Earnings Call Transcript - IPHA Q1 2026

Operator, Operator

Ladies and gentlemen, thank you for joining, and welcome to the Innate Pharma First Quarter 2026 Business Update and Financial Results. I will now hand the conference over to Stephanie Cornen, Vice President of Investor Relations, Communications and Commercial Strategy at Innate Pharma. Please go ahead.

Stéphanie Cornen, Vice President, Investor Relations, Communications and Commercial Strategy

Good morning, and good afternoon, everyone. Thank you for joining us for Innate Pharma's Q1 2026 Business Update and Financial Results Conference Call. The press release and today's presentation are both available on the IR section of our website. Before we begin, I would like to remind everyone that today's presentation includes forward-looking statements based on current expectations. These statements involve risks and uncertainties that could cause actual results to differ materially. To briefly cover today's agenda, our CEO, Jonathan Dickinson, will begin with a strategic overview and outlook. Sonia Quaratino, our Chief Medical Officer; and Yannis Morel, our Chief Operating Officer and I will then provide updates on lacutamab, IPH4502 and next-generation ADCs as well as our AstraZeneca partner program, including monalizumab and IPH5201. Jonathan will then return with closing remarks. Frederic Lombard, our CFO, will join us for the Q&A. With that, I will now hand it over to Jonathan Dickinson.

Jonathan Dickinson, Chief Executive Officer

Thank you, Stéphanie. Good morning to those joining from the U.S., and good afternoon to our European participants. Turning to Slide 5. We continue to execute against our strategy, which is focused on our three priority assets with discipline, and we're pleased with the strong progress we are seeing to date. Starting with lacutamab, our anti-KIR3DL2 monoclonal antibody, which is being developed in cutaneous T-cell lymphoma or CTCL. As you remember, we received the FDA clearance to proceed with the TELLOMAK-3 Phase III trial for lacutamab in CTCL, and we expect to be able to initiate the study in the second half of 2026. We have made progress in negotiating non-dilutive financing options for lacutamab, including potential pharma partnerships and royalty-based structures. From a commercial perspective, we believe that lacutamab represents a meaningful opportunity in CTCL in both the United States and Europe with additional lifecycle expansion opportunities in peripheral T-cell lymphoma. Moving to IPH4502, our differentiated Nectin-4 ADC, which is being evaluated in advanced solid tumors. The Phase I study is ongoing and approaching completion of enrollment in the dose escalation phase and backfill cohorts. As highlighted on the slide, we continue to observe preliminary antitumor activity in heavily pretreated patients, including in urothelial cancer patients previously treated with enfortumab vedotin (EV). We believe that IPH4502 may represent a differentiated opportunity, both in the post-EV urothelial cancer setting and potentially across a broader range of solid tumors. And finally, turning to monalizumab, our AstraZeneca-partnered anti-NKG2A monoclonal antibody, which is being developed in non-small cell lung cancer. The ongoing PACIFIC-9 Phase III study remains on track for a planned readout in the second half of 2026. From a financial perspective, the partnership also continues to represent a potentially important source of future value for Innate, including potential milestones, profit sharing in Europe and royalties in the United States and the rest of the world. Overall, we believe these three assets provide Innate with a focused portfolio of differentiated clinical-stage opportunities spanning both proprietary and partnered programs. I'll now hand over to Sonia and Stéphanie for a more detailed review of the lacutamab program.

Sonia Quaratino, Chief Medical Officer

Thank you, Jonathan. Turning to Slide 7. Lacutamab continues to progress towards initiation of the TELLOMAK-3 confirmatory Phase III trial and the potential accelerated approval pathway in Sézary syndrome. As a reminder, the Phase II TELLOMAK study has demonstrated clinically meaningful and durable activity in both mycosis fungoides and Sézary syndrome, including improvement in quality of life with a favorable safety and tolerability profile supporting potential for long-term treatment. Based on this data, lacutamab has received Breakthrough Therapy designation from the FDA in relapsed or refractory Sézary syndrome. It has previously received Fast Track designation from the FDA, PRIME designation from EMA and orphan drug status in both the United States and Europe. The Phase II data from the TELLOMAK trial also support the potential accelerated approval filing in Sézary syndrome once the confirmatory Phase III trial is underway. In the next slide, the planned TELLOMAK-3 is an open-label multicenter randomized comparative study to demonstrate the efficacy and safety of lacutamab in two separate cohorts of patients with cutaneous T-cell lymphoma who have failed at least one prior systemic therapy. In Cohort 1, patients with any stage Sézary syndrome who have failed at least one prior line of systemic therapy, including mogamulizumab, will be randomized 1:1 to either lacutamab or the comparator. In Cohort 2, patients with mycosis fungoides ranging from Stage IB to IV who have failed at least one prior line of systemic therapy will be randomized 1:1 to either lacutamab or mogamulizumab. Both cohorts will be randomized 1:1 and randomization will be stratified according to disease stage and region. The primary endpoint for both cohorts is progression-free survival assessed by blinded independent central review. The secondary endpoint for the Sézary cohort is overall survival, while the key secondary endpoints for the mycosis fungoides cohort are quality of life and pruritus. TELLOMAK-3 study is designed to serve as the confirmatory trial for Sézary syndrome while also supporting full approval in mycosis fungoides. And from a regulatory standpoint, we have received FDA clearance to proceed with this clinical trial protocol, and we continue towards Phase III initiation expected in the second half of 2026. Stéphanie will now go through the commercial opportunity.

Stéphanie Cornen, Vice President, Investor Relations, Communications and Commercial Strategy

Thank you, Sonia. So we continue to believe lacutamab represents an attractive commercial opportunity supported by a focused and efficient commercial footprint. Based on recent analysis, we estimate Sézary syndrome prevalence in the U.S. of around 1,000 patients, the majority of whom are treated in a limited number of specialized academic centers. Mycosis fungoides has larger incident and prevalence numbers, with an estimated prevalence in the U.S. of around 12,000 patients from an analysis now available in the EHA 2026 online materials. This is a highly concentrated treatment landscape with over 85% of patients managed in academic centers and a large proportion treated within approximately 50 key institutions. This concentration enables a targeted commercial approach with limited infrastructure. At the same time, Sézary syndrome and mycosis fungoides share the same prescriber base, which is a critical point from a commercial perspective. This means that an initial launch in Sézary syndrome is not a stand-alone opportunity, but a direct entry point into the broader CTCL market. Importantly, when looking at the current market, mogamulizumab generated approximately $300 million in annual sales in 2025 as marketed and is projected to reach $350 million in 2026 with strong adoption in Sézary syndrome and more limited penetration in mycosis fungoides. This provides a relevant benchmark for the market opportunity and highlights the potential for our therapy to capture share across both Sézary syndrome and mycosis fungoides. From a value perspective, key drivers include treatment duration, which is supported by durability of responses, pricing and market share across a broader eligible patient population. We see the combined market opportunity expanding to over $500 million across Sézary syndrome and mycosis fungoides in the second setting with additional upside as lacutamab moves into earlier lines of therapy and broader patient segments over time. I will now hand it over to Yannis to start the update on IPH4502.

Yannis Morel, Chief Operating Officer

Thank you, Stéphanie. IPH4502 is a next-generation Nectin-4 ADC which is in Phase I. Turning to Slide 11, IPH4502 has been designed to overcome the limitations of the third-generation Nectin-4 ADCs and to deliver a more favorable therapeutic profile across multiple solid tumors. The drug candidate is based on a proprietary humanized antibody that binds to a distant non-overlapping epitope on the Nectin-4 target. It is combined with a stable, cleavable and hydrophilic linker, which supports high systemic exposure of the ADC while minimizing the release of free cytotoxin in circulation and therefore reducing the risk of off-target toxicity. The payload is a potent topoisomerase I inhibitor with strong bystander activity enabling it to target not only Nectin-4–expressing tumor cells but also neighboring cells with lower or heterogeneous expression. Moreover, it is not sensitive to the mechanism of drug resistance related to MMAE, allowing to address patients who have been pre-exposed to other ADCs. Next slide shows how IPH4502 is positioned within the evolving Nectin-4 ADC landscape. The first wave of Nectin-4 ADCs largely relied on MMAE payloads, including enfortumab vedotin (EV). While EV has validated Nectin-4 as an important ADC target, other MMAE-based approaches will most likely face similar limitations as EV, such as MDR1 resistance and peripheral neuropathy. IPH4502 is designed to address these limitations through payload and differentiated linker design — we believe this creates a potential opportunity in bladder cancer, particularly in the post-EV setting, as well as across multiple tumor types with low or moderate Nectin-4 expression. Overall, we believe IPH4502 has the potential to be best-in-class as a Top1 Nectin-4 ADC driven by its differentiated design. On the next slide, we show newly generated preclinical data that continue to reinforce the best-in-class potential of IPH4502 as a Top1 Nectin-4 ADC. You can see that in both high and low Nectin-4–expressing models, IPH4502 demonstrates robust antitumor activity. However, the key differentiation versus other Top1 Nectin-4 clinical ADCs appears in models with low Nectin-4 expression: IPH4502 maintains meaningful antitumor efficacy, while the other clinical ADCs show a clear loss of activity. This is really important as it highlights the unique ability of IPH4502 to remain active in tumors with lower target expression. Overall, across multiple in vivo models, we consistently observe better efficacy for IPH4502, supporting its best-in-class agent potential, particularly in low to moderate Nectin-4–expressing tumors. Now turning to Sonia for the clinical update.

Sonia Quaratino, Chief Medical Officer

Thanks, Yannis. Turning to Slide 14. We see the outline of the clinical design of the Phase I IPH4502 study. We are currently evaluating this asset in a first-in-human Phase I open-label multicenter study in patients with advanced solid tumors known to express Nectin-4. We collect tumor biopsies at baseline from these patients and evaluated the Nectin-4 expression retrospectively. The study started in January 2025 and runs at specialized cancer sites in the U.S. and in France. This first-in-human study is guided by an adaptive Bayesian design with backfill cohorts with the objective to assess safety, tolerability and preliminary antitumor activity. Cohorts are backfilled at lower doses during the dose-finding trial while prioritizing the dose escalation cohort to explore a higher dose. These backfills help to generate more data in terms of safety, PK, and efficacy at a given dose level. Enrollment in the dose escalation part of the study has progressed well and Phase I dose escalation and cohort enrichment are nearing completion and the maximum tolerated dose has been reached. We have defined a clear therapeutic window with a favorable safety profile to date and see preliminary efficacy at different dose levels within the defined therapeutic window in heavily pretreated patients with advanced solid tumors, including urothelial cancer patients who have progressed after enfortumab vedotin. Turning to the next slide. We highlighted the growing therapeutic gap in bladder cancer after progression on EV plus pembrolizumab. Despite the advancement of enfortumab vedotin that has been introduced in urothelial cancer patients, two-thirds of these patients still experience disease progression within two years and the management of patients who progress on this regimen has become a critical challenge. As of 2026, there is no single established gold standard for second-line therapy after EV plus pembrolizumab, but several strategies are utilized based on patient-specific factors. For patients who received first-line EV plus pembrolizumab without prior platinum exposure, platinum-based chemotherapy, cisplatin or carboplatin with gemcitabine is the preferred subsequent option. Real-world data indicates modest efficacy with a median real-world time to next therapy of approximately 3 to 4.7 months. Due to the limited efficacy of current second-line options, enrollment in clinical trials is strongly prioritized in 2026 guidelines to investigate novel mechanisms of action and combination therapies. This creates a significant unmet need in the post-EV plus pembrolizumab setting, and we believe IPH4502 is well positioned to potentially fill this therapeutic gap. In the next slide, we'll see our development vision for IPH4502, which includes both bladder cancer and broader solid tumor opportunities. In bladder cancer, we see an opportunity to address the growing population of metastatic urothelial cancer patients who progress after EV-based therapy, where Nectin-4 expression appears to remain stable in tumors from patients who progress after EV. Over time, we also see potential to move to earlier lines, including in combination with anti–PD-1 therapy. Beyond bladder cancer, we believe IPH4502 may also have potential across multiple solid tumors with low to medium Nectin-4 expression, and we intend to consolidate the signals observed in the dose escalation study. Overall, our objective is to build a broad and modular clinical development strategy, starting with high unmet-need populations and expanding into earlier lines of therapy and additional tumor types over time, depending on the emerging data.

Yannis Morel, Chief Operating Officer

Now before we move ahead with our partner program, this slide highlights how we have built a comprehensive ADC discovery platform to develop a portfolio of next-generation ADCs designed to overcome the limitations of the current ones. Building on the IPH4502 linker, whose stability in patients is clearly demonstrated by our emerging clinical data, we are developing a drug candidate portfolio around three approaches. Dual-targeted bispecific ADCs to address tumor antigen heterogeneity and to expand addressable indications compared to single tumor antigen targeting. Then bispecific ADCs with enhanced internalization to unlock activity in low-expressing tumors. And finally, dual-payload ADCs using complementary mechanisms of action to overcome resistance. Our next wave of ADCs is currently progressing towards candidate selection and then IND-enabling studies. Now turning to Sonia.

Sonia Quaratino, Chief Medical Officer

Turning to Slide 19. We now provide an update on our AstraZeneca-partnered programs, monalizumab and IPH5201. In the next slide, let's start with monalizumab. The PACIFIC-9 is a major Phase III randomized double-blind study to demonstrate that dual immunotherapy can significantly increase the survival rate of patients with unresectable Stage III non-small cell lung cancer who have not progressed following definitive concurrent chemoradiotherapy. The rationale for this trial is supported by three Phase II studies in early-stage non-small cell lung cancer, including COAST, NeoCOAST and NOCOS-2 studies. These studies reinforced the potential of targeting the NKG2A pathway to enhance the innate immune response alongside PD-L1 inhibition in early-stage lung cancer. And enrollment in PACIFIC-9 has been completed, and now we look forward to the data expected in the second half of 2026. Now in the next slide, let's move to another asset, this time in the adenosine pathway that is also codeveloped with AstraZeneca, IPH5201, that blocks CD39, an enzyme that converts ATP into adenosine, which suppresses the immune system. By preventing this conversion, the therapy is aimed at driving the immune system within the tumor microenvironment. IPH5201 is currently evaluated in the MATIS Phase II trial in combination with durvalumab and neoadjuvant platinum-based chemotherapy in patients with resectable non-small cell lung cancer. The recent preplanned interim data presented at the AACR Annual Meeting on April 21 during a clinical trial plenary session has significantly strengthened the case for this anti-CD39 antibody. The interim analysis of 40 patients demonstrated that the combination of IPH5201, durvalumab and chemotherapy is achieving pathological complete response rates that compare very favorably to the current benchmark. The primary endpoint of pathological complete response showed a strong correlation with PD-L1 expression level. Based on the robust 35.7% pCR rate in PD-L1 ≥1% and 50% pCR rate in patients with tumors with PD-L1 expression of at least 50%, the study is now moving forward by focusing recruitment exclusively on patients with PD-L1–positive tumors. No new or unexpected safety signals were identified. The combination was generally well tolerated with most adverse events being grade 1 or 2. CD3 cell density in tumors is warranted to be further investigated as an emerging biomarker for predicting pathological complete response in IPH5201/durvalumab treatment. Overall, these encouraging early findings support continued investigation of IPH5201 in non-small cell lung cancer.

Yannis Morel, Chief Operating Officer

Coming to Slide 22. Slide 22 summarizes the financial highlights of our AstraZeneca partnerships. For monalizumab, the agreements amount up to $1.275 billion of milestones. We have already received $450 million and remain eligible to additional $825 million of potential payments. AstraZeneca will book sales and Innate Pharma will receive double-digit royalties on sales in the U.S. and rest of the world. In Europe, since Innate Pharma is contributing to 30% of the funding for the Phase III trial, we will get 50% of the profits and have the option to co-promote the drug. For IPH5201, the agreement is worth up to $85 million in milestones. To date, we already received $60 million and remain eligible to $25 million. This agreement has a similar structure to the monalizumab agreement. Innate Pharma also has the option to fund a Phase III trial in order to get 50% of the European profits and co-promotion rights. Otherwise, Innate Pharma will receive royalties in Europe, the U.S. and the rest of the world. Together, this partner program provides Innate with meaningful potential non-dilutive cash through future milestones, royalties and profit-sharing economics. I will now hand over to Jonathan for closing remarks.

Jonathan Dickinson, Chief Executive Officer

Thank you, Yannis, Sonia and Stéphanie. So turning to our upcoming milestones. Over the coming quarters, we expect several important catalysts across our priority assets. For lacutamab, we remain focused on initiating the TELLOMAK-3 confirmatory Phase III study in the second half of 2026, subject to financing. For IPH4502, the study is progressing very well, and we have observed preliminary antitumor activity with a favorable safety profile to date, including in patients with urothelial cancer relapsed or refractory to EV, which is a signal that we're starting to validate our preclinical hypothesis. We look forward to continued maturation of the emerging clinical data set following completion of dose escalation and cohort enrichment. And for monalizumab, the Phase III PACIFIC-9 trial in non-small cell lung cancer has completed enrollment with data expected for the primary endpoint in the second half of 2026. Taken together, these three programs provide a clear set of value-driving catalysts across our portfolio. With a cash position of EUR 25.4 million as of March 31, 2026, we remain disciplined in our execution and focused on advancing programs that we believe have the potential to deliver meaningful value for both patients and shareholders. With that, operator, we're now ready to open the call for questions.

Operator, Operator

Your first question comes from the line of Daina Graybosch with Leerink Partners.

Daina Graybosch, Analyst, Leerink Partners

I have a question on MATIS and CD39 since that was presented recently. The discussion at AACR pointed out that while the triplet compares quite favorably to prior outcomes with durvalumab plus chemotherapy, it looks pretty similar to prior outcomes with PD-1 plus chemotherapy in the neoadjuvant setting. And I wonder what gives you confidence given that sort of range of broader benchmarks? And in the next part of the MATIS trial, is there a certain threshold of activity or biomarker finding that AstraZeneca and you are looking for to take it forward into Phase III?

Jonathan Dickinson, Chief Executive Officer

I think Sonia between the two of you. I know you want to start and then Yann can fill in on the second.

Sonia Quaratino, Chief Medical Officer

Sure. Of course, you are right to say that this interim data show that the pCR rate that we observed at this interim analysis may be comparable to what has been seen in other trials using pembrolizumab. But when you are benchmarking, of course, with the same PD-L1 backbone that is durvalumab, you have to admit that there is a significant uplift adding our therapy on top as a single agent. And so in that respect, this has definitely produced an increase of pathological complete response that is not matched by an increase of toxicities, which is remarkable. We've also seen that, for instance, in pCR high PD-L1 expression, this pCR rate goes even higher. Of course, we cannot predict where this trial might materialize in a Phase III. But so far, the data looks very promising.

Yannis Morel, Chief Operating Officer

Yes, like Sonia said, I mean, this trial is providing two levels of information. When you add CD39 blockade on top of an active PD-1 blocker, it's increasing the pCR rate. So for us, it's clearly important that if the signal is confirmed on the additional patients, it would really validate targeting this checkpoint in the adenosine pathway and the efficacy of our drug candidate. Whether AstraZeneca will decide to take the license and move it into Phase III is a separate commercial and strategic decision for AstraZeneca. But from our perspective, confirming and establishing that blocking CD39 can be effective is very important.

Operator, Operator

Your next question comes from the line of Christopher Liu with Lucid Capital Markets.

Christopher Liu, Analyst, Lucid Capital Markets

Maybe just two for me about IPH4502. So for the first question, are there any additional details you can give us on the profile of the drug at the go-forward dose? And for the second question, what do you see as the most compelling indications outside of bladder cancer for the asset considering market opportunity and potential competition?

Sonia Quaratino, Chief Medical Officer

Thanks for the question. At this moment, we can only say we have seen some efficacy readouts at different dose levels within the therapeutic window. And we will be a bit more specific around both dose levels as well as potential indications to bring forward at a clinical conference this year.

Operator, Operator

Your next question comes from the line of Swayampakula Ramakanth with H.C. Wainwright.

Swayampakula Ramakanth (RK), Analyst, H.C. Wainwright

This is RK from H.C. Wainwright. Regarding the Nectin-4 ADC... You mentioned Lilly's product, which are in Phase I and Bicycle recently deprioritized their product. So how do you see the competition going forward? And what sort of data would you be able to release in the next 6 months or so, so we have an understanding of how you are poised against the competition?

Sonia Quaratino, Chief Medical Officer

Well, thanks for the question. In fairness, we don't know much about Lilly's program so far. And we can only speculate that perhaps the asset was deprioritized because it doesn't look as good as the other Nectin-4 program that they also have in clinical development. We do not have their data because they have not been shared, and we will see when any abstract or data are made available. Sorry for not adding more color, but we don't have details.

Jonathan Dickinson, Chief Executive Officer

Yes. And then in terms of the data, I think Sonia mentioned earlier that we expect to present the data at a medical conference sometime later in the second half of the year. And I think at that point, you will see go-forward indications and the data in urothelial cancer and next steps for the program.

Swayampakula Ramakanth (RK), Analyst, H.C. Wainwright

Okay. And then on the collaboration with AstraZeneca, have you elected for the 30% funding on the PACIFIC-9? And is there any residual cash obligations between you and them?

Jonathan Dickinson, Chief Executive Officer

I mean, between now and a positive readout... I just to qualify a couple of things. So the agreement that we have with AstraZeneca is capped at a certain level, and we are actually very close to the cap of the contribution. So there are actually minimal contributions required between now and the data readout.

Operator, Operator

Your next question comes from the line of Jeet Mukherjee with BTIG.

Jeet Mukherjee, Analyst, BTIG

Two from our side. Just any further color or perspective on the status of the lacutamab partnership discussions? Do you anticipate or feel confident that a deal can be finalized before the third quarter of this year? And the second question, are we expecting any Phase II PTCL data from lacutamab this year as well?

Jonathan Dickinson, Chief Executive Officer

So maybe on the partnerships, maybe I can start off and Yannis can fill in any gaps. So we are very confident that we will execute either a BD partnership or a royalty financing partnership for lacutamab. The discussions are quite advanced, and we would expect to be able to conclude one of those two types of partnerships moving forward in the relatively short term. And from our perspective, it doesn't really matter which way we go with either a BD partnership or a royalty financing partnership. We would be running the Phase III confirmatory study. So that will be in our control where we could utilize our expertise that we've developed in the CTCL area from the TELLOMAK-2 study. So we'll make that decision in the coming future, basically based on what's best for the company in terms of the NPVs of the two different approaches. Yannis, I don't know if you want to add?

Yannis Morel, Chief Operating Officer

Short answer is yes, we are confident that we can execute something before Q3.

Jeet Mukherjee, Analyst, BTIG

And just the second question around Phase II PTCL data.

Sonia Quaratino, Chief Medical Officer

Yes. PTCL, as you know, is run by the LARC group, and we are towards the completion of this study, but I don't think that this data will materialize before the end of this year. Yes. And we have no further visibility on this study.

Jonathan Dickinson, Chief Executive Officer

Yes. This is an investigator-sponsored trial, it's under the control of the LARC group. So this is independent and not fully within our control for timelines. We know that the LARC group are quite excited about lacutamab in combination with the GEMOX chemo regimen, where they're studying this in late-stage patients. And we're optimistic that there will be data at some point in the future, but we can't put a very specific timeline on that.

Operator, Operator

There are no further questions at this time. I will now turn the call back to Jonathan Dickinson, CEO, for closing remarks.

Jonathan Dickinson, Chief Executive Officer

Okay. Thank you, everybody, for attending the earnings call today. We're at a point in time where I think we have some very exciting catalysts coming over the coming months. So just to remind you, on lacutamab, the initiation of the confirmatory Phase III program. For IPH4502, we're expecting to be releasing data on the first-in-human studies at a medical conference before the end of the year. And then on monalizumab, we have the results from the primary endpoint of the PACIFIC-9 study coming before the end of the year. So thank you, everybody, for attending, and we look forward to giving you some updates in the very near future. Thank you.

Operator, Operator

This concludes today's call. Thank you for attending. You may now disconnect.