Innate Pharma - Q4 2023

Transcript

Operator (participant)

At this time, I would like to welcome everyone to the Innate Pharma full-year 2023 Financial Results and Business Update Call. Today's conference is being recorded, and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you, and I will now turn the conference over to Henry Wheeler, Vice President of Investor Relations. Mr. Wheeler, you may begin.

Henry Wheeler (VP of Investor Relations)

Thank you. Good morning, good afternoon, and welcome, everyone. This morning, Innate issued a press release for our full-year 2023 financial results and business updates. We look forward to highlighting the progress made during the year to date, as well as addressing future goals and milestones. The press release and today's presentation are both available on the IR section of our website. On slide 2, before we start, I'd like to remind you that we'll be making forward-looking statements regarding the financial outlook in addition to regulatory and product plan development. These statements are subject to risk and uncertainties that may cause actual results to differ from those forecasted. On slide 3, on today's call, we will be joined by Hervé Brailly, our Interim Chief Executive Officer. We will hand over to Sonia Quaratino, our Chief Medical Officer, who will cover updates on the lacutamab and IPH6501.

We will then hand to Yannis Morel, Chief Operating Officer, who will then discuss ANKET and ADC platform updates. Frédéric Lombard, our CFO, will cover the financials. We're very pleased to welcome Arvind Sood, EVP U.S. Operations, who will wrap up and close. Hervé, I now hand the call over to you.

Hervé Brailly (CEO)

Thanks, Henry. Good morning and good afternoon, everyone. I would just like first to recall that Innate Pharma is a very important player in the field of NK cell pharmacology and innate immunity manipulation. We address that through different mechanisms of actions where we have corresponding products. It's first about engaging NK cells as cytotoxic effectors, those tumor cells, and that's the approach that we implement with the ANKET platform, but also with the cytotoxic antibody lacutamab. We've also been pioneering the field of checkpoint inhibitors of NK cells with monalizumab, which is a checkpoint which is shared which is targeting a checkpoint which is shared by different classes of effector cells, both NK and T cells, and eventually through addressing suppression of the cytotoxic immune response through IPH52 and 53, which addresses the adenosine pathway. So that's it. What is the Innate Pharma strategy?

Well, firstly, it's about creating near-term value, and that's what we want to achieve with our most advanced proprietary asset, lacutamab, which is in development in T cell lymphoma. Actually, final CTCL and early PTCL data have been released by the end of 2023 at ASH. And here, we do look forward to the next step, which will be the data on mycosis fungoides, and that will inform the future of this program for the late-stage development. Second, we continue to fuel our innovative portfolio with both ANKET and antibody drug conjugates. ANKET is really a core asset. It's a platform which generated several molecules. And as you know, the first molecule in clinic has been advanced by our partner Sanofi, who published in 2023 important first clinical data. We'll come back to that, of course, in greater detail for the SAR443579.

But the ANKET portfolio is now expanding with other assets that have been further licensed in by Sanofi, but also with a proprietary program that was recently announced is now, and this is a second-generation ANKET, which has now been brought to clinic in phase I in lymphoma. And beyond ANKET, we also advanced a second class of agents which are active as a single agent potentially in tumor with antibody-drug conjugates, the first one being brought to we work on bringing it to IND in 2024. Eventually, and this is through partnership, we have monalizumab, a checkpoint inhibitor, in phase III. AstraZeneca is pursuing this late-stage asset, which will deliver in the next years very important data. So that translates into the portfolio, which is a combination of proprietary product and a partnered asset.

And I will now leave it to Sonia to detail the clinical stages and the clinical progress with those assets, and especially and firstly, with lacutamab. Sonia?

Sonia Quaratino (CMO)

Thank you very much, Hervé. When we look at slide 7, I would like to summarize the progress we are making with lacutamab. Here, on this phase, we are pursuing a fast-to-market strategy for lacutamab in the niche setting of Sézary syndrome, where lacutamab was granted the U.S. Fast Track designation and the EU PRIME designation back in 2020. We then expanded post-Sézary syndrome to mycosis fungoides, where we have seen encouraging preliminary data from the phase II TELLOMAK trial in patients that have KIR3DL2 expression level above as well as below the threshold of 1%. We expect to present this data at one upcoming conference later this year.

Now, the data in MF, together with the data in SS, will be shared with regulators to align on a path forward to maximize the value of lacutamab in CTCL, building on the existing Fast Track and Orphan designation. Now, if we move to the PTCL space, today we announced that we are not going to reopen the recruitment of the phase I testing lacutamab in monotherapy in PTCL, as the number of observed objective responses did not meet the prespecified threshold for activity with lacutamab as a single agent. However, based on the data presented at ASH last year, demonstrating a synergism between lacutamab and chemotherapy in preclinical models of PTCL, we remain committed to the development in PTCL and continue to enroll patients in the phase II combination trial with chemotherapy, gemcitabine and oxaliplatin, where we believe the combination can offer additional benefit to patients.

On the next slide, slide 8, we have a summary on the final phase II data in Sézary syndrome that were presented at ASH last December in an oral presentation. This is a heavily pretreated post-mogamulizumab patient pool with at least five prior systemic lines of therapy, including Moga, and the global overall response rate was an encouraging 37.5%. I would like to note the deepness of the partial responses, as you can see on the waterfall plot on the slide. We have also reported in this patient population an overall response rate of 46.4% in the skin and 48.2% in the blood, and overall a clinical benefit rate of 87.5%, and the median PFS of 8 months with a durability of response of 12.3 months.

A favorable safety profile was also observed, and we look forward to sharing this data set along with the final data in mycosis fungoides cohort with the regulator later on. Now, on slide 9, we can switch gear to our most advanced proprietary ANKET, which includes a detuned variant IL-2 to include activation and proliferation of NK cells in the tumor microenvironment. We were pleased to announce earlier this month that IPH65, the first of these second-generation ANKETs which target CD20, has entered the clinic, and the first in human has started with the first patient being dosed in March. The trial will enroll patients with relapsed refractory non-Hodgkin lymphoma, and we will run in the US, Australia, and France.

In B-cell non-Hodgkin lymphoma, compared to recent therapies, including CAR-T and T-cell engagers, IPH65 has a disruptive mechanism of action that eliminates cancer cells via profound activation and proliferation of the NK cells. IPH65 differs from allogeneic NK therapies, including CAR-NK, as it is an off-the-shelf therapy that drives the proliferation of the patient's own NK cells in non-Hodgkin lymphoma and does not require any lymphodepletion as for other cell therapies. Now, the IPH65 format also addresses the common challenges associated with the loss of CD16 by ensuring the activation of intratumoral NK cells via the activation of NKp46. Finally, by stimulating the NK cell natural function, IPH65, as a bystander effect, can cause the elimination of CD20-negative tumor cells, overcoming tumor heterogeneity or loss of tumor antigen. Now, I will turn to Yannis.

Yannis Morel (COO)

Thank you, Sonia. On slide 10, I wanted to highlight our proprietary first-in-class NK cell engager platform that we call ANKET. ANKET is a versatile technology made of antibody-derived building blocks that is creating an entirely new class of multispecific engagers to induce synthetic immunity against cancer. Leveraging our scientific expertise in the NK cell space, this platform is an engine for producing a series of drug candidates addressing multiple tumor targets, both in heme and solid tumors. The activating NK cell receptor called NKp46 is the backbone of our technology, and since it has a stable expression at the NK cell surface, even in the tumor microenvironment, it induces an optimal activation of the NK effector functions. We have also developed a second-generation version of the technology by incorporating a variant of interleukin 2 in order to induce NK cell proliferation.

As you can see, our pipeline of ANKET molecules is significantly growing, with Sanofi having now licensed four molecules. Two are in the clinic in heme, and two are at preclinical stage in solid tumor, including IPH67, which is the program for which Sanofi opted in December last year. We are also very pleased to see our proprietary portfolio of ANKET progressing. The second-generation ANKET, IPH6501, is now in the clinic, and we continue to fuel our pipeline with new preclinical programs against multiple targets. On slide 11, you can see an overview of the clinical data presented by Sanofi last year at ASH for the ANKET IPH6101, also named SAR579. In this dose escalation, we were encouraged to see initial preliminary single-agent activity and safety for SAR579 in relapsed recurrent AML patients.

At the one-week per-cycle dose, 5 complete responses were observed out of 15 patients, with 3 responders remaining in remission at data cutoff at over 7, 12, and 14 months of treatment. SAR579 was well tolerated up to six weeks per-cycle, with no dose-limiting toxicity observed and 2 grade 1 CRS observed out of 43 patients. The FDA awarded SAR579 a Fast Track designation in May, and we look forward to seeing further updates from Sanofi in due course. On slide 12, you can see a summary of our Sanofi alliance. In 2016, we signed an initial agreement for two ANKET molecules, worth up to EUR 400 million in milestone plus royalty, among which we announced EUR 16 million to date. Both programs, SAR579 and SAR445136, have progressed into phase I clinical trials.

In December 2022, we signed a second agreement whereby Sanofi licensed the IPH62 ANKET program targeting B7-H3, a solid tumor target, and again optioned for two other targets. In December last year, they opted in for one of these programs called IPH67, targeting an undisclosed tumor target in solid tumors, triggering a EUR 15 million milestone and making EUR 40 million the total of payment received for this second agreement. Altogether, considering these two agreements, we are eligible for a total milestone package of up to EUR 1.75 billion plus royalties. Slide 13 highlights our growing antibody-drug conjugate pipeline. As we continue to develop next-generation therapeutics having single-agent activity utilizing our antibody engineering platform, we find that for some tumor targets, we can generate antibodies with good internalizing property that therefore are well-suited for ADC development.

Our agreement with Takeda in the field provides validation to this research approach and highlights our capability to generate differentiated ADC candidates. I will now cover updates on our lead proprietary ADC program, IPH45, on the next slide. Slide 14 highlights IPH45, which is our proprietary Nectin-4 targeting ADC with a topo-1 inhibitor payload. We managed to create a differentiated product through multiple components. First, we generated a proprietary antibody with a differentiated epitope non-overlapping with enfortumab, the antibody backbone of PADCEV. Then, we selected a validated cleavable linker designed to be hydrophilic in order to counterbalance the hydrophobicity of the payload and to allow for a high drug-antibody ratio. Finally, we selected a well-validated topo-1 inhibitor with bystander effect, allowing to bypass MMAE-related resistance mechanism and to address tumors with heterogeneous Nectin-4 expression.

Altogether, these elements result in a differentiated Nectin-4 ADC showing strong efficacy in preclinical models, including in PADCEV-refractory PDX, as well as encouraging PK/tox profile in the non-human primates. These preclinical data have been selected for presentation at an oral session at AACR in the coming couple of weeks. We are looking forward to presenting them and to filing the IND for this product this year. On slide 15, I would like to remind you of monalizumab, the anti-NKG2A checkpoint inhibitor that we have licensed to AstraZeneca for oncology. In this slide, you can see an overview of the late-stage development plan for monalizumab in lung cancer. MoNA is currently being investigated in a phase III trial called PACIFIC-9.

AstraZeneca started this phase III evaluating the combinations of either MoNA or oleclumab plus durvalumab in the unresectable stage 3 non-small cell lung cancer setting who have not progressed after concurrent chemoradiotherapy based on the results of their phase II COAST trial. COAST data were published in the Journal of Clinical Oncology in 2022, and after a median follow-up of 11.5 months, PFS data showed a hazard ratio of 0.42 in favor of MoNA+ durvalumab combination versus durvalumab alone. The results also showed an increase in the primary endpoints of confirmed overall response for MoNA+ Durva combination over Durva alone of 36% versus 18%, respectively.

The AstraZeneca-sponsored NeoCOAST-2 study is also underway in an earlier setting of lung cancer, evaluating MoNA+ durvalumab with chemo in the neoadjuvant non-small cell lung cancer patients based on phase II data from the NeoCOAST study, which show also superiority of the MoNA+ durvalumab combination over durvalumab in this neoadjuvant setting. I will now turn to Frédéric for the financials.

Frédéric Lombard (CFO)

Thank you, Yannis. On slide 16, the key elements of Innate's financial position and financial results as of the year ended on the 31st of December 2023 is as follows: Cash and cash equivalents, short-term investments, and financial assets amount to EUR 102.3 million as of the end of last year, including financial instruments amounting to EUR 9.8 million. This number does not include the EUR 15 million payment received from Sanofi in January 2024. Revenue and other income from continuing operations amounted to EUR 61.6 million in 2023, which mainly comprises revenue from collaboration and licensing agreements received pursuant to the agreements with AstraZeneca, Sanofi, and Takeda, and EUR 9.7 million in research tax credits.

Operating expenses from continuing operations amounted to EUR 74.3 million in 2023, with R&D now making up 75% of the OpEx. Research and development expenses from continuing activities amounted to EUR 56 million in 2023, up 8.4% from prior year.

The increase in R&D mainly results from an increase in direct research and development expenses, both clinical and non-clinical. General and administrative expenses amounted to EUR 18.3 million, down by 18.5% on prior year due to the decrease in personnel expenses, non-scientific advisory, fees, and other expenses mainly resulting from efficiency measures applied by the company. The table in the press release summarized the IFRS consolidated financial statements as of and for the year ended 31st of December 2023, including 2022 comparative information. I will now hand over to Hervé.

Hervé Brailly (CEO)

Thank you, Frédéric. I won't go through all the catalysts that we have listed on slide 17, but I'll spend a few minutes on some of the key clinical catalysts that we have noted on this slide, and then we'll provide a summary before we turn to your questions. We are expecting the final data for proprietary antibody lacutamab in mycosis fungoides imminently, and we look forward to presenting this data in detail at an upcoming medical meeting. Concurrent with that, we'll also commence interactions with the global regulatory agencies as we map out the next steps in its development. Our antibody therapeutic NK cell engager program that was earlier referred to as the ANKET program, this continues to evolve. This program has received broad validation through the licensing of four programs to Sanofi.

We have recently taken a proprietary program emanating from this ANKET platform into the clinic ourselves by dosing the very first patient. This program, known as IPH6501, is targeting CD20 in B cell non-Hodgkin lymphoma. For monalizumab, our antibody-targeting NKG2A, the phase III trial called PACIFIC-9 is underway. This is a study looking at monalizumab plus durvalumab in non-small cell lung cancer. The thinking here is that the dual targeting of the PD-L1 and the NKG2A pathways through this combination will lead to enhanced anti-tumor activity versus single-agent therapy. We continue to advance other agents targeting the adenosine pathway in the clinic. An example is IPH5201, which is currently in phase II in combination with durvalumab and chemotherapy in treatment-naive patients with resectable early-stage non-small cell lung cancer. Just to conclude, over the years, we have established a strong expertise in immunopharmacology.

With definitive phase II data in hand, we are mapping out the regulatory next steps for lacutamab. Our proprietary NK cell engager platform, ANKET, has the potential of addressing both hematologic malignancies and solid tumors. We are pursuing ADCs with a focus on differentiation with IPH45. This is our ADC targeting Nectin-4 being a key example of our approach. And lastly, we continue to retain a strong cash position to fund our operations well through the end of 2025. We are excited about our prospects for the future. And before I close, I would also like to thank the many employees at Innate Pharma who work very hard on developing therapies for the potential benefit of patients. With that, we can open it up for questions.

Operator (participant)

Thank you. At this time, I would like to remind everyone, in order to ask a question, press star and then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. We will take our first question from Yigal Nochomovitz with Citi. Your line is open.

Amir Aminfar (Analyst)

This is Aminfar on for Yigal. Thank you for taking our questions. We had a couple. First, on the PDCO program, that you are not planning to reopen the phase I monotherapy trial. Can you walk us through your thought process there and give us more details on that? And what was the internal bar for efficacy there? And then on the second, again, on lacutamab, where are you standing within the process of finding a partner for your commercialization and development of the program? Are you expecting the upcoming data for MF to catalyze a partnership there?

Sonia Quaratino (CMO)

Right. Let me say that in PTCL, we have enrolled 20 patients. The data around safety from 10 patients were presented at ASH last year. Per protocol, we have included a formal, let's say, interim analysis where we defined a minimum number of objective responses that needed to be observed prior to continue the recruitment. Despite we observed some objective responses in PTCL with lacutamab in monotherapy, this number of objective responses did not meet the minimum number preset by the protocol. As you understand, in PTCL, there are many different therapeutic options, and many already provide a quite robust number of objective responses, and therefore our threshold was quite high, too much.

We remain, however, committed to the PTCL through the phase II study in combination with chemotherapy, where we expect to see some synergism between lacutamab and chemotherapy, and therefore provide some meaningful clinical benefit to patients. The second question was around the partners. Is that correct? Is that?

Amir Aminfar (Analyst)

The second question was on partnership, yes.

Sonia Quaratino (CMO)

Partnership. Around partnership for lacutamab, we are actively looking for different options to pursue the next stage with lacutamab in the CTCL, either via partnership or alternative options.

Amir Aminfar (Analyst)

Okay, got it. That makes sense. Just one quick follow-up. Do you expect this continuation of monotherapy to impact your plans on the partnership for this molecule?

Sonia Quaratino (CMO)

Not really. I mean, the data on PTCL have no impact, neither on the phase II in PTCL in combination with chemo, but definitely not on the CTCL where we already have the data in-house.

Amir Aminfar (Analyst)

Okay, got it. Great. Thank you very much for taking our questions.

Operator (participant)

We will take our next question from Daina Graybosch with Leerink Partners. Your line is open.

Daina Graybosch (Analyst)

Hi. I'm going to ask a follow-up on the one just asked on the single-agent activity. It's hard because we can't see it. And so is this you had one response and yet a lot of shrinking stable disease, or did you have three and it just didn't meet your bar? And so I wonder if you could give us any more specific details, particularly because I think we'd like to what should make us confident clinically that this is going to prove out in GEMOX to be something more meaningful for patients and the unmet needs compared to the therapeutic options here?

Operator (participant)

This is the operator. I apologize. Did our presenters go on mute? All right. Ladies and gentlemen, please stand by. We are experiencing technical difficulties. All right. Ladies and gentlemen, I will put music back on while we wait for our speakers to reconnect. Thank you.

Speaker 9

Hello, Henry? This is Abby.

Operator (participant)

Okay, perfect. Give me just one moment. All right. Let me make a slide once again. Ladies and gentlemen, thank you for your patience while we managed our technical difficulties. Ms. Graybosch, do you mind asking your question again, please?

Daina Graybosch (Analyst)

That came from Citi, which is, I wonder if you could give us any more details on the specific responses or any correlation with KIR3DL2 activity. What in the clinical data could we hang on to to be confident that we're going to see synergy in combination with chemotherapy next year?

Sonia Quaratino (CMO)

I suspect you are talking about the PTCL rather than the mycosis fungoides.

Daina Graybosch (Analyst)

Yes. Always, yes.

Sonia Quaratino (CMO)

Right. Okay. Basically, in this study, we have recruited patients who have an expression level of KIR3DL2 that is equal or above 1%. We did not, let's say, restrict to any subtype of PTCL, and we hope to present the data later on this year, even if we are not going to reopen the study and the sample size is relatively small because it's around 20 patients.

Daina Graybosch (Analyst)

What gives you confidence in the GEMOX combo will prove successful?

Sonia Quaratino (CMO)

This is an investigator-sponsored trial, and the date of completion is predicted to be towards the end of 2025.

Daina Graybosch (Analyst)

Yeah, but why do you think that this will be successful? Why continue with the IIT?

Sonia Quaratino (CMO)

Because at ASH last year, we have presented some data that demonstrated some synergism in preclinical models with lacutamab and chemotherapy.

Daina Graybosch (Analyst)

Okay. Thank you for that.

Hervé Brailly (CEO)

So operator, I'll ask an offline question, and then maybe we can go back to the online questions. So I have an offline question from Justine Telliez at Kepler Cheuvreux. On lacutamab, regarding the potential progress made with the regulatory authorities in Sézary syndrome, can you give us an update? And also, at what point are you regarding a desired partner, which I think you covered already? So regulatory interactions.

Sonia Quaratino (CMO)

We are working now that we have the data in MF, and these preliminary data are promising. We are working for a path forward alongside SS and MF, and a plan to maximize the value of lacutamab is going to be discussed with the regulators.

Hervé Brailly (CEO)

Okay. Operator, next question, please.

Operator (participant)

All right. Thank you. Our next phone question comes from Arthur He with H.C. Wainwright. Your line is open.

Arthur He (Analyst)

Hey. Good morning, everyone. This is Arthur He for H.C. Wainwright. Thanks for taking my question. So I just want to follow up on the regulatory question on lacutamab. So are you guys to go to the agency with the data, both with the Sézary syndrome and the MF, or rather go for the Sézary syndrome data alone to talk to the agency to file the BLA? Just want to clarify that.

Sonia Quaratino (CMO)

Sure. Sure. Originally, when we had the data of Sézary, there was the option of going to the regulators with the Sézary data alone, where we had Fast Track designation and PRIME. Now we can really plan to merge the data, as I say, to maximize the value of lacutamab not only in Sézary, that is a small subgroup of the CTCL, but maximize the value of the drug in the whole of CTCL, together, of course, with mycosis fungoides. And of course, the option of asking for accelerated approval still remains. And as you know, in order to get accelerated approval anyway, we need the 12-month durability of response that is needed for this. And of course, we need to align on what the registrational trial could look like.

Arthur He (Analyst)

Thanks for that. Really helpful. Just quick on the ANKET program. It's great to see the progress along and the expanding of the portfolio. Specifically on the 6501, I'm just curious, for the trial you're going to evaluate initially, is there a CD20 cutoff for the patient inclusion? And how about the dosing strategy there, if you can give an additional cut? Appreciate.

Sonia Quaratino (CMO)

Sure. In the study, are going to be recruited the CD20-positive non-Hodgkin lymphomas, again, in every subtype. This is a classic first-in-human trial, and therefore we are at the first cohort, as you can imagine, as the first patient was enrolled in March. It's a dose escalation study with expansion.

Arthur He (Analyst)

Thanks. And how about the dosing-wise? What's the dosing interval and the strategy for the dosing escalation?

Sonia Quaratino (CMO)

Well, the dose escalation is guided by the safety signals that we see and, of course, by statistical consideration and the appetite of the investigators, depending on the safety and the exposure that we observe at each cohort.

Arthur He (Analyst)

All right. Thanks. Thanks for the additional color.

Henry Wheeler (VP of Investor Relations)

Operator, are there any more questions?

Operator (participant)

We have no further phone questions at this time. I would now like to turn the call back to Mr. Hervé Brailly for any closing remarks.

Hervé Brailly (CEO)

Yeah. Thanks a lot for your questions. We're looking forward to the next meetings. The next important steps will be the oral presentation at the AACR to present the features of the ADC, the IPH45, and then, of course, the general meeting taking place on May 21st. We're looking forward to reconnecting with you all on those two opportunities. I wish you a very good day. I'm looking forward to the next steps.

Henry Wheeler (VP of Investor Relations)

Great. Thank you, everybody.

Operator (participant)

Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.