control transaction and the above parameters; if the per share price is less than $10 per share, no portion of the awards will vest and theawards will be forfeited in their entirety. Finally, certain of our named executive officers received supplemental grants of stock options. The 2016 equitygrants for each of our named executive officers are described in more detail below under “Compensation Actions for our Named Executive Officers.” Inconnection with Mr. Ballantyne’s resignation, he forfeited all of his 2016 grants.Benefits.We provide the following benefits to our named executive officers generally on the same basis as the benefits provided to all of our employees: •Health, vision and dental insurance; •Life insurance; •Short- and long-term disability; •Flexible spending accounts; •401(k) plan; and •Employee Stock Purchase Plan.We believe that these benefits are consistent with those offered by companies against which we compete for talent.We have also provided personal health-related benefits to our named executive officers from time to time, including certain benefits to Dr. Stein asdescribed in the Summary Compensation Table. We also provide Dr. Armen with an allowance to use a private aircraft for business and/or personal travel, andwe provide Dr. Stein with a housing allowance, access to Company housing, a company automobile, financial planning and advisory services, and, in 2016,reimbursed him for relocation expenses, all as described below. We provided these benefits to Dr. Stein in order to allow him to focus on his duties as ourPresident of R&D without the disruption associated with having to relocate his home, which we believe, in turn, will increase long-term stockholder value.Severance Compensation and Termination Protection.We have employment and change of control agreements with Dr. Armen, Dr. Stein and Ms. Valentine. Mr. Baysal and Ms. Klaskin participate in ourexecutive change of control plan. These agreements provide for severance compensation to be paid if the executive’s employment is terminated under certainconditions, such as in connection with a change of control of the Company or a termination without cause by us, each as is defined in the respectiveagreements or plan.The employment and change of control agreements and the executive change of control plan, as applicable, between the Company and our namedexecutive officers and the related severance compensation provisions are designed to meet the following objectives: •Change of Control: As part of our normal course of business, we may engage in discussions with other biotechnology and pharmaceuticalcompanies about possible collaborations, licensing and/or other ways in which the companies may work together to further our respectivelong-term objectives. In addition, many larger established pharmaceutical companies consider companies at similar stages of development toours as potential acquisition targets. In certain scenarios, a merger or sale of the Company may be in the best interests of our stockholders. Weprovide severance compensation if a named executive officer’s employment is terminated following a change of control transaction in order tomaintain management continuity in the event a potential transaction is announced and to promote the ability of our named executive officersto act in the best interests of our stockholders even though their employment could be terminated as a result of the transaction. •Termination without Cause: If we terminate the employment of a named executive officer who is party to an employment and change of controlagreement without cause, or the executive resigns due to a compensation reduction or, in the case of Dr. Armen, for other good reason asdefined in the applicable agreement, we are obligated to continue to pay the executive’s base salary, bonus, and medical and dental benefits fora defined period, as well as to provide outplacement services. We believe this is appropriate because the terminated executive would be boundby confidentiality, non-101Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. solicitation and non-competition provisions following such termination. In addition, having a mutually agreed to severance package that is inplace prior to any termination event provides us with more flexibility to make a change in senior management if we consider such a change tobe in our and our stockholders’ best interests.Compensation Actions for our Named Executive OfficersCompensation actions for 2016 reflect our Compensation Committee’s assessments of performance relative to Company goals and objectives andindividual performance objectives, and comparisons against market references described above.Dr. Armen, our Chief Executive Officer, makes recommendations to our Compensation Committee as to individual compensation actions for ourexecutives, including our named executive officers, but excluding himself. Our Compensation Committee works with our Vice President of Human Resourcesand Administration and our independent compensation consultant to determine the specific compensation actions for our named executive officers. OurCompensation Committee makes all final determinations regarding the compensation of our executive officers, including our named executive officers.Our compensation actions for our Chief Executive Officer and our other named executive officers are summarized as follows:Dr. Garo H. Armen—Chairman and Chief Executive OfficerCompensation Actions in 2016: •Base Salary: Our Compensation Committee made no change to Dr. Armen’s base salary for 2016. •Annual Incentive Bonus: In March 2016, our Compensation Committee approved an annual incentive bonus of $490,000 to reward Dr. Armenfor his performance in 2015. •Annual Incentive Bonus Target: In March 2016, our Compensation Committee increased Dr. Armen’s annual incentive bonus target from 50%to 60% of his base salary. •Long-Term Incentives: In conjunction with a Company-wide award in March 2016, Dr. Armen was granted an option to purchase 555,000shares of our common stock at an exercise price per share of $4.16, representing the fair market value of a share of our common stock on thegrant date. The option has a three-year vesting schedule where one-third of the options vest on the one-year anniversary of the grant date, withthe remainder vesting in equal quarterly installments thereafter, subject to his continued employment with the Company. In March 2016, Dr.Armen was granted performance shares with a target of 132,500 shares, which are eligible to vest (if at all) in a single tranche on March 31,2019, based on the achievement of certain performance milestones as described above under “Long-Term Incentives” and his continuedemployment through the vesting date. In September 2016, Dr. Armen was granted an option to purchase 53,037 shares of our common stock atan exercise price per share of $6.77, representing the fair market value of a share of our common stock on the grant date. The option vests in asingle tranche on the one-year anniversary of the grant date, subject to Dr. Armen’s continued employment through the vesting date. TheSeptember 2016 option grant was intended to replace an option that Dr. Armen previously held that expired by its terms without beingexercised. After reviewing the Company’s performance and our achievement of our annual goals in 2015 and 2016, as described in herein andin our 2015 proxy statement, the Compensation Committee believed this additional option grant was appropriate to reward Dr. Armen’sperformance and to keep his interests aligned with those of our stockholders. •Other Compensation: In 2016, the Compensation Committee approved an allowance of up to $150,000 for Dr. Armen to use private aircraft forbusiness and/or personal travel. All personal use was treated as a perquisite and taxed accordingly. Certain Compensation Actions in 2017: •Base Salary: Our Compensation Committee made no change to Dr. Armen’s base salary for 2017. •Annual Incentive Bonus: In March 2017, our Compensation Committee approved an annual incentive bonus of $485,000 to reward Dr. Armenfor his performance in 2016.C. Evan Ballantyne—Former Chief Financial Officer (resigned effective July 29, 2016)Compensation Actions in 2016: •Base Salary: Our Compensation Committee made no change to Mr. Ballantyne’s base salary for 2016. •Annual Incentive Bonus: In March 2016, our Compensation Committee approved an annual incentive bonus of $86,100 to rewardMr. Ballantyne for his performance in 2015.102Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. •Long-Term Incentives: In conjunction with a Company-wide award in March 2016, Mr. Ballantyne was granted an option to purchase 75,000shares of our common stock at an exercise price per share of $4.16, representing the fair market value of a share of our common stock on thegrant date. The option had a three-year vesting schedule where one-third of the options vest on the one-year anniversary of the grant date, withthe remainder vesting in equal quarterly installments thereafter, subject to his continued employment with the Company. In March 2016, Mr.Ballantyne was also granted performance shares with a target of 14,000 shares, which were eligible to vest (if at all) in a single tranche onMarch 31, 2019, based on the achievement of certain performance milestones, as described under “Long-Term Incentives” above, and hiscontinued employment through the vesting date. These long-term incentive awards were forfeited in their entirety when Mr. Ballantyneresigned from the Company in July 2016. Christine M. Klaskin—Vice President, FinanceCompensation Actions in 2016: •Base Salary: Our Compensation Committee made no change to Ms. Klaskin’s base salary for 2016. •Annual Incentive Bonus: In March 2016, our Compensation Committee approved an annual incentive bonus of $108,750 to rewardMs. Klaskin for her performance in 2015. •Long-Term Incentives: In conjunction with a Company-wide award in March 2016, Ms. Klaskin was granted an option to purchase 30,000shares of our common stock at an exercise price per share of $4.16, representing the fair market value of a share of our common stock on thegrant date. The option has a three-year vesting schedule where one-third of the options vest on the one-year anniversary of the grant date, withthe remainder vesting in equal quarterly installments thereafter, subject to her continued employment with the Company. In March 2016, Ms.Klaskin was also granted performance shares with a target of 13,500 shares, which are eligible to vest (if at all) in a single tranche on March 31,2019, based on the achievement of certain performance milestones, as described under “Long-Term Incentives” above, and her continuedemployment through the vesting date. In September 2016, Ms. Klaskin was granted an option to purchase 7,551 shares of our common stock atan exercise price per share of $6.77, representing the fair market value of a share of our common stock on the grant date. The option vests in asingle tranche on the one-year anniversary of the grant date, subject to Ms. Klaskin’s continued employment through the vesting date. TheSeptember 2016 option grant was intended to replace an option that Ms. Klaskin previously held that expired by its terms without beingexercised. After reviewing the Company’s performance and our achievement of our annual goals in 2015 and 2016, as described in herein andin our 2015 proxy statement, the Compensation Committee believed this additional option grant was appropriate to reward Ms. Klaskin’sperformance and to keep her interests aligned with those of our stockholders. Certain Compensation Actions in 2017: •Base Salary: Our Compensation Committee made no change to Ms. Klaskin’s base salary for 2017. •Annual Incentive Bonus: In March 2017, our Compensation Committee approved an annual incentive bonus of $102,000 to reward Ms.Klaskin for her performance in 2016.Ozer Baysal—Chief Business OfficerCompensation Actions in 2016: •Base Salary: Our Compensation Committee made no change to Mr. Baysal’s base salary for 2016. •Annual Incentive Bonus: In March 2016, our Compensation Committee approved an annual incentive bonus of $92,796 to reward Mr. Baysalfor his performance in 2015. •Long-Term Incentives: In conjunction with a Company-wide award in March 2016, Mr. Baysal was granted an option to purchase 40,000shares of our common stock at an exercise price per share of $4.16, representing the fair market value of a share of our common stock on thegrant date. The option has a three-year vesting schedule where one-third of the options vest on the one-year anniversary of the grant date, withthe remainder vesting in equal quarterly installments thereafter, subject to his continued employment with the Company. In March 2016, Mr.Baysal was also granted performance shares with a target of 13,500 shares, which are eligible to vest (if at all) in a single tranche on March 31,2019, based on the achievement of certain performance milestones, as described under “Long-Term Incentives” above, and his continuedemployment through the vesting date.103Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Certain Compensation Actions in 2017: •Base Salary: Our Compensation Committee made no change to Mr. Baysal’s base salary for 2017. •Annual Incentive Bonus: In March 2017, our Compensation Committee approved an annual incentive bonus of $95,000 to reward Mr. Baysalfor his performance in 2016.Dr. Robert B. Stein—President, Research & DevelopmentCompensation Actions in 2016: •Base Salary: Effective July 1, 2016, our Compensation Committee increased Dr. Stein’s base salary by 6% from $400,000 to $425,000. •Annual Incentive Bonus: In March 2016, our Compensation Committee approved an annual incentive bonus of $249,600 to reward Dr. Steinfor his performance in 2015, less the $100,000 previously paid in July 2015 for his performance in the first half of 2015. •Long-Term Incentives: In conjunction with a Company-wide award in March 2016, Dr. Stein was granted an option to purchase 250,000 sharesof our common stock at an exercise price per share of $4.16, representing the fair market value of a share of our common stock on the grant date.The option has a three-year vesting schedule where one-third of the options vest on the one-year anniversary of the grant date, with theremainder vesting in equal quarterly installments thereafter, subject to his continued employment with the Company. In March 2016, Dr. Steinwas also granted performance shares with a target of 34,000 shares, which are eligible to vest (if at all) in a single tranche on March 31, 2019,based on the achievement of certain performance milestones, as described under “Long-Term Incentives” above, and his continuedemployment through the vesting date. •Other Compensation: In December 2015, the Compensation Committee approved allowances of up to $80,000 for Dr. Stein over a 12-monthperiod, comprised of a housing allowance of up to $6,000 per month for his primary residence in New York and exclusive use of a companyautomobile at a lease rate of $1,250 per month. The Compensation Committee also approved the following for Dr. Stein in 2016: (i) paymentsto a third-party financial planning and advisor service, (ii) use of a corporate apartment near the Company’s Lexington, MA office, (iii)payment of relocation expenses from Brooklyn, NY to New York, NY totaling approximately $20,000, (iv) use of a corporate apartment nearthe Company’s New York office and (v) payment of certain non-routine medical costs.Certain Compensation Actions in 2017: •Base Salary: Our Compensation Committee made no change to Dr. Stein’s base salary for 2017. •Annual Incentive Bonus: In March 2017, our Compensation Committee approved an annual incentive bonus of $200,000 to reward Dr. Steinfor his performance in 2016.Karen H. Valentine—Chief Legal Officer and General CounselCompensation Actions in 2016: •Base Salary: Our Compensation Committee made no change to Ms. Valentine’s base salary for 2016. •Annual Incentive Bonus: In March 2016, our Compensation Committee approved an annual incentive bonus of $220,320 to rewardMs. Valentine for her performance in 2015.104Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. •Long-Term Incentives: In conjunction with a Company-wide award in March 2016, Ms. Valentine was granted an option to purchase 140,000shares of our common stock at an exercise price per share of $4.16, representing the fair market value of a share of our common stock on thegrant date. The option has a three-year vesting schedule where one-third of the options vest on the one-year anniversary of the grant date, withthe remainder vesting in equal quarterly installments thereafter, subject to her continued employment with the Company. In March 2016, Ms.Valentine was also granted performance shares with a target of 27,500 shares, which are eligible to vest (if at all) in a single tranche on March31, 2019, based on the achievement of certain performance milestones, as described under “Long-Term Incentives” above, and subject to hercontinued employment through the vesting date. In September 2016, Ms. Valentine was granted an option to purchase 2,083 shares of ourcommon stock at an exercise price per share of $6.77, representing the fair market value of a share of our common stock on the grant date. Theoption vests in a single tranche on the one-year anniversary of the grant date, subject to Ms. Valentine’s continued employment through thevesting date. The September 2016 option grant was intended to replace an option that Ms. Valentine previously held that expired by its termswithout being exercised. After reviewing the Company’s performance and our achievement of our annual goals in 2015 and 2016, as describedin herein and in our 2015 proxy statement, the Compensation Committee believed this additional option grant was appropriate to reward Ms.Valentine’s performance and to keep her interests aligned with those of our stockholders.Certain Compensation Actions in 2017: •Base Salary: Our Compensation Committee made no change to Ms. Valentine’s base salary for 2017. •Annual Incentive Bonus: In March 2017, our Compensation Committee approved an annual incentive bonus of $210,000 to reward Ms.Valentine for her performance in 2016.Tax and Accounting ConsiderationsSection 162(m) of the Code (“Section 162(m)”) generally disallows a tax deduction for any publicly-held corporation for individual compensationexceeding $1 million in any taxable year for a company’s named executive officers, other than its chief financial officer, unless compensation qualifies asperformance-based under such section. Last year, our stockholders approved the material terms of our 2009 Amended and Restated Equity Incentive Plan andour 2016 Executive Incentive Plan to permit us, if desired, to pay compensation under those plans that are intended to be exempt from the deductibilitylimits of Section 162(m). In making compensation decisions, including those described above, the Compensation Committee considers the tax andaccounting implications of its decisions, including the deductibility limits of Section 162(m). However, the Compensation Committee believes that itsprimary responsibility is to provide a compensation program that attracts, retains and rewards the executives necessary for our success. Accordingly, theCompensation Committee may, in its judgment, authorize, and has authorized, compensation payments that do not comply with the exemptions, in whole orin part, under Section 162(m) or that may otherwise be limited as to tax deductibility. The Compensation Committee has not adopted a policy thatcompensation must be tax deductible or have the most favorable accounting treatment to the Company.The Compensation Committee regularly considers the accounting implications of significant compensation decisions, especially in connection withdecisions that relate to our equity incentive award plans and programs. If accounting standards change, we may revise certain programs to appropriately alignaccounting expenses of our equity awards with our overall executive compensation philosophy and objectives.105Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.COMPENSATION OF EXECUTIVE OFFICERSSummary Compensation TableThis table shows certain information about the compensation paid or awarded to, or earned by, our named executive officers for 2016, 2015 and 2014. Name and Principal Position Year Salary($) Bonus(5)($) StockAwards(6)($) OptionAwards(9)($) All OtherCompensation(13)($) Total($) Garo H. Armen, Ph.D.(1) 2016 575,000 485,000 480,975(7) 1,699,334(10) 3,981 3,244,290 Chief Executive Officer 2015 544,538 490,000 —(8) 833,099(11) 8,271 1,875,908 2014 502,360(4) 420,000 — 1,336,213(12) — 2,258,573 C. Evan Ballantyne(2) 2016 235,981 — —(7) 197,075(10) — 433,056 Former Chief Financial Officer 2015 179,038 86,100 —(8) 1,160,806 — 1,425,944 Christine M. Klaskin 2016 250,000 102,000 49,005(7) 113,138(10) 5,481 519,624 Vice President, Finance 2015 239,846 108,750 —(8) 155,542(11) 11,486 515,624 2014 222,855 103,500 — 271,007(12) — 597,362 Ozer Baysal 2016 209,000 95,000 49,005(7) 105,107(10) 3,617 461,729 Chief Business Officer 2015 209,000 92,796 —(8) 128,901(11) 9,406 440,103 2014 204,327 125,400 — 261,296(12) — 591,023 Robert Stein, Ph.D.(3) 2016 411,635 200,000 123,420(7) 656,918(10) 167,133 1,559,106 President, Research & Development 2015 373,654 249,600 —(8) 413,144(11) 101,559 1,137,957 2014 323,827 300,000 — 807,065(12) 121,637 1,552,529 Karen H. Valentine 2016 340,000 210,000 99,825(7) 337,338(10) 6,058 993,221 Chief Legal Officer and 2015 319,692 220,320 —(8) 304,274(11) 12,659 856,945 General Counsel 2014 289,214 200,000 — 354,192(12) — 843,406 (1)As an employee-director, Dr. Armen receives no additional compensation for his services to the Board.(2)Mr. Ballantyne was hired on June 17, 2015 and resigned effective July 29, 2016. Mr. Ballantyne did not receive an annual incentive bonus for 2016.(3)Dr. Stein was hired on January 10, 2014.(4)Includes $79,200 in 2014 paid in shares of our common stock in lieu of salary at Dr. Armen’s election, calculated based on the fair market value of thestock on the date of payment.(5)Annual incentive bonuses paid under our annual incentive plan. Dr. Stein’s 2014 bonus amount includes an additional $50,000 special bonus paid toDr. Stein in 2014 for his performance in connection with our acquisition of 4-Antibody AG.(6)Amounts shown reflect the grant date fair value of performance shares determined in accordance with ASC Topic 718, disregarding the effects ofestimated forfeitures, using a Monte Carlo simulation model. Please see the notes to our consolidated financial statements on page 74 of this Form 10-K for the year ended December 31, 2016 for the assumptions used in valuing such awards. No stock awards were granted to our named executiveofficers during 2014.(7)Stock awards for 2016 include the grant date fair value of performance shares which vest on March 31, 2019 based upon the 90-day average closingprice of our common stock on such date, as described above in the section titled “Compensation Discussion and Analysis—Long-Term Incentives.”Amounts in the table are valued based on the probable outcome of the performance conditions associated with these awards on the grant date, whichassumed that all applicable performance conditions would be achieved in full. Mr. Ballantyne forfeited his performance shares upon his resignationfrom employment.(8)Stock awards for 2015 include the grant date fair values of performance shares, which vest based on the completion of certain milestones as describedabove in the section titled “Compensation Discussion and Analysis—Long-Term Incentives.” Amounts in the table are valued based on the probableoutcome of the performance conditions associated with these awards on the grant date. Assuming the achievement of all applicable milestones, thegrant date fair value of the 2015 awards would be $1,895,549 for Dr. Armen, $576,907 for Mr. Ballantyne, $274,717 for Ms. Klaskin, $344,492 for Mr.Baysal, $879,098 for Dr. Stein and $653,829 for Ms. Valentine, which represents the grant date fair values if the maximum number of performanceshares were earned. Mr. Ballantyne forfeited his performance shares upon his resignation from employment. (9)Amounts shown reflect the grant date fair value of options awarded during each of 2014, 2015 and 2016 determined in accordance with ASC Topic718, disregarding the effects of estimated forfeitures. Please see the notes to our consolidated financial statements on page 74 of this Form 10-K for theyear ended December 31, 2016 for the assumptions used in valuing such awards. Mr. Ballantyne forfeited all of his unvested options upon hisresignation from employment. (10)Option awards for 2016, which vest based on the named executive officer’s continued employment.106Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(11)Option awards for 2015 include the grant date fair values of performance-based options granted in 2015 which vest based on the completion of certainmilestones as described above in the section titled “Compensation Discussion and Analysis—Long-Term Incentives.” Amounts in the table withrespect to performance-based options are valued based on the probable outcome of the performance conditions associated with these awards. Amountsin the table with respect to these performance-based options are $123,556 for Dr. Armen, $18,019 for Ms. Klaskin, $20,078 for Mr. Baysal, $64,352 forDr. Stein and $41,185 for Ms. Valentine, which would be $266,983 for Dr. Armen, $38,935 for Ms. Klaskin, $43,385 for Mr. Baysal, $139,054 for Dr.Stein and $88,994 for Ms. Valentine if all milestones were achieved at maximum levels.(12)Option awards for 2014 include the grant date fair values of performance-based options awarded in 2013 which vest based on the completion ofcertain milestones. Amounts in the table with respect to performance-based options are valued based on the probable outcome of the performanceconditions associated with these awards. Amounts in the table with respect to these performance-based options are $263,513 for Dr. Armen, $56,467for Ms. Klaskin, and $75,290 for Ms. Valentine. (13)Please see the table below, which summarizes all other compensation for 2016.Other CompensationThis table shows the components of the “All Other Compensation” received by our named executive officers in 2016. Executive Officer 401(k)Match($) Housingand CarAllowances($) OtherBenefits($) Total($) Garo H. Armen, Ph.D. 3,981 — — 3,981 Christine M. Klaskin 5,481 — — 5,481 Ozer Baysal 3,617 — — 3,617 Robert Stein, Ph.D. — 110,622(1) 56,511(2) 167,133 Karen H. Valentine 6,058 — — 6,058 (1)Represents (i) use of a corporate apartment near the Company’s headquarters in Lexington, MA, valued at the full rental cost of the apartment,including utilities, for the days it was used by Dr. Stein, (ii) a housing allowance for Dr. Stein’s primary residence in Brooklyn, New York (prior to himmoving), (iii) relocation expenses in moving from Brooklyn, NY to New York, NY that were reimbursed by the Company, (iv) use of a corporateapartment near the Company’s New York, NY office, valued at the full rental cost of the apartment, including utilities, for the days it was used by Dr.Stein, and (v) personal use of a Company automobile valued at the full monthly lease rate paid by the Company.(2)Includes (i) payments made by the Company on Dr. Stein’s behalf in 2016 to a third party financial planning and advisory service (ii) certainsupplemental medical costs paid by the Company for Dr. Stein in connection with non-routine medical care needed by Dr. Stein and (iii) expensereimbursements in excess of the Company’s travel and expense policy for a first class airline ticket and meal reimbursements above the dailyallowance.107Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Grants of Plan-Based Awards for 2016This table shows our grants of plan-based awards to our named executive officers in 2016. The awards listed below were all granted under the 2009Equity Incentive Plan. The exercise price of all stock options granted during 2016 was equal to the closing market price of the Company’s common stock onthe date of the grant. Executive Officer GrantDate EstimatedFuturePayoutsUnderEquityIncentivePlanAwardsThreshold(#) EstimatedFuturePayoutsUnderEquityIncentivePlanAwardsTarget(#) EstimatedFuturePayoutsUnderEquityIncentivePlanAwardsMaximum(#) All OtherStockAwards:Numberof Sharesof Stock orUnits(#) All OtherOptionAwards:NumberofSecuritiesUnderlyingOptions(#) ExerciseorBasePrice ofOptionAwards($/Share) Grant DateFair Valueof Stockand OptionAwards($)(4) Garo H. Armen, Ph.D. 3/31/2016(1) 555,000 4.16 1,458,358 Chief Executive Officer 3/31/2016(2) 66,250 132,500 198,750 480,975 9/16/2016(3) 53,037 6.77 240,976 C. Evan Ballantyne 3/31/2016(1) 75,000 4.16 197,075 Former Chief Financial Officer 3/31/2016(2) 7,000 14,000 21,000 50,820 Christine M. Klaskin 3/31/2016(1) 30,000 4.16 78,830 Vice President, Finance 3/31/2016(2) 6,750 13,500 20,250 49,005 9/16/2016(3) 7,551 6.77 34,308 3/31/2016(1) 40,000 4.16 105,107 Ozer Baysal Chief Business Officer 3/31/2016(2) 6,750 13,500 20,250 49,005 3/31/2016(1) 250,000 4.16 656,918 Robert Stein, Ph.D. President, Research & Development 3/31/2016(2) 17,000 34,000 51,000 123.420 Karen H. Valentine 3/31/2016(1) 140,000 4.16 367,874 Chief Legal Officer and General Counsel 3/31/2016(2) 13,750 27,500 41,250 99.825 9/16/2016(3) 2,083 6.77 9,464 (1)Options have a three-year vesting schedule where one-third of the options vest on the one-year anniversary of the grant date, with the remaindervesting in equal quarterly installments thereafter, subject to the named executive officer’s continued employment. Mr. Ballantyne forfeited hisoptions upon his resignation from employment.(2)Performance shares vest on March 31, 2019 based upon the 90-day average closing price of our common stock on such date, subject to the namedexecutive officer’s continued employment, as described above in the section titled “Compensation Discussion and Analysis—Long-Term Incentives.”The number of shares listed in the “Threshold” column represents the number of shares that will vest if the $10 per share stock price milestone isachieved, the number of shares listed in the “Target” column represents the number of shares that will vest if the $15 per share stock price milestone isachieved, and the number of shares listed in the “Maximum” column represents the number of shares that will vest if the $20 per share stock pricemilestone is achieved. In the event that the stock price milestone is achieved at a price between $10 per share and $20 per share, the number of sharesthat will vest will be determined on a straight-line basis between the threshold and target or target and maximum amounts, as applicable. Mr.Ballantyne forfeited his performance shares upon his resignation from employment.(3)Option vests on the one-year anniversary of the grant date, subject to the named executive officer’s continued employment.(4)Represents the grant date fair value of stock options and performance shares granted during 2016 determined in accordance with ASC Topic 718,disregarding the effects of estimated forfeitures. Amounts in the table are valued based on the probable outcome of the performance conditionsassociated with these awards on the grant date, which assumed that all applicable performance conditions would be achieved in full. See notes (7) and(10) to the Summary Compensation Table.108Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Outstanding Equity Awards at Fiscal Year-End 2016The following table shows outstanding equity awards for the named executive officers as of December 31, 2016: Option Awards Stock Awards Name Number ofSecuritiesUnderlyingUnexercisedOptionsExercisable(#) Number ofSecuritiesUnderlyingUnexercisedOptionsUnexercisable(#) OptionExercisePrice($) OptionExpirationDate Number ofShares orUnits ofStockThatHave NotVested(#) EquityIncentivePlanAwards:Number ofUnearnedShares,Units orOtherRightsThatHave NotVested EquityIncentivePlanAwards:Marketor PayoutValue ofUnearnedShares,Units orOtherRightsThatHave NotVested(1)($) Garo H. Armen, Ph.D. 87,500 — 9.48 7/16/19 — — — 35,200 — 13.62 9/12/17 — — — 42,500 — 9.42 9/10/18 — — — 58,333 — 4.50 1/26/20 — — — 81,654 — 6.30 1/4/21 — — — 119,178 — 3.36 9/14/21 — — — 250,000 — 5.34 6/14/22 — — — 200,000 — 3.61 6/13/23 — — — 140,000 — 2.72 9/12/23 — — — 458,337 41,663(5) 3.00 2/14/24 — — — 108,000 70,000(7) 5.04 2/12/25 — — — 72,000 — 5.04 8/12/17 — — — — — — — 143,930(2) 592,992 — 555,000(11) 4.16 3/31/2026 — — — — — — 3/31/2019 — 198,750(10) 818,850 — 53,037(9) 6.77 9/16/2026 — — — — — — — — C. Evan Ballantyne — — — — — — — — — — — — — — — — — — — — Christine M. Klaskin 4,537 — 9.48 7/16/19 — — — 8,150 — 13.62 9/12/17 — — — 8,333 — 9.42 9/10/18 — — — 12,500 — 4.50 1/26/20 — — — 6,666 — 6.30 1/4/21 — — — 16,563 — 3.36 9/14/21 — — — 56,250 — 5.34 6/14/22 — — — 32,500 — 3.61 6/13/23 — — — 30,000 — 2.72 9/12/23 — — — 91,674 8.326(5) 3.00 2/14/24 — — — 24,294 10,206(7) 5.04 2/12/25 — — — 10,500 — 5.04 8/12/17 — — — — — — — — 20,860(2) 85,943 — 30,000(11) 4.16 3/31/2026 — — — — — 03/31/2019 — 20,250(10) 83,430 7,551(9) 6.77 09/16/2026 — — — Ozer Baysal 18,750 6,250(3) 4.24 1/2/23 — — — 18,750 6,250(4) 3.84 4/1/23 — — — 109Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Option Awards Stock Awards Name Number ofSecuritiesUnderlyingUnexercisedOptionsExercisable(#) Number ofSecuritiesUnderlyingUnexercisedOptionsUnexercisable(#) OptionExercisePrice($) OptionExpirationDate NumberofShares orUnits ofStockThatHaveNotVested(#) EquityIncentivePlanAwards:Number ofUnearnedShares,Units orOtherRightsThatHave NotVested EquityIncentivePlanAwards:Marketor PayoutValue ofUnearnedShares,Units orOtherRightsThatHave NotVested(1)($) — — — 1/2/23 6,250(3) — 25,750 47,500 — 3.61 6/13/23 — — — 40,000 — 2.72 9/12/23 — — — 79,475 7,225(5) 3.00 2/14/24 — — — 15,925 11375(7) 5.04 2/12/25 — — — 11,750 — 5.04 8/12/17 — — — — — — — — 26,158(2) 107,770 — 40,000(11) 4.16 3/31/2026 3/31/2019 20,250(10) 83,430 Karen H. Valentine 4,687 — 9.48 7/16/19 — — — 5,000 — 12.18 12/4/16 — — — 8,150 — 13.62 9/12/17 — — — 8,333 — 9.42 9/10/18 — — — 12,500 — 4.50 1/26/20 — — — 14,740 — 6.30 1/4/21 — — — 19,432 — 3.36 9/14/21 — — — 75,000 — 5.34 6/14/22 — — — 47,500 — 3.61 6/13/23 — — — 40,000 — 2.72 9/12/23 — — — 119,174 10,826(5) 3.00 2/14/24 — — — 42,669 23,331(7) 5.04 2/12/25 — — — 24,000 — 5.04 8/12/17 — — — — — — — — 49,646(2) 204,542 — 140,000(11) 4.16 3/31/2026 3/31/2019 41,250(10) 169,950 — 2,083(9) 6.77 9/31/2026 — — — Robert Stein, Ph.D. 75,000 75,000(8) 3.14 1/10/24 — — — 133,333 66,667(6) 3.00 2/14/24 — — — 51,044 36,456(7) 5.04 2/12/25 — — — 37,500 — 5.04 8/12/17 — — — — — — — — 66,750(2) 275,010 — 250,000(11) 4.16 3/31/2026 — — — — — — 3/31/19 — 51,000 210,120 (1)We valued the stock awards using the closing price of our common stock on The NASDAQ Capital Market on December 30, 2016, the last businessday of 2016, which was $4.12 per share.(2)The performance shares vest based on the achievement of certain key Company performance milestones as described above in the section titled“Compensation Discussion and Analysis—Long-Term Incentives.” Amounts in the table represent the target number of performance shares.(3)The award vested on January 2, 2017.(4)The option vests on April 1, 2017, subject to the named executive officer’s continued employment.110Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(5)The option vests on February 14, 2017, subject to the named executive officer’s continued employment.(6)The option vests on February 14, 2017, subject to the named executive officer’s continued employment.(7)The option vests in nine equal quarterly installments beginning February 12, 2017, subject to the named executive officer’s continued employment.(8)The option vests in two equal annual installments beginning January 10, 2017, subject to the named executive officer’s continued employment.(9)The option vests on September 16, 2017, subject to the named executive officer’s continued employment.(10)The performance shares vest on March 31, 2019 based upon the 90-day average closing price of our common stock on such date, as described above inthe section titled “Compensation Discussion and Analysis—Long-Term Incentives,” subject to the named executive officer’s continued employment.(11)Option has a three-year vesting schedule where one-third of the options vest on the one-year anniversary of the grant date, with the remainder vestingin equal quarterly installments thereafter, subject to the named executive officer’s continued employment.Option Exercises and Stock Vested for 2016The following table shows information about performance shares that vested in 2016 and the value realized on those awards by our named executiveofficers in 2016. No stock options were exercised by our named executive officers in 2016. Stock Awards Name Number ofShares AcquiredOn Vesting(#) Value RealizedOn Vesting($)(1) Garo Armen 71,964 298,651 Charles E. Ballantyne 21,902 90,893 Christine M. Klaskin 10,429 43,280 Ozer Baysal 19,328 82,149 Robert Stein 33,375 138,506 Karen H. Valentine 24,822 103,011 (1)Determined by multiplying the number of shares that vested by the closing price of our common stock on the date of vesting.Pension Benefits for 2016We do not have any plans providing for payments or other benefits to our named executive officers at, following, or in connection with, retirement.Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans for 2016We do not have any nonqualified defined contribution plans or other deferred compensation plans for our named executive officers.Potential Payments Upon Termination or Change of ControlWe have entered into certain agreements and maintain certain plans that may require us to make certain payments and/or provide certain benefits toour named executive officers in the event of a termination of employment or a change of control. Dr. Armen, Dr. Stein and Ms. Valentine are each currentlyparty to employment and change of control agreements providing for payments in connection with such officers’ termination of employment or a change ofcontrol. Ms. Klaskin, and Mr. Baysal are each subject to agreements under our executive change of control plan which provides for payments in connectionwith a change of control. A “change of control” is defined in each of the agreements and plan generally as (i) the acquisition by any individual, entity orgroup of 50% or more of the common stock of the Company, (ii) a change in the incumbent Board such that incumbent directors cease to constitute at least amajority of our Board, (iii) a sale or other disposition of all or substantially all of the assets of the Company, or (iv) approval by the stockholders of theCompany of a complete liquidation or dissolution of the Company. The following text and tables summarize the potential payments to each applicablenamed executive officer assuming that the triggering event occurred on December 31, 2016, the last day of our fiscal year.Mr. Ballantyne did not receive any severance payments or benefits in connection with his resignation on July 29, 2016.111Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Our Chief Executive OfficerUnder Dr. Armen’s employment and change of control agreement, if we terminate Dr. Armen’s employment without cause or if he terminates hisemployment for good reason (each, as defined in his agreement), he is entitled to receive from the Company: •his base salary for a period of 18 months, plus a lump sum payment of 150% of the higher of his target annual incentive bonus for the year oftermination or his last actual annual incentive bonus, •coverage under our medical and dental plans for a period of 18 months following the date of termination, •a lump sum payment of $15,000 for outplacement assistance, •a gross-up for any taxes with respect to such outplacement assistance payment, and •a gross-up payment for any taxes, interest and penalties imposed by Section 4999 of the Code. •at the Compensation Committee’s discretion, the acceleration of vesting of any unvested stock options.Under Dr. Armen’s employment and change of control agreement, “good reason” means the occurrence of any of the following events: (i)failure to continue Dr. Armen in the position of Chief Executive Officer, (ii)a material and substantial diminution in the nature or scope of his responsibilities, duties or authority, (iii)a material reduction in his base salary or benefits, or (iv)relocation of Dr. Armen’s principal office, without his prior consent, to a location more than 30 miles away (in the event of a change of control).Upon a change of control, 100% of any of Dr. Armen’s outstanding unvested performance shares immediately vest (other than the March 2016Performance Share Grant, which will vest based solely on the share price in the change of control transaction as described above) and 50% of any ofDr. Armen’s outstanding unvested stock options as of the change of control date become vested and exercisable and, in the case of shares of restricted stock,no longer subject to forfeiture. If a change of control occurs and, within 24 months, we terminate Dr. Armen’s employment without cause or if he terminateshis employment for good reason, he is entitled to receive from the Company: •a lump sum payment of 24 months of base salary plus two times the higher of his target annual incentive bonus for the year of termination orhis last actual annual incentive bonus, •coverage under our medical and dental plans for a period of 24 months following the date of termination, •a lump sum payment of $15,000 for outplacement assistance, •a gross-up for any taxes with respect to such outplacement assistance payment, •a gross-up payment for any taxes, interest and penalties imposed by Section 4999 of the Code, and •acceleration of vesting for all unvested stock options, performance shares and shares of restricted stock as of the date of termination.112Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Additionally, under Dr. Armen’s employment and change of control agreement, he is subject to non-competition and non-solicitation restrictions forthe greater of a period of 18 months post-termination or the period during which he is receiving post-termination payments from us. Executive Benefits and Payments Upon Termination orChange of Control Termination inConnection withaChange ofControl*($) Terminationwithout Causeorwith GoodReason*($) Base Salary 1,150,000 862,500 Bonus Payment 970,000 727,000 Acceleration of Vesting of Equity 639,654 N/A Perquisites and Other Personal Benefits 53,075 44,117 Gross-up Payments for Change of Control Excise Taxes 1,281,812 N/A Total: 4,094,541 1,634,617 We used the following assumptions to calculate these payments: •Represents the value associated with cashing out all stock options and performance shares that accelerate as a result of the event described inthe table, based on a stock price of $4.12, which was the closing market price of our common stock on December 30, 2016, the last business dayof 2016. Awards were valued based on the number of shares associated with each accelerated award multiplied by the difference between $4.12and the exercise price related to such award (if any). For purposes of the table, we have assumed that performance shares that accelerate vest atthe maximum amount. Upon a change of control without termination, the acceleration of vested equity would be valued at $616,322 •We assumed in each case that the termination of employment is without cause, Dr. Armen does not violate his non-competition or non-solicitation agreements with us following such termination, he does not receive medical and dental insurance coverage from another employerwithin two years of such termination, and he does not incur legal fees requiring reimbursement from us. •We used the same assumptions for health care benefits that we used for our financial reporting under generally accepted accounting principlesin the United States. •Gross-up payments assume a December 31, 2016 change of control and termination date. For purposes of these payments, the following areincluded as parachute payments: cash severance payable upon termination in connection with a change of control, the value of anyoutplacement services and benefits continuation due in the event of such a termination (including a tax gross-up in respect of outplacementservices), and the value of the acceleration of outstanding equity awards, all determined in accordance with applicable tax regulations. Wehave assumed that all outstanding options are cashed out in the assumed transaction for an amount equal to the excess, if any, of $4.12 (theclosing price of our common stock on December 30, 2016) over the exercise price per share under the option, multiplied by the number ofshares subject to the option. Finally, these figures assume that none of the parachute payments will be discounted as attributable to reasonablecompensation and no value is attributed to the executive executing a non-competition agreement in connection with the assumed terminationof employment.Other Named Executive OfficersUnder the employment and change of control agreement for Dr. Stein and Ms. Valentine, if we terminate Dr. Stein’s or Ms. Valentine’s employmentwithout cause or if Dr. Stein or Ms. Valentine terminates his/her employment following a material reduction in base salary or benefits (“CompensationReduction”), each of Dr. Stein and Ms. Valentine is entitled to receive from the Company: •his/her base salary for a period of 12 months plus a lump sum payment of the higher of his/her target annual incentive bonus for the year oftermination or his/her last actual annual incentive bonus, •coverage under our medical and dental plans for a period of 12 months following the date of termination, •a lump sum payment of $15,000 for outplacement assistance, •a gross-up for any taxes with respect to such outplacement assistance payment, •a gross-up payment for any taxes, interest and penalties imposed by Section 4999 of the Code, and •at the Compensation Committee’s discretion, the acceleration of vesting of any unvested equity awards.113Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Under the employment and change of control agreements for Dr. Stein and Ms. Valentine, upon a change of control: •100% of any of Dr. Stein’s or Ms. Valentine’s outstanding unvested performance shares as of the change of control date immediately vest (otherthan the March 2016 Performance Share Grant, which will vest based solely on the share price in the change of control transaction as describedabove). •50% of any of Dr. Stein’s or Ms. Valentine’s outstanding unvested stock options and shares of restricted stock as of the change of control datebecome vested and exercisable, and in the case of shares of restricted stock, no longer subject to forfeiture. •If a change of control occurs and, within 18 months, we terminate Dr. Stein’s or Ms. Valentine’s employment without cause or if Dr. Stein orMs. Valentine terminates his/her employment for a Compensation Reduction or good reason (as defined below), each of Dr. Stein andMs. Valentine is entitled to receive from the Company: •a lump sum payment of 18 months of base salary plus 150% of the higher of his/her target incentive bonus for that year or his/her lastactual incentive bonus, •coverage under our medical and dental plans for a period of 18 months following the date of termination, •a lump sum payment of $15,000 for outplacement assistance, •a gross-up for any taxes with respect to such outplacement assistance payment, •for Ms. Valentine only, gross-up payment for any taxes, interest and penalties imposed by Section 4999 of the Code, and •acceleration of vesting for all unvested stock options and shares of restricted stock as of the date of termination.Under the employment and change of control agreements for Dr. Stein and Ms. Valentine, “good reason” means the occurrence of any of the followingevents: (i)relocation of Dr. Stein’s or Ms. Valentine’s principal office, without their prior consent, to a location more than 30 miles away, (ii)failure of the Company to continue Dr. Stein or Ms. Valentine in the position held immediately prior to the change of control, or (iii)a material and substantial diminution in the nature or scope of his/her responsibilities, duties or authority.Under the change of control agreement with Ms. Klaskin, upon a change of control: •100% of any of Ms. Klaskin’s outstanding unvested performance shares as of the change of control date immediately vest (other than the March2016 Performance Share Grant, which will vest based solely on the share price in the change of control transaction as described above); •50% of each of Ms. Klaskin’s outstanding unvested stock options and shares of unvested restricted stock as of the change of control datebecome vested and exercisable, and in the case of restricted stock, no longer subject to forfeiture; and •If a change of control occurs and, within 18 months, we terminate Ms. Klaskin’s employment without cause or if Ms. Klaskin terminates heremployment for good reason, she is entitled to receive from the Company: •a lump sum payment of 18 months of base salary plus 150% of the higher of her target incentive bonus for the year of termination or herlast actual incentive bonus, •coverage under our medical and dental plans for 18 months following the date of termination, •a lump sum payment of $15,000 for outplacement assistance, •a gross-up for any taxes with respect to such outplacement assistance payment, and •the acceleration of vesting of all unvested stock options and unvested restricted stock as of the date of the change of control.Under the change of control agreement with Mr. Baysal, upon a change of control: •100% of the his outstanding unvested performance shares as of the change of control date immediately vest (other than the March 2016Performance Share Grant, which will vest based solely on the share price in the change of control transaction as described above); •50% of the his outstanding unvested stock options and shares of unvested restricted stock as of the change of control date become vested andexercisable, and in the case of restricted stock, no longer subject to forfeiture; and114Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. •If a change of control occurs and, within 18 months, we terminate the officer’s employment without cause or if the officer terminates hisemployment for good reason, he is entitled to receive from the Company: •a lump sum payment of 12 months of base salary plus 100% of the higher of his target incentive bonus for the year of termination or hislast actual incentive bonus, •coverage under our medical and dental plans for 12 months following the date of termination, •a lump sum payment of $10,000 for outplacement assistance, •a gross-up for any taxes with respect to such outplacement assistance payment, and •the acceleration of vesting of all unvested stock options and unvested restricted stock as of the date of the change of control.Under the change of control agreement with Ms. Klaskin and Mr. Baysal, “good reason” means: (i) a material reduction in his/her base salary, benefits,duties or responsibilities; or (ii) relocation of his/her principal office, without his/her consent, to a location to a location more than 30 miles away.Additionally, under Ms. Klaskin’s, Mr. Baysal’s, Dr. Stein’s and Ms. Valentine’s agreements, they are each subject to a non-competition and non-solicitation period for the greater of 12 months post-termination or the period during which the officer is receiving post-termination payments from us. Executive Benefits andPayments Upon Termination in Connection with aChange of Control*($) Termination without Cause or ForCompensation Reduction or withGood Reason*($) Terminationor Change of Control Dr.Stein Ms.Klaskin Mr.Baysal Ms.Valentine Ms.Klaskin Mr.Baysal Dr.Stein Ms.Valentine Base Salary 637,500 375,000 209,000 510,000 n/a n/a 425,000 340,000 Bonus Payment 300,000 153,000 95,000 315,000 n/a n/a 200,000 210,000 Acceleration of Vesting of Equity 423,177 95,268 143,363 216,667 n/a n/a n/a n/a Perquisites and Other Personal Benefits 55,106 19,557 12,385 51,648 n/a n/a 39,588 40,180 Gross-up Payments for Change of Control Excise Taxes n/a n/a n/a n/a n/a n/a n/a n/a Total: 1,415,783 642,825 459,748 1,093,315 n/a n/a 664,588 590,180 *We used the following assumptions to calculate these payments: •Represents the value associated with cashing out all stock options and performance shares and, for Mr. Baysal, restricted shares that accelerateas a result of the event described in the table, based on a stock price of $4.12, which was the closing market price of our common stock onDecember 30, 2016, the last business day of 2016. Awards were valued based on the number of shares associated with each accelerated awardmultiplied by the difference between $4.12 and the exercise price related to such award (if any). For purposes of the table, we have assumed thatperformance shares that accelerate vest at the maximum amount. Upon a change of control without termination, the acceleration of vestedequity would be valued at $349,094, $90,606, $125,567, and $210,604 for Dr. Stein, Ms. Klaskin, Mr. Baysal, and Ms. Valentine, respectively. •We assumed in each case that termination of employment is without cause, the executive does not violate his or her non-competition or non-solicitation agreements with us following such termination, the executive does not receive medical and dental insurance coverage from anotheremployer within 18 months of such termination, and the executive does not incur legal fees requiring reimbursement from us. •We used the same assumptions for health care benefits that we used for our financial reporting under generally accepted accounting principlesin the United States.115Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. •Gross-up payments assume a December 31, 2016 change of control and termination date. For purposes of these payments, the following areincluded as parachute payments: cash severance payable upon termination in connection with a change of control, the value of anyoutplacement services and benefits continuation due in the event of such a termination (including a tax gross-up in respect of outplacementservices), and the value of the acceleration of outstanding equity awards, all determined in accordance with applicable tax regulations. Wehave assumed that all outstanding options are cashed out in the assumed transaction for an amount equal to the excess, if any, of $4.12 (theclosing price of our common stock on December 30, 2016) over the exercise price per share under the option, multiplied by the number ofshares subject to the option. Finally, these figures assume that none of the parachute payments will be discounted as attributable to reasonablecompensation and no value is attributed to the executive executing a non-competition agreement in connection with the assumed terminationof employment.Change of Control Under Our 2009 Equity Incentive PlanUnder our 2009 Equity Incentive Plan, in the event of a change of control (as determined by the Board), the Board may make a provision for thecontinuation, acceleration or assumption or substitution of unvested options and restricted stock, or provide for a cash-out of outstanding awards.116Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.DIRECTOR COMPENSATIONThe following table shows the compensation paid or awarded to each non-employee director for his or her service as a non-employee director in 2016: Name Fees Earnedor Paidin Cash(1)($) OptionAwards(2)(3)($) All OtherCompensation($) Total($) Brian Corvese 70,000 79,030 — 149,030 Wadih Jordan 60,000 79,030 — 139,030 Shahzad Malik 57,500 79,030 — 136,530 Shalini Sharp 55,000 132,483 — 187,483 Ulf Wiinberg 37,500 171,921 209,421 Timothy Wright 102,500 79,030 — 181,530 (1)Includes fees earned in 2016 but deferred pursuant to our Directors’ Deferred Compensation Plan (as amended).(2)Amounts shown reflect the grant date fair value of options awarded during 2016 determined in accordance with ASC Topic 718, disregarding theeffects of estimated forfeitures. Please see the notes to our consolidated financial statements included on page 74 of this Form 10-K for the year endedDecember 31, 2016 for the assumptions used in valuing such awards. Each director was granted 35,000 options during 2016. Upon election to theBoard, Mr. Wiinberg was awarded 45,000 options.(3)Aggregate number of option awards held by each director as of December 31, 2016 was: Brian Corvese 117,916 Wadih Jordan 113,750 Shahzad Malik 93,750 Shalini Sharp 221,749 Ulf Wiinberg 80,000 Timothy Wright 134,251 Employee directors do not receive any additional compensation for their service as a director. Each year, the Compensation Committee reviews thecompensation we pay to our non-employee directors. The committee compares our Board compensation to compensation paid to non-employee directors bycompanies in our peer group, described above. The committee also considers the responsibilities that we ask our Board members to assume and the amount oftime required to perform those responsibilities.117Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Cash and Equity Compensation for Non-Employee Directors for 2016 Type of Fee Annual retainer $40,000 Additional annual retainer for Lead Director $20,000 Additional annual retainer for Audit and Finance Committee Chair $20,000 Additional annual retainer for Audit and Finance Committee member $10,000 Additional annual retainer for Compensation Committee Chair $20,000 Additional annual retainer for Compensation Committee member $10,000 Additional annual retainer for Corporate Governance and Nominating Committee Chair $15,000 Additional annual retainer for Corporate Governance and Nominating Committee member $7,500 Additional annual retainer for Business & Development Advisory Committee Chair $15,000 Additional annual retainer for Business & Development Advisory Committee member $7,500 Initial stock option grant(1) 45,000 shares Annual stock option grant(1) 35,000 shares (1)Each stock option grant vests over three years in equal annual installments. Any unvested portion vests automatically on the last day of the term of adirector who does not stand for reelection at the end of his or her term.Agenus also reimburses non-employee directors for reasonable travel and out-of-pocket expenses in connection with his or her service as director.Our Directors’ Deferred Compensation Plan (as amended) (the “DDCP”) permits each non-employee director to defer all or a portion of his or her cashcompensation until his or her service ends or until a specified date. A director may credit his or her deferred cash into an interest bearing account, an equityaccount, or a combination of both. As a matter of policy, directors are encouraged to elect to defer twenty-five percent of their cash compensation into anequity account under the DDCP.The Board has adopted a policy guideline that encourages directors to hold 10,000 shares of our common stock within a reasonable period of timefollowing their election or appointment to the Board. In addition to purchasing shares in the open market, directors may utilize the DDCP or the AgenusBoard Compensation Policy, which allows directors to receive their compensation in stock, to acquire these shares. In accordance with the requirements ofthe DDCP, elections to defer compensation thereunder must be made prior to the end of the third quarter of the prior calendar year. In some cases, a director,due to securities law restrictions, may be unable to purchase such shares until such election takes effect.Compensation Committee Interlocks and Insider ParticipationThe members of the Compensation Committee for the year ended December 31, 2016 were Mr. Jordan (Chair), Mr. Corvese, and Mr. Wright. Nomember of the Compensation Committee was at any time during 2016, or formerly, an officer or employee of Agenus or any subsidiary of Agenus. Noexecutive officer of Agenus has served as a director or member of a compensation committee (or other committee serving an equivalent function) of any otherentity while an executive officer of that other entity served as a director of Agenus or member of our Compensation Committee.118Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.COMPENSATION COMMITTEE REPORTThe Compensation Committee of the Board consists entirely of independent directors who are not officers or employees of Agenus. TheCompensation Committee charter is posted on the corporate governance section of our website at http://www.agenusbio.com/finance/corporate-governance.No material on our website is part of this Annual Report on Form 10-K.The Compensation Committee of the Board has reviewed and discussed with management the foregoing Compensation Discussion and Analysis, andbased on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be includedin this Annual Report on Form 10-K for filing with the SEC.By the Compensation Committee,Wadih Jordan (Chair)Brian CorveseTimothy R. Wright Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersEQUITY PLANSSecurities Authorized For Issuance Under Equity Compensation PlansThe following table provides information about the securities authorized for issuance under our equity compensation plans as of December 31, 2016: Plan Category Number ofSecurities to beIssued UponExercise ofOutstandingOptions,Warrants andRights(1) WeightedAverageExercise Price ofOutstandingOptions,Warrants andRights Number ofSecuritiesRemainingAvailable forFuture Issuanceunder EquityCompensationPlan(ExcludingSecuritiesReflected inColumn (a)) (a) (b) (c) Equity compensation plans approved by security holders 13,098,819 $4.53 4,763,761(2)Equity compensation plans not approved by security holders(3) 706,228 $4.42 793,772 Total 13,805,047 5,557,533 (1)Includes 12,665,950 shares subject to awards under our 2009 Equity Incentive Plan, assuming maximum achievement of all applicable performanceconditions, and 174,546 shares issuable under our DDCP at a weighted average price of $5.29.(2)Includes shares that may be issued under our 2009 Equity Incentive Plan and 2009 Employee Stock Purchase Plan and 78,373 shares available underour DDCP.(3)Represents the Agenus Inc. 2015 Inducement Equity Plan under which inducement grants may be made in accordance with NASDAQ rules.119Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.OWNERSHIP OF OUR COMMON STOCKOwnership By ManagementOn February 28, 2017, Agenus had 98,328,556 shares of common stock issued and outstanding. The table below shows certain information about thebeneficial ownership of Agenus common stock, as of February 28, 2017, by: •each of our directors, •each of our named executive officers, and •all of our directors and executive officers as a group.In accordance with SEC rules, we have included in the column “Number of Issued Shares” all shares of common stock over which the person has soleor shared voting or investment power as of February 28, 2017, and we have included in the column “Number of Shares Issuable” all shares of common stockthat the person has the right to acquire within 60 days after February 28, 2017 through the exercise of any stock options, the vesting of restricted shares, or inthe case of directors, any shares to be distributed under the DDCP. All shares that a person has a right to acquire within 60 days of February 28, 2017 aredeemed outstanding for the purpose of computing the percentage beneficially owned by the person, but are not deemed outstanding for the purpose ofcomputing the percentage beneficially owned by any other personUnless otherwise indicated, each person has the sole power (or shares the power with a spouse) to invest and vote the shares of common stock listedopposite the person’s name. Where applicable, ownership is subject to community property laws. Our inclusion of shares in this table as beneficially owned isnot an admission of beneficial ownership of those shares by the person listed in the table. Except as noted, the address of each stockholder is c/o Agenus Inc.,3 Forbes Road, Lexington, Massachusetts 02421. Name of beneficial owner Number ofIssuedShares Number ofSharesIssuable Total Percentof Class Garo H. Armen, Ph.D.(1) 1,318,477 2,178,131(2) 3,496,608 3.5%Wadih Jordan — 151,606(3) 151,606 * Timothy R. Wright 1,666 174,510(4) 176,176 * Brian Corvese — 66,249 66,249 * Shalini Sharp 104,270(6) 160,537 264,807 * Shahzad Malik, M.D(6) 1,587,302 46,249 1,633,551 1.7%Ulf Wiinberg 30,000 — 30,000 * Christine M. Klaskin 52,816 322,334 375,150 * Ozer Baysal 39,883 267,432 307,315 * Robert Stein, Ph.D. 20,986 491,661 512,647 * Karen H. Valentine 68,288 478,340 546,628 * All current directors and executive officers as a group (11 persons) 3,223,688 4,337,049(7) 7,560,737 7.4% *Less than one percent(1)Excludes shares owned through Antigenics Holdings LLC (“Holdings”). Dr. Armen is Chief Executive Officer, Chairman of the Board of Managersand a member of Holdings which owns 4,046 shares of our common stock.(2)Includes 284,785 shares issuable upon exercise of warrants.(3)Includes 85,357 deferred shares to be distributed in accordance with the terms of our DDCP.(4)Includes 87,760 deferred shares to be distributed in accordance with the terms of our DDCP.(5)Represents shares held by the Sharp Family Trust. Ms. Sharp is a trustee of the Sharp Family Trust.(6)Includes 54,556 and 1,532,746 shares beneficially owned by Advent Life Sciences and Advent Life Sciences Fund II, respectively, for whichDr. Malik is a General Partner and shares voting and investment authority over the shares. Dr. Malik disclaims beneficial ownership of such sharesexcept to the extent of his pecuniary interest therein.(7)Includes 173,117 deferred shares to be distributed in accordance with the terms of our DDCP and excludes shares held by Holdings as described infootnote (1).120Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Ownership By Certain Beneficial OwnersThis table shows certain information, based on filings with the SEC, about the beneficial ownership of our capital stock as of February 28, 2017 byeach person known to us owning beneficially more than 5% of any class of our capital stock. Unless otherwise indicated in a footnote to this table, eachperson has the sole power to invest and vote the shares of common stock listed opposite the person’s name. Name and Address of beneficial Owner Title of Class Number ofShares Percentof Class Brad M. Kelley Common 1,591,039 1.7%1410 Moran RoadFranklin, TN 37069-6300 Series A-1Preferred 31,620(1) 100%Incyte Corporation1801 Augustine Cut-OffWilmington, DE 19803 Common 17,763,968 18.1% (1)Mr. Kelley owns 31,620 shares of our Series A-1 Convertible Preferred Stock, our only shares of outstanding Series A-1 preferred stock. These shareshave an initial conversion price of $94.86 and are currently convertible into 333,333 shares of our common stock. If Mr. Kelley had converted all31,620 shares of Series A-1 Convertible Preferred Stock into shares of common stock as of January 31, 2017, he would have held 1,924,372 shares ofour common stock, or 2.2% of the shares outstanding. Item 13.Certain Relationships and Related Transactions, and Director IndependenceCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSRelated Party TransactionsChildren of Armenia FundOur Audit and Finance Committee approved a charitable contribution to the Children of Armenia Fund (“COAF”) totaling $125,000 for 2016.Dr. Garo H. Armen, Agenus’ Chairman and Chief Executive Officer, is the founder and chairman of COAF. The 2016 charitable contribution was comprised ofa cash component and a non-cash component. The cash component was $75,000, which Agenus paid in quarterly installments. The non-cash component was$50,000, which was the estimated value of a portion of Agenus’ office space in its New York office that was (and continues to be) made available to COAFemployees.IncyteIn January 2015, Agenus entered into a broad, global alliance with Incyte Corporation (“Incyte”) to discover, develop and commercialize novelimmuno-therapeutics using Agenus’ antibody platforms. The collaboration was initially focused on four CPM programs targeting GITR, OX40, TIM-3 andLAG-3, and in November 2015, the parties expanded the alliance by adding three novel undisclosed CPM targets. Pursuant to the terms of the originalagreement, Incyte made non-creditable, non-refundable upfront payments to Agenus totaling $25.0 million. Targets under the collaboration were designatedas either profit-share programs, where the parties shared all costs and profits equally, or royalty-bearing programs, where Incyte funded all costs, and Agenuswas eligible to receive milestones and royalties. Under the original collaboration agreement, programs targeting GITR, OX40 and two of the undisclosedtargets were designated as profit-share programs, while the other targets were royalty-bearing programs. For each profit-share product, Agenus was eligible toreceive up to $20.0 million in future contingent development milestones. For each royalty-bearing product, Agenus was eligible to receive (i) up to $155.0million in future contingent development, regulatory, and commercialization milestones and (ii) tiered royalties on global net sales at rates generally rangingfrom 6%-12%. Concurrent with the execution of the original collaboration agreement, the parties also entered into a stock purchase agreement pursuant towhich Incyte purchased approximately 7.76 million shares of Agenus common stock for an aggregate purchase price of $35.0 million, or approximately$4.51 per share. In February 2017, the parties amended the terms of the original collaboration agreement to, among other things, convert the GITR and OX40programs 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 programsrelating to two undisclosed targets were removed from the collaboration, with one reverting to Incyte and one to Agenus (the latter being Agenus’ TIGITantibody program), each with royalties on global net sales at a flat 15% rate. The remaining three royalty-bearing programs in the collaboration targetingTIM-3, LAG-3 and one undisclosed target remain unchanged, and there are no more profit-share programs under the collaboration. Pursuant to the amendedagreement, Agenus received accelerated milestone payments of $20.0 million from Incyte related to the clinical development of INCAGN1876 (anti-GITRagonist) and INCAGN1949 (anti-OX40 agonist). Across all programs in the collaboration, Agenus is now eligible to receive up to a total of $510.0 million infuture potential development, regulatory and commercial milestones.121Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Concurrent with the execution of the amendment agreement, the parties entered into a separate stock purchase agreement whereby Incyte purchased anadditional 10 million shares of Agenus common stock at $6.00 per share. Immediately following the transaction, Incyte owned approximately 18.1% ofAgenus’ outstanding common stock.Related Party Transaction Policies and ProceduresThe Audit and Finance Committee of the Board is responsible for reviewing and approving all material transactions with any related party on acontinuing basis. Related parties can include any of our directors or executive officers, certain of our stockholders, and their immediate family members. Thisobligation is set forth in writing in our Audit and Finance Committee Charter. A copy of the Audit and Finance Committee Charter is posted on the corporategovernance section of our website at http://investor.agenusbio.com/corporate-governance. No material on our website is part of this Annual Report on Form10-K. In evaluating related party transactions, our Audit and Finance Committee members apply the same standards of good faith and fiduciary duty theyapply to their general responsibilities as a committee of the Board and as individual directors. The Audit and Finance Committee will approve a related partytransaction when, in its good faith judgment, the transaction is fair to, and in the best interest of, Agenus.To identify related party transactions each year, we submit and require our directors and executive officers to complete Director and OfficerQuestionnaires identifying any transactions with us in which the officer or director or their family members have an interest. We also review related partytransactions due to the potential for a conflict of interest. A conflict of interest occurs when an individual’s private interest interferes, or appears to interfere,in any way with our interests. Our Code of Ethics requires all directors, officers, and employees who may have a potential or apparent conflict of interest toimmediately notify our Chief Compliance Officer for review and approval by management and our Corporate Governance and Nominating Committee. Acopy of our Code of Ethics is posted on the corporate governance section of our website at http://investor.agenusbio.com/corporate-governance. No materialon our website is part of this Annual Report on Form 10-K.Independence of DirectorsOur Governance Guidelines and NASDAQ listing rules provide that a majority of the Board should be composed of independent directors. TheCorporate Governance and Nominating Committee annually reviews the independence of the directors and reports to the Board which directors itrecommends that the Board determine are independent. The Board then makes the final determination. The Board takes into account NASDAQ listing rules,applicable laws and regulations, and other factors in making its determinations including potential conflicts of interest, transactions, and other relationshipsthat would reasonably be expected to compromise a director’s independence. The Board has determined that Mr. Corvese, Mr. Jordan, Dr. Malik, Ms. Sharp,Mr. Wiinberg, and Mr. Wright are currently independent directors. Dr. Armen is currently not an independent director because he is employed as our ChiefExecutive Officer. In making independence determinations with regard to other directors, the Board considered transactions between us and a director or adirector’s affiliates and any positions a director holds with entities with commercial relationships with us. Item 14.Principal Accounting Fees and ServicesAudit FeesFees incurred by us for professional services rendered by KPMG LLP for the audit of the annual consolidated financial statements and of the effectiveoperation of internal control over financial reporting, included in our Annual Report on Form 10-K, for the reviews of the consolidated financial statementsincluded in our Forms 10-Q and for comfort letters, consents and review of registration statements were $639,500 for 2016 and $836,100 for 2015.Audit-Related FeesFees paid to KPMG LLP for the audit of our 401(k) Retirement Plan were $29,000 in 2016 and $28,000 in 2015.Tax FeesFees paid to KPMG LLP associated with tax compliance and tax consultation services were $152,715 in 2016 and $15,134 in 2015.All Other FeesWe paid no other fees to KPMG LLP for 2016 or 2015.Pre-Approval of Audit and Non-Audit Services122Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.All of the KPMG LLP fees for 2016 and 2015 shown above were pre-approved by the Audit and Finance Committee. The Audit and FinanceCommittee pre-approves all audit and other permitted non-audit services provided by our independent registered public accounting firm. Pre-approval isgenerally provided for up to one year, is detailed as to the particular category of services and is subject to a monetary limit. Our independent registered publicaccounting firm and senior management periodically report to the Audit and Finance Committee the extent of services provided by the independentregistered public accounting firm in accordance with the pre-approval, and the fees for the services performed to date. The Audit and Finance Committee mayalso pre-approve particular services on a case-by-case basis. 123Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.PART IV Item 15.Exhibits and Financial Statement Schedules(a) 1. Consolidated Financial StatementsThe consolidated financial statements are listed under Item 8 of this Annual Report on Form 10-K.2. Financial Statement SchedulesThe financial statement schedules required under this Item and Item 8 are omitted because they are not applicable or the required information is shownin the consolidated financial statements or the footnotes thereto.3. ExhibitsThe exhibits are listed below under Part IV Item 15(b).(b) Exhibits Item 16.Form 10-K Summary None. 124Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit IndexExhibit No. Description 3.1 Amended and Restated Certificate of Incorporation of Antigenics Inc. Filed as Exhibit 3.1 to our Current Report on Form 8-K (File No. 0-29089) filed on June 10, 2002 and incorporated herein by reference. 3.1.1 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Antigenics Inc. Filed as Exhibit 3.1 to our CurrentReport on Form 8-K (File No. 0-29089) filed on June 11, 2007 and incorporated herein by reference. 3.1.2 Certificate of Ownership and Merger changing the name of the corporation to Agenus Inc. Filed as Exhibit 3.1 to our Current Report onForm 8-K (File No. 0-29089) filed on January 6, 2011 and incorporated herein by reference. 3.1.3 Certificate of Second Amendment to the Amended and Restated Certificate of Incorporation of Agenus Inc. Filed as Exhibit 3.1 to ourCurrent Report on Form 8-K (File No. 0-29089) filed on September 30, 2011 and incorporated herein by reference. 3.1.4 Certificate of Third Amendment to the Amended and Restated Certificate of Incorporation of Agenus Inc. Filed as Exhibit 3.1.4 to ourQuarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended June 30, 2012 and incorporated herein by reference. 3.1.5 Certificate of Fourth Amendment to the Amended and Restated Certificate of Incorporation of Agenus Inc. Filed as Exhibit 3.1 to ourCurrent Report on Form 8-K (File No. 0-29089) filed on April 25, 2014 and incorporated herein by reference. 3.1.6 Certificate of Fifth Amendment to the Amended and Restated Certificate of Incorporation of Agenus Inc. Filed as Exhibit 3.1 to ourCurrent Report on Form 8-K (File No. 0-29089) filed on June 16, 2016 and incorporated herein by reference. 3.3 Certificate of Designation, Preferences and Rights of the Series A Convertible Preferred Stock of Agenus Inc. filed with the Secretary ofState of the State of Delaware on September 24, 2003. Filed as Exhibit 3.1 to our Current Report on Form 8-K (File No. 0-29089) filed onSeptember 25, 2003 and incorporated herein by reference. 3.4 Certificate of Designations, Preferences and Rights of the Class B Convertible Preferred Stock of Agenus Inc. Filed as Exhibit 3.1 to ourCurrent Report on Form 8-K (File No. 0-29089) filed on September 5, 2007 and incorporated herein by reference. 3.5 Certificate of Designations, Preferences and Rights of the Series A-1 Convertible Preferred Stock of Agenus Inc. Filed as Exhibit 3.1 to ourCurrent Report on Form 8-K (File No. 0-29089) filed on February 5. 2013 and incorporated herein by reference. 4.1 Form of Common Stock Certificate. Filed as Exhibit 4.1 to our Current Report on Form 8-K (File No. 0-29089) filed on January 6, 2011and incorporated herein by reference. 4.2 Form of Amended and Restated Note under the Securities Purchase Agreement dated as of October 30, 2006 (as amended), by and amongAgenus Inc., a Delaware corporation and the investors listed on the Schedule of Buyers thereto. Filed as Exhibit 4.4 to our Annual Reporton Form 10-K (File No. 0-29089) for the year ended December 31, 2010 and incorporated herein by reference. 4.3 Form of Warrant under the Securities Purchase Agreement dated January 9, 2008. Filed as Exhibit 4.1 to our Current Report on Form 8-K(File No. 0-29089) filed on January 11, 2008 and incorporated herein by reference. 4.4 Purchase Agreement dated August 31, 2007 by and between Agenus Inc. and Fletcher International. Filed as Exhibit 99.1 to our CurrentReport on Form 8-K (File No. 0-29089) filed on September 5, 2007 and incorporated herein by reference. 4.5 Securities Purchase Agreement dated April 8, 2008. Filed as Exhibit 10.1 to our Current Report on Form 8-K (File No. 0-29089) filed onApril 10, 2008 and incorporated herein by reference. 4.6 Form of Warrant to purchase common stock dated April 9, 2008. Filed as Exhibit 4.1 to our Current Report on Form 8-K (File No. 0-29089)filed on April 10, 2008 and incorporated herein by reference. 4.7 Securities Purchase Agreement by and between Agenus Inc. and the investors identified on Schedule I attached to the agreement, datedJanuary 9, 2008. Filed as Exhibit 10.1 to our Current Report on Form 8-K (File No. 0-29089) filed on January 11, 2008 and incorporatedherein by reference. 4.8 Form of 4 Year Warrant under the Securities Purchase Agreement dated July 30, 2009. Filed as Exhibit 4.2 to our Current Report on Form8-K (File No. 0-29089) filed on August 3, 2009 and incorporated herein by reference. 125Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit No. Description 4.9 Form of 4 Year Warrant under the Securities Purchase Agreement dated August 3, 2009. Filed as Exhibit 4.2 to our Current Report on Form8-K (File No. 0-29089) filed on August 5, 2009 and incorporated herein by reference. 4.10 Securities Purchase Agreement dated as of July 30, 2009 by and among Agenus Inc. and the investors listed on the Schedule of Buyersthereto. Filed as Exhibit 10.1 to our Current Report on Form 8-K (File No. 0-29089) filed on August 3, 2009 and incorporated herein byreference. 4.11 Securities Exchange Agreement dated as of February 4, 2013 by and between Agenus Inc., and Mr. Brad Kelley. Filed as Exhibit 10.1 toour Current Report on Form 8-K (File No. 0-29089) filed on February 5, 2013 and incorporated herein by reference. 4.12 Note Purchase Agreement dated as of April 15, 2013 by and between Agenus Inc., and the Purchasers listed on Schedule 1.1 thereto. Filedas Exhibit 4.1 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2013 and incorporated herein byreference. 4.13 Form of Senior Subordinated Note under the Note Purchase Agreement dated as of April 15, 2013 by and between Agenus Inc., and thePurchasers listed on Schedule 1.1 thereto. Filed as Exhibit 4.2 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarterended March 31, 2013 and incorporated herein by reference. 4.14 Form of Warrant under the Note Purchase Agreement dated as of April 15, 2013 by and between Agenus Inc., and the Purchasers listed onSchedule 1.1 thereto. Filed as Exhibit 4.3 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2013and incorporated herein by reference. 4.15 Securities Exchange Agreement dated as of April 15, 2013 by and among Agenus Inc., Ingalls & Snyder Value Partners L.P. and ArthurKoenig. Filed as Exhibit 4.5 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2013 andincorporated herein by reference. 4.16 Securities Purchase Agreement, dated September 18, 2013, as amended, by and between Agenus Inc. and the investors party thereto. Filedas Exhibit 10.1 to our Current Report on Form 8-K (File No. 0-29089) filed on September 19, 2013 and incorporated herein by reference. 4.17 Form of Warrant under the Securities Purchase Agreement, dated September 18, 2013, as amended, by and between Agenus Inc. and theinvestors party thereto. Filed as Exhibit 4.1 to our Current Report on Form 8-K (File No. 0-29089) filed on September 19, 2013 andincorporated herein by reference. 4.18 Share Exchange Agreement, dated January 10, 2014, by and among Agenus Inc., 4-Antibody AG, certain shareholders of 4-Antibody AGand Vischer AG. Filed as Exhibit 2.1 to our Current Report on Form 8-K (File No. 0-29089) filed on January 13, 2014 and incorporatedherein by reference. 4.19 Securities Purchase Agreement dated as of August 3, 2009 by and among Agenus Inc. and the investors listed on the Schedule of Buyersthereto. Filed as Exhibit 10.1 to our Current Report on Form 8-K (File No. 0-29089) filed on August 5, 2009 and incorporated herein byreference. 4.20 Stock Purchase Agreement dated as of January 9, 2015, by and between Agenus Inc. and Incyte Corporation. Filed as Exhibit 4.21 to ourAnnual Report on Form 10-K (File No. 0-29089) for the year ended December 31, 2014 and incorporated herein by reference. 4.21(1) Amended and Restated Note Purchase Agreement dated as of February 20, 2015, as amended, by and between Agenus Inc. andthe Purchasers listed on Schedule 1.1 thereto. Filed as Exhibit 4.2 to our Quarterly Report on Form 10-Q (File No. 0-29089) for thequarter ended March 31, 2015 and incorporated herein by reference. 4.22 Form of Senior Subordinated Note under the Amended and Restated Note Purchase Agreement dated as of February 20, 2015,as amended, by and between Agenus Inc. and the Purchasers listed on Schedule 1.1 thereto. Filed as Exhibit 4.3 to our QuarterlyReport on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2015 and incorporated herein by reference. 4.23 Form of Warrant under the Amended and Restated Note Purchase Agreement dated as of February 20, 2015, as amended, byand between Agenus Inc. and the Purchasers listed on Schedule 1.1 thereto. Filed as Exhibit 4.4 to our Quarterly Report on Form10-Q (File No. 0-29089) for the quarter ended March 31, 2015 and incorporated herein by reference. 126Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit No. Description 4.24(1) Note Purchase Agreement, by and among Antigenics LLC, the guarantors named therein, Oberland Capital SA Zermatt LLC, as collateralagent (“Oberland”), an affiliate of Oberland as the lead purchaser and the other purchasers, dated September 4, 2015. Filed as Exhibit 4.1to our Current Report on Form 8-K/A (File No. 0-29089) filed on September 11, 2015 and incorporated herein by reference. 4.25 Form of Limited Recourse Note under the Note Purchase Agreement, by and among Antigenics LLC, the guarantors named therein,Oberland Capital SA Zermatt LLC, as collateral agent (“Oberland”), an affiliate of Oberland as the lead purchaser and the other purchasers,dated September 4, 2015. Filed as Exhibit 4.2 to our Current Report on Form 8-K/A (File No. 0-29089) filed on September 11, 2015 andincorporated herein by reference. 4.26 Revenue Interest Assignment and Termination Agreement, by and among Agenus Inc., Antigenics LLC, Ingalls & Snyder Value Partners,L.P. and Arthur Koenig, dated September 4, 2015. Filed as Exhibit 4.3 to our Current Report on Form 8-K/A (File No. 0-29089) filed onSeptember 11, 2015 and incorporated herein by reference. 4.27 Amendment to Notes and Warrants dated as of March 15, 2017 by and among Agenus Inc. and the Investors listed therein. Filed herewith. Employment Agreements and Compensation Plans 10.1* 1999 Equity Incentive Plan, as amended. Filed as Exhibit 10.1 to our Annual Report on Form10-K (File No. 0-29089) for the year ended December 31, 2008 and incorporated herein by reference. 10.1.1* Form of Non-Statutory Stock Option. Filed as Exhibit 10.1 to our Current Report on Form 8-K (File No. 0-29089) filed on December 15,2004 and incorporated herein by reference. 10.1.2* Form of 2007 Restricted Stock Award Agreement. Filed as Exhibit 10.1.5 to our Annual Report on Form 10-K (File No. 0-29089) for theyear ended December 31, 2007 and incorporated herein by reference. 10.1.3* Form of 2008 Restricted Stock Award Agreement. Filed as Exhibit 10.1 to our Current Report on Form 8-K (File No. 0-29089) filed onMarch 11, 2008 and incorporated herein by reference. 10.1.4* Sixth Amendment to the Agenus Inc. 1999 Equity Incentive Plan. Filed as Appendix D to our Definitive Proxy Statement on Schedule 14Afiled on April 27, 2009 and incorporated herein by reference. 10.2* Agenus Inc. Amended and Restated 2009 Equity Incentive Plan. Filed as Exhibit 10.1 to our Current Report on Form 8-K (File No. 0-29089) filed on June 16, 2016 and incorporated herein by reference. 10.2.1* Form of Restricted Stock Award Agreement for the Agenus Inc. Amended and Restated 2009 Equity Incentive Plan. Filed as Exhibit 10.2to our Current Report on Form 8-K (File No. 0-29089) filed on June 15, 2009 and incorporated herein by reference. 10.2.2* Form of Stock Option Agreement for the Agenus Inc. Amended and Restated 2009 Equity Incentive Plan. Filed asExhibit 10.3 to our Current Report on Form 8-K (File No. 0-29089) filed on June 15, 2009 and incorporated herein by reference. 10.3* Agenus Inc. 2009 Employee Stock Purchase Plan. Filed as Appendix B to our Definitive Proxy Statement on Schedule 14A filed on April27, 2009 and incorporated herein by reference. 10.4 Agenus Inc. Directors' Deferred Compensation Plan, as amended to date. Filed as Exhibit 10.4 to our Annual Report on Form 10-K (FileNo. 0-29089) for the year ended December 31, 2012 and incorporated herein by reference. 10.4.1 Seventh Amendment to Agenus Directors' Deferred Compensation Plan. Filed as Appendix C to our Definitive Proxy Statementon Schedule 14A filed on April 30, 2015 and incorporated herein by reference. 10.5* Amended and Restated Executive Change-in-Control Plan applicable to Christine M. Klaskin. Filed as Exhibit 10.1 to our Current Reporton Form 8-K (File No. 0-29089) filed on November 3, 2010 and incorporated herein by reference. 10.5.1* Modification of Rights in the Event of a Change of Control, dated as of June 14, 2012, by and between Agenus Inc. and ChristineKlaskin. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended June 30, 2012 andincorporated herein by reference. 10.6* 2004 Executive Incentive Plan, as amended. Filed as Exhibit 10.1 to our Current Report on Form 8-K (File No. 0-29089) filed on January27, 2011 and incorporated herein by reference. 10.6.1 Agenus Inc. 2016 Executive Incentive Plan. Filed as Exhibit 10.2 to our Current Report on Form 8-K (File No. 0-29089) filed on June 16,2016 and incorporated herein by reference.127Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit No. Description 10.8* Employment Agreement dated December 1, 2005 between Agenus Inc. and Garo Armen. Filed as Exhibit 10.1 to our Current Report onForm 8-K (File No. 0-29089) filed on December 7, 2005 and incorporated herein by reference. 10.8.1* First Amendment to Employment Agreement dated July 2, 2009 between Agenus Inc. and Garo Armen. Filed as Exhibit 10.1 to ourQuarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended September 30, 2009 and incorporated herein by reference. 10.8.2* Second Amendment to Employment Agreement dated December 15, 2010 between Agenus Inc. and Garo Armen. Filed as Exhibit 10.12.2to our Annual Report on Form 10-K (File No. 0-29089) for the year ended December 31, 2010 and incorporated herein by reference. 10.9* Employment Agreement dated September 16, 2008 between Agenus Inc. and Karen Valentine. Filed as Exhibit 10.1 to our Current Reporton Form 8-K (File No. 0-29089) filed on September 19, 2008 and incorporated herein by reference. 10.9.1* First Amendment to Employment Agreement dated July 2, 2009 between Agenus Inc. and Karen Valentine. Filed as Exhibit 10.3 to ourQuarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended September 30, 2009 and incorporated herein by reference. 10.9.2* Second Amendment to Employment Agreement dated December 15, 2010 between Agenus Inc. and Karen Valentine. Filed as Exhibit10.20.2 to our Annual Report on Form 10-K (File No. 0-29089) for the year ended December 31, 2010 and incorporated herein byreference. 10.10* Employment Agreement dated February 20, 2007 between Agenus Inc. and Kerry Wentworth. Filed as Exhibit 10.2 to our Current Reporton Form 8-K (File No. 0-29089) filed on February 26, 2007 and incorporated herein by reference. 10.10.1* First Amendment to Employment Agreement dated July 2, 2009 between Agenus Inc. and Kerry Wentworth. Filed as Exhibit 10.4 to ourQuarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended September 30, 2009 and incorporated herein by reference. 10.10.2* Second Amendment to Employment Agreement dated December 15, 2010 between Agenus Inc. and Kerry Wentworth. Filed as Exhibit10.11.2 to our Annual Report on Form 10-K (File No. 0-29089) for the year ended December 31, 2010 and incorporated herein byreference. 10.11* Agenus Inc. 2015 Inducement Equity Plan. Filed as Exhibit 4.14 to our Registration Statement on Form S-8 (File No. 333-209074) filed onJanuary 21, 2016 and incorporated herein by reference. 10.11.1* Form of Stock Option Agreement for the Agenus Inc. 2015 Inducement Equity Plan. Filed as Exhibit 4.15 to our Registration Statement onForm S-8 (File No. 333-209074) filed on January 21, 2016 and incorporated herein by reference. 10.11.2* Form of Restricted Stock Award Agreement for the Agenus Inc. 2015 Inducement Equity Plan. Filed as Exhibit 4.16 to our RegistrationStatement on Form S-8 (File No. 333-209074) filed on January 21, 2016 and incorporated herein by reference. 10.11.3* Form of Restricted Stock Unit Agreement for the Agenus Inc. 2015 Inducement Equity Plan. Filed as Exhibit 4.17 to our RegistrationStatement on Form S-8 (File No. 333-209074) filed on January 21, 2016 and incorporated herein by reference. 10.12* Agreement by and between Agenus Inc. and C. Evan Ballantyne dated June 8, 2015. Filed as Exhibit 10.1 to our Current Reporton Form 8-K (File No. 0-29089) filed on June 17, 2015 and incorporated herein by reference. 10.13* Non-Qualified Stock Option Inducement Award Agreement by and between Agenus Inc. and C. Evan Ballantyne effective June17, 2015. Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended June 30, 2015 andincorporated herein by reference. 10.14* Employment Agreement dated June 30, 2015 between Agenus Inc. and Dr. Robert Stein. Filed as Exhibit 10.1 to our CurrentReport on Form 8-K (File No. 0-29089) filed on June 30, 2015 and incorporated herein by reference. 10.15* Form of Restricted Stock Unit Agreement for the Agenus Inc. Amended and Restated 2009 Equity Incentive Plan. Filed asExhibit 10.2 to our Current Report on Form 8-K (File No. 0-29089) filed on June 30, 2015 and incorporated herein by reference. 10.16* Employment Agreement dated March 10, 2017 between Agenus Inc. and Dr. Jean-Marie Cuillerot. Filed herewith. 128Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit No. Description License and Collaboration Agreements 10.17(1) Patent License Agreement between Agenus Inc. and Mount Sinai School of Medicine dated November 1, 1994, as amended on June 5,1995. Filed as Exhibit 10.8 to our registration statement on Form S-1 (File No. 333-91747) and incorporated herein by reference. 10.18(1) License Agreement between the University of Connecticut Health Center and Agenus Inc. dated May 25, 2001, as amended on March 18,2003. Filed as Exhibit 10.2 to the Amendment No. 1 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March31, 2003 and incorporated herein by reference. 10.18.1(1) Letter Agreement by and between Agenus Inc. and The University of Connecticut Health Center dated May 11, 2009. Filed as Exhibit 10.5to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended June 30, 2009 and incorporated herein by reference. 10.18.2(1) Amendment Number Two to License Agreement by and between Agenus Inc. and The University of Connecticut Health Center dated June5, 2009. Filed as Exhibit 10.6 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended June 30, 2009 andincorporated herein by reference. 10.19(1) License Agreement by and between Agenus Inc. and GlaxoSmithKline Biologicals SA dated July 6, 2006. Filed as Exhibit 10.1 to ourQuarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended June 30, 2006 and incorporated herein by reference. 10.20(1) Amended and Restated Manufacturing Technology Transfer and Supply Agreement by and between Agenus Inc. and GlaxoSmithKlineBiologicals SA dated January 19, 2009. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarterended March 31, 2009 and incorporated herein by reference. 10.21(1) First Right to Negotiate and Amendment Agreement between Agenus Inc., Antigenics LLC and GlaxoSmithKline Biologicals SA, datedMarch 2, 2012. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2012 andincorporated herein by reference. 10.22(1) Revenue Interests Assignment Agreement dated as of April 15, 2013 by and among Agenus Inc., Ingalls & Snyder Value Partners L.P.,Arthur Koenig and Antigenics LLC. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q (File No. 0-029089) for the quarter endedMarch 31, 2013 and incorporated herein by reference. 10.23(1) License Agreement dated as of December 5, 2014 by and between 4-Antibody AG, a limited liability company organized under the laws ofSwitzerland (and wholly-owned subsidiary of Agenus Inc.) and Ludwig Institute for Cancer Research Ltd. Filed as Exhibit 10.21 to ourAnnual Report on Form 10-K (File No. 0-29089) for the year ended December 31, 2014 and incorporated herein by reference. 10.24(1) License, Development and Commercialization Agreement dated as of January 9, 2015 by and among Agenus Inc., 4-Antibody AG, alimited liability company organized under the laws of Switzerland (and wholly-owned subsidiary of Agenus Inc.), Incyte Corporation andIncyte Europe Sarl, a Swiss limited liability company (and wholly-owned subsidiary of Incyte Corporation). Filed as Exhibit 10.22 to ourAnnual Report on Form 10-K (File No. 0-29089) for the year ended December 31, 2014 and incorporated herein by reference. 10.25(1) License Agreement dated March 19, 2013, as amended, by and between the University of Virginia Patent Foundation d/b/a University ofVirginia Licensing and Ventures Group and Agenus Inc. (as successor by merger to PhosImmune Inc.). Filed as Exhibit 10.24 to our AnnualReport on Form 10-K (File No. 0-29089) for the year ended December 31, 2015 and incorporated herein by reference. 10.26(1) License Agreement dated as of January 25, 2016 by and among Agenus Inc., 4-Antibody AG, a limited liability company organized underthe laws of Switzerland (and wholly-owned subsidiary of Agenus Inc.), and Ludwig Institute for Cancer Research Ltd. Filed as Exhibit10.24 to our Annual Report on Form 10-K (File No. 0-29089) for the year ended December 31, 2015 and incorporated herein by reference. Real Estate Leases 10.27 Lease of Premises at 3 Forbes Road, Lexington, Massachusetts dated as of December 6, 2002 from BHX, LLC, as Trustee of 3 Forbes RealtyTrust, to Agenus Inc. Filed as Exhibit 10.1 to our Current Report on Form 8-K (File No. 0-29089) filed on January 8, 2003 and incorporatedherein by reference. 10.27.1 First Amendment of Lease dated as of August 15, 2003 from BHX, LLC, as trustee of 3 Forbes Road Realty, to Agenus Inc. Filed as Exhibit10.1 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2004 and incorporated herein by reference.129Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit No. Description 10.27.2 Second Amendment of Lease dated as of March 7, 2007 from BHX, LLC as trustee of 3 Forbes Road Realty, to Agenus Inc. Filed as Exhibit10.1 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2007 and incorporated herein by reference. 10.27.3 Third Amendment to Lease dated April 23, 2008 between TBCI, LLC, as successor to BHX, LLC, as Trustee of 3 Forbes Road Realty Trust,and Agenus Inc. Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended June 30, 2008 andincorporated herein by reference. 10.27.4 Fourth Amendment to Lease dated September 30, 2008 between TBCI, LLC, as successor to BHX, LLC, as Trustee of 3 Forbes Road RealtyTrust, and Agenus Inc. Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended September 30,2008 and incorporated herein by reference. 10.27.5 Fifth Amendment to Lease dated April 11, 2011 between TBCI, LLC, as successor to BHX, LLC, as Trustee of 3 Forbes Road Realty Trust,and Agenus Inc. Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2011 andincorporated herein by reference. 10.28 Standard Form of Office Lease dated December 13, 2012 between 149 Fifth Ave. Corp. and Agenus Inc. Filed as Exhibit 10.22 to ourAnnual Report on Form 10-K (File No. 0-29089) for the year ended December 31, 2012 and incorporated herein by reference. 10.29 Sublease Agreement between 4-Antibody AG, and Technologie Park Basel AG dated January 28, 2011. Filed as Exhibit 10.3 to ourQuarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2014 and incorporated herein by reference. 10.29.1 Addendum to the Lease Agreement from January 28, 2011 between 4-Antibody AG and Technologie Park Basel AG dated March 31, 2012.Filed as Exhibit 10.3.1 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2014 and incorporatedherein by reference. 10.29.2 Addendum No. 4 to the Lease Agreement from January 28, 2011 between 4-Antibody AG and Technologie Park Basel AG dated June2013. Filed as Exhibit 10.3.2 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2014 andincorporated herein by reference. 10.29.3 Addendum No. 5 to the Lease Agreement from January 28, 2011 between 4-Antibody AG and Technologie Park Basel AG dated April 30,2013. Filed as Exhibit 10.3.3 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2014 andincorporated herein by reference. 10.29.4 Addendum No. 6 to the Lease Agreement from January 28, 2011 between 4-Antibody AG and Technologie Park Basel AG dated July 31,2013. Filed as Exhibit 10.3.4 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2014 andincorporated herein by reference. 10.30 Commercial Lease Agreement No. 01/2003 between BioCentiv GmbH and 4-Antibody AG dated December 1, 2002. Filed as Exhibit 10.4to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2014 and incorporated herein by reference. 10.30.1 20th Addendum to Commercial Lease Agreement No. 01/2003 between BioCentiv GmbH and 4-Antibody AG dated November 1, 2010.Filed as Exhibit 10.4.1 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2014 and incorporatedherein by reference. 10.30.2 28th Addendum to Commercial Lease Agreement No. 01/2003 between BioCentiv GmbH and 4-Antibody AG dated July 2, 2013. Filed asExhibit 10.4.2 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2014 and incorporated herein byreference. 10.30.3 29th Addendum to Commercial Lease Agreement No. 01/2003 dated between BioCentiv GmbH and 4-Antibody AG August 9, 2013. Filedas Exhibit 10.4.3 to our Quarterly Report on Form 10-Q (File No. 0-29089) for the quarter ended March 31, 2014 and incorporated hereinby reference. Sales Agreement 10.31 At Market Issuance Agreement, dated as of October 24, 2014, by and between Agenus Inc. and MLV & Co. LLC. Filed as Exhibit 1.2 toour Registration Statement on Form S-3 (File No. 333-199255) and incorporated herein by reference. 21.1 Subsidiaries of Agenus Inc. Filed herewith. 23.1 Consent of KPMG LLP, independent registered public accounting firm. Filed herewith.130Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit No. Description 31.1 Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, asamended. Filed herewith. 31.2 Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, asamended. Filed herewith. 32.1 Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002. Submitted herewith. 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Label Linkbase Document 101.PRE XBRL Taxonomy Presentation Linkbase Document *Indicates a management contract or compensatory plan.(1)Certain confidential material contained in the document has been omitted and filed separately with the Securities and Exchange Commission pursuantto Rule 406 of the Securities Act or Rule 24b-2 of the Securities Exchange Act. 131Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized. AGENUS INC. By: /s/ GARO H. ARMEN, PH.D. Garo H. Armen, Ph.D. Chief Executive Officer and Chairman of the Board Dated: March 16, 2017Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated. Signature Title Date /S/ GARO H. ARMEN, PH.D. Chief Executive Officer and Chairman of the March 16, 2017Garo H. Armen, Ph.D. Board of Directors (Principal Executive Officer) /S/ CHRISTINE M. KLASKIN Vice President Finance March 16, 2017Christine M. Klaskin (Principal Financial and Accounting Officer) /S/ ULF WIINBERG Director March 16, 2017Ulf Wiinberg /S/ BRIAN CORVESE Director March 16, 2017Brian Corvese /S/ WADIH JORDAN Director March 16, 2017Wadih Jordan /S/ SHAHZAD MALIK Director March 16, 2017Shahzad Malik /S/ SHALINI SHARP Director March 16, 2017Shalini Sharp /S/ TIMOTHY R. WRIGHT Director March 16, 2017Timothy R. Wright 132Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 4.27AMENDMENT TO NOTES AND WARRANTS This Amendment to Notes and Warrants (this “Amendment”) is entered into this 15th day of March, 2017 by and between(a) Agenus Inc., a Delaware corporation, having an address at 3 Forbes Road, Lexington, MA 02421 (the “Company”), and (b) MarkBerg, Nicole Berg, Alice Saraydarian and Khajak Keledjian (collectively, the “Original Investors”) and (c) Nicky V LLC and MSBResearch Inc. (together, the “Additional Investors” and collectively with the Original Investors, the “Investors”). WITNESSETH WHEREAS, the Company and the Original Investors are parties to that certain Note Purchase Agreement dated April 15,2013, pursuant to which the Company issued to the Original Investors, among other things, warrants to purchase an aggregate of500,000 shares of common stock of the Company that expire on April 17, 2017 (the “2013 Warrants”); WHEREAS, the Company, the Original Investors and the Additional Investors are parties to that certain Amended andRestated Note Purchase Agreement dated February 20, 2015, as amended (the “2015 Purchase Agreement”), pursuant to which theCompany issued to the Original Investors and the Additional Investors, among other things, 8% senior subordinated notes that matureon February 20, 2018 (the “2015 Notes”); WHEREAS, the parties now wish to (i) extend the term of the 2013 Warrants by two years from April 17, 2017 to April17, 2019 and (ii) extend the maturity date of the 2015 Notes by two years from February 20, 2018 to February 20, 2020; and WHEREAS, Section 5.13(a) of the 2015 Purchase Agreement provides that the 2015 Notes may be amended by thePurchasers of Notes (as defined therein) representing at least a majority of the aggregate principal amount outstanding under all of the2015 Notes (the “Required Investors”), and the undersigned Investors constitute (i) the Required Investors and (ii) all of the holdersof the 2013 Warrants. NOW, THEREFORE, the parties hereby agree as follows: 1.Section 2 of each of the 2013 Warrants is hereby deleted in its entirety and replaced with the following: “Term of Warrant. Subject to the terms and conditions hereof, at any time or from time to time after the datehereof and prior to 5:00 p.m., New York City time, on the sixth (6th) anniversary of the date hereof or, if suchday is not a Business Day, on the next preceding Business Day (the “Exercise Period”), the Holder of thisWarrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject toadjustment as provided herein).”Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 2.The maturity date for each of the 2015 Notes is hereby extended by two years from February 20, 2018 to February 20,2020. 3.The parties acknowledge and agree that, except as set forth in this Amendment, the 2013 Warrants and 2015 Notesshall remain in full force and effect. 4.This Amendment shall be governed by and construed in accordance with the laws of the State of New Yorkirrespective of any conflicts of law principles thereof. 5.This Amendment may be executed in counterparts, which, when taken together, shall constitute one agreement. If anysignature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid andbinding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if suchfacsimile or “.pdf” signature page were an original thereof. [Signature Page Follows] Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respectiveauthorized officers as of the day and year first above written.COMPANY:AGENUS INC.By:_/s/ Christine Klaskin____Name: Christine KlaskinTitle: VP, Finance INVESTORS: /s/ Mark BergMark Berg/s/ Nicole BergNicole Berg/s/ Alice SaraydarianAlice Saraydarian/s/ Khajak KeledjianKhajak KeledjianNICKY V LLCBy:_/s/ Nicole Berg_______Name: Nicole BergTitle: OwnerMSB RESEARCH INC.By:_/s/ Mark Berg________Name: Mark BergTitle: PresidentSource: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 10.16AGREEMENT AGREEMENT made and entered into in Lexington, MA, by and between Agenus Inc. (the “Company”), a Delawarecorporation with a principal place of business at 3 Forbes Rd. Lexington, MA 02421, and Jean-Marie Cuillerot, MD (the “Executive”),effective as of this 10th day of March, 2017 (the “Effective Date”) (the “Agreement”). Words or phrases which are initially capitalizedor are within quotation marks shall have the meanings provided in Section 14 below and as provided elsewhere herein. WHEREAS, the operations of the Company and its Affiliates are a complex matter requiring direction and leadership in avariety of arenas;WHEREAS, the Executive is possessed of certain experience and expertise that qualify him/her to provide the direction andleadership required by the Company; andWHEREAS, subject to the terms and conditions hereinafter set forth, the Company therefore wishes to promote andcontinue to employ the Executive and the Executive wishes to accept such promotion and continued employment;NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, terms, provisions and conditionsset forth in this Agreement, the parties hereby agree:1. Employment. Subject to the terms and conditions set forth in this Agreement, the Company hereby offers and theExecutive hereby accepts continued employment.2. Term.This Agreement will continue in effect until terminated in accordance with Section 5 hereof. The term of thisAgreement is hereafter referred to as “Term”.3. Capacity and Performance.(a) During the Term hereof, the Executive shall be employed by the Company on a full-time basis and shallperform such duties and responsibilities on behalf of the Company and its Affiliates as may be designated from time to time consistentwith his/her position. In addition, and without further compensation, the Executive shall serve as a director and/or officer of one ormore of the Company's Affiliates if so elected or appointed from time to time. (b) During the Term hereof, the Executive shall devote his/her best efforts, business judgment, skill andknowledge to the advancement of the business and interests of the Company and its Affiliates and to the discharge of his/her duties andresponsibilities hereunder. The Executive shall not engage in any other business activity or serve in any industry, trade, professional,governmental or academic position during the Term of this Agreement, except as may be approved by the Board of Directors of theCompany (the “Board”) or its designee. Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 4. Compensation and Benefits. As compensation for all services performed by the Executive under and during the Termhereof and subject to performance of the Executive's duties and of the obligations of the Executive to the Company and its Affiliates,pursuant to this Agreement or otherwise:(a) Base Salary. During the Term hereof, the Company shall pay the Executive a minimum base salary at the rateof four hundred thousand dollars ($400,000) per annum, payable in accordance with the payroll practices of the Company for itsexecutives and subject to increase by the Board, in its sole discretion. Such base salary, as from time to time increased, is hereafterreferred to as the “Base Salary”. The Board shall review the Base Salary no less than annually.(b) Incentive and Bonus Compensation. During the Term hereof, the Executive shall be entitled to participate inthe Company’s Executive Incentive Plan to the extent eligible and in accordance with the terms thereof, as such terms may be modifiedor amended by the Company from time to time; provided, however, that nothing contained herein shall obligate the Company tocontinue such incentive compensation program. The Executive’s target incentive bonus under the Executive Incentive Plan is 40% ofhis/her Base Salary, with the actual bonus, if any, to be determined by the Board in accordance with the terms of the ExecutiveIncentive Plan. Such target may be modified by the Company from time to time, in its sole discretion. Any compensation paid to theExecutive under the Executive Incentive Plan shall be in addition to the Base Salary. (c) Stock Options. At the discretion of the Compensation Committee of the Board, the Executive may be grantedadditional options to purchase shares of stock of the Company in the future. Any existing or future grants shall be governed by theterms of the applicable Company stock option plan, as amended from time to time, and any stock option certificate, stock optionagreement, and other restrictions generally applicable to Company stock options. (d) Vacations. During the Term hereof, the Executive shall be entitled to accrue four weeks of vacation perannum, to be taken at such times and intervals as shall be determined by the Executive, subject to the reasonable business needs of theCompany. Vacation shall otherwise be governed by the policies of the Company, as in effect from time to time. (e) Other Benefits. During the Term hereof and subject to any contribution therefor generally required ofemployees (including executives) of the Company, the Executive shall be entitled to participate in any and all employee benefit plansfrom time to time in effect for employees of the Company generally, except to the extent such plans are in a category of benefitotherwise provided to the Executive. Such participation shall be subject to (i) the terms of the applicable plan documents, (ii) generallyapplicable Company policies and (iii) the discretion of the Board or any administrative or other committee provided for in orcontemplated by such plan. The Company may alter, modify, add to or delete its employee benefit plans at any time as it, in its solejudgment, determines to be appropriate, without recourse by the Executive. -2- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (f) Business Expenses. The Company shall pay or reimburse the Executive for all reasonable, customary andnecessary business expenses incurred or paid by the Executive in the performance of his/her duties and responsibilities hereunder,subject to any maximum annual limit and other restrictions on such expenses as set forth in the Company’s Travel Policy as may beamended from time to time, and to such reasonable substantiation and documentation as may be specified by the Company from timeto time. The Executive’s right to payment or reimbursement for business expenses hereunder shall be subject to the followingadditional rules: (i) the amount of expenses eligible for payment or reimbursement during any calendar year shall not affect theexpenses eligible for payment or reimbursement in any other calendar year, (ii) payment or reimbursement shall be made not later thanDecember 31 of the calendar year following the calendar year in which the expense or payment was incurred, and (iii) the right topayment or reimbursement is not subject to liquidation or exchange for any other benefit.5. Termination of Employment and Severance Benefits. Notwithstanding the provisions of Section 2 hereof, but subject toSection 6 hereof, the Executive's employment hereunder shall terminate prior to the expiration of the Term under the followingcircumstances:(a) Death. In the event of the Executive's death during the Term hereof, the Executive's employment hereundershall immediately and automatically terminate. In the event of the Executive's death during the Term hereof, the Company shall pay tothe Executive's designated beneficiary or, if no beneficiary has been designated by the Executive, to his/her estate, any earned andunpaid Base Salary and accrued but unused vacation through the date of his/her death (all of the foregoing, “FinalCompensation”). The Company shall have no further obligation or liability to the Executive.(b) Disability. (i) The Company may terminate the Executive's employment hereunder, upon notice to the Executive,in the event that the Executive becomes disabled during his/her employment hereunder through any illness, injury, accidentor condition of either a physical or psychological nature and, as a result, is unable to perform substantially all of his/herduties and responsibilities hereunder, with or without a reasonable accommodation, for ninety (90) days during any period ofthree hundred and sixty-five (365) consecutive calendar days. (ii) The Board may designate another employee to act in the Executive's place during any period of theExecutive's disability. Notwithstanding any such designation, the Executive shall continue to receive the Base Salary inaccordance with Section 4(a) and benefits in accordance with Section 4(e), to the extent permitted by the then-current termsof the applicable benefit plans, until the Executive becomes eligible for disability income benefits under the Company'sdisability income plan or until the termination of his/her employment, whichever shall first occur. -3- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (iii) While receiving disability income payments under the Company's disability income plan, theExecutive shall not be entitled to receive any Base Salary under Section 4(a) hereof, but shall continue to participate inCompany benefit plans in accordance with Section 4(e) and the terms of such plans, until the termination of his/heremployment.(iv) If any question shall arise as to whether during any period the Executive is disabled through anyillness, injury, accident or condition of either a physical or psychological nature so as to be unable to perform substantially allof his/her duties and responsibilities hereunder, the Executive may, and at the request of the Company shall, submit to amedical examination by a physician selected by the Company to whom the Executive or his/her duly appointed guardian, ifany, has no reasonable objection to determine whether the Executive is so disabled and such determination shall for thepurposes of this Agreement be conclusive of the issue. If such question shall arise and the Executive shall fail to submit tosuch medical examination, the Company's determination of the issue shall be binding on the Executive.(v) In the event the Company terminates the Executive’s employment hereunder due to disability, theCompany shall pay to the Executive any Final Compensation due to the Executive. The Company shall have no furtherobligation or liability to the Executive.(c) By the Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause atany time upon notice to the Executive setting forth in reasonable detail the nature of such Cause. The following, as determined by theCompany in its reasonable judgment, shall constitute Cause for termination:(i) The Executive’s failure to perform (other than by reason of disability), or negligence in theperformance of, his/her duties and responsibilities to the Company or any of its Affiliates; or(ii) Material breach by the Executive of any provision of this Agreement; or(iii) Other conduct by the Executive that is, or could reasonably be expected to be, materially harmful tothe business, interests or reputation of the Company or any of its Affiliates.Upon the giving of notice of termination of the Executive's employment hereunder for Cause, the Company shall have nofurther obligation or liability to the Executive, other than for any Final Compensation due to the Executive. -4- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (d) By the Company Other than for Cause. The Company may terminate the Executive's employment with theCompany other than for Cause at any time upon notice to the Executive. In the event of such termination, in addition to any FinalCompensation due to the Executive, the Company shall provide the Executive the following (in the aggregate, the “SeveranceBenefits”): (i) the Company will continue to pay the Executive his/her Base Salary, at the rate in effect on the date of termination, untilthe conclusion of a period of twelve (12) months following the date of termination, (ii) the Company shall pay to the Executive in onelump sum an amount equal to the higher of (x) the Executive’s target incentive bonus under the Executive Incentive Plan for the yearin which the Executive’s employment is terminated or (y) the actual incentive bonus paid to the Executive, if any, under the ExecutiveIncentive Plan for the last full fiscal year preceding the year in which the Executive’s employment is terminated, (iii) the Companyshall also, until the conclusion of a period of twelve (12) months following the date of termination, pay the Executive an amount equalto the full premium cost of the Executive's participation in the Company's group medical and dental insurance plans pursuant to thefederal law known as COBRA, provided that the Executive is entitled to continue such participation under applicable law and planterms, and (iv) the Company will also provide the Executive with an outplacement assistance benefit in the form of a lump-sumpayment of $15,000 plus an additional lump-sum payment in an amount sufficient, after giving effect to all federal, state and othertaxes with respect to such additional payment, to make Executive whole for all taxes (including withholding taxes) on suchoutplacement assistance benefit. Furthermore, at the sole discretion of the Compensation Committee of the Board, any unvestedoptions to purchase Company stock may be accelerated. Notwithstanding anything in the Agreement to the contrary, in the event anyprovision contained in this Agreement regarding payment or assistance to the Executive related to the continuation of healthcarecoverage for the Executive would cause the Company to violate the anti-discrimination rules of the healthcare reform laws known asthe Patient Protection and Affordable Care Act, or would otherwise result in the imposition of taxes or penalties on the Company, suchprovision shall be a nullity.(e) By the Executive for a Compensation Reduction. The Executive may terminate his/her employment hereunderbased on a material reduction in Base Salary or benefits due in accordance with the terms of this Agreement (“CompensationReduction”), provided that Executive provides notice to the Company setting forth in reasonable detail the nature of suchCompensation Reduction, and provided further that the Company shall have thirty (30) days from such notice to cure suchreduction. In the event of termination in accordance with this Section 5(e), the Executive will be entitled to receive the SeveranceBenefits he/she would have been entitled to receive had he/she been terminated by the Company other than for Cause pursuant toSection 5(d) above. Notwithstanding anything in this Section 5(e) to the contrary, this Section 5(e) shall only be applicable if theExecutive provides notice to the Company of the Compensation Reduction within 30 days following the initial existence of thecondition claimed by the Executive to be a Compensation Reduction, and the Executive, in fact, terminates employment with theCompany within 90 days of the initial existence of such condition. -5- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (f) By the Executive Other than for a Compensation Reduction. The Executive may terminate his/heremployment hereunder at any time upon 120 days’ notice to the Company, unless such termination would violate any obligation of theExecutive to the Company under a separate severance agreement. In the event of termination of the Executive pursuant to this Section5(f), the Board may elect to waive the period of notice, or any portion thereof, and, if the Board so elects, the Company will pay theExecutive his/her Base Salary for the notice period (or for any remaining portion of the period so waived). The Company shall alsopay the Executive any Final Compensation due him/her.(g) Upon a Change in Control.(i) If a Change in Control occurs, on the date of such Change in Control fifty-percent (50%) of anystock options or shares of restricted stock of the Company previously granted or issued to the Executive that are outstandingand unvested as of the date of the Change in Control shall become vested, exercisable and, in the case of shares of restrictedstock, no longer subject to forfeiture, provided that the Executive is employed by the Company on the date of such Changein Control.(ii) If a Change in Control occurs and within eighteen (18) months following such Change in Control,the Company terminates the Executive’s employment other than for Cause, or the Executive terminates his/her employmentas a result of a Compensation Reduction or for Good Reason (as defined herein), then, in lieu of any payments to or onbehalf of the Executive under Section 5(d) or 5(e) hereof, but in addition to any Final Compensation due to the Executive,the Company shall provide the Executive the following (in the aggregate, the “Change in Control Severance Benefits”): (A)the Company shall pay to the Executive in one lump sum an amount equal to (x) eighteen (18) months Base Salary at therate in effect on the date of termination, plus (y) 150% of the higher of (I) the Executive’s target incentive bonus under theExecutive Incentive Plan for the year in which the Executive’s employment is terminated or (II) the actual incentive bonuspaid to the Executive, if any, under the Executive Incentive Plan for the last full fiscal year preceding the year in which theExecutive’s employment is terminated; (B) subject to the last sentence of Section 5(d), the Company shall also, until theconclusion of a period of eighteen (18) months following the date of termination, pay the full premium cost of theExecutive’s participation in the Company’s group medical and dental insurance plans, provided that the Executive is entitledto continue such participation under applicable law and plan terms; (C) any (x) outstanding unvested options granted orissued to the Executive as of the date of the Change in Control shall become vested and shall be exercisable for ninety (90)days following termination of the Executive’s employment and (y) shares of unvested restricted stock of the Companygranted or issued to the Executive as of the date of the Change in Control shall become vested and no longer subject toforfeiture; and (D) the Company will also provide the Executive with an outplacement assistance benefit in the form of alump-sum payment of $15,000 plus an additional lump-sum payment in an amount sufficient, after giving effect to allfederal, state and other taxes with respect to such additional payment, to make Executive whole for all taxes (includingwithholding taxes) on such outplacement assistance benefit. -6- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (iii) In the event that it is determined that any payment or benefit provided by the Company or any of itsAffiliates to or for the benefit of Executive, either under this Agreement or otherwise, would be subject to the excise taximposed by Section 4999 of the Internal Revenue Code or any successor provision(s) (“Section 4999”), the payments orbenefits otherwise payable will be automatically reduced to the extent necessary so that such excise tax shall not beapplicable. The specific payments to be reduced for this purpose will be determined at the Company’s discretion, butreductions shall first be applied to payments that are in the form of cash payments (rather than accelerated vesting of equity-based grants). Determinations under this Section 5(g)(iii) will be made by an accounting firm engaged by theCompany (the “Firm”). The determinations of the Firm will be binding upon the Company and Executive except as thedeterminations are established in resolution (including by settlement) of a controversy with the Internal Revenue Service tohave been incorrect. All fees and expenses of the Firm will be paid by the Company.(iv) For the purpose of this Section 5(g), a “Change in Control” shall mean: (A) the acquisition by anyOrganization of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% ormore of the common stock of the Company; provided, however, that for purposes of this subsection (A), an acquisition shallnot constitute a Change in Control if it is: (x) by a Benefit Plan sponsored or maintained by the Company or an entitycontrolled by the Company or (y) by an entity pursuant to a transaction that complies with clauses (x), (y) and (z) ofsubsection (C) of this Section 5(g)(iv); or (B) individuals who, as of January 25, 2017, constitute the Board (the “IncumbentBoard”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becominga director subsequent to January 25, 2017 whose election, or nomination for election by the Company’s stockholders, wasapproved by a vote of at least a majority of the directors then comprising the Incumbent Board (or a majority of the membersof a nominating committee who are members of the Incumbent Board) shall be treated as a member of the Incumbent Boardunless he or she assumed office as a result of an actual or threatened election contest with respect to the election or removalof directors or other actual or threatened solicitation of proxies or consents by or on behalf of an Organization other than theBoard; or (C) consummation of a merger or consolidation involving the Company, or a sale or other disposition of all orsubstantially all of the assets of the Company, (a “transaction”) in each case unless, immediately following such transaction,(x) the beneficial owners of the common stock of the Company outstanding immediately prior to such transactionbeneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding voting securities ofthe entity resulting from such transaction (including, without limitation, an entity which as a result of such transaction ownsthe Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (y) noOrganization (excluding any entity resulting from such transaction or any Benefit Plan of the Company or such entityresulting from such transaction) beneficially owns, directly or indirectly, 50% or more of -7- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. the combined voting power of the then outstanding voting securities of such entity and (z) at least a majority of the membersof the board of directors or similar board of the entity resulting from such transaction were members of the Incumbent Boardat the time of the execution of the initial agreement, or of the action of the Board, providing for such transaction; or (D)approval by the stockholders of the Company of a complete liquidation or dissolution of the Company; notwithstanding theforegoing, no transaction or series of transactions shall constitute a Change of Control unless such transaction or series oftransactions constitutes a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i). For purposes of the foregoing: “Benefit Plan” means any employee benefit plan, including any related trust; “Board”means the Board of Directors of the Company; “Exchange Act” means the Securities Exchange Act of 1934, as amended;and “Organization” means any individual, entity or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of theExchange Act).(h) To the extent any payment under Section 5 shall be required to be delayed following separation from service tocomply with the “specified employee” rules of Section 409A of the Internal Revenue Code, it shall be delayed (but not more than isrequired to comply with such rules). 6. Effect of Termination. The provisions of this Section 6 shall apply to termination due to the expiration of the Termhereof, termination pursuant to Section 5 or otherwise.(a) Provision by the Company of any Severance Benefits or Change in Control Severance Benefits that may bedue to the Executive under Section 5 shall constitute the entire obligation of the Company to the Executive. In order to receive anySeverance Benefits or Change in Control Severance Benefits hereunder, the Executive must first execute and return to the Company atimely and effective a General Release of Claims in a form acceptable to the Company. The General Release of Claims must becomeeffective, if at all, by the sixtieth (60th) calendar day following the date the Executive’s employment is terminated. (b) Except for medical and dental insurance coverage continued pursuant to Section 5 hereof, or any right of theExecutive to continue such plan participation in accordance with applicable law, benefits shall terminate pursuant to the terms of theapplicable benefit plans based on the date of termination of the Executive's employment without regard to any Severance Benefits orChange in Control Severance Benefits provided to the Executive following such date of termination.(c) Provisions of this Agreement shall survive any termination if so provided herein or if necessary or desirablefully to accomplish the purposes of such provision, including without limitation the obligations of the Executive under Sections 7, 8and 9 hereof. The obligation of the Company to provide Severance Benefits or Change in Control Severance Benefits hereunder isexpressly conditioned upon the Executive's continued full performance of obligations under Sections 7, 8 and 9 hereof. The Executiverecognizes that, except as expressly provided in Section 5, no compensation is earned by, or in any way owing to, Executive aftertermination of employment. -8- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (d) Subject to Section 6(e), (i) any payments to be made to the Executive (or to the Executive’s designatedbeneficiary or estate) hereunder following the Executive’s termination of employment, other than payments that are expressly stated aspaid in a series of installments, shall be paid in the form of a single lump sum, which lump sum shall be paid to the Executive on thefirst regular payday that follows the expiration of 60 days following the date of the Executive’s termination of employment; and (ii) anypayments to be made in a series of installments to the Executive (or to the Executive’s designated beneficiary or estate) hereunderfollowing the Executive’s termination of employment shall be paid in the form of salary continuation, payable in accordance with thenormal payroll practices of the Company, the first payment of which shall be paid to the Executive on the first regular payday thatfollows the expiration of 60 days following the date of termination; but that first payment shall be retroactive to the day following thedate the Executive’s employment terminates.(e) Notwithstanding anything to the contrary in this Agreement, if at the time your employment terminates, you area “specified employee,” as defined below, any and all amounts payable under this Agreement on account of such separation fromservice that would (but for this provision) be payable within six (6) months following the date of termination, shall instead be paid onthe next business day following the expiration of such six (6) month period or, if earlier, upon your death; except (A) to the extent ofamounts that do not constitute a deferral of compensation within the meaning of Treasury regulation Section 1.409A-1(b) (includingwithout limitation by reason of the safe harbor set forth in Section 1.409A-1(b)(9)(iii), as determined by the Company in its reasonablegood faith discretion); (B) benefits which qualify as excepted welfare benefits pursuant to Treasury regulation Section 1.409A-1(a)(5);or (C) other amounts or benefits that are not subject to the requirements of Section 409A of the Internal Revenue Code of 1986, asamended (“Section 409A”). (f) For purposes of this Agreement, all references to “termination of employment” and correlative phrases shall beconstrued to require a “separation from service” (as defined in Section 1.409A-1(h) of the Treasury regulations after giving effect to thepresumptions contained therein), and the term “specified employee” means an individual determined by the Company to be a specifiedemployee under Treasury regulation Section 1.409A-1(i).(g) Each payment made under this Agreement shall be treated as a separate payment and the right to a series ofinstallment payments under this Agreement is to be treated as a right to a series of separate payments.(h) In no event shall the Company have any liability relating to the failure or alleged failure of any payment orbenefit under this Agreement to comply with, or be exempt from, the requirements of Section 409A. -9- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 7. Confidential Information. (a) The Executive acknowledges that the Company and its Affiliates continually develop ConfidentialInformation, that the Executive has developed and may develop Confidential Information for the Company or its Affiliates and that theExecutive has learned and may learn of Confidential Information during the course of employment. The Executive will comply withthe policies and procedures of the Company and its Affiliates for protecting Confidential Information and shall never disclose to anyPerson (except as required by applicable law or for the proper performance of his/her duties and responsibilities to the Company and itsAffiliates), or use for his/her own benefit or gain, any Confidential Information obtained by the Executive incident to his/heremployment or other association with the Company or any of its Affiliates. The Executive understands that the restriction shallcontinue to apply after his/her employment terminates, regardless of the reason for such termination. Nothing in this Agreement limits,restricts or in any other way affects the Executive’s communicating with any governmental agency or entity, or communicating withany official or staff person of a governmental agency or entity, concerning matters relevant to the governmental agency or entity. TheExecutive cannot be held criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (1) inconfidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, solely for the purpose ofreporting or investigating a suspected violation of law, or (2) in a complaint or other document filed under seal in a lawsuit or otherproceeding. Notwithstanding this immunity from liability, the Executive may be held liable if the Executive unlawfully accesses tradesecrets by unauthorized means.(b) All documents, records, tapes and other media of every kind and description relating to the business, present orotherwise, of the Company or its Affiliates and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared bythe Executive, shall be the sole and exclusive property of the Company and its Affiliates. The Executive shall safeguard allDocuments and shall surrender to the Company at the time his/her employment terminates, or at such earlier time or times as the Boardor its designee may specify, all Documents then in the Executive's possession or control. The Executive also agrees that, upon requestof any duly authorized officer of the Company, the Executive shall disclose all passwords and passcodes necessary or desirable toobtain access to, or that would assist in obtaining access to, any information which the Executive has password-protected on anycomputer equipment, network or system of the Company or any of its Affiliates.(c) The Executive acknowledges and agrees that all Confidential Information and proprietary materials that areprovided by the Company to the Executive under this Agreement are and shall remain the exclusive property of the Company or thethird party entrusting such Confidential Information or proprietary materials to the Company. -10- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 8. Restricted Activities. The Executive agrees that the following restrictions on his/her activities during and after his/heremployment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and itsAffiliates:(a) While the Executive is employed by the Company and for the greater of (i) twelve (12) months after his/heremployment terminates or (ii) the period during which the Executive is receiving payments under Section 5 (the “Non-CompetitionPeriod”), the Executive shall not, directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer orotherwise, compete with the Company or any of its Affiliates in any geographic area in which the Company or any of its Affiliatesdoes business or is actively planning to do business during the Executive’s employment, or with respect to the portion of the Non-Competition Period that follows the termination of his/her employment, at the time his/her employment terminates (the “RestrictedArea”) or undertake any planning for any business competitive with the Company or any of its Affiliates in the RestrictedArea. Specifically, but without limiting the foregoing, the Executive agrees not to engage in any manner in any activity that is directlyor indirectly competitive with all or any portion of the business of the Company or any of its Affiliates as conducted or underconsideration at any time during the Executive's employment within the Restricted Area and further agrees not to work for or provideservices, in any capacity, whether as an employee, independent contractor or otherwise, whether with or without compensation, to anyPerson that is engaged in any business that is competitive with all or any portion of the business of the Company or any of itsAffiliates, as conducted or in active planning during his/her employment with the Company or, with respect to the portion of the Non-Competition Period that follows the termination of his/her employment, at the time his/her employment terminates. For the purposes ofthis Section 8, the business of the Company and its Affiliates shall include all Products and the Executive's undertaking shallencompass all items, products and services that may be used in substitution for Products. The foregoing shall not prohibit theExecutive's passive ownership of two percent (2%) or less of the equity securities of any publicly traded company.(b) The Executive agrees that, during his/her employment with the Company or any Affiliate of the Company,he/she will not undertake any outside activity, whether or not competitive with the business of the Company or its Affiliates, that couldreasonably give rise to a conflict of interest or otherwise interfere with his/her duties and obligations to the Company or any of itsAffiliates.(c) The Executive further agrees that while he/she is employed by the Company or any Affiliate of the Companyand thereafter during the Non-Competition Period, except as required for the proper performance of his/her duties and responsibilitiesto the Company and its Affiliates, the Executive will not hire or attempt to hire any employee of the Company or any of its Affiliates,assist in such hiring by any Person, encourage any such employee to terminate his/her or her relationship with the Company or any ofits Affiliates or solicit or encourage any customer or vendor of the Company or any of its Affiliates to terminate its relationship withthem, or, in the case of a customer, to conduct with any Person any business or activity which -11- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. such customer conducts or could conduct with the Company or any of its Affiliates; provided, however, that these restrictions shallapply (y) only with respect to those Persons who are or have been a customer or employee of the Company or any of its Affiliates atany time within the immediately preceding one-year period, and (z) only if the Executive has performed work for such customer duringhis/her employment with the Company or one of its Affiliates or been introduced to, or otherwise had contact with, such customer as aresult of his/her employment or other associations with the Company or one of its Affiliates or has had access to ConfidentialInformation which would assist in the Executive in his/her solicitation of such customer.9. Assignment of Rights to Intellectual Property. The Executive shall promptly and fully disclose, if he/she has not done soalready, all Intellectual Property to the Company. The Executive shall maintain adequate records (whether written, electronic, orotherwise) to document the Intellectual Property, including without limitation the conception and reduction to practice of all inventions,and shall make such records available to the Company upon request. The Company shall have sole ownership of all IntellectualProperty and all such records with respect thereto. The Executive hereby assigns, conveys, and grants to the Company (or as otherwisedirected by the Company), and agrees to assign, convey and grant to the Company (or as otherwise directed by the Company), all ofhis/her right, title, and interest in and to the Intellectual Property and any and all patents, patent applications, and copyrights relating tothe Intellectual Property. The Executive agrees to execute any and all applications for domestic and foreign patents, copyrights orother proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of furtherassurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company toenforce any patents, copyrights or other proprietary rights to the Intellectual Property. The Executive will not charge the Company fortime spent in complying with these obligations. All copyrightable works that the Executive creates shall be considered “work made forhire” and shall, upon creation, be owned exclusively by the Company.The Executive represents that the attached Exhibit A contains a complete list of all inventions, copyrightable works, tangible materials,and other intellectual property that the Executive (either alone or jointly with others) conceived, developed, discovered, created, orreduced to practice prior to the Executive’s employment with the Company (the “Prior IP”). The Prior IP is not assigned to theCompany under this Agreement, except to the extent that the Executive expressly assigns such Prior IP to the Company under theterms of a separate written instrument. If no Prior IP is listed on Exhibit A, the Executive represents that no Prior IP exists. TheExecutive recognizes that the protection of the Intellectual Property of the Company against unauthorized disclosure and use is ofcritical importance to the Company, and therefore, the Executive agrees to use his/her best efforts and exercise utmost diligence toprotect and safeguard the Intellectual Property of the Company and its Affiliates, if any, and, except as may be expressly required bythe Company in connection with the Executive’s performance of his/her obligations to the Company under this Agreement, theExecutive shall not, either during the Term of this Agreement or thereafter, directly or indirectly, use for his/her own benefit or for thebenefit of another, or disclose to another, any of such Intellectual Property. -12- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 10. Notification Requirement. Until the conclusion of the Non-Competition Period the Executive shall give notice to theCompany of each new business activity he/she plans to undertake, at least twenty-one (21) days prior to beginning any such activity. Such notice shall state the name and address of the Person for whom such activity is undertaken and the nature of the Executive'sbusiness relationship(s) and position(s) with such Person. The Executive shall provide the Company with such other pertinentinformation concerning such business activity as the Company may reasonably request in order to determine the Executive's continuedcompliance with his/her obligations under Sections 7, 8 and 9 hereof.11. Enforcement of Covenants. The Executive acknowledges that he/she has carefully read and considered all the terms andconditions of this Agreement, including the restraints imposed upon him/her pursuant to Sections 7 and 8 hereof. The Executiveagrees that said restraints are necessary for the reasonable and proper protection of the goodwill, Confidential Information and otherlegitimate interests of the Company and its Affiliates and that each and every one of the restraints is reasonable in respect to subjectmatter, length of time and geographic area. The Executive further acknowledges that, were he/she to breach any of the covenantscontained in Sections 7 or 8 hereof, the damage to the Company would be irreparable. The Executive therefore agrees that theCompany, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against anybreach or threatened breach by the Executive of any of said covenants, without having to post bond, together with an award of itsattorneys’ fees incurred in connection with securing any relief hereunder. The parties further agree that, in the event that any provisionof Section 7 or 8 hereof shall be determined by any court of competent jurisdiction to be unenforceable by reason of its being extendedover too great a time, too large a geographic area or too great a range of activities, such provision shall be deemed to be modified topermit its enforcement to the maximum extent permitted by law. The Executive agrees that the Non-Competition Period shall betolled, and shall not run, during any period of time in which he/she is in violation of the terms thereof, in order that the Company andits Affiliates shall have all of the agreed-upon temporal protection recited herein. Each of the Company’s Affiliates shall have the rightto enforce all of the Executive’s obligations to that Affiliate under this Agreement, including without limitation pursuant to Section 7 or8 hereof. No breach of any provision of this Agreement by the Company, or any other claimed breach of contract or violation of law,or change in the nature or scope of the Executive’s employment or other relationship with the Company or any of its Affiliates, shalloperate to extinguish the Executive’s obligation to comply with Sections 7 and 8 hereof.12. Conflicting Agreements. The Executive hereby represents and warrants that the execution of this Agreement and theperformance of his/her obligations hereunder will not breach or be in conflict with any other agreement to which the Executive is aparty or is bound and that the Executive is not now subject to any covenants against competition or similar covenants, or any otherobligations under any court order, judgment or decree, that would affect the performance of his/her obligations hereunder. TheExecutive will not disclose to or use on behalf of the Company any proprietary information of a third party without such party'sconsent. -13- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 13. Indemnification. The Company shall indemnify the Executive to the extent provided in its then current Articles or By-Laws. The Executive agrees to promptly notify the Company of any actual or threatened claim arising out of or as a result of his/heremployment with the Company.14. Definitions. For purposes of this Agreement, the following definitions apply:(a) “Affiliates” means all persons and entities directly or indirectly controlling, controlled by or under commoncontrol with the Company, where control may be by either management authority or equity interest.(b) “Confidential Information” means any and all information of the Company and its Affiliates that is notgenerally known by the public. Confidential Information includes without limitation such information relating to (i) the development,research, testing, manufacturing, marketing and financial activities of the Company and its Affiliates, (ii) the Products, (iii) the costs,sources of supply, financial performance and strategic plans of the Company and its Affiliates, (iv) the identity and special needs of thecustomers of the Company and its Affiliates and (v) the people and organizations with whom the Company and its Affiliates havebusiness relationships and the nature and substance of those relationships. Confidential Information also includes comparableinformation that the Company or any of its Affiliates have received belonging to others or which was received by the Company or anyof its Affiliates with any understanding that it would not be disclosed. (c) “Good Reason” means: (i) the relocation of the Executive’s principal office, without his/her prior consent, to alocation more than thirty (30) miles from its location on the day prior to the Change in Control; (ii) failure of the Company to continuethe Executive in the position held immediately prior to the Change in Control; or (iii) material and substantial diminution in the natureor scope of the Executive's responsibilities, duties or authority; however, the Company's failure to continue the Executive'sappointment or election as a director or officer of any of its Affiliates and any diminution of the business of the Company or any of itsAffiliates, including without limitation the sale or transfer of any or all of the assets of the Company or any of its Affiliates, shall notconstitute “Good Reason”. Notwithstanding anything in this Agreement to the contrary, termination of employment by the Executiveshall not be considered to be for “Good Reason” unless (i) the Executive provides notice to the Company of the condition claimed tobe “Good Reason” within 30 days following the initial existence of such condition, (ii) the Company fails to remedy such conditionwithin 30 days following its receipt of such notice from the Executive, and (iii) the Executive, in fact, terminates employment with theCompany within 90 days of the initial existence of such condition. -14- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (d) “Intellectual Property” means inventions, discoveries, developments, methods, processes, compositions, works,concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed orreduced to practice by the Executive (whether alone or with others, whether or not during normal business hours or on or off Companypremises) during the Executive's employment and during the period of twelve (12) months immediately following termination ofhis/her employment that relate to either the Products or any prospective activity of the Company or any of its Affiliates.(e) “Person” means an individual, a corporation, an association, a partnership, an estate, a trust and any otherentity or organization, other than the Company or any of its Affiliates.(f) “Products” mean all products planned, researched, developed, under development, tested, manufactured, sold,licensed, leased or otherwise distributed or put into use by the Company or any of its Affiliates, together with all services provided orplanned by the Company or any of its Affiliates, during the Executive's employment.15. Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amountsrequired to be withheld by the Company under applicable law.16. Assignment. Neither the Company nor the Executive may make any assignment of this Agreement or any interestherein, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company mayassign its rights and obligations under this Agreement without the consent of the Executive in the event that the Company shallhereafter effect a reorganization, consolidate with, or merge into, an Affiliate or any other Person or transfer all or substantially all of itsproperties, stock or assets to an Affiliate or any other Person. This Agreement shall inure to the benefit of and be binding upon theCompany and the Executive, their respective successors, executors, administrators, heirs and permitted assigns.17. Severability. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by acourt of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstancesother than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision ofthis Agreement shall be valid and enforceable to the fullest extent permitted by law.18. Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waivingparty. The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either partyof any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver ofany subsequent breach. -15- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 19. Notices. Any and all notices, requests, demands and other communications provided for by this Agreement shall be inwriting and shall be effective when delivered in person or deposited in the United States mail, postage prepaid, registered or certified,and addressed to the Executive at his/her last known personal address on the books of the Company or, in the case of the Company, atits principal place of business, attention of Senior Attorney, or to such other address as either party may specify by notice to the otheractually received.20. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all priorcommunications, agreements and understandings, written or oral, with respect to the terms and conditions of the Executive'semployment, excluding any obligations with respect to the securities of the Company or the grant of any stock options, all of whichshall remain in full force and effect in accordance with their terms; provided, however, that this Agreement shall not supersede anyeffective assignment of any invention or other intellectual property to the Company or any of its Affiliates in effect on the EffectiveDate and shall not constitute a waiver by the Company or any of its Affiliates of any right that any of them now has or may now haveunder any agreement imposing obligations on the Executive with respect to confidentiality, non-competition, non-solicitation ofemployees, customers or independent contractors or like obligations.21. Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive andby an expressly authorized representative of the Company.22. Headings. The headings and captions in this Agreement are for convenience only and in no way define or describe thescope or content of any provision of this Agreement.23. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be an original and allof which together shall constitute one and the same instrument.24. Governing Law. This is a contract and shall be construed and enforced under and be governed in all respects by thelaws of the Commonwealth of Massachusetts, without regard to the conflict of laws principles thereof.[SIGNATURE PAGE FOLLOWS] -16- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company, by its duly authorizedrepresentative, and by the Executive, as of the date first above written. THE EXECUTIVE: AGENUS INC., a Delaware corporation /s/ Jean-Marie Cuillerot By:/s/ Garo H. Armen Jean-Marie Cuillerot Name:Garo H. Armen, Ph.D. Title:Chairman and CEO -17- Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 21.1SUBSIDIARIES OF AGENUS INC.Antigenics LLC., a Delaware limited liability company and a wholly-owned subsidiary of Agenus Inc.Aronex Pharmaceuticals, Inc., a Delaware corporation and a wholly-owned subsidiary of Agenus Inc.Antigenics Therapeutics Limited, a company organized under the laws of Ireland and a wholly-owned subsidiary of Agenus Inc.Agenus Switzerland Inc., a joint stock company organized under the laws of Switzerland formerly known as 4-Antibody AG, and a wholly-ownedsubsidiary of Agenus Inc.Agenus West, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Agenus Inc. (as of November 3, 2015).Agenus UK Limited, a private limited company organized under the laws of England and Wales and a wholly-owned subsidiary of Agenus Inc. (asof September 17, 2015). Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 23.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsAgenus Inc.:We consent to the incorporation by reference in the registration statements (Nos. 333 40440, 333-40442, 333-50434, 333-69580, 333-106072, 333-115984,333-143807, 333-143808, 333-151745, 333-160084, 333-160087, 333-160088, 333-176609, 333-183066, 333-183067, 333-189926, 333-195851, 333-209074, and 333-212889) on Form S-8 and (Nos. 333-161277, 333-163221, 333-189534, 333-195852, 333-199255, 333-203807, 333-206513, 333-208135,333-208890, 333-209749, 333-209941, and 333-215640) on Form S-3 of Agenus Inc. of our reports dated March 16, 2017, with respect to the consolidatedbalance sheets of Agenus Inc. and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of operations and comprehensiveloss, stockholders’ (deficit) equity, and cash flows for each of the years in the three-year period ended December 31, 2016, and the effectiveness of internalcontrol over financial reporting as of December 31, 2016, which reports appear in the December 31, 2016 Annual Report on Form 10 K of Agenus Inc./s/ KPMG LLPBoston, MassachusettsMarch 16, 2017 Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 31.1Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amendedI, Garo H. Armen, certify that: 1.I have reviewed this Annual Report on Form 10-K of Agenus Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period coveredby this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as definedin Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the Registrant and have: a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known tous by others within those entities, particularly during the period in which this report is being prepared; b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with U.S. generally accepted accounting principles; c.evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions aboutthe effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and d.disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’smost recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely to materially affect, the Registrant’s internal control over financial reporting; and 5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalentfunction): a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and b.any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’sinternal control over financial reporting. Date:March 16, 2017 /s/ GARO H. ARMEN, PH.D. Garo H. Armen, Ph.D. Chief Executive Officer and Principal Executive Officer Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 31.2Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amendedI, Christine M. Klaskin, certify that: 1.I have reviewed this Annual Report on Form 10-K of Agenus Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period coveredby this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as definedin Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the Registrant and have: a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known tous by others within those entities, particularly during the period in which this report is being prepared; b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with U.S. generally accepted accounting principles; c.evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions aboutthe effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and d.disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’smost recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely to materially affect, the Registrant’s internal control over financial reporting; and 5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalentfunction): a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and b.any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’sinternal control over financial reporting. Date:March 16, 2017 /s/ CHRISTINE M. KLASKIN Christine M. Klaskin VP, Finance and Principal Financial Officer Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 32.1CertificationPursuant to 18 U.S.C. Section 1350,As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report on Form 10-K of Agenus Inc. (the “Company”) for the year ended December 31, 2016 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), each of the undersigned to his/her knowledge hereby certifies, pursuant to 18 U.S.C.Section 1350, that: (i)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (ii)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. /s/ GARO H. ARMEN, PH.D. Garo H. Armen, Ph.D. Chief Executive Officer and Principal Executive Officer /s/ CHRISTINE M. KLASKIN Christine M. Klaskin VP, Finance and Principal Financial OfficerDate: March 16, 2017A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company andfurnished to the Securities and Exchange Commission or its staff upon request.The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Annual Report on Form 10-K for theyear ended December 31, 2016 and should not be considered filed as part of the Annual Report on Form 10-K. Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: AGENUS INC, 10-K, March 16, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

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