Investors in Lexington, Massachusetts-based Agenus (AGEN) had a very good day on Tuesday. The immune-oncology biotech specialist announced a deal to license its anti-TIGIT (a.k.a. T cell immunoreceptor with Ig and ITIM domains) bispecific antibody program to Bristol Myers Squibb (BMY). As a result, investors bid Agenus stock up more than 20% in the following trading sessions. It’s easy to see why they were excited. From Bristol Myers’ perspective, it will gain an exclusive global license to use Agenus’s proprietary bispecific antibody program, AGEN1777, “that blocks TIGIT and a second undisclosed target,” with the aim of improving a body’s ability to destroy cancerous tumors — in particular, non-small cell lung cancer. As the companies explained, “in preclinical studies [AGEN1777] has shown significant potential in tumor models where anti-PD-1 or anti-TIGIT monospecific antibodies alone are ineffective.” In return for the license, Bristol Myers will pay Agenus $200 million up front, and up to $1.36 billion more as the therapy passes certain “development, regulatory and commercial milestones.” Then, once the product comes to market, Bristol Myers will keep paying Agenus “tiered double-digit royalties on net product sales.” On top of all that, Agenus doesn’t have to pay a penny for the development. Instead, after Agenus files an Investigational New Drug (“IND”) application for the development of AGEN1777 with the U.S. Food and Drug Administration in the second quarter of 2021, “Bristol Myers Squibb will become solely responsible for the development and any subsequent commercialization of AGEN1777 and its related products worldwide.” Meanwhile, Agenus retains the right to tinker with AGEN1777 on its own, including by conducting studies testing AGEN1777’s effectiveness when used in conjunction “with certain other Agenus pipeline assets.” Agenus had previously stated its intention of securing “meaningful non-dilutive financing” for AGEN1777’s development, and this deal exceeds any expectations investors might have had for it, says B. Riley analyst Mayank Mamtani. In addition to the upfront cash — which is certainly nice — and the milestone payments — which are about seven-times nicer — Mamtani likes the fact that Agenus will retain the ability to conduct clinical studies combining AGEN1777 with other programs that it wholly owns, citing “balistilimab, AGEN1181” as one particularly attractive prospect. As the analyst explains, this gives Agenus “additional value drivers from AGEN1777 on a standalone basis” — revenue that it doesn’t need to share with Bristol Myers. And all of that is great, too — but the cash still seems like the best part. Up till now, you see, Agenus has been burning through cash at the rate of up to $150 million a year as it developed AGEN1777 (and other products) on its own. With Bristol Myers contributing $200 million upfront, though, and nearly $1.4 billion more down the road (although we don’t know exactly how the milestone payments will be spaced out), it looks like Agenus may have just solved all its cash problems for the next 10 years. Based on the above, Mamtani rates AGEN a Buy along with an $8 price target. Investors could be pocketing gains of ~91%, should the analyst’s forecast go according to plan. (To watch Mamtani’s track record, click here) Small cap stocks like Agenus typically get fewer analyst reviews than the corporate giants, but the consensus of the analysts who look at AGEN is a Strong Buy – and it is unanimous. All three recent reviews have rated the stock a Buy. The average price target is $7.50 and implies ~80% upside from current levels. (See AGEN stock analysis on TipRanks) To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.