Earnings Call Transcript - IPHA Q1 2023

Operator, Operator

Thank you for being here for the Innate Pharma Revenue Publication Conference Call for the first quarter of 2023. I am happy to introduce Henry Wheeler, Vice President of Investor Relations and Communications. Henry, please take it from here.

Henry Wheeler, Vice President, Investor Relations and Communications

Thank you. Good morning, good afternoon, and welcome, everyone. This morning, Innate issued a press release providing a business update for Q1 2023. 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 will make 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, for today's call, we will be joined by Mondher Mahjoubi, our Chief Executive Officer, who will then hand over to Joyson Karakunnel, our Chief Medical Officer, who will cover updates on lacutamab and monalizumab. Yannis Morel, Head of BD and Product Portfolio Strategy, will then cover some anchor updates on BD, who will then hand over to Mondher for close. We will also have our CFO, Frederic Lombard, on the line for questions. Mondher, I'll now hand over to you.

Mondher Mahjoubi, CEO

Thank you, Henry. Good morning, good afternoon, everyone, and welcome to this call. Let's maybe move to Slide 4 first to remind everyone what our strategy is. As you know, we are an early clinical-stage company. Our business model centers around three key priorities where we look to drive value from our early R&D efforts to later stage partnerships, where it makes sense to do so. Our ambition is to develop innovative drug candidates that contribute to transform cancer care through a very strong pipeline of differentiated antibodies. So first, we look to create near-term value, driven by our lead proprietary asset, lacutamab, which is in development for T-cell lymphoma, with final cutaneous T-cell lymphoma readouts expected to happen in the second half of this year. Early peripheral T-cell lymphoma data are underway. Second, we continue to fuel our pipeline and create longer-term value by leveraging our antibody engineering capabilities to develop novel molecules with a primary focus on our multi-specific NK cell engager proprietary platform we call ANKET. And as we develop antibody targets for our ANKET platform, we recognize some of these binders may be more applicable for antibody-drug conjugate technology, and we look to further leverage our expertise in these settings. Last but not least, we are building a strong ascertainable foundation of our business with various partnerships across industry and academia. Here, our AstraZeneca partnership with monalizumab is continuing in early-stage non-small cell lung cancer. Our focus remains to leverage the value of our assets as much as possible. We want to ensure that if we can gain valuable competencies via partner agreements, we will consider that in our development plans for the product. This will further validate our science and offer capital that we can reinvest to advance our early R&D engine. Before I hand over to Joyson, Slide 5, you have an overview of our pipeline, which shows how we are continuing to translate our science into a robust portfolio of both proprietary and partnered assets. It also illustrates how we are executing against our strategy with our lead proprietary assets, lacutamab, the ANKET portfolio with the lead IPH65 and also the emerging ADCs. In the bottom of this slide, we have our partnered products with AstraZeneca, Sanofi, and now Takeda from late to early-stage development. As you know, we anticipate a series of potential clinical readouts and catalysts in the upcoming couple of years as our R&D engine continues to leverage our centric know-how to create a sustainable business. I would like now to pass the call over to Joyson, who will review the progress made with our portfolio, starting with lacutamab, our most advanced proprietary asset. Joyson, over to you.

Joyson Karakunnel, Chief Medical Officer

Thank you, Mondher. On Slide 6, let me summarize the progress we are making with lacutamab. We are pursuing a fast-to-market strategy for lacutamab in the niche setting of Sézary syndrome, where lacutamab was granted U.S. Fast Track designation and EU PRIME designation in 2020. We have expanded Sézary syndrome to mycosis fungoides, where we have seen encouraging preliminary data from our Phase II trial in both cohorts. For the Sézary syndrome and mycosis fungoides, enrollment is on track, and the final data is due for both cohorts in the second half of 2023. Finally, we are continuing to enroll into peripheral T-cell lymphoma in the Phase Ib and II monotherapy in combination trials in the relapse setting, with initial data expected later this year. On Slide 7, we have the preliminary Phase II data published last year in Sézary syndrome and mycosis fungoides. On the top half of the slide, in Sézary syndrome, at the ASH Annual Congress in December of 2022, the presentation showed that in this heavily pretreated post-mogamulizumab patient pool with a median prior line of therapy of six, the ORR in the ITT population was 21.6%, with an ORR of 35.1% in the skin and 37.8% in the blood. It was very encouraging to see activity replicated in the larger Phase II trial in these late-line patients. A favorable safety profile was also seen. We look forward to further interactions with regulators as we get the final data later this year. The lower half of the slide summarizes the preliminary Cohort 2 and 3 data in mycosis fungoides at EORTC in September of last year. In this data presentation, in the KIR3DL2-expressing cohort, we were encouraged to see that in these late-line patients with a median of four prior treatments, lacutamab demonstrated a 28.6% ORR and six responses. We are particularly encouraged by the responses in the skin, where we saw a 57.1% ORR and with 12 responses. A reminder that skin response is an important response in this skin-predominant disease. As many of you know, a clarification of the guidelines for CTCL have been released this year, and we will be issuing more guidance on our strategy based on these criteria. In addition, we continue to engage with the FDA as per our FDA Fast Track designation. On Slide 8, I would like to update you on monalizumab. To remind you, monalizumab is an anti-NKG2A, which acts upon the checkpoint pathway to potentiate NK cell activation that we have licensed to AstraZeneca for oncology. On this slide, you can see an overview of the late-stage development plan for monalizumab in lung cancer.

Operator, Operator

Ladies and gentlemen, this is the operator. We are currently experiencing a short technical difficulty. Your call will resume shortly. Until that time, your lines will be placed on music hold. Please stand by. This presentation will now resume.

Joyson Karakunnel, Chief Medical Officer

I apologize for the technical difficulty. Let me go ahead and continue where I had stopped off. For the Sézary syndrome and mycosis fungoides, enrollment is on track, with final data due for both cohorts in the second half of 2023. Finally, we are continuing to enroll into peripheral T-cell lymphoma in the Phase Ib and II monotherapy in combination trials in the relapse setting, with initial data expected later this year. On Slide 7, we have the preliminary Phase II data published last year in Sézary syndrome and mycosis fungoides. On the top half of the slide, in Sézary syndrome, at the ASH Annual Congress in December of 2022, the presentation showed that in this heavily pretreated post-mogamulizumab patient pool with a median prior line of therapy of six, the ORR in the ITT population was 21.6%, with an ORR of 35.1% in the skin and 37.8% in the blood. It was very encouraging to see activity replicated in the larger Phase II trial in these late-line patients. A favorable safety profile was also seen. We look forward to further interactions with regulators as we get the final data later this year. The lower half of the slide summarizes the preliminary Cohort 2 and 3 data in mycosis fungoides at EORTC in September of last year. In this data presentation, in the KIR3DL2-expressing cohort, we were encouraged to see that in these late-line patients with a median of four prior treatments, lacutamab demonstrated a 28.6% ORR and six responses. We are particularly encouraged by the responses in the skin, where we saw a 57.1% ORR and with 12 responses. A reminder that skin response is an important response in this skin-predominant disease. As many of you know, a clarification of the guidelines for CTCL have been released this year, and we will be issuing more guidance on our strategy based on these criteria. In addition, we continue to engage with the FDA as per our FDA Fast Track designation.

Yannis Morel, Head of BD and Product Portfolio Strategy

Thank you, Joyson. On Slide 9, I wanted to highlight our proprietary NK cell engager platform that we call ANKET, ANKET standing for antibody-based NK cell engager therapeutics. ANKET is a versatile fit-for-purpose technology made of various building blocks that is creating an entirely new class of multi-specific engager to induce synthetic immunity against cancer. This technology platform, which leverages our scientific expertise in the NK cell space, will be an engine for our pipeline, creating value via a series of drug candidates addressing multiple tumor targets. The backbone of the ANKET platform is based on the unique engagement of the activating NK cell receptor, NKp46 and CD16 on NK cells, which allows for optimal harnessing of the NK cell effector function, which can be further increased by the addition of an IL-2 variant to induce NK cell proliferation.

Operator, Operator

Please stand by, a short technical difficulty, and we'll just connect them back in. Thank you for standing by. This will now recommence.

Yannis Morel, Head of BD and Product Portfolio Strategy

Sorry for the interruption. So the backbone of the ANKET platform is based on the unique engagement of the activating NK cell receptor, NKp46 and CD16 on NK cells, which allows for optimal harnessing of the NK cell effector function, which can be further increased by the addition of an IL-2 variant to induce NK cell proliferation. On Slide 10, I wanted to share our enthusiasm for this platform. As you can see, our pipeline of ANKET molecules is significantly growing, with Sanofi having now licensed three molecules and having an option on two other undisclosed targets. Also, our most advanced proprietary, ANKET IPH6501, which is targeting CD20, is heading towards an IND this year. In addition, we have a proprietary preclinical program against multiple targets. On the right panel, you can see the detailed mechanism of action of the ANKET molecules, which we have recently published in a couple of articles in high-impact journals. Our Nature Biotechnology paper, published in January this year, described the joint work with Sanofi on the CD123 NK cell engager, IPH6101 or SAR'579. SAR'579 is co-engaging NKp46 and CD16 on NK cells and, therefore, triggers potent antigen-dependent killing of AML tumors as well as the production of key cytokines for the antitumor response, but without inducing systemic cytokine release, which is dose-limiting for most T-cell engagers. Moreover, we have shown that in our cell reports medicine paper that the incorporation of an IL-2 variant into an ANKET induces potential NK cell proliferation within the tumor microenvironment, therefore increasing the number of antitumor effect cells. On Slide 11, you can see another view of the IPH6101 ANKET program, also named SAR'579. Preclinical studies demonstrate antitumor activity in mice, but most importantly, efficacy against patient primary tumors. They also showed good PK/PD and safety in nonhuman primates. In addition, one key advantage of the ANKET technology is shown on the graph here. As compared to a T-cell engager against the same target, here in red, SAR'579, in blue, does not induce systemic cytokine release, which is a very common side effect for T-cell engagers, suggesting a potentially better safety for the NK engager as well as allowing for potential higher dosing. SAR'579 entered into Phase I in December 2021 based on this rationale. And we look forward to the presentation by Sanofi next month at ASCO, as the SAR'579 Phase I has been selected for an oral presentation. On Slide 13, you will see the highlights of our recent Takeda deal. We entered into an agreement whereby Takeda gained exclusive rights to a panel of selected antibodies against an undisclosed target to develop antibody-drug conjugates with a primary focus in Celiac disease, which is outside of our oncology focus. The terms of the agreement included a $5 million upfront and up to $410 million in milestone and royalties on net sales. The deal further demonstrates our antibody engineering expertise and its applicability to antibody-drug conjugate development as well as our ability to monetize pipeline assets in therapeutic areas outside of our area of expertise. Now I will now hand over to Mondher for a summary.

Mondher Mahjoubi, CEO

Thank you, Yannis. So as you can see on Slide 14, we are working diligently to execute across all our strategic pillars and believe that we are laying the foundation to drive near and long-term value. Looking at our clinical program, we expect to achieve a number of milestones over the next two years. As you heard from Joyson, our Phase II TELLOMAK study for lacutamab continues to progress, with final data due at the end of this year. In addition, we look forward to initiating two initial peripheral T-cell lymphoma data later in the year. In parallel, we continue to develop the ANKET technology platform further, reinforced by our partner, Sanofi, and we are very encouraged by the preclinical results from our next-generation NK cell engagers and progress in the clinic. Yes. So I'm not sure where we disconnected, so I'm going to probably go to Slide 15, where you can see the upcoming abstract selected for the ASCO Annual Meeting. We look forward to updates from our early ANKET, with the first clinical data on IPH6101 to be shared by Sanofi, while AstraZeneca will provide progress on the two ongoing clinical trials with monalizumab in early-stage non-small cell lung cancer. Let's move to the conclusion slide on Slide 16. As you can tell, we continue our exciting journey at Innate. We look to build our business to create value for patients and stakeholders. In summary, we have positioned Innate Pharma for the future with our strategy and made meaningful progress across all three strategic pillars. With our R&D engine and antibody engineering expertise, our science is producing more candidates to progress to the clinic, some we are developing alone and some are partnered. We have a focus on our NK cell engager platform, ANKET, as well as ADC. In parallel, our late-stage portfolio continues to advance as we look to maximize the late-stage portfolio assets of lacutamab and monalizumab. Our partnership strategy continues to evolve with the recent Takeda deal adding to those of AstraZeneca and Sanofi. Finally, we have carefully managed our resources so we can continue a sustainable business to invest and progress in our pipeline. I'm very pleased that we continue to have a strong cash position with a runway into mid-2025. Collectively, we are driving value across our business and ultimately advancing our goal to deliver innovative medicine to patients. We look forward to keeping you updated on our progress. That concludes our prepared remarks. We will now open the call to questions.

Operator, Operator

Your first question comes from the line of Yigal Nochomovitz of Citi.

Ashiq Mubarack, Analyst

This is Ashiq Mubarack on for Yigal. You alluded to some regulatory discussions you have planned later this year on Sézary. I'm just wondering if you can give us a sense of when those might happen, what the scope of those discussions might be.

Mondher Mahjoubi, CEO

Thank you. So Joyson, I hope you've heard the question. It's about the regulatory strategy for lacutamab. You're on mute.

Joyson Karakunnel, Chief Medical Officer

Can you hear me now? Okay, yes. So first, thanks for your question, and thank you for the opportunity. So from a regulatory standpoint, we are continuing to talk with the FDA based on FDA Fast Track designation. Those conversations are ongoing at this point. We are working to best proceed in alignment with the FDA to be able to move forward for our next-stage development for lacutamab.

Mondher Mahjoubi, CEO

Thank you, Joyson. Thank you for the question. Do you have another one?

Ashiq Mubarack, Analyst

Yes, please. Okay, I'll ask one more then. Congrats on the recently signed Takeda deal. I'm just wondering if you can comment at all on the sort of rationale for using an ADC in a disease like Celiac. I think we tend to think of ADCs as very intensive therapies, life-saving treatments, whereas for something like Celiac, I tend to think of it as a more manageable disease or something like that. So I'm wondering if you can help us put that into context a little more.

Mondher Mahjoubi, CEO

Thank you. I'm not sure we're going to help you that much. First of all, as you know, we are not experts in the field of inflammatory and chronic diseases like Celiac disease. Because of the agreement with our partner, Takeda, we did not disclose any information on the target. So unfortunately, I cannot provide more granularity on the rationale of this deal and why. But nevertheless, Takeda has been invested in this field for quite some time, and they are, of course, experts in this development. So I would refer to them to provide more details on this deal. I hope you understand.

Operator, Operator

Your next question comes from the line of Daina Graybosch from SVB Securities.

Daina Graybosch, Analyst

Could you provide any context for the upcoming oral presentation of the CD123 ANKET at ASCO? Specifically, how many patients are involved? Is it focused on PK/PD efficacy? And if you cannot share those details due to your partnership with Sanofi, what data points do you think are particularly important for this first-in-human data for your ANKET platform that would validate it overall?

Mondher Mahjoubi, CEO

Absolutely. Thank you, Daina. Very important question, and I wish we could have the opportunity to provide more details. This is a Sanofi Phase I. No other info was disclosed or they disclosed at this time. You know that the upside, the content will be disclosed on May 25, and the presentation is scheduled for June 2. So what I can say, this is a Phase I trial that started back in December 2021. And of course, it's essentially in AML, but also in MDS and also some form of ALL. So you can certainly have an idea of the patient population and the number of patients that you can expect from a dose-escalation Phase I. That's all I can say at this point in time. Sorry for not disclosing more because it's not in our hands.

Daina Graybosch, Analyst

That's okay. I understand. How about just from an ANKET platform, what type of data do you think would be validating? And I guess, are there particular PD biomarkers that you're looking at that you think are important for the platform for all the programs, or certain PK markers in addition to efficacy?

Mondher Mahjoubi, CEO

Yes, certainly. Maybe I'm going to hand over to Yannis to provide a little bit more color on this second question.

Yannis Morel, Head of BD and Product Portfolio Strategy

Daina, I think one important thing that we would like to see, and that's why we'll be, like you, really looking forward to seeing the abstract on the 25th as well as the presentation, is to see where the claims that we are making based on the preclinical observations we have made translate into clinical observations as well, especially in preclinical. As I mentioned, we see antitumor activity without the need for additional NK cells, but also, most importantly, this of systemic cytokine release, which allows the dosing of the molecule at a dose that is more in the microgram per kilogram range rather than the per kilogram, which is the typical range for T-cell engagers.

Mondher Mahjoubi, CEO

Thank you, Yannis. Thank you, Daina. Do we have another question? Okay.

Operator, Operator

Your next question comes from the line of Swayampakula Ramakanth from HCW.

Swayampakula Ramakanth, Analyst

This is RK from H.C. Wainright. So talking about the ANKET platform, in terms of 6501, the CD20-targeted ANKET, what sort of additional work do you need to do to get to the IND? And also, in terms of initiating the clinical trial, can you give us a little bit more color as to the timing of that?

Mondher Mahjoubi, CEO

Yes. Thank you, RK. Thank you for your question. It gives me, of course, the opportunity to update everyone on IPH65 or tetra-specific ANKET that is targeting CD20. As we said, IND filing is planned for this year. We are working diligently, and the start of the Phase I is planned in 2023. That's what I can say. We are really actively working on executing the regulatory strategy and getting the final go from the FDA for this Phase I, which, as you would anticipate, is targeting CD20 disease and is a classic dose-escalation phase, first and then the dose-expansion part of it is coming next.

Swayampakula Ramakanth, Analyst

And then on lacutamab, in terms of the PTCL data that's expected later this year from the two studies, what sort of data should we expect? And what do you think is meaningful for you folks to see so that you can take this to the next stage of development?

Mondher Mahjoubi, CEO

Sure. Another important question. Joyson, did you hear the question about PTCL and the expectation and what would be meaningful from a clinical standpoint?

Joyson Karakunnel, Chief Medical Officer

Sure, thank you for the question. Currently, we are involved in the monotherapy as well as the combination with gemcitabine and oxaliplatin for PTCL. The data will be disclosed at the end of this year. PTCL is a very aggressive disorder with a high unmet need and extremely low incidence rate. Presently, there is no strongly established standard of care for relapsed/refractory cases, making it challenging to identify a comparison drug in this cohort. That said, response rates typically range from 25% to 40%.

Mondher Mahjoubi, CEO

Thank you, Joyson. Thanks, RK.

Operator, Operator

Your next question comes from the line of Justine Telliez of Kepler Cheuvreux.

Justine Telliez, Analyst

Just two questions on the financial side, please. First, just for our modeling purposes, how long will you have the recognition of the two received after the agreements with Sanofi and Takeda? And second, what is the expected evolution of the cash burn over the coming year, taking into account the carryover of the first quarter?

Mondher Mahjoubi, CEO

Absolutely. Thank you, Justine. I'm going to hand over to Frederic, who will address the two questions, maybe starting with the cash burn.

Frederic Lombard, CFO

Yes. With regards to the cash burn, we communicated that we will have a runway into mid-'25. So we ended Q1 as expected, so there is no change versus what has been communicated. With regards to your first question, we do not disclose the exact details of the deal and how we progress and when the milestones are coming on, obviously.

Mondher Mahjoubi, CEO

Thank you, Justine. Okay, operator?

Operator, Operator

And your next question comes from the line of Liisa Bayko from Evercore.

Jingming Chen, Analyst

This is Jingming on for Liisa. So my first question is on monalizumab. So for the PACIFIC-9 study, should we also expect a futility analysis for the study? And my second question is on ADC. So will you consider developing any ADC in-house?

Mondher Mahjoubi, CEO

Thank you. Two great questions. I'll probably hand over to Joyson for the first one, any futility analysis planned for the PACIFIC-9 trial, Joyson?

Joyson Karakunnel, Chief Medical Officer

Thank you for the questions. I'll pass it over to Joyson to address the first one about any planned futility analysis for the PACIFIC-9 trial.

Mondher Mahjoubi, CEO

Thank you. So the ADC, do we have an ADC strategy beyond what we have communicated on the Takeda deal?

Yannis Morel, Head of BD and Product Portfolio Strategy

Yes. Actually, our antibody generic platform is generating several candidates. Some of them, depending on the targets, are useful for an NK cell engager approach, and some of them, depending on the target as well as the progress of the antibody, are more suitable for ADCs, and that's really something that we are contemplating for the moment.

Mondher Mahjoubi, CEO

Thank you, Yannis. Thank you. Okay. First of all, everyone, sorry for these technical issues and problems that we had during this call. But let me conclude this Q1 results by reminding everyone three key takeaways. As you can see, we are consistent, and we stay focused on our strategic priorities, which are advancing lacutamab, and we are getting close; maximizing the ANKET platform, not only with the deal we signed at the end of last year with Sanofi, but now that we have clinical data coming around the corner; and finally, continuing to build strategic partnerships in oncology, but also outside oncology, and I think the deal we announced with Takeda is a perfect example of that. Thank you very much. Stay tuned for the important readouts that we have from our proprietary and partnered portfolio, which I expect, as I said, over the next two years. And finally, with a strong financial position, we continue to be well funded into mid-2025. Thank you. Have a good day.

Operator, Operator

This concludes today's conference call. Enjoy the rest of your day. You may now disconnect.