Innate Pharma reports first half 2022 financial results and business update

• Monalizumab and IPH5201 developed in collaboration with AstraZeneca advanced into Phase 3 and 2 clinical trials in lung cancer, triggering $55M in milestone payments

• Second preclinical asset based on Sanofi’s proprietary multifunctional CROSSDILES^® platform and Innate’s proprietary multi-specific NK cell engager platform, ANKET^TM targeting BCMA, selected by Sanofi for IND-enabling studies, with €3M milestone payment

• Cash position of €158.2 million¹ as of June 30, 2022, anticipated cash runway into H2 2024

• Conference call to be held today at 2:00 p.m. CEST / 8:00 a.m. EDT

Innate Pharma SA (Euronext Paris: IPH; Nasdaq: IPHA) (“Innate” or the “Company”) today reported its consolidated financial results for the six months ended June 30, 2022. The consolidated financial statements are attached to this press release.

“Based on our strong financial position, we continued the momentum in our product pipeline during the second quarter of the year. We are advancing our anti-CD39 blocking monoclonal antibody IPH5201 to a Phase 2 clinical trial in lung cancer with AstraZeneca, and Sanofi selected a second asset for development, targeting BCMA, that benefits from ANKET^TM, Innate’s proprietary multi-specific NK cell engager platform and Sanofi’s CROSSDILES^® platform. The ANKET^TM technology is the engine for development of our robust pipeline of much needed novel solutions to treat cancer.” said Mondher Mahjoubi, Chief Executive Officer of Innate Pharma. “We continue to see progress for monalizumab in the early non-small cell lung cancer setting, with the ongoing PACIFIC-9 Phase 3 study, sponsored by AstraZeneca, and recent Phase 2 data presentations. We look forward to further clinical readouts from the Phase 2 TELLOMAK trial for lacutamab and ANKET^TM updates in the second half of the year.”

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Webcast and conference call will be held today at 2:00 p.m. CEST (8:00 a.m. ET)

Access to webcast replay:
https://event.on24.com/wcc/r/3824660/86089F900A17B3EA55F4BEE49AD268A8

Download the presentation

This information can also be found on the Investors section of the Innate Pharma website, www.innate-pharma.com. 

A replay of the webcast will be available on the Company website for 90 days following the event.

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Pipeline highlights:

Lacutamab (anti-KIR3DL2 antibody): 

• The Phase 2 TELLOMAK study in Sézary syndrome and mycosis fungoides continues to progress and the Company expects to report preliminary data from both cohorts in the second half of 2022. 
• Preliminary results from the TELLOMAK Phase 2 study of lacutamab in patients with advanced mycosis fungoides according to KIR3DL2 expression will be presented at the EORTC-CLTG (European Organisation for Research and Treatment of Cancer - Cutaneous Lymphoma Tumours Group) 2022 meeting in Madrid on Friday 23 September.
• Two clinical trials are underway evaluating lacutamab in patients with KIR3DL2-expressing, relapsed/refractory peripheral T-cell lymphoma (PTCL):
  • Phase 1b trial: a Company-sponsored Phase 1b clinical trial to evaluate lacutamab as a monotherapy in patients with KIR3DL2-expressing relapsed PTCL.
  • Phase 2 KILT (anti-KIR in T Cell Lymphoma) trial: The Lymphoma Study Association (LYSA) investigator-sponsored, randomized trial to evaluate lacutamab in combination with chemotherapy GEMOX (gemcitabine in combination with oxaliplatin) versus GEMOX alone in patients with KIR3DL2-expressing relapsed/refractory PTCL.
• On the 11 September, at the ESMO (European Society for Medical Oncology) 2022 conference, the Company presented a poster on ongoing lacutamab Phase 1b trial design in monotherapy in PTCL.

ANKET™ (Antibody-based NK cell Engager Therapeutics):

• The Phase 1/2 clinical trial by Sanofi continues, evaluating IPH6101/SAR’579, the first NKp46/CD16-based NK cell engager, in patients with relapsed or refractory acute myeloid leukemia (R/R AML), B-cell acute lymphoblastic leukemia (B-ALL) or high-risk myelodysplastic syndrome (HR-MDS). 
• During the period, Sanofi informed the Company of the decision to progress IPH6401/SAR’514 into investigational new drug (IND)-enabling studies, triggering a €3 million milestone payment. IPH6401/SAR’514 is a BCMA-targeting NK cell engager using Sanofi’s proprietary CROSSODILE^® multi-functional platform, which comprises the Cross-Over-Dual-Variable-Domain (CODV) format. It induces a dual targeting of the NK activating receptors, NKp46 and CD16, for an optimized NK cell activation, based on Innate’s ANKET^TM proprietary platform. IPH6401/SAR’514 has shown anti-tumor activity and promising drug properties in pre-clinical models. Sanofi will be responsible for all future development, manufacturing and commercialization of IPH6401/SAR’514.
• Innate plan to provide updates on IPH65, the tetra-specific ANKET^TM, throughout the year as progress is made toward IND-enabling studies in 2023.

Monalizumab (anti-NKG2A antibody), partnered with AstraZeneca:

• On April 29, Innate announced a $50 million milestone payment from AstraZeneca was triggered for dosing the first patient in the Phase 3 clinical trial, PACIFIC-9, evaluating durvalumab (anti-PD-L1) in combination with monalizumab or AstraZeneca’s oleclumab (anti-CD73) in patients with unresectable, Stage III non-small cell lung cancer (NSCLC) who have not progressed following definitive platinum-based concurrent chemoradiation therapy (CRT).
• Detailed results from the randomized AstraZeneca-sponsored Phase 2 COAST clinical trial, including monalizumab data in combination with durvalumab, were published in the Journal of Clinical Oncology on April 22. The results were initially presented during the ESMO Congress 2021. The results of the interim analysis showed monalizumab in combination with durvalumab improved progression-free survival (PFS) and objective response rate (ORR) compared to durvalumab alone in patients with unresectable, Stage III NSCLC who had not progressed after concurrent CRT. The Journal of Clinical Oncology publication now includes exploratory subgroup analysis. 
• On April 11 at the American Association for Cancer Research (AACR) Annual Meeting, there was an oral presentation from the AstraZeneca-sponsored Phase 2 NeoCOAST randomized trial in resectable, early-stage NSCLC. The presentation highlighted improved disease responses with durvalumab in combination with monalizumab, oleclumab or danvatirsen, when compared to durvalumab alone. The follow-up randomized Phase 2 clinical trial, NeoCOAST-2, is enrolling patients with resectable, stage IIA-IIIA NSCLC to receive neoadjuvant durvalumab combined with chemotherapy and either oleclumab or monalizumab, followed by surgery and adjuvant durvalumab plus oleclumab or monalizumab.
• As a post-period event, on August 1, Innate announced that a planned futility interim analysis of the INTERLINK-1 study Phase 3 sponsored by AstraZeneca did not meet a pre-defined threshold for efficacy. The company announced that, based on the result and the recommendation of an Independent Data Monitoring Committee, the study was to be discontinued. There were no new safety findings. AstraZeneca plan to share the data in due course. The INTERLINK-1 study, sponsored by AstraZeneca, evaluated monalizumab in combination with cetuximab vs. cetuximab in patients with recurrent or metastatic squamous cell carcinoma of the head and neck who have been previously treated with platinum-based chemotherapy and PD-(L)1 inhibitors.
• On the 12 September at the ESMO 2022 congress, AstraZeneca presented an oral presentation on the Phase 2 NeoCOAST study assessing the safety and efficacy of neoadjuvant durvalumab in combination with chemotherapy and oleclumab or monalizumab and adjuvant treatment in patients with resectable, early-stage NSCLC.

IPH5201 (anti-CD39), partnered with AstraZeneca: 

• On June 3, Innate announced that IPH5201, an anti-CD39 blocking monoclonal antibody developed in collaboration with AstraZeneca, will advance into a Phase 2 clinical trial in lung cancer. Innate received in August 2022 a $5 million milestone payment from AstraZeneca and will be responsible for conducting the study. AstraZeneca and Innate will share study costs and AstraZeneca will supply clinical trial drugs. AstraZeneca conducted a Phase 1 trial in solid tumors with IPH5201 alone or in combination with durvalumab. The data are expected to be presented at an upcoming medical meeting in due course. 

IPH5301 (anti-CD73):

• The investigator-sponsored Phase 1 trial of IPH5301 (CHANCES), in collaboration with Institut Paoli-Calmettes is underway. The trial will be conducted in two parts, Part 1, the dose escalation, followed by a Part 2 safety expansion study cohort. Part 2 will evaluate IPH5301 in combination with chemotherapy and trastuzumab in HER2+ cancer patients.

Preclinical updates:

• During the period, the Company received from AstraZeneca a notice that it will not exercise its option to license the four preclinical programs covered in the "Future Programs Option Agreement". This option agreement was part 2018 multi-term agreement between AstraZeneca and Innate. Innate has now regained full rights to further develop the four preclinical molecules.

 
Corporate Update:

• On May 03, Innate announced the commencement of an At-The-Market (ATM) program, pursuant to which it may, from time to time, offer and sell to eligible investors a total gross amount of up to $75 million American Depositary Shares (“ADS”). Each ADS representing one ordinary share of Innate. As of June 30, 2022, the balance available under our May 2022 sales agreement remains at $75 million.
• Announced on 20 May 2022, as part of the resolutions voted by shareholders, Dr Sally Bennett was appointed as new member of the Supervisory Board. She was appointed as a member of the Audit Committee during the Supervisory Board Meeting of May 20, 2022. On the same day it was announced that Mr Patrick Langlois decided to resign from his mandate of Supervisory Board member of Innate Pharma. 

 
Financial highlights for the first half of 2022:

The key elements of Innate’s financial position and financial results as of and for the six-month period ended June 30, 2022 are as follows:

• Cash, cash equivalents, short-term investments and financial assets amounting to €158.2 million (€m) as of June 30, 2022 (€159.7m² as of December 31, 2021).
• Revenue and other income from continuing operations³ amounted to €45.6m in the first half of 2022 (€14.7m in the first half of 2021) and mainly comprise of:
  • Revenue from collaboration and licensing agreements, which mainly resulted from  the partial or entire recognition of the proceeds received pursuant to the agreements with AstraZeneca and Sanofi and which are recognized on the basis of the percentage of completion of the works performed by the Company under such agreements: 
    • (i) Revenue from collaboration and licensing agreements for monalizumab increased by €10.3m to €16.4m in the first half of 2022 (€6.1m in the first half of 2021). This change mainly results from the transaction price increase of €13.4m ($14.0m) triggered by the launch of the “PACIFIC-9” Phase 3 trial on April 28, 2022. This change in the transaction price generated a €12.5 million favorable cumulative adjustment in the revenue related to monalizumab agreements for the first half of 2022, partially offset by effects of the decrease in direct monalizumab research and development costs over the period as compared to the first half of 2021, in connection with the Phase 1 & 2 trials maturity;
    • (ii) Revenue related to IPH5201 for the six months ended June 30, 2022 amounted to €4.8m and results from the entire recognition in revenue of the $5.0m milestone payment received in August 2022 from AstraZeneca following the signature on June 1, 2022 of an amendment to the initial contract signed in October 2018. This amendment sets the terms of the collaboration following AstraZeneca’s decision to advance IPH5201 to a Phase 2 study;
    • (iii) During the period, the Company received from AstraZeneca a notice that it will not exercise its option to license the four preclinical programs covered in the "Future Programs Option Agreement". This option agreement was part of the 2018 multi-term agreement between AstraZeneca and the Company under which the Company received an upfront payment of $20.0m (€17.4m). Innate has now regained full rights to further develop the four preclinical molecules. Consequently, the entire initial payment of $20.0m, or €17.4m was recognized as revenue as of June 30, 2022.
    • (iv) During the period, the Company was informed of Sanofi's decision to advance IPH6401/SAR'514 into investigational new drug (IND)-enabling studies. As such, Sanofi has selected a second multispecific antibody engaging NK cells as a drug candidate. This selection triggered a €3.0m milestone payment from Sanofi to the Company, fully recognized in revenue as of June 30, 2022. This amount was received by the Company on September 9, 2022. 
  • Government funding for research expenditures of €4.3m in the first half of 2022 (€6.4m in the first half of 2021).
• Operating expenses from continuing operations are €37.1m in the first half of 2022 (€33.9m in the first half of 2021), of which 67.3% (€25.0m) are related to R&D. 
  • R&D expenses from continuing operations increased by €3.7m to €25.0m in the first half of 2022 (€21.2m in the first half of 2021). This change mainly results from (i) a €0.7m increase in direct R&D expenses relating to lacutamab clinical program and to non-clinical programs, notably IPH65, partially offset by the decrease in others clinical programs expenses; (ii) a €1.7m increase in personnel expenses mainly explained by the increase in share-based payments and (iii) the increase in other R&D expenses explained by the provision relating to the payment to be made to Orega Biotech SAS upon receipt of the $5.0m milestone payment from AstraZeneca under the IPH5201 collaboration and agreement following the amendment signed on June 1, 2022.
• General and administrative (G&A) expenses from continuing operations decreased by €0.5m to €12.1m in the first half of 2022 (€12.6m in the first half of 2021).
• A loss on the Lumoxiti discontinued operations amounting to €0.1m (€6.2m for the first half of 2021). As a reminder, the Company recorded, as of June 30, 2021, a provision for charges relating to the payment of €5.2 million ($6.2 million) to AstraZeneca under the Lumoxiti transition and termination agreement effective as of June 30, 2021. Persuant to the April 2022 underlied agreement, the amount of €5.9 million ($6.2 million) was paid by the Company. 
• A net financial loss of €2.1m in the first half of 2022 (net financial gain of €1.7m in the first half of 2021), principally as a result of the decrease in fair value of certain of our financial instruments due to the negative impact of the COVID-19 health crisis as well as the Ukrainian crisis on the financial markets.
• A net income of €6.3m for the first half of 2022 (net loss of €23.7m for the first half of 2021).

The table below summarizes the IFRS consolidated financial statements as of and for the six months ended June 30, 2022, including 2021 comparative information. 
 

_{(1)    Comparative relating to the six months ended June 30, 2021 have been restated to reflect the impact of the classification of Lumoxiti's activities as discontinued operations in 2021.} 

_{1  Including short term investments (€20.4 million) and non-current financial instruments (€34.8 million)
2  Cash and cash equivalents included proceeds relating to State-Guaranteed Loans
3 Comparative relating to the six months ended June 30, 2021 have been restated to reflect the impact of the classification of Lumoxiti's activities as discontinued operations in 2021.}