SEC Comment Letter for AGENUS INC (AGEN) (CIK 0001098972) (AGEN) — Nov 3, 2006
AGENUS INC (AGEN) (CIK 0001098972)
Date: Nov. 3, 2006 · CIK: 0001098972 · Accession: 0000000000-06-053640
AI Filing Summary & Sentiment
Reasoning
Letter
Via Facsimile and U.S. Mail Mail Stop 6010 November 3, 2006 Garo H. Armen, Ph.D. Chief Executive Officer and Chairman of the Board Antigenics Inc. 630 Fifth Avenue Suite 2100 New York, NY 10111
Re: Antigenics Inc. Form 10-K for Fiscal Year Ended December 31, 2005 File No. 0-29089
Dear Dr. Armen:
We have limited our review of your filing to the issues we have addressed in our comments. In our comments, we ask you to pr ovide us with more information so we may better understand your disclosure. After re viewing this information, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filings. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Form 10-K for the Year Ended December 31, 2005
Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
Critical Accounting Policies and Estimates
Research and Development, page 68 1. You disclose how you determine your acc ruals for research and development expenses and you indicate that you subs equently adjust your accruals as you become aware of actual costs. You also indicate that these adjustments could be material. Please provide us, in a disclosu re-type format, a revised discussion that quantifies: • the effect that changes in estimates ha ve had on the financial statements for each period presented; and
Garo H. Armen, Ph.D. Antigenics Inc. November 3, 2006 Page 2 • the effect that reasonably likely cha nges in the key assumptions underlying these estimates as of the latest ba lance sheet may have on the financial statements.
Financial Statements and Supplementary Data
Notes to Consolidated Financial Statements
Note 15: Debt, page 100 2. You disclose that the conversion price is subject to adjustment and that notes surrendered for conversion in connection with certain fundamental changes may in certain circumstances be entitled to an increase in the conversion rate of the notes. You also disclose that you are obligated to keep effective a shelf registration statement for the shares unde rlying the conversion of your notes. It appears from your January 25, 2005 indenture agreement that the fundamental changes include a change of control and th e termination of trad ing; both events that appear to be outside your control. Please explain to us why you apparently have not bifurcated the embedded conversion feature under EITF 00-19. In your response please address all the requiremen ts of paragraphs 12 through 32 of that consensus. In addition, please provide us , in a disclosure-type format, revised disclosure that clearly indicates: • how the initial conversion rate of $10.76 can be adjusted; • the nature of the fundamental change s outlined in your indenture agreement; • the circumstances that could increase th e conversion rate of the notes when a fundamental change exists; and • your consideration for the separate de rivative accounting for the conversion feature of the notes.
Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please furnish a letter that keys your responses to our comments and provides the requested information. Detailed letters greatly facilitate our review. Please furnish your letter on EDGAR under the form type label CORRESP.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed invest ment decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our co mments, please provide, in your letter, a statement from the company acknowledging that:
Garo H. Armen, Ph.D. Antigenics Inc. November 3, 2006 Page 3 the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing.
If you have any questions, please co ntact Mark Brunhofer , Senior Staff Accountant, at (202) 551-3638. In this regard, do not hesita te to contact me, at (202) 551-3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant
Show Raw Text
Via Facsimile and U.S. Mail
Mail Stop 6010
November 3, 2006
Garo H. Armen, Ph.D.
Chief Executive Officer and Chairman of the Board
Antigenics Inc.
630 Fifth Avenue
Suite 2100
New York, NY 10111
Re: Antigenics Inc.
Form 10-K for Fiscal Year Ended December 31, 2005
File No. 0-29089
Dear Dr. Armen:
We have limited our review of your filing to the issues we have addressed in our
comments. In our comments, we ask you to pr ovide us with more information so we may
better understand your disclosure. After re viewing this information, we may raise
additional comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filings. We look forward to working with you in these respects. We
welcome any questions you may have about our comments or any other aspect of our
review. Feel free to call us at the telephone numbers listed at the end of this letter.
Form 10-K for the Year Ended December 31, 2005
Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
Critical Accounting Policies and Estimates
Research and Development, page 68
1. You disclose how you determine your acc ruals for research and development
expenses and you indicate that you subs equently adjust your accruals as you
become aware of actual costs. You also indicate that these adjustments could be
material. Please provide us, in a disclosu re-type format, a revised discussion that
quantifies:
• the effect that changes in estimates ha ve had on the financial statements for
each period presented; and
Garo H. Armen, Ph.D.
Antigenics Inc.
November 3, 2006 Page 2
• the effect that reasonably likely cha nges in the key assumptions underlying
these estimates as of the latest ba lance sheet may have on the financial
statements.
Financial Statements and Supplementary Data
Notes to Consolidated Financial Statements
Note 15: Debt, page 100
2. You disclose that the conversion price is subject to adjustment and that notes
surrendered for conversion in connection with certain fundamental changes may in certain circumstances be entitled to an increase in the conversion rate of the
notes. You also disclose that you are obligated to keep effective a shelf
registration statement for the shares unde rlying the conversion of your notes. It
appears from your January 25, 2005 indenture agreement that the fundamental changes include a change of control and th e termination of trad ing; both events
that appear to be outside your control. Please explain to us why you apparently
have not bifurcated the embedded conversion feature under EITF 00-19. In your response please address all the requiremen ts of paragraphs 12 through 32 of that
consensus. In addition, please provide us , in a disclosure-type format, revised
disclosure that clearly indicates:
• how the initial conversion rate of $10.76 can be adjusted;
• the nature of the fundamental change s outlined in your indenture agreement;
• the circumstances that could increase th e conversion rate of the notes when a
fundamental change exists; and
• your consideration for the separate de rivative accounting for the conversion
feature of the notes.
Please respond to these comments within 10 business days or tell us when you
will provide us with a response. Please furnish a letter that keys your responses to our comments and provides the requested information. Detailed letters greatly facilitate our
review. Please furnish your letter on EDGAR under the form type label CORRESP.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision. Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our co mments, please provide, in your letter, a
statement from the company acknowledging that:
Garo H. Armen, Ph.D.
Antigenics Inc.
November 3, 2006 Page 3
the company is responsible for the adequacy and accuracy of the disclosure in the
filing;
staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
If you have any questions, please co ntact Mark Brunhofer , Senior Staff
Accountant, at (202) 551-3638. In this regard, do not hesita te to contact me, at (202)
551-3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant