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. 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 the 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're 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. I would like to first recall that Innate Pharma is a very important player in the field of ADC pharmacology and innate immunity manipulation. We address that through different mechanisms of action where we have corresponding products. It's first about engaging NK cells, cytotoxic effectors to tumor cells, and that's the approach we implement with the ANKET platform, but also with the cytotoxic antibody lacutamab. We have also been pioneering the field of checkpoint inhibitors of NK cells with monalizumab, which is a checkpoint that is shared and is targeting the checkpoint shared by different classes of effector cells, both NK and T cells. And eventually by addressing suppression of the cytotoxic immune response through IPH62 and 63, which address the adenosine pathway. So what is the Innate Pharma strategy? Well firstly, it's about creating near-term value. That's what we want to achieve with our most advanced proprietary asset, lacutamab, which is in development in T cell lymphoma and actually in final CTCL with early PTCL data expected to be released by the end of 2023 at ASH. We look forward to the next steps, which will be the data on mycosis fungoides and that will inform the future of this program for further 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 that has generated several molecules. The first molecule in the clinic, advanced by our partner Sanofi, published in '23 important first clinical data. We will come back to that in greater detail for the SAR443579. 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: the second generation ANKET, which has now been brought to the clinic in Phase 1 in lymphoma. Beyond ANKET, we also advanced a second class of agents active as a single agent potentially in tumors with antibody drug conjugates. The first one being brought to IND in '24. This is through partnership; we have monalizumab, a checkpoint inhibitor in Phase 3, with AstraZeneca pursuing this late-stage asset which will deliver significant data in the next year. This translates into a portfolio that is a combination of proprietary products and partnered assets. I will now leave it to Sonia to detail the clinical stages and clinical progress with those effects on specialty, starting 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. Here, we are pursuing a fast to market strategy for lacutamab in the niche setting of Sezary syndrome, where lacutamab was granted the U.S. Fast Track Designation and EU PRIME Designation back in 2020. We expanded, post-Sezary syndrome, to mycosis fungoides where we have seen encouraging preliminary data from the Phase 2 TELLOMAK trial in patients that have a KIR3DL2 expression level above as well as below the threshold of 1%. We expect to present this data at an upcoming conference later this year. Data in MF together with the data in excess 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 1 testing lacutamab in monotherapy in PTCL, as the number of observed objective responses did not meet the pre-specified threshold for activity with lacutamab as a single agent. However, based on the data presented at ASH last year demonstrating the synergies between lacutamab and chemotherapy preclinical models of PTCL, we remain committed to the development in PTCL and continue to enroll patients in the Phase 2 combination trial with chemotherapy, gemcitabine, and oxaliplatin, where we believe the combination can offer additional benefit to patients. On Slide 8, we have a summary of the final Phase 2 data in Sezary presented at ASH last December in an oral presentation. This is a heavily pretreated post-mogalizumab patient pool with at least 5 million prior systemic lines of therapies, including moga. The global overall response rate was an encouraging 37.5%. I note the deepness of the partial responses as you can see on the waterfall plot on the slide. We also reported in this patient population an overall response rate of 46.4% in the skin and 48.2% in the blood and an overall clinical benefit rate of 87.5% with a median PFS of 8 months and durability of results 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 the causes from world code with the regulator later on. 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 intact cells in the tumor microenvironment. We were pleased to announce earlier this month that IPH65, the first of the second-generation aggregates, which target CD20 has entered the clinic, and the first human trial started with the first patient being dosed in March. The trial will enroll patients with relapsed refractory and non-Hodgkin's lymphoma and we will run-in the U.S., Australia, and France. In B-cell non-Hodgkin's 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's lymphoma and does not require any immune for the deletion as for other cell therapies. Additionally, the IPH65 program addresses the commentary associated with the loss of CD16 by ensuring activation of intratumoral NK cells via the activation of NKp46. Finally, by stimulating the NK cell's natural function, IPH65 has bystander effects that can cause the elimination of CD20 negative tumor cells, overcoming tumor heterogeneity or loss of a 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 antisense 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 effector for NKp46 is the backbone of our technology, and since it has stable expression at the NK cell surface, even in the genomic environment, it introduces optimal activation of the NK effector functions. We have also developed a second generation version of the technology by incorporating a variant of INTERLINK-2 to induce NK cell proliferation. As you can see, our pipeline of ANKET molecules is significantly growing, with Sanofi now having licensed 4 molecules. Two are in the clinic, ANKET and two are at the technical stage in solid tumors, including IPH67, which is a 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 another view of the clinical data presented by Sanofi last year at ASH for the ANKET IPH6101, also named SAR’579. In this dose escalation, we were encouraged to see initial preliminary single agent activity and safety of SAR’579 in relapsed recurrent AML patients. At the 1mg/kg dose, 5 complete responses were observed out of 15 patients with 3 responders remaining in remission at the beta cutoff at over 7, 12, and 14 months of treatment. Top SAR'579 was well tolerated up to 6 mg/kg with no dose-limiting toxicity observed and only 2 grade 1 CRS observed out of 43 patients. The FDA awarded SAR'579 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 collaboration with Sanofi. In 2016, we signed an initial agreement for 2 ANKET molecules worth up to EUR400 million in milestones plus royalties, among which we have announced EUR60 million to date. Both programs, SAR'579 and SAR‘514, are progressing to Phase 1 clinical trials. In December '22, we signed a second agreement whereby Sanofi licensed the IPH62 ANKET program targeting B7H3, 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 EUR15 million milestone and bringing the total payment received from the second agreement to EUR40 million. Altogether, considering these two agreements, we are eligible for a total milestone package of up to EUR1.75 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 properties that are well suited for ADC development. Our agreement with Takeda in the field provides validation for 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 electing for targeted 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 non-overlapping with enfortumab, the antibody backbone of PADCEV. Then, we selected the validated clickable linker designed to be hydrophilic to counterbalance the hydrophobicity of the payload and to allow for a high blood antibody ratio. Finally, we selected a well-validated Topo I inhibitor with a bystander effect, allowing us to bypass MMAE related resistance mechanisms and to address tumors with pathogenicity making for expression. Altogether, these elements result in a differentiated ADC showing strong efficacy in preclinical models, including in fact set by factory PDX, as well as an encouraging PK tox profile in non-human primates. These clinical 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 3 trial called PACIFIC-9. AstraZeneca started this Phase 3 evaluating the combinations of either monalizumab or oleclumab plus durvalumab in the unresectable Stage 3 non-small cell lung cancer setting, for patients who have not progressed after concurrent chemo-radiotherapy. Based on the results of their Phase 2 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 the monalizumab and lacutamab combination versus durvalumab alone. The results also showed an increase in the primary endpoints of confirmed overall response for monalizumab and durvalumab combination or durvalumab alone of 76% 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 neoadjuvant non-small cell lung cancer patients. Based on Phase 2 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 Innate's financial position and financial results as of the year ended December 31, '23, are as follows. Cash, cash equivalents, short-term investments, and financial assets amount to EUR102.3 million as of the end of last year, including financial instruments amounting to EUR9.8 million. This number does not include the EUR15 million payment received from Sanofi in January '24. Revenue and other income from continuing operations amounted to EUR61.6 million in '23, which mainly comprises revenue from collaboration and licensing agreements received pursuant to the agreements with AstraZeneca, Sanofi, and Takeda, along with EUR9.7 million in research tax credit. Operating expenses from continuing operations amounted to EUR74.3 million in '23, with R&D now making up 75% of the OpEx. Research and development expenses from continuing activities amounted to EUR56 million in '23, up 8.4% from the 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 EUR18.3 million, down by 18.5% from the 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 summarizes the IFRS consolidated financial adjustments for the year ended December 31, '23, including 2022 comparative information. I will now hand over to Herve.

Thank you, Frederic. I won't go through all the catalysts listed on Slide 17, but I'll spend a few minutes on some of the key clinical catalysts noted on this slide before providing a summary and turning to your questions. We expect the final data for our proprietary antibody lacutamab in mycosis fungoides imminently, and we look forward to presenting this data in detail at an upcoming medical meeting. Concurrently, we'll also commence interactions with global regulatory agencies as we map out the next steps in its development. Our antibody therapeutic NK cell engager program, referred to as the ANKET program, continues to evolve. This program has received broad validation through licensing of 4 programs to Sanofi. Recently, we have taken a proprietary program originating 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 3 trial called PACIFIC-9 is underway. This study examines monalizumab plus durvalumab in non-small cell lung cancer, with the thinking being that dual targeting of the PD-L1 and NKG2A pathways through this combination will lead to enhanced antitumor activity compared to 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 2 in combination with durvalumab and chemotherapy in treatment-naive patients with resectable early-stage non-small cell lung cancer. In conclusion, over the years, we have established strong expertise in immunopharmacology with definitive Phase 2 data in hand and are mapping out the regulatory next steps for lacutamab. Our proprietary NK-cell engager platform ANKET has the potential to address both hematologic malignancies and solid tumors. We are pursuing ADCs with a focus on differentiation, with IPH45 being a key example of our approach. 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. 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.

We will take our first question from Yigal Nochomovitz with Citi.

This is Yigal Nochomovitz from Citi. I have a couple of questions. First, regarding the PTCL program, could you explain your decision not to reopen the Phase I monotherapy trial and provide more details on that? What was the internal benchmark for efficacy? Additionally, unlike lacutamab, where you are in the process of securing a partner for commercialization and development, do you anticipate that the upcoming data for MF will help in establishing a partnership?

Right. Let me say that in PTCL, we have enrolled 20 patients and the data around safety from 10 patients were presented at ASH last year. However, we included a formal interim analysis where we defined a minimum number of objective responses that needed to be observed prior to continuing recruitment. Despite observing some objective responses in PTCL, we needed a higher number of those responses for monotherapy. This number did not meet the minimum requirement set by the protocol. As you understand, in PTCL, there are many different therapeutic options already providing quite a robust number of objective responses, so our threshold was quite high. However, we remain committed to the PTCL through the Phase 2 study in combination with chemotherapy, where we expect to see some synergism between lacutamab and chemotherapy, providing meaningful clinical benefit to patients. The second question was around partnerships, is that correct?

The second question was on partnership, yes.

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

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

Not really. The data on PTCL have no impact neither on the Phase 2 in PTCL in combination with chemo, but definitely not on the CTCL where we already have the data in-house.

I'm going to ask a follow-up on the previous question regarding the single-agent activity. It's challenging to ascertain since we can't see the results. Did you have one response along with significant stable disease? Or did you have three responses, and I simply didn't meet your criteria? I wonder if you could provide any more specific details, especially since we would like to know what gives us clinical confidence that this will demonstrate a more meaningful benefit for patients and the unmet need compared to current therapeutic options.

This is the operator. I apologize; did our presenters go on mute? Ladies and gentlemen, we are experiencing technical difficulties. Ladies and gentleman, I will put music back on 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 manage our technical difficulties. Ms. Graybosch, do you mind asking your question again, please?

That came from CD, 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 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.

In this study, we have recruited patients to have an expression level of KIR3DL2 that is equal to or above 1%. We did not restrict it to any subtype of PTCL, and we hope to present the data later on this year. Even if we are not reopening the study, the sample size is relatively small because it's around 20 patients.

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

This is an investigator-sponsored trial, and the 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 IIIB?

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

Operator, I have an offline question before we return to the online ones. Justine Telliez from Kepler Cheuvreux has asked for an update on lacutamab and the potential progress with regulatory authorities regarding Sezary syndrome. Can you provide an update on this and the status of the partnership that you mentioned earlier? What are the current regulatory interactions?

We are working. Now that we have the data in MF and these data are promising, we are working towards a fast forward alongside SS and MS, and a plan to maximize the value of lacutamab will be discussed with regulators.

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

Sure. Initially, we had the option to approach the regulators using only the Sézary data, where we received Fast Track Designation and PRIME. Now, we're planning to integrate the data to enhance the value of lacutamab, not just for Sézary, which is a small subgroup of CTCL, but also to maximize its potential for the entire CTCL population, including mycosis fungoides. The possibility of pursuing accelerated approval is still on the table. To achieve accelerated approval, we will need to demonstrate 12 months of durability of response. Additionally, we must agree on the design of the registrational trial.

Just quick on the ANKET program. It's great to see the progress there and the expansion of the portfolio. Specifically on the 6501 trial, I'm just curious for the initial evaluation. Would there be CD20 color for patient inclusion? And how about the dosing strategy available?

Sure. In the study, we are going to recruit patients who have CD20 positive non-Hodgkin lymphoma, and this includes every subtype. This is a classic first human trial. Therefore, we started the first cohort, as you can imagine, since the first patient was enrolled in March. It's a dose escalation study with expansion.

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

The dose escalation is guided by the safety signals that we see and, of course, by statistical considerations and appetite from the investigators depending on the safety and exposure that we observe in 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. We're looking forward to the next meeting, and the next important steps will be the overall presentation at the ACR to present the features of ADC, OCD, the IPH45 and then, of course, the general meeting taking place on May 21. We're looking forward to reconnecting with you all on those two opportunities. 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. You may now disconnect.