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

Hello, everyone. Thank you for joining us and welcome to the Innate Pharma first half 2026 business update and financial results. [Operator Instructions] We will now hand the conference over to Stéphanie Cornen, Vice President, Investor Relations, Communication and Commercial. Stéphanie, please go ahead.

Good morning and good afternoon, everyone. Thank you for joining us for Innate Pharma's first half 2026 business update and financial results conference call. The press release and today's presentation are both available on the IR section of our website. Before we begin, I would like to remind everyone that today's presentation includes forward-looking statements based on current expectations. These statements involve risks and uncertainties that could cause actual results to differ materially. To briefly cover today's agenda, our CEO, Jonathan Dickinson, will begin with a strategic overview and outlook. Marcus Jensen, our Chief Medical Officer, and Yannis Morel, our Chief Operating Officer, will then take us through updates on Lacutamab, IPH4502, Monalizumab, and our preclinical ADC pipeline. Frédéric Lombard, our Chief Financial Officer, will then review our financial results. Jonathan will return for our upcoming catalysts and closing remarks before we open the call for Q&A. With that, I will now hand it over to Jonathan.

Thank you, Stéphanie. Good morning to those joining from the U.S. and good afternoon to our European participants. Turning to slide 5. The first half of 2026, together with development since the end of the period, has been marked by important progress across our focus portfolio. Starting with Lacutamab, in August, we announced our strategic partnership with Sobi to advance the program in T-cell lymphoma. As announced yesterday, that partnership is now effective following the closing of the deal and the TELLOMAK-3, Phase 3, has been initiated. We are targeting the first patient in the study in Q1 '27 as we work toward a filing for accelerated approval in Sézary syndrome in the second half of 2027. For IPH4502, as announced in July, we completed Phase 1 dose escalation and cohort enrichment enrollment and have seen preliminary anti-tumor activity, including objective responses in post-EV urothelial cancer, as well as in non-small cell lung cancer and head and neck cancer, with a favorable safety profile observed to date. We will share initial Phase 1 dose escalation data at the EORTC-NCI-AACR meeting on November 18, 2026, in Barcelona. Turning to Monalizumab, enrollment in the PACIFIC-9 Phase 3 study has been completed, and we continue to expect the Phase 3 readout in the second half of 2026. Financially, our position has been strengthened by the $75 million Sobi upfront payment associated with the closing of the deal and the €30 million equity financing. Together, these are expected to extend our projected cash runway through the end of the first quarter of 2028. Taken together, we believe these developments position Innate for several important catalysts in the second half of 2026. Let me start with Lacutamab. Lacutamab is our anti-KIR3DL2 antibody being developed in cutaneous T-cell lymphoma, or CTCL. Turning to slide 7, as I mentioned, in August, we announced a strategic partnership with Sobi to license Lacutamab in T-cell lymphoma. The transaction has now closed. TELLOMAK-3, our confirmatory Phase 3 study in CTCL, has been initiated with the first patient expected in the first quarter of 2027. Innate will conduct the Phase 3 study, and we will file for accelerated approval in Sézary syndrome based on the existing Phase 2 TELLOMAK data. Upon the potential accelerated approval, Sobi will receive exclusive global rights to commercialize Lacutamab. Considering positive Phase 3 results, Sobi will be eligible to obtain full global development rights. Under the terms of the agreement, the transaction includes a $75 million upfront payment, up to $40 million in near-term milestones connected to Sézary syndrome, and up to an additional $465 million related to Sobi's option to obtain full development rights and future regulatory and commercial milestones. The agreement also includes tiered double-digit royalties on future net sales. I'll now hand it over to Marcus to review the regulatory and development path forward. Marcus.

Thank you, Jonathan. Lacutamab is now progressing towards Phase 3 clinical initiation and planned accelerated approval filing. So, from a regulatory and development perspective, the path forward is well-defined. We have FDA clearance to proceed with TELLOMAK-3, which now has been initiated with the first patient expected in the first quarter of 2027. The study includes a confirmatory cohort in Sézary syndrome and a registration cohort in mycosis fungoides. The existing Phase 2 TELLOMAK data are intended to support an accelerated approval filing in Sézary syndrome once TELLOMAK-3 is underway. The filing currently planned for the second half of 2027. As a reminder, Lacutamab received breakthrough therapy designation from the FDA for relapsed or refractory Sézary syndrome, as well as fast track designation from the FDA, PRIME designation from the EMA, and an orphan drug status in both U.S. and Europe. So, with the regulatory pathway established and the Sobi partnership now effective, our focus is on advancing TELLOMAK-3 towards first patient enrollment first quarter 2027. Turning slide, please. I now move to IPH4502, our differentiated Nectin-4 specific ADC, which is in Phase 1 clinical development for advanced solid tumors. IPH4502 was designed to address some of the key limitations of the first generation of Nectin-4 ADCs. The molecule combines an exatecan-topoisomerase-1 payload with our proprietary stable linker, of affinity Nectin-4 antibody that binds non-overlapping epitope compared with enfortumab vedotin. We believe these features provide an important point of differentiation as the Nectin-4 ADC landscape continues to evolve. Importantly, we are now beginning to see that profile translate clinically and have observed preliminary anti-tumor activity to objective responses in heavily pretreated patients, including patients with urothelial cancer following prior enfortumab vedotin treatment, as well as in non-small cell lung cancer and head and neck cancer. The safety profile observed to date has been favorable with limited hematological toxicity. We completed dose escalation in July and are broadly tracking in line with our expectations across expansion cohorts with approximately 15 patients enrolled in both post-EV urothelial carcinoma and head and neck cancer, and somewhat lower enrollment in non-small cell lung cancer cohort. Data cleaning is ongoing, and we look forward to presenting the initial Phase 1 dose escalation data set at the EORTC-NCI-AACR Symposium on November 18, 2026. Next slide, please. Our area of particular interest for IPH4502 is urothelial cancer following prior EV treatment. While EV plus pembrolizumab has significantly changed the treatment landscape, most patients progress within two years and there remains no established second-line standard treatment after progression of FITS regime. Against that backdrop, the preliminary activity we have observed with IPH4502 in heavily pretreated post-EV patients, including objective responses, is encouraging. These remain early Phase 1 observations, and the upcoming data set will help us to determine how to best advance the program. Slide 11, please, slide 12, please. I move forward to Monalizumab, which is our NKG2A antibody being co-developed with AstraZeneca in non-small cell lung cancer. PACIFIC-9 is a randomized Phase 3 trial with unresectable stage 3 non-small cell lung cancer patients who have not progressed following a definitive platinum-based concurrent chemoradiotherapy. The study enrolled 1,051 patients in comparison to Durvalumab plus Olecumab, Durvalumab plus Monalizumab and Durvalumab plus Placebo as a control, with progression-free survival as the primary endpoint. The program is supported by three earlier Phase 2 studies non-small cell lung cancer, including COAST, NEOCOAST and NEOCOAST 2. With enrollment complete, Phase 3 data remain expected in the second half of 2026. I now hand over to Yannis to briefly review the economics of our partnership with AstraZeneca.

Thank you, Marcus. As a reminder, under our Monalizumab partnership with AstraZeneca, we have received up to date EUR 450 million. And the additional potential milestone in the agreement are up to EUR 825 million. Together with double-digit royalties outside Europe and 50% profit sharing in Europe. Turning to slide 15, I'll move now to our next generation ADC pipeline. Beyond IPH4502, we are using our internal capabilities and technology to build a broad portfolio of differentiated ADC candidates. Turning to slide 16, leveraging our antibody discovery and engineering expertise, we have built a comprehensive ADC platform to develop a portfolio of next-generation ADCs designed to overcome the limitation of the current ones. Building on IPH4502 linker, which stability in patients is demonstrated by our emerging clinical data, we are developing a drug candidate portfolio around three approaches. First, dual targeted bispecific ADCs to address tumor antigen heterogeneity and to expand addressable indication compared to single tumor antigen targeting. Second, bispecific ADCs with enhanced internalization to unlock the activity in antigen low expressing tumors. And finally, dual payload ADCs using complementary mechanism of action to overcome resistance. I now hand over to Frederic for our financial results.

Thank you, Yannis. I'll now provide a brief overview of our financial position for the first half of 2026. Turning to slide 18. So, as of June 30, 2026, our cash, cash equivalent, and financial assets were amounting for €21.4 million. That balance does not include the $75 million Sobi upfront payment, equivalent to €65 million, nor the proceeds from the €30 million equity offering. The offering represents €30 million on gross proceeds or approximately €28 million in expected net proceeds. The primary use of proceeds is the continued clinical development of IPH4502, the advancements of our preclinical ADC portfolio, and as well as general corporate purposes. Together with the Sobi upfront payment, these proceeds are expected to extend our cash runway through the end of the first quarter of 2028.

I'll now hand over to Jonathan. Thank you, Frederic. Moving to slide 20. And turning to our key catalysts for the remainder of 2026. For Lacutamab, following closing of the strategic partnership with Sobi, TELLOMAK-3 has been initiated with the first patient planned for the first quarter of 2027, followed by a plan and filing for accelerated approval in the second half of 2027. For IPH4502, dose escalation enrollment is complete with preliminary anti-tumor activity and a favorable safety profile observed to date. We will report initial Phase 1 dose escalation data at the EORTC-NCI-AACR meeting on November 18, 2026. And for Monalizumab, PACIFIC-9 enrollment is complete, with the Phase 3 readout expected in the second half of this year. We have three important near-term catalysts across our focus portfolio, together with a strengthened financial position that supports our continued execution of these priorities. With that, operator, we are ready to open the call for questions.

We will now begin the question and answer session. [Operator Instructions] Your first question comes from the line of Daina Graybosch with Leerink Partners. Your line is open, Daina. Please go ahead.

Hey, morning, everyone. Got plenty of updates. So, just one for me. I got on for Daina. So we've seen the prior exatecan-based ADC show some pretty good activity in the post-PADF setting, but it did have some, you know, pretty high heme toxicities. And so can you talk about IPH4502 stable linker design and sort of what gives you confidence you won't see the same sort of issues? Thank you.

Thank you for the question. Maybe Yannis, you can take that one. Yes, maybe I can start and let Marcus comment. I mean, we have worked on the design of the linker and based on what we have seen at ASCO.

By others with their own linker, it seems that the stability of our linker that we have seen in preclinical models, including in non-human primates, seems to be transferred, translated into the human situation, leading to a very limited release of a free payload, which is one of the reasons of the systemic pathological toxicity of some ADCs.

Yes, what we can add is the Lilly data that have been released recently actually state that based on their own data that have seen in the trial. So the unstable linker was used as an explanation for the hematologic toxicity in this data set.

Great, thank you. Your next question comes from the line of Jeet Mukherjee with US Bancorp BTIG. Your line is open, Jeet. Please go ahead.