Earnings Call Transcript - IPHA Q4 2021

Operator, Operator

Good afternoon, ladies and gentlemen and welcome to the Innate Pharma’s Full Year 2021 Results Conference Call. As a reminder, this conference call is being recorded. I will now hand over to Mr. Henry Wheeler, Head of Investor Relations of Innate Pharma to begin. Sir, please go ahead.

Henry Wheeler, Head of Investor Relations

Thank you. Good morning, good afternoon and welcome everyone. This morning, Innate issued a press release providing a business update for the 2021 full year results. We look forward to presenting the progress made during the year-to-date as well as addressing future goals and plans. The press release and today’s presentation are both available on the IR section of the website. On Slide 2, I would 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, on today’s call, we will be joined by Mondher Mahjoubi, our Chief Executive Officer, who will then hand over to Dr. Joyson Karakunnel, our EVP and Chief Medical Officer. Mondher, I will now hand over to you.

Mondher Mahjoubi, CEO

Thank you, Henry. Can you hear me well?

Operator, Operator

I can hear you well now.

Mondher Mahjoubi, CEO

Perfect. Thank you. So, let me first start by reminding you of our strategy. As you know, our strategy centers around three key priorities while we look to drive value from our early R&D efforts through later stage partnerships where it makes sense to do so. Firstly, we look to create significant value driven by our lead proprietary product candidate, lacutamab, which is in development for T-cell lymphoma. Second, we continue to fuel our pipeline and create longer term value by leveraging our antibody engineering capabilities to develop innovative molecules with the primary focus on our multi-specific NK cell Engager platform called ANKET. Last but not least, we are building a strong and sustainable foundation for our business, leveraging various partnerships across industry and academia. Our goal is to leverage the value of our product as much as possible. We want to ensure that if we can gain valuable competencies, we have a partner agreement we will consider that in our development plan for the product, which will further validate our time and offer capital that we can reinvest to advance our early portfolio. Let me now turn to the next slide where I will cover the highlights for 2021. 2021 was a very busy year for Innate, during which we continued to deliver on our strategic objectives and demonstrated steady progress across all key strategic pillars. Starting with lacutamab, we presented exciting mycosis fungoides data earlier in the year at the ICML meeting in Lugano and announced the advancement to the next stage of the Phase 2 trial, TELLOMAK. We also initiated two trials in the larger indication of peripheral T-cell lymphoma last year. In the R&D pipeline, we were very pleased to see the lead tri-specific ANKET compound selected by Sanofi enter into the clinic. The data on the CD123 targeted agent in AML preclinical model were also presented at SITC last year. So, we continue to progress our proprietary tetra-specific ANKET towards IND-enabling studies with preclinical data presented throughout the year. On the adenosine pathway front, we have initiated our Phase 1 trial with our anti-CD73 IPH5301 in partnership with the IPC Cancer Center here in Marseille and we look to further discussions with AstraZeneca on the next steps for our anti-CD39 IPH5201. Finally, as we turn to monalizumab, we were very pleased to see our partner AstraZeneca commence another Phase 3 registrational trial, PACIFIC-9, in Stage 3 unresectable lung cancer and also start further device Phase 2 study called NeoCOAST-2 in the neoadjuvant setting for resectable lung cancer patients. At ESMO last year, we saw data presentation from the Phase 2 randomized COAST trial, and we expect to see more in the earlier setting from the NeoCOAST-2 trial in a few weeks at the AACR meeting. Finally, at the end of the year, we also presented data from the triplet combination of monalizumab, durvalumab, and cetuximab in frontline head and neck cancer at the ESMO IO. Please move to the next slide. Before I hand over to Joyson, here is an overview of the pipeline, which shows how we have translated our science into a robust portfolio of proprietary and partnered assets. It illustrates how we are executing against our strategy with our lead proprietary asset, lacutamab, supported by partner and early-stage products, particularly from our NK cell Engager platform. We are pleased to see the progress throughout the portfolio with multiple assets in the clinical space now progressing from Phase 1/2 to registrational Phase 3. We look forward to the potential clinical data readouts and catalysts in the upcoming couple of years as our R&D engine looks to leverage our scientific 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 Karakunnel, EVP and Chief Medical Officer

Thank you, Mondher. On Slide 7, let me start with our first-in-class humanized monoclonal antibody that targets the immune receptor, KIR3DL2. As you may remember, KIR3DL2 is an inhibitory receptor found in approximately 65% of patients across all cutaneous T-cell lymphomas and even more in certain aggressive subtypes, but with limited expression in healthy tissue. To date, data from lacutamab have shown promise, demonstrating compelling single-agent activity and offering immense potential in T-cell lymphomas historically associated with a poor prognosis for which there are few therapeutic options at an advanced stage. Let me highlight the progress we have made this year in our ongoing Phase 2 TELLOMAK study for Sézary syndrome and mycosis fungoides. In mycosis fungoides, the KIR3DL2 expressing cohort moved from Stage 1 to Stage 2, clearing a predetermined threshold before 50% of the cohort was enrolled. The KIR3DL2 mycosis fungoides data was also presented in 2021 at Lugano, and the next mycosis fungoides data will be in 2022. Today, we are also announcing the opening of an all-comers cohort in the mycosis fungoides setting to further evaluate our FFPE companion diagnostic being considered for late-stage trials. As expected, our scientific hypothesis was confirmed by the data in the non-expressing cohort, as the number of responses to move to Stage 2 was not reached as per the Simon 2-stage design, and recruitment into this cohort was stopped. For the Sézary syndrome cohort, enrollment is on track and we expect to be able to report preliminary data in 2022. On Slide 8, we have a summary of the Cohort 2 mycosis fungoides data in KIR3DL2 expressors and Cohort 3 non-expressors. In the preliminary results of Cohort 2, we showed an overall response rate of 35% in late-line patients with limited treatment options. As the median follow-up is only 4.8 months, we anticipate presenting longer-term follow-up on the duration of response at the next update. Even with the short follow-up, there have been 6 out of 17 confirmed responses. In the skin compartment, we have 11 out of 17 confirmed responses. Of the three compartments, the skin compartment is essential because of its association with the quality of life for patients. As you look to the right of the slide, you can see the Cohort 3 non-expressors data. As I explained earlier, as anticipated in this non-expressing cohort, the three required events per the Simon 2-stage design were not reached for the trial to progress from Stage 1 to Stage 2. And due to this recruitment was stopped. We are encouraged by the data and look forward to further proof points in 2022. On Slide 9, let me summarize the progress we are making with lacutamab. We are pursuing a fast-to-market strategy for lacutamab in T-cell lymphomas, with a potentially pivotal trial underway in the initial setting of Sézary syndrome where lacutamab was granted U.S. Fast Track designation and EU prime designation last year. We have expanded past Sézary syndrome to mycosis fungoides, where we have seen encouraging preliminary data from our Phase 2 trial. For the Sézary syndrome cohort, enrollment is on track and we still expect to be able to report top-line preliminary data in the second half of 2022. In mycosis fungoides, we moved the KIR3DL2 expressing cohort from Stage 1 to Stage 2 earlier than anticipated. And as expected, due to the number of events not having been reached, the non-expressing Cohort 3 was closed to enrollment. The next preliminary mycosis fungoides data is due in the second half of 2022. Finally, we are advancing into peripheral T-cell lymphoma and have started two clinical trials in the relapsed setting. On Slide 10, I would like to update you on our monalizumab efforts. To remind you, monalizumab is an anti-NKG2A, which acts upon the checkpoint pathway to potentiate NK cell activation that we have out-licensed to AstraZeneca. There are currently two ongoing Phase 3 trials with monalizumab: one in combination with cetuximab in head and neck cancer and one in combination with the anti-PD-L1 durvalumab in lung cancer. On this slide, I wanted to recap the results for the randomized Phase 2 COAST study that AstraZeneca conducted in unresectable Stage 3 non-small cell lung cancer presented at ESMO in September 2021 and the first line head and neck data we presented at ESMO IO in December 2021. For the COAST study, the three arms evaluated the combinations of durvalumab plus monalizumab and durvalumab plus oleclumab, AstraZeneca’s anti-CD73. For the results shown here, both arms performed well versus the standard of care on durvalumab. After a median follow-up of 11.5 months, the results of an interim analysis showed a 10-month PFS rate of 72.7% for durvalumab plus monalizumab versus 39.2% with durvalumab alone. The results also showed an increase in the primary endpoint of confirmed overall response rate for durvalumab plus monalizumab over durvalumab alone of 36% versus 18% respectively. On the right side of the slide, Cohort 3 evaluated the triple combination of monalizumab, durvalumab, and cetuximab in frontline head and neck cancer. The data demonstrated anti-tumor activity in the first study to evaluate this chemo-free triplet combination in the first-line recurrent or metastatic head and neck cancer setting. As a reminder, the standard of care is based on the KEYNOTE-048 trial. The approval is for pembrolizumab monotherapy in CPS greater than or equal to 1 and pembro plus chemo in all-comer patients. We continue to collaborate with our partner AstraZeneca on potential next steps for this program. Finally, in lung cancer, we are pleased to see that the NeoCOAST study has been accepted for an oral presentation on April 11, 2022, at the American Association for Cancer Research Annual Meeting this year. On Slide 11, you can see an overview of the late-stage development for monalizumab in lung cancer. As mentioned, based on the Phase 2 COAST data, AstraZeneca has commenced PACIFIC-9, a Phase 3 trial evaluating the combination of either monalizumab and oleclumab plus durvalumab in the unresectable Stage 3 non-small cell lung cancer setting who have not progressed after concurrent chemoradiation therapy. Separately, AstraZeneca also announced that it is starting a Phase 2 clinical trial, NeoCOAST-2, in Stages 2A to 3A non-small cell lung cancer that includes a treatment arm with monalizumab in combination with durvalumab and chemotherapy. We look forward to seeing the data from Phase 2 NeoCOAST at AACR as mentioned. On Slide 12, moving to head and neck cancer, we presented data from Cohort 3 of the Phase 2 trial at ESMO IO for the triplet of monalizumab plus durvalumab plus cetuximab in first-line head and neck cancer. Additionally, the Phase 3 INTERLINK-1 trial of monalizumab plus cetuximab in IO-pretreated head and neck cancer is ongoing with final data expected in 2024. We look to further work with our partners, AstraZeneca, on this potential new treatment. On Slide 13, we are pleased to have presented our latest innovation to our proprietary multi-specific NK cell Engager platform that we call ANKET, which Eric Vivier has presented at several meetings last year, including ESMO and SITC. ANKET stands for antibody-based NK cell Engager therapeutics. These multi-specific molecules are made up of various building blocks as illustrated here. ANKET is a versatile fit-for-purpose technology that is creating an entirely new class of tri- and tetra-specific molecule to induce strategic immunity against cancer. This technology platform will be an engine for our pipeline, creating value through multiple target candidates and further reinforces our scientific expertise in the NK cell space. Our excitement for the ANKET platform is driven by the preclinical data we have to date. First, the ANKET platform allows for the harnessing of NK cell effector function and NK cell proliferation in preclinical models against cancer. Second, the preclinical efficacy is due to the unique NK cell engagement of the activating NK cell receptors, NKP46 and CD16, as well as the IL-2 variant, which targets receptors for the IL-2R beta and IL-2R gamma complex, which is unique to the tetra-specific molecule and includes a specific tumor antigen. Overall, it demonstrates better preclinical anti-tumor efficacy than we have seen preclinically with clinically approved antibodies. On Slide 14, we wanted to highlight the data on our recent generation of tetra-specific ANKET, made up of four components: in yellow, an antibody fragment that recognizes the tumor antigen; in green, an antibody fragment that recognizes NKP46; in red, an FC portion that interacts with CD16; and in blue, a variant of interleukin 2. On the left, we show the contribution of the tetra-specific ANKET with the non-alpha-IL-2 variant. The black graph on the far left is the vehicle. The green graph is the tetra-specific ANKET, and the red graph on the right is a trispecific ANKET with a systemic IL-2 variant. You can see the benefit with the green graph, including the tetra-specific ANKET with the IL-2 variant. On the right, you can see the benefit of the tetra-specific versus the vehicle as well as obinutuzumab in lung mouse models. On top, you have the vehicle, in the middle, tetra-specific ANKET, and on the bottom, CD20 obinutuzumab. Activity is seen with the tetra-specific model that is not seen with obinutuzumab. We look forward to further updates on ANKET throughout the year as we progress toward IND-enabling studies. I will turn to Frederic for an update on the financials.

Frederic Lombard, CFO

Thank you, Joyson, and good day, everyone. Moving to the finance, Slide 16, I will start with one of our key metrics, as usual, our cash position. Our cash and cash equivalents amounted to €159.7 million as of December 31, 2021. This includes the state guaranteed loan of €28.7 million we received in December 2021. In addition, as you can see, we are efficiently managing our resources so that we can best capitalize on our progress and that are read out to explore development pathways in debt identifications. We believe this approach ensures that we remain in a position to strategically invest in our vision for Innate. Now going into the P&L, I will only comment on the main and most significant lines, and you have very detailed comments in the happening of the press release that you can refer to for information. Note that as compared to our previous filing, Lumoxiti activity has been classified as discontinued operations in the separate lines of the P&L for all relating Lumoxiti income expenses. I’ll start with our revenue and other income, which amounted to €24.7 million this year. It mainly resulted from revenues from collaboration and licensing agreements and governmental funding. The revenue line is characterized by the spreading of the upfront and opt-in payments received from AstraZeneca for monalizumab, which I’ll remind is recognized based on the percentage of completion of the work performed by the company. I also remind you that it has no impact on cash flow. Operating expenses amounted to €72.5 million, showing an increase of 5% compared to 2020. R&D expenses were at €47 million, decreasing by 5% compared to the last year, but the increase was mainly due to the decrease in depreciation and amortization of intangible assets acquired by the company, mostly IPH5201 fully amortized at the end of 2020 and monalizumab, partly offset by an increase in direct research and development expenses, clinical and non-clinical. The company has paid €11.4 million to AstraZeneca related to co-funding of the monalizumab programs in 2021 compared to €1.8 million in 2020. Turning to G&A expenses, they were €25.5 million for the year. The increase here was mainly due to an increase in restructuring costs relating to the evolving U.S. business, excluding Lumoxiti, and to an increase of non-scientific ancillary fees. G&A expenses related to Lumoxiti discontinued operations amounted to €8.5 million in 2021 compared to €12.3 million in 2020, respectively. In 2021, these expenses are mainly composed of the settlement amount of $6.2 million equivalent to €5.4 million to be paid in April this year to AstraZeneca as part of the termination and transition agreement. As a reminder, the company has communicated in its 2020 consolidated financial statements on a contingent liability estimated to a maximum of €12.8 million related to the sharing of certain manufacturing costs. These are the last Lumoxiti-related expenses we are expecting this year. Total G&A costs, including Lumoxiti discontinued operations increased actually by 9% year-on-year. To recap, we have a strong cash and cash equivalent position of €159.7 million at the end of 2021. We estimate that we have enough cash to fund planned operations to at least 2023. With that, I’m turning back to Mondher.

Mondher Mahjoubi, CEO

Thank you, Frederic. Please move to Slide 17. If you can put your cell phone on mute, please. Okay, so as you can see on Slide 17, we are working diligently to execute across all our strategic pillars, and we believe that we are laying the foundation to drive long-term value. Looking at our clinical program, we expect to achieve a number of milestones over the next two years. As you’ve heard from Joyson, our Phase 2 TELLOMAK study for lacutamab continues to progress. We continue to expect to report preliminary data from the potentially total child and Sézary syndrome as well as data in mycosis fungoides in the second half of this year. In addition, as you’ve heard, we are moving our anti-T cell lymphoma program into the clinic with initial data expected next year. For monalizumab, we look forward to further clinical development in early lung cancer, with the head and neck cancer trial underway. We continue to advance the adenosine pathway agents in the clinic where we look forward to data from the anti-CD39 IPH5201 in 2023. In parallel, we continue to develop our ANKET technology platform, and we are very encouraged by the preclinical results from our next-generation NK cell Engager. We believe that this represents a natural evolution of our platform, with data presented at conferences last year. We are very excited to see the lead trispecific ANKET in the clinic with Sanofi and look forward to updates on our proprietary ANKET throughout 2022. Let’s move to the conclusion Slide 18. As you can tell, we are continuing our exciting journey at Innate. We look to build our business to create value for patients and stakeholders. In summary, we have positioned the company for the future with our strategy and made meaningful progress throughout 2021 across all three strategic pillars. We have carefully managed our resources, so we can continue to invest and progress in our pipeline, and I’m very pleased that we continue to have a very strong cash position with nearly €160 million as of 31st of December 2021, which provides us with a runway into 2023. Collectively, we are driving value across our business and intimately advancing our goal to deliver innovative medicines to cancer patients. We look forward to keeping you updated on our projects throughout the year. That concludes our prepared remarks. We will now open the call to questions.

Operator, Operator

And our first question today comes from Daina Graybosch of SVB Leerink. Daina, please go ahead, your line is open.

Daina Graybosch, Analyst

Hi, thanks for taking my questions, guys. Maybe three for me, two on lacutamab, one on monalizumab. On lacutamab, can you confirm and help me understand the new all-comers cohort in mycosis fungoides in the context of not moving forward in the KIR3DL2 negative cohort? What’s the purpose of the all-comers when you’re not moving the other cohort forward? The second question on lacutamab for mycosis fungoides, after this next stage of TELLOMAK, do you expect ultimately to be able to get a single-arm approval in MS? Or would you expect the need to move into a randomized study for approval on MS? Finally, on monalizumab, can you confirm that we’re still on track to have the interim fertility analysis in the INTERLINK study that’s connected to a milestone payment to Innate Pharma from AstraZeneca this year? Thank you.

Mondher Mahjoubi, CEO

Thank you, Daina. I’ll answer all three questions. When I quickly answer the third one, the INTERLINK interim analysis is still on track, and we are expecting this to happen in 2022, most likely in the second half. No change to the timeline. The date that you have seen on the slide presented by Joyson is for the final analysis, but the interim is still scheduled throughout the end of this year. Now for your two questions on the lacutamab, I’m going to ask Joyson to provide a little bit more detail on why we are doing this cohort and eventually what impact that could have. And of course, as you’ve heard, this is a continuous dialogue with the FDA, so we can give a little bit more color on our MS registration strategy. Joyson, please.

Joyson Karakunnel, EVP and Chief Medical Officer

Thank you, Mondher, and thank you, Daina. So I’m going to combine these questions into two, so please feel free to let me know if I cannot answer those questions. As a reminder, for Cohort 2 and Cohort 3, when we were selecting those patients of expressors versus non-expressors, this was based on frozen biopsy samples. The IHC assay was based on frozen samples, and that’s what we used as a tool for selection. Now going forward, the all-comer cohort will be evaluating an FFPE companion diagnostic approach. We don’t anticipate that this is going to lead to any type of delay in development since we have seamlessly integrated this into the TELLOMAK study, and it comprises patients that are similar to Cohort 2 and Cohort 3. That connects with our registrational approach, as you mentioned. A single-arm approach is always possible and always dependent upon the data. But we currently plan for a Phase 3 study to be required for registration. We would look to use the optimal assay in this registrational trial, which we believe will be the FFPE. We continue with these Phase 3 discussions with health authorities and hope to disclose more soon, especially as the data readouts come along. I hope that answers the question.

Daina Graybosch, Analyst

So just to confirm potentially what is – yes, just to confirm potentially after this new cohort, the percentage of patients that are positive may change slightly because it could be optimized in this work to really understand the best cutoff for further enrichment.

Joyson Karakunnel, EVP and Chief Medical Officer

Yes. The total percentage of patients could change. I think what we know is it is around 50%, so we wouldn’t anticipate a huge variation there in comparison between the pathways.

Mondher Mahjoubi, CEO

Thank you, Daina. Thank you, Joyson. Operator, I think we have the next question from Yigal.

Operator, Operator

Yes. Yigal Nochomovitz from Citi. Please go ahead.

Unidentified Analyst, Analyst

Hi, this is Carly on for Yigal. Thanks for taking our question. Our first question is on the CD73 program. Can you talk a bit more about the rationale for focusing on HER2-positive cancers? Is there evidence that CD73 plays a larger role in immunosuppression and HER2-positive cancers versus other tumor types? I guess, just interested in your thoughts there because I don’t believe we’ve seen others in the CD73 space focused on the HER2 segment specifically. Thank you.

Mondher Mahjoubi, CEO

Thank you. Before I hand over to Joyson, again, I wanted to put this into the context of trying to differentiate our anti-CD73 from the rest of the crowd. We are not the first. We are indeed the latest to get into the clinic. And that, of course, we used to learn from what other companies have delivered, and this knowledge was extremely useful to help us actually better understand potential synergies with ideation therapy as the potential position for cancer. But at the same time, we have looked at the preclinical models and what we have in-house to differentiate our development when we came up with this strategy, which is not in play for now because we started the classic dose escalation. But I’m going to hand over to Joyson to give you a little bit more background for why we’re targeting this indication with this combination with lacutamab. Joyson?

Joyson Karakunnel, EVP and Chief Medical Officer

So thanks, Mondher, and thank you for the questions. To begin, it goes back to what Mondher said. Currently, the CD73 landscape, as all of you are aware, is quite crowded and continues to become more crowded. When we started the development for CD73, we asked ourselves, how can we set ourselves apart? I will hand over to Yannis to speak a little bit to the scientific rationale around HER2 that you have asked. So when we started this, we said we would go ahead and differentiate ourselves. So we looked at how to do this. Based on the science, we chose to go into the HER2 space. Afterwards, as Mondher mentioned, the COAST data came around, which made us think about how we can optimize the development of our CD73 utilizing the clinical data seen in COAST, which provides us another indication with proof in the clinical space. I’ll hand it over to Yannis who can speak about the science around HER2.

Yannis Morel, Scientist

Yes. Thank you, Joyson. Like you said, we are differentiating our molecule primarily because of its increasing properties—our antibody—as opposed to other CD73 inhibitors that are in development, especially oleclumab. Our antibody does not have the effect, meaning it continued to block the enzyme even at high doses, blocking both the surface and soluble molecules of CD73, which is crucial for an enzyme. As Joyson stated, it was also vital to differentiate our asset development going into combinations that were not explored by others. Others were primarily exploring PD1 combinations. Based on preclinical data we have indicating that the combination of CD73 mediates resistance to ADCT of HER2 targeting antibody, we believe combining with the blockade of CD73 can increase the efficacy of trastuzumab in preclinical models.

Unidentified Analyst, Analyst

Okay. Got it. That’s really helpful. And then just one housekeeping question. Did Innate receive a milestone payment from AstraZeneca on the start of PACIFIC-9? And are there any other milestones tied to PACIFIC-9 that we should be aware of? Thanks.

Mondher Mahjoubi, CEO

Yes. So again, maybe remind everyone that we are, of course, excited that the PACIFIC-9 study has started. We still wait for their first patient to be dosed. We have not provided granularity on potentially minor stocks. We have received so far €400 million, the €50 million on the first Phase 3 INTERLINK-1, which started in the fall of 2020. An interim analysis will also trigger a payment of €50 million if the predefined rate activity is achieved. In total, we could potentially receive another €425 million in regulatory and development milestones, and about €400 million in commercial as well as a double-digit royalty part of the payment from AstraZeneca. Thank you.

Unidentified Analyst, Analyst

Okay, great. Thanks for taking the questions.

Mondher Mahjoubi, CEO

Thank you.

Operator, Operator

Thank you. Our next question comes from Liisa Bayko of Evercore ISI. Liisa, please go ahead, your line is open.

Liisa Bayko, Analyst

Hi there. Thanks for taking my questions. First one, are you planning an interim analysis of INTERLINK for this year?

Mondher Mahjoubi, CEO

Hi Liisa, thank you for joining the call and your questions. As you know, this trial is being conducted by AstraZeneca, and the plan is to have an interim analysis performed about 18 months to 24 months after the first patient is enrolled. The first patient was enrolled in November 2020, so the interim is expected for the second half of 2022.

Liisa Bayko, Analyst

Wonderful. Okay. Great. And then can you maybe discuss a little bit more specifically about your regulatory strategy for Sézary syndrome? Are you going to file just for this indication alone? I think there was some mention at JPMorgan that you might do some sort of combination with MF. Maybe you can just discuss. Thanks.

Mondher Mahjoubi, CEO

Yes, absolutely. I think it’s good to hand over to Joyson to recap our MF/Sézary syndrome registration strategy based upon, again, the interaction we have with the FDA. Joyson, can you please address this question?

Joyson Karakunnel, EVP and Chief Medical Officer

Thanks Mondher and thank you for the question. Our initial strategy for Sézary was, in fact, a fast-to-market strategy. We have the pivotal cohort ongoing, and we are looking to present data on that later this year. That cohort is still ongoing and provides a potential registrational pathway. To your question about what is another option, another possibility is that we take the approach of combining both Sézary syndrome and mycosis fungoides, which as many of you know, the mogamulizumab label includes both SS and MF. There is precedent for combining both of these indications, so we look at all possible options to be considered for a registrational pathway. We also have ongoing discussions with the FDA and European health regulators to ensure that they are aligned with the options we have as well as the registrational pathways.

Liisa Bayko, Analyst

Okay. Any idea when you might have some more granularity on that, or is it really data dependent?

Joyson Karakunnel, EVP and Chief Medical Officer

It is data dependent. As we mentioned, we will be presenting data about Sézary syndrome as well as mycosis fungoides later this year.

Mondher Mahjoubi, CEO

Thank you.

Operator, Operator

Thank you. Our next question comes from Keyur Parekh of Goldman Sachs. Keyur, please go ahead.

Keyur Parekh, Analyst

Hi. Thank you for taking my questions. Two, if I may, please. One, as you think about the opportunity across both Sézary syndrome and MF, can you remind me how big you guys think these indications can be, and how quickly do you believe you might be able to reach peak revenue sizes for this indication? That’s question number one. Then separately for you, Mondher, as you think about developing the tetra ANKET products, you have been doing oncology drug development longer than most people. Help us think about what you view as some of the challenges and the opportunities might be. We have seen bi-specifics struggle with safety variability. If you are targeting five different targets, help us think through what it means from a tolerability perspective for these agents. Thank you.

Mondher Mahjoubi, CEO

Thank you, Keyur. Great questions. I will try to answer as clearly and precisely as possible. First, on Sézary and MF, we have data for U.S. and top five EU. It’s roughly about 50% to 60% of the market. Nevertheless, I think it’s significant to start having an idea. There are about 100 to 200 new Sézary syndrome cases every year, so it’s really a niche indication. These patients receive multiple lines of therapy, have a long PFS, and live longer, and all in all, if you think about prevalence at one point in time, it’s less than 1,000 patients. This is really a small business. But we anticipated from day one that Sézary is primarily a proof of concept on one side and a way to get to market as quickly as possible, which is a much larger market opportunity. Please keep in mind that mycosis fungoides is just one of the many types of cutaneous T-cell lymphoma. About half of cutaneous T-cell lymphoma cases are mycosis fungoides. And there are approximately 50% of cutaneous T-cell lymphoma cases that are not mycosis fungoides. It’s very heterogeneous, sophisticated and difficult to classify. It’s quite challenging to conduct registration work on such a heterogeneous population, which is why we elected to go after mycosis fungoides. We are talking about maybe 3,000 to 4,000 new patients every year. Clearly, the cutaneous T-cell lymphoma overall is not a huge market opportunity compared to peripheral T-cell lymphoma, which is much larger, with nearly 20,000 new patients every year, half of whom express the target. There is a much bigger indication. However, we are still early in our commercial strategy thinking. I would say it would be too ambitious to give you a specific numerical figure. We have looked at the potential, and mogamulizumab is a good benchmark. If they sold about €150 million for mogamulizumab, which mainly targets MF and Sézary, there is a market here in cutaneous T-cell lymphoma. As you know, mogamulizumab is approved in the U.S. and in Europe, but it’s not reimbursed everywhere in Europe. We face market penetration challenges. Therefore, it’s a good indicator regarding the market opportunity pertaining to MF and Sézary. I hope I clarified the first question. Your second question relates to what we do every day, how we try to navigate the path for proprietary ANKET products into IND-enabling studies and prepare for the clinic while developing this drug, positioning it as a new generation of multi-specific antibodies. The main opportunity lies in the safety of using an NK-cell engager versus a T-cell engager; we have a good reason to believe that this could be one way to differentiate but also enhance combination strategies that we could pursue. You’ve already seen data from others combining fresh cells, active cells with antibody engagement into the reserve pathway, which are quite significant, especially in liquid tumors. Of course, it’s still early days and usually involves Phase 1 and 2 trials. Nevertheless, this provides some insight into what’s possible with this combination. I think it’s a great opportunity if we can apply the same techniques to solid tumors. Again, we are not the only ones working to tackle the solid tumor space by utilizing antibodies that target solid tumors. I believe there is significant potential, but there are challenges, particularly in terms of CMC and manufacturing, that we must overcome since it’s our first experience developing such complex antibodies. Ultimately, once we venture into the clinic, it’s essential to ensure that the benefits observed in preclinical data translate into real clinical efficacy and maintain a favorable safety profile. These are the two primary short-term challenges we must navigate, and clinical data will confirm whether what we’ve generated thus far and presented at various meetings last year translates into tangible clinical benefits for patients. I apologize for my lengthy response, but I hope it puts our NK platform development strategy into perspective.

Keyur Parekh, Analyst

Thank you, Mondher. That’s very helpful.

Mondher Mahjoubi, CEO

You’re welcome. Thank you, Keyur. Operator, next question.

Operator, Operator

And our next question comes from Swayampakula Ramakanth from H.C. Wainwright. Swayampakula, please go ahead.

Swayampakula Ramakanth, Analyst

Thank you. Most of my questions have been asked, Mondher. However, on the 5201, the anti-CD39 antibody, in terms of what the next steps are, is it potentially AstraZeneca who has to make the decision, or do you have any say in how the program will be developed from here onwards?

Mondher Mahjoubi, CEO

Hi RK. Good to have you, and thank you for your question. The CD39 license agreements with AstraZeneca resemble the monalizumab agreement, so it’s indeed a co-development, co-commercialization agreement where we are involved and engaged in the development of this policy. AstraZeneca handled the initial part of the escalation, single agent, and then in combination. They resisted development because we reached the milestone or objective of Phase 1. Currently, we are in the planning phase and discussions with AstraZeneca on the next step, learning from the COAST trial, which, as I said, was a proof-of-concept demonstration for the pathway. Nevertheless, this is an important milestone in the development of these antibodies. We are collaborating with AstraZeneca to determine the best positioning and differentiate CD39 from the rest of the competition.

Swayampakula Ramakanth, Analyst

Thank you, Mondher.

Mondher Mahjoubi, CEO

Thank you, RK.

Operator, Operator

Thank you. We have no further questions. I will hand the call back over to you, Mondher.

Mondher Mahjoubi, CEO

Thank you. I think it’s a great opportunity to present our full year results for 2021. As you could appreciate, I hope we continue to execute against our strategic priorities as we reported multiple readouts from both proprietary and partnered portfolio programs. These results are center stage for delivering both near-term and long-term value, while also highlighting the strength and depth of our core R&D. Looking ahead, we will continue to advance our lacutamab development program. We will continue to move our early-stage R&D activities toward the clinic with our next-generation ANKET platform. Furthermore, we look forward to showing the clinical development in early lung cancer with the head and neck cancer trial well underway, which of course is in force of our strategy of building a sustainable business with an R&D engine. With that said, I wish you a wonderful day, and thank you for your participation in this call. Thank you. Bye-bye.

Operator, Operator

Thank you. Ladies and gentlemen, this concludes today’s call. Thank you all for joining. You may now disconnect your lines.