Innate Pharma S.A. (IPH) Earnings Call Transcript & Summary

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 speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I will now turn the conference over to Henry Wheeler, Vice President of Investor Relations. Mr. Wheeler, you may begin.

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 update. 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 risks and uncertainties that may cause actual results to differ from those forecasted. On Slide 3, on today's call, we will be joined by Herve Brailly, our Interim Chief Executive Officer; then we will hand over to Sonia Quaratino, our Chief Medical Officer, who will cover updates on lacutamab and IPH65. We will then hand to Yannis Morel, Chief Operating Officer who will then discuss ANKET and ADC platform updates. Frederic Lombard, our CFO will cover the financials, and we are very pleased to welcome Arvind Sood, EVP, U.S. Operations, who will wrap up and close. Herve, I'll now hand the call over to you.

Thanks, Henry. Good morning and good afternoon, everyone. Just first to recall that Innate Pharma is a very important player in the period of NK cell pharmacology on innate immunity, manipulation. And we address that through a different mechanism of actions where we have corresponding products. It's first about engaging NK cells on 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 inhibitor of NK cells with monalizumab, which is checkpoint -- which is shared -- which is targeting the checkpoint, which is shared by different classes of effector cells both NK and T cells. Eventually through addressing suppression of the cytotoxic immune response through IPH62 and IPH63 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 -- for which -- which is in development in T-cell lymphoma and actually final CTCL and early PTCL data have been released by the end of '23 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 '23 important first clinical data, and we'll come back to that, of course, in greater detail for SAR443579. But the ANKET portfolio is now expanding with other assets that have been further licensed in by Sanofi, but also with the proprietary program that we recently announced is now, and this is a second generation ANKET, which has now been [ grown ] 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 time being brought to work on bringing it to IND in '24. Eventually, this is through partnership, we have monalizumab, the checkpoint inhibitor in Phase III, AstraZeneca is pursuing this late-stage asset which will deliver in the next year, a very important data. So that translates into the portfolio, which is a combination of proprietary product on the partnered asset. I will know before -- I will now leave it to Sonia to detail the clinical status, on the clinical progress with [ loose assets ] especially and firstly with lacutamab, Sonia?

Thank you very much, Herve. When we look at Slide 7, I would like to summarize the progress we are making with lacutamab and 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 in the U.S. fast-track designation and the prime designation back in 2020. We have been expanded post Sezary 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%. And we expect to present this data on 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's price, today we have announced that we are not going to reopen the recruitment of the Phase I testing of 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 the synergism between lacutamab and chemotherapy per clinical 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 what we believe the combination can offer additional benefits to patients. On the next slide, Slide 8, we have a summary on the final Phase II data in Sézary that were presented at ASH last December in an oral presentation. This is a heavily pretreated post-mogamulizumab patient pool with at least 5 million prior systemic line of therapies, including moga and global overall response rate was an encouraging 37.5%. I would like to note the deepness of the patron responses, as you can see on the waterfront clock 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 the 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 [indiscernible] trial 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 the second-generation ANKETs which targets CD20 sent to the clinic and the first in human has started with the first patient windows in March. The trial will enroll patients with relapsed refractory in non-Hodgkin lymphoma, and we will run in the U.S., Australia and France. In B-cell non-Hodgkin lymphoma compared to recent therapies, including CAR-T and T-cell engagers, IPH65 as a disruptive mechanism of action that eliminates cancer cell via profound activation and proliferation of the NK cells and 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 lymph depletion 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 intra-tumoral NK cells via the activation of NKp46. Finally, by stimulating the NK cell natural function, IPH65 has bystander effect that can cause the elimination of CD20 negative tumor cells overcoming tumor heterogeneity or loss of tumor antigen. Now I will turn to Yannis.

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 multi-specific engagers to induce synthetic immunity against cancer. Leveraging our scientific expertise in the ANKET space, this platform is an engine for producing 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 the genomic environment introduces an optimal activation of the NK effector functions. We have also developed a second-generation version of the technology by incorporating a variance of interleukin-2 in order to induce NK cell proliferation. As you can see, our pipeline of ANKET molecule is significantly growing with Sanofi having now licensed 4 molecules, 2 are in the clinic in heme and 2 are at technical 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 program against multiple targets. On Slide 11, you can see a number of view 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 of SAR579 in relapsed recurrent AML patients. The 1 mg/kg dose, 5 complete responses were observed out of 15 patients with 3 responders remaining in remission and data cutoff at over 7, 12 and 14 months of treatment. SAR579 was well tolerated up to 6 mg/kg with no dose-limiting toxicity of cell 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 2 ANKET molecules worth up to EUR 400 million in milestone plus royalty, among which we announced EUR 60 million to date. Both programs SAR579 and SAR14 have progressed into Phase I clinical trials. In December 22, we signed a second agreement with Sanofi license in IPH62 ANKET program targeting B7-H3 a solid tumor target and again, option for 2 other targets. In December last year, they opted in for one of this program called IPH67, targeting an undisclosed tumor target in solid tumors, triggering a EUR 15 million milestone and making EUR 40 million, the total of payments received for the [ secondary limits ]. Altogether, considering these 2 agreements, we are eligible for a total maximum 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 a 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 I inhibitor payload. We managed to create a differentiated product through multiple components. First, we generate a proprietary antibody with a differentiated epitope nonoverlapping with enfortumab, the antibody backbone of PADCEV. Then we selected the 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 I inhibitor with bystander effect allowing to bypass MMAE-related resistant mechanism and to address tumors with heterogenous Nectin-4 expression. Altogether, these elements result in a differentiated Nectin-4 ADC showing strong efficacy in preclinical models, including PADCEV refractory PDX as well as encouraging PDX tox profile in the nonhuman primates. This preclinical data have been selected for presentation at the lower session at ACR 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 another view of the late-stage development plan for monalizumab in lung cancer. Monalizumab is currently being investigated in a Phase III trial called PACIFIC-9. AstraZeneca started this Phase III, evaluating the combinations of either Monalizumab or oleclumab with davelumab in the unresectable Stage III non-small cell lung cancer setting, who have not progressed at the concurrent chemoradiotherapy based on the results of their Phase II COAST trial. COAST data were published in the Journal of Clinical Oncology in '22 and after a median follow-up of 11.5 months, PFS data showed a hazard ratio of 0.42 in favor of monalizumab with durvalumab combination versus durvalumab alone. The results also showed an increase in the primary endpoint of confirmed overall response for monalizumab and durvalumab combination or durvalumab alone of 36% versus 18%, respectively. The AstraZeneca sponsored NeoCOAST-2 study is also underway in an earlier setting of lung cancer, evaluating monalizumab and durvalumab with chemo in the neoadjuvant non-small cell lung cancer patients based on Phase II data from the NeoCOAST study, which showed also superiority of the monalizumab plus durvalumab combination or durvalumab in this neoadjuvant setting. I will now turn to Frederic for the financials.

Thank you, Yannis. On Slide 16, the key elements of the Innate's financial position and financial results as of the year ended 31st of December '23 is as follows. Cash, cash equivalents, short-term investment 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 '24. Revenue and other income from continuing operations amounted to EUR 61.6 million in '23, 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 credit. Operating expenses from continuing operations amounted to EUR 74.3 million in '23 with R&D now making up 75% of the OpEx. Research and development expenses from continuing activities amounted to EUR 56 million in '23, 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 nonclinical. 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 adjustments as of and for the year ended 31st of December 23, including 2022 comparative information. I will now hand over to Herve.

Thank you Frederic. 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 a 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 4 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's 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 PDL1 and the NKG2A pathways through this combination will lead to enhanced antitumor 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. So 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, who work very hard in developing therapies for the potential benefit of patients. With that, we can open it up for questions.

[Operator Instructions] We will take our first question from Yigal Nochomovitz with Citi.

This is [indiscernible] for Yigal. We had a couple. First on the PTCL program which you are not planning to reopen the Phase I monotherapy trial. Can you walk us through your thought process there and give us more granular details on that? And what was the internal bar for efficacy there? And then on the second -- again, unlike lacutamab where are you spending within the process of finding a partner for the commercialization and development of the program? Are you expecting the upcoming data for MF to capitalize the partnership there?

Right. Let me say that we have -- in PTCL, we have enrolled 20 patients and the data around safety from 10 patients were presented at ASH last year. But probable, we have included a formal, let's say, interim analysis where we define a minimum number of objective responses that needed to be observed prior to continuing the recruitment. And despite we observed some objective responses in PTCL with lacutamab in monotherapy. These 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 quite a robust number of objective responses and therefore our -- our threshold though 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?

The second question was on partnership, yes.

Partnership. And around the partnership for lacutamab, we are actively looking for different options to pursue the next stage with lacutamab in the CTCL either by a partnership or alternative options.

And just one quick follow-up. Do you expect discontinuation of monotherapy impact your plans on the partnership for this molecule?

Not really. I mean the data on PTCL has 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.

We will take our next question from Daina Graybosch with Leerink Partners.

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 you had a lot of shrinking [indiscernible] Disease or did you have 3, and 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 in the unmet need compared to the therapeutic options here.

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

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?

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

Yes.

Basically, in this study, we have recruited the patients to 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.

So then what gives you confidence in the GEMOX combo will prove successful?

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

And yes, but why do you think that this will be successful? Why continue with the [indiscernible]

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

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

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

Our next phone question comes from Arthur He with H.C. Wainwright.

This is Arthur in for RK. So I just want to follow up on the regulatory question on lacutamab. So are you guys to go to the agent with the data, both with Sézary syndrome and the MF rather go for the Sézary syndrome data alone to talk to the agent to file the BLA. Just want to clarify that.

Sure. Originally, we -- when we had the data of Sézary, there was the option of going to the regulators with Sézary data alone, where we had a fast track designation and prime. Now we can really plan to merge the data, as I said, to maximize the value of lacutamab not only in Sézary that is a small sub group 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 other option of asking for accelerated approval still remains. And as you know, in order to get accelerated approval anyway, we need 12 months' durability of response that is needed for this. And of course, we need to align on what the registrational trial could look like.

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. Would -- is there CD20 color for the patient inclusion? And how about the dosing strategy there, if you can give additional color. Appreciate it.

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

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

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

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

Yes. Thanks a lot for your questions. And we're looking forward to the next meeting and the next important steps will be the presentation. The overall presentation at the ACR to present the features of ADC, [indiscernible] the IPH45 and then, of course, the general meeting taking place on May 21. So we're looking forward to reconnecting with you all on those 2 opportunities. And I wish you a very good day and looking forward to the next steps.

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