Earnings Call Transcript - IPHA Q2 2024

Operator, Operator

Thank you for standing by, and welcome to the Innate Pharma First-Half 2024 Financial Results and Business Update. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. Thank you. I'd now like to turn the call over to Henry Wheeler, Vice President, Investor Relations and Communications. You may begin.

Henry Wheeler, Vice President, Investor Relations and Communications

Thank you. Good morning, good afternoon, and welcome everyone. This morning, Innate issued a press release for our H1 business update and financial results. We look forward to highlighting the progress made during the year-to-date, as well as addressing future goals and milestones. The press release in today's presentation are both available on the IR section of the website. On slide two, 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 developments. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. On slide three, on today's call, we will be joined by Herve Brailly, our Interim Chief Executive Officer. We’ll then 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, our Chief Operating Officer, who will discuss ANKET and the ADC platform updates; Frederic Lombard, our CFO will cover the financials; and Arvind Sood, our EVP, U.S. Operations will wrap up and close. Herve I’ll now hand the call over to you.

Herve Brailly, Interim Chief Executive Officer

Thanks, Henry. So turning to slide five, I'd like to remind you of an Innate Pharma Strategy. So now there's an early stage clinical stage strategy. All business model centers around three priorities where we look to draw value from our early R&D efforts through later stage partnerships where it makes sense to do so. Our ambition is to develop innovative drug candidates with a strong pipeline of differentiated antibodies. So first we look to create near-term value driven by our lead proprietary asset, lacutamab, in development for T cell lymphoma with topline CTCL data that were presented at ASCO this year on ASH in December. We'll do latest data in hand, we'll now assess the best path forward to maximize the potential of this asset. Second, we continue to fuel a pipeline and create longer-term value by leveraging our antibody engineering capabilities to develop innovative molecules with a primary focus on our multi-specific end-case elongation platform ANKET. We are pleased to see continued progress with Sanofi, presenting various updates for the lead ANKET candidate, SAR443579, which was recently transitioned from Phase 1 to Phase 2 in monotherapy, and more recently has started a new combination Phase 1/2 trial. We're also pleased to see our lead candidate ANKET IPH6501 continue in Phase 1. As we develop antibody targets, we recognize some of these targets might be very suitable for ADC technology. And we have some further details in our ADC pipeline today with our lead ADC asset IPH45 progressing through Phase 1. Finally, we are building a strong foundation for business by key partnerships across the industry. On a key example there is monalizumab where we saw some further data, Phase 2 data presented last week at WCLC, which is partnered as you know with AstraZeneca on its advancing in its developing lung cancer. The next slide, that is slide six. Slide six summarizes actually where we stand with our pipeline and shows how we continue to translate our science into a robust portfolio of proprietary unpartnered assets. It also illustrates how we are executing against our strategy with our lead proprietary assets lacutamab, ANKET on emerging ADCs supported by partnered product with AstraZeneca, Sanofi, and Takeda from late to early stage development. We actually anticipate a series of potential clinical data readouts on 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'd like now to pass the call over to Sonia, who will review the progress made with a portfolio, starting with lacutamab, our most advanced proprietary asset.

Sonia Quaratino, Chief Medical Officer

Thank you, Herve. On slide eight, I will recapitulate the progress we are making with lacutamab and in particular with the TELLOMAK trial in Cutaneous T Cell Lymphoma. Lacutamab is a monoclonal antibody that targets KIR3DL2 and was shown to deplete the cells that express the receptor. Just a reminder, the KIR3DL2 is apparently expressed as a tumor-associated antigen in CTCL, in particular in more than 90% of patients with Sezary syndrome and approximately 50% of patients with mycosis fungoides. The TELLOMAK trial is a Phase 2 single arm study, investigating lacutamab monotherapy in CTCL in patients with Sezary and mycosis fungoides, who received at least two prior systemic therapies. The FDA granted an orphan drug designation for lacutamab in the treatment of CTCL and the first drug designation for the treatment of all patients with refractory relapsed Sezary syndrome who have received at least two prior lines of systemic therapies. The key results of the trial in Sezary were presented last year at ASH. And at ASCO this year, we presented the key results in mycosis fungoides cohorts. We are going to present other secondary results at other conferences this year. Aberrant expression of KIR3DL2 is often detected also in peripheral T-cell lymphoma. And in this indication in PTCL, lacutamab is investigated in combination with gemcitabine and oxaliplatin. The KILT Phase 2 trial is currently ongoing and recruiting and we believe this combination with chemotherapy may offer additional benefit to patients with PTCL. In the next slide, I would like to summarize the key results in this heavily pretreated patient population with four median prior lines of therapy of systemic therapy and 11.8 months of follow-up. At the data cutoff of October 2023, we observed a global objective response rate of 16.8% and the median PFS of 10.2 months. It is interesting to stress that objective responses have been observed not only in the sub-population expressing more than 1% of the target, but also in the population expressing less than 1% of the KIR3DL2. This suggests that lacutamab may produce clinical benefit in MS, regardless of the KIR3DL2 expression and you can see this on the water-flow plot on the right-hand side. In keeping with previous results, also in MS, a very favorable safety profile was observed. On the next slide, we can see the opportunity for lacutamab in the treatment landscape. With potentially no need for a companion diagnostic, we believe that the number of CTCL patients that could benefit from lacutamab expands from 1,500 to 3,500 in the two-plus line of therapy. This figure may even increase to 5,000 in an earlier line setting. Now, our aim is to ensure that lacutamab gets to patients who need it as quickly as possible and to maximize the value, not only in Sezary but also in the larger population of mycosis fungoides. We believe that there remains a critical unmet need for additional treatment options, in particular for relapsed and refractory Sezary and also in mycosis fungoides. Based on the strength of our data from the TELLOMAK trial, we are engaged with the FDA on a proposed registration strategy that could enable a fast-to-market approval. On the next slide, we would like to discuss our most advanced proprietary asset, IPH65, which is a tetraspecific antibody-based NK-engager therapeutic, the ANKET molecule. This is the first NK cell-engager designed to target the tumor through a tumor-associated antigen while also engaging two activating receptors on the NK side, namely NKp46 and CD16, along with the interleukin-2 receptor via an IL-2 variant known as IL-2V. The innovative mechanism of action incorporates the IL-2 variant to activate and promote the proliferation of NK cells within the tumor microenvironment. IPH65 is the first of the second generation ANKET targeting CD20. We were pleased to announce earlier this quarter that IPH65 has entered clinical trials, with the first-in-human study starting in early March. The trial is enrolling patients with relapsed and refractory B-cell non-Hodgkin's lymphoma and is being conducted in the U.S., Australia, and France. I would like to highlight several points regarding this tetraspecific ANKET. It effectively eliminates CD20 positive cancer cells by significantly activating and proliferating NK cells. By stimulating the natural function of NK cells through the IL-2 variant, IPH65 also has a bystander effect that can lead to the elimination of CD20 negative tumor cells, thereby addressing issues of tumor heterogeneity or loss of tumor antigens that are sometimes observed in patients. The IPH65 format also tackles common challenges associated with antibodies related to loss of CD16 by activating intratumoral NK cells through NKp46. Additionally, this asset is distinct from allogeneic and cell-based NK cell therapies, such as CAR-NK, because it is an off-the-shelf therapy that enhances the proliferation of the patient's own NK cells without requiring lymphodepletion as seen in cell therapies. We presented preclinical data at the ASCO meeting this year, showing that IPH65 depletes autologous CD20 B-cells from healthy donors with greater effectiveness and lower levels of pro-inflammatory cytokines compared to CD20 T-cell engagers. IPH65 also efficiently stimulates NK cell proliferation from the PDMC of patients with relapsed refractory non-Hodgkin lymphoma. Moreover, the ongoing Phase 1/2 trial has been presented at both the European Hematology Association Congress and the ASCO conference in 2024. On the next slide, I will briefly outline the upcoming steps for IPH65. Throughout the year, we plan to complete the dose escalation and anticipate initial safety data, pharmacokinetic and pharmacodynamic readouts, along with preliminary efficacy signals. Post CD26, we will initiate the dose optimization phase of the study to determine the optimal dose and establish expansion cohorts in non-Hodgkin lymphoma. Now, I will turn it over to Yannis to discuss other ANKETs and the AGC.

Yannis Morel, Chief Operating Officer

Thank you, Sonja. I will now highlight the two classes of next generation antibody therapeutics on which we are focusing all our research activities, the NK cell engager of ANKET and the ADC. On slide 14, I draw your attention to our portfolio of ANKET, which has made significant progress during the last quarter. As you remember, our proprietary 13-class NK cell engager platform is a multi-specific plug-and-play technology made of antibody-derived building blocks aiming at engaging NK cells toward tumor cells by triggering the most stable activating NK cell surface receptor called NKP46. The interesting feature of this platform is that by swapping the tumor-binding portion of the ANKET molecule, it can produce multiple drug candidates, addressing a variety of targets in oncology, but also it can potentially harness NK cells to kill pathogenic cells in other disease areas like AML. Last quarter, Sanofi advanced the most advanced ANKET, TAR-579, to Phase 2 on the back of initial efficacy data showing single-agent activity with durable complete responses in relapsed refractory AML patients. In addition, Sanofi started a new Phase 1/2 trial in front line AML in combination with azacitidine and venetoclax. We are looking forward to seeing further updates from Sanofi. Also, as mentioned by Sonia, we are very pleased to have our proprietary second generation ANKET in the clinic with the first patient dosed with IPH6501 in March. Last but not least, we are putting a lot of effort to further expand this portfolio to additional tumor targets, including in solid tumors. Slide 15 highlights our growing portfolio of ADC drug candidates. As we continue to develop next-generation antibody therapeutics, we find that for some tumor targets, we can generate antibodies with good internalizing properties that are therefore more suited for ADC. On slide 16, I will now cover updates on our lead proprietary ADC, IPH45, which is targeting Nectin-4. The preclinical characterization of this drug candidate has been presented at a normal session at AACR in San Diego earlier this year, and I like the key differentiation feature of this product. Based on this data, we feel that we have a novel and differentiated ADC to target Nectin-4 in the broad panel of tumor indications on top of bladder cancer by overcoming the challenges associated with Nectin-4, MMAE, ADC, including Enfortumab Vedotin. Here on the slide, we highlight the opportunity for IPH45 in Nectin-4 expressing tumors, especially in low to moderate expressors, beyond bladder, like breast, lung, prostate, and pancreas, where efficacy reported by Padcev is so far limited. Slide 17 is a summary of some of the data presented at AACR. In a nutshell, we show that IPH45 has strong antitumor efficacy in a variety of preclinical models, including ones that are refractory to Padcev, because of high expression of MDA1, which is a transporter known to be a mechanism of resistance to MMAE. Also, it has strong efficacy in patient-derived PDX models with low expression of Nectin-4, as shown in the graph in the middle of the slide, where Padcev does not work. With the favorable developability profile, including high yields of productivity, high drug stability, and encouraging PK tox data in animal studies, we are progressing IPH45 towards Phase 1 this year. On slide 18, we summarize the next step of the program. As we are progressing towards Phase 1 this year, we are looking forward to generating preliminary Phase 1 safety data in 2025, and then to establish an activity in Nectin-4 expressing tumor types with low and high expression levels. On slide 19, I would like to remind you of monalizumab, the anti-NKG2A we have licensed to AstraZeneca for oncology. On this slide, you can see an overview of the late-stage development of Monalizumab in lung cancer. Based on the Phase 2 COAST data, AstraZeneca started in May 22 PACIFIC 9, a Phase 3 trial evaluating the addition of either monalizumab or oleclumab to durvalumab in the unresectable Stage 3 non-small cell lung cancer patients, who have not progressed after concurrent chemo-radiation therapy. We are encouraged to announce in today's press release that over summer the independent data monitoring committee recommended the continuation of the Phase 3 PACIFIC 9 based on the pre-planned analysis. The AstraZeneca sponsored NeoCOAST-2 Phase II study is also underway in an earlier lung cancer setting, evaluating the addition of novel agents, including monalizumab, to durvalumab and chemo in the perioperative setting. Preliminary data were presented last week at World Lung, supporting the activity of monalizumab in this setting with 26.7% of technological complete responses and 53.3% major pathological responses observed in 60 patients, which are numerically higher than the currently approved regimen. Together with COAST and NeoCOAST, these NeoCOAST-2 data provide a third proof point in a controlled Phase II study that monalizumab provides additional antitumor activity on top of durvalumab in early lung.

Frederic Lombard, CFO

Thanks, Yannis. Today, I will cover the highlights from the financials. Detailed tables are included in the press release we issued today. The key elements of Innate's financial position and results for the six months period ending June 30, 2024, are as follows. Revenue and other income amounted to $12.3 million in the first half of 2024, and mainly comprised of two elements: first, revenue from collaboration and licensing agreements which mainly resulted from the partial and entire recognition of the proceeds received from AstraZeneca and Sanofi; and second, governmental funding for research and expenditures for $4.1 million for the first half of 2024. On the operating expenses side, we are reaching $38.7 million for the first half of 2024, with 75% related to R&D and decreasing by 5%. R&D expenses decreased by $2.4 million to $29.1 million for the first half of 2024. This decrease is mainly due to lower personnel and other R&D expenses. On the G&A side, expenses have increased slightly by $0.4 million to $9.6 million for the first half of 2024. Lastly, cash, cash equivalents, short-term investments, and financial assets amounted to $102.1 million as of June 30, 2024, sufficient to fund operations until the end of 2025.

Henry Wheeler, Vice President, Investor Relations and Communications

Arvind, are you there?

Arvind Sood, EVP, U.S. Operations

Yes, can you hear me now?

Henry Wheeler, Vice President, Investor Relations and Communications

Yes, go ahead.

Arvind Sood, EVP, U.S. Operations

Okay. Excellent. Thank you, Frederic. A key value driver for any biopharma company is upcoming R&D catalysts that can contribute to long-term growth, and we have a number of them. Near-term, we are looking forward to engaging with the regulatory bodies over next steps for lacutamab. Programs coming out of our ANKET platform continue to advance as IPH6501, targeting CD123 in hematologic malignancies partnered with Sanofi has recently progressed to Phase II. Our proprietary TETRA-specific ANKET, which goes by IPH6501, is now in clinical development. And as Yannis pointed out, our ADC targeting Nectin-4 is rapidly progressing towards the clinic. So I would like to leave you with a few thoughts. Yes, we are a small biotechnology company, but we have a differentiated pipeline with several first-in-class opportunities. We have seven products in clinical development with three that are proprietary and four that are partnered. Within the first half of this year, we have made significant pipeline progress, as outlined on this slide. Our cash position, as Frederic pointed out, of EUR105 million through the end of June will enable us to fund operations well through the end of 2025. This is also, in many ways, a very special year for Innate Pharma. It's our 25th year anniversary. To commemorate this special occasion, we will host an investor meeting in New York on October 3, beginning at 8 a.m. Eastern time in collaboration with and at the Mount Sinai School of Medicine. I, together with the rest of the executive management team, will be there and look forward to discussing our advancing pipeline and strategy for growth and value creation. We hope to see you all there. So with that, Rob, I'd like to turn the call back over to you, and we can open the call for Q&A. And if you can please review the procedure for asking questions. Thank you.

Operator, Operator

Certainly, we will now begin the question-and-answer session. Your first question comes from the line of Rajan Sharma from Goldman Sachs. Your line is open.

Rajan Sharma, Analyst

Hi, thanks for taking my questions. Just on the NeoCOAST-2 data we saw at the conference for lung cancer. They obviously looked to be a good efficacy signal with monalizumab, as you pointed out, but optically, at least, it looked like the data showed higher response rates. So just wanted to get your perspectives on monalizumab's potential role in the setting and why there may be a reason for it to coexist with data showed and potentially the PD-1 CTLA-4 bispecific that's also in that trial that we're yet to see data for. And then on CEO appointment, could you just maybe talk about internal timelines there? And then related to that, absent a permanent CEO, to what extent are you able to make key strategic decisions going forward, such as the strategy with lacutamab? And then if I could just squeeze one in on the Takeda termination. Just wondering if there is any data generated that could be informative to your development of the ADC program? Thank you.

Herve Brailly, Interim Chief Executive Officer

Thanks for all those questions. I will leave the first one on monalizumab to Yannis, then the one on lacutamab to Sonia, and I will take the third question about the CEO recruitment.

Yannis Morel, Chief Operating Officer

Hi. Rajan, can you hear me?

Rajan Sharma, Analyst

I can hear you.

Yannis Morel, Chief Operating Officer

Yes, Yannis speaking. Yes, so I mean, like you mentioned, the NeoCOAST data are really encouraging for monalizumab and they really show superiority of the PCR and NPR rate, compared to what is known for agent, for example. The study is run by AZ, and obviously, we cannot comment on the next steps. You may note also that only 60 patients have been reported, the trial enrolls 72 patients. So we are really looking forward to see the final data. Also note that these are preliminary results and the confidence intervals are overlapping. And yes, as of today, I would say the main message from this data is that it's reinforcing the confidence that monalizumab has really a strong activity in early lung cancer.

Herve Brailly, Interim Chief Executive Officer

Lacutamab, Sonia?

Sonia Quaratino, Chief Medical Officer

We are currently working with the FDA on a strategy to seek fast-track approval for lacutamab. The FDA has several programs designed to speed up approvals for serious conditions, and we believe lacutamab may qualify for one of these expedited processes based on their feedback. We will provide updates as they become available. Regarding the next steps, we are exploring various options, including potential partnerships, and we remain open to all development possibilities for lacutamab in CTCL. I hope this answers your question.

Yannis Morel, Chief Operating Officer

Yes. And Rajan, with regard to your question on Takeda, you may remember this was a very early stage deal with Takeda, where we based on the preclinical data package, we licensed them a panel of antibodies, which were really at the research stage. So it was a very early-stage deal. This termination is really related to a strategic review on their side and the closing of the research side where the research was performed with this technology in this therapeutic area. So yes, there is really nothing to, I would say, to draw from this determination or the data generated during this initial work.

Herve Brailly, Interim Chief Executive Officer

To your question on the permanent CEO, so the process is still ongoing, but we should be able to come back and inform the market in a reasonable time about where we stand with the progression in this direction.

Henry Wheeler, Vice President, Investor Relations and Communications

Okay Rob, let's take the next question please.

Operator, Operator

Your next question comes from the line of Daina Graybosch from Leerink Partners. Your line is open.

Daina Graybosch, Analyst

Hi, thank you guys for the question. On PACIFIC 9, can you give us any more details about what this interim analysis was by which the IDMC decided to go ahead and continue?

Yannis Morel, Chief Operating Officer

Hi, Daina. Yannis speaking. Unfortunately, we cannot tell anything more than what we said, and neither AZ nor us. I mean, there was an interim pre-planned analysis. The IDMC looked at the data, and we basically get information AZ and us that the trial is continuing. So that's basically it.

Daina Graybosch, Analyst

Could you provide us with timing for when we might expect the next interim or final analysis of PACIFIC 9? Additionally, could you clarify the timing of the regulatory interactions with lacutamab? We've been asking similar regulatory questions for several quarters now. In which quarter should we expect a more detailed plan from Innate?

Yannis Morel, Chief Operating Officer

Yes. So with regard to the timing of the PAC 9, no, we cannot comment. I mean you know what is public is the ‘26 you mentioned on the ct.gov. If you use the original PACIFIC as a benchmark, the time between the final analysis and the first patient was three years. But again, AZ has not communicated any update on the timing for the availability of the final data. And with regard to lacutamab, we are calling to have the interaction during the fourth quarter of this year.

Daina Graybosch, Analyst

You put into interactions in the fourth quarter. Did I hear that correctly?

Yannis Morel, Chief Operating Officer

Yes, Q4.

Sonia Quaratino, Chief Medical Officer

I appreciate your patience in this. As you know, it takes time to prepare for Type C meetings and the FDA has their time. But I would say that in our next discussion, we may provide a bit more clarity.

Daina Graybosch, Analyst

Very helpful. Thank you.

Operator, Operator

Your next question comes from the line of Yigal Nochomovitz from Citi. Your line is open.

Ashiq Mubarack, Analyst

Actually, this is Ashiq Mubarack on for Yigal. Thanks for taking my questions. Just a couple on the early stage pipeline. So the CD20 ANKET asset that's now in early development, I believe you said you have some timelines for data, I think you said next year. Can you give us a little color on what sort of signal you're looking for to warrant further advancement there? And maybe what specific types of patients you're enrolling? And then a similar question on the Nectin-4 development plan. Is the plan to enroll primarily post-pot patients given the potential to treat MMA resistant patients? Any color there would be helpful. Thanks.

Herve Brailly, Interim Chief Executive Officer

Sonia?

Sonia Quaratino, Chief Medical Officer

On the IPH65, the CD20 ANKET, we are currently in the process of dose escalation. This year, we opened all the necessary sites and are making progress with this phase. Next year, we aim to complete the dose escalation and move into dose optimization, which is a crucial step in the development of early-stage programs. We're focused on establishing the safety profile for this asset. It's worth noting that the first-generation ANKET developed by Sanofi showed a highly favorable safety profile, and we hope to achieve similar results with the second-generation ANKET, which features an additional IL-2 variant. We are also looking for pharmacodynamic markers, such as levels of B-cell depletion at various dose levels and the stimulation of ANKET cells. Ultimately, we are on the lookout for early signs of antitumor activity, aligning with the classic preliminary activity observed in Phase I trials. Currently, we are enrolling patients with Non-Hodgkin lymphoma, particularly DLBCL, but we are open to including other sub-groups of CD20 positive Non-Hodgkin lymphomas. Regarding the ADC and its clinical development plan, we are preparing to initiate Phase I by the end of the year. This will be a first-in-human, dose escalation study, and we are recruiting for indications that generally express a moderate level of Nectin-4, which includes not only bladder and breast cancer but also non-small cell lung cancer and esophageal GJ tumors. The dose escalation will take place for these indications, and we expect to observe preliminary signs of efficacy along with safety profile, pharmacokinetic, and pharmacodynamic markers.

Ashiq Mubarack, Analyst

And do you expect significant enrollment of patients pretreated with other lines?

Sonia Quaratino, Chief Medical Officer

We don't know how many there may be, but definitely, this is not an exclusion criteria.

Swayampakula Ramakanth, Analyst

Thank you. So I'm just trying to understand what's the progress in the PTCL indication for lacutamab. If you can give us an idea of when you could expect some data from the KILT trial?

Herve Brailly, Interim Chief Executive Officer

Sonia?

Sonia Quaratino, Chief Medical Officer

Thank you for the question. As you know, this is an IST that is sponsored by the Lisa Group. The study is ongoing and recruiting. While it is not directly under our control, we can see that it is on track for a completion late next year.

Swayampakula Ramakanth, Analyst

Okay, thank you.

Rajan Sharma, Analyst

Hi, thanks for taking the follow-up. Just wanted to come back on one of my initial questions. And if I could just ask a question around the CEO and strategy in a different way. Just wanted to be clear on the extent to which you can make strategic decisions on things like lacutamab absent the CEO? Or will these things be on hold until you've made an appointment there? Thank you.

Herve Brailly, Interim Chief Executive Officer

Yes, we are considering various options for the next steps in the program, and the decision will be made by the Board with the CEO in place.

Operator, Operator

We're actually out of questions. So we will now conclude our question-and-answer session, and I would like to thank everyone for joining us today. This concludes today's conference call. Thank you for your participation. You may now disconnect.