Iteos Therapeutics Inc

NASDAQ:ITOS

Earnings Call Analysis

Earnings Call Transcript 2021-Q3

[Operator]

Good afternoon and welcome to the iTeos Therapeutics’ Third Quarter 2021 Financial Results Conference Call. This time, all participants are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded at the company’s request.

At this time I would like to turn it over to Ryan Baker, Head of Investor Relations at iTeos. Ryan please proceed.

[Ryan Baker, Head-IR]

Thank you Operator and thank you everyone on the call for joining us today. Joining me from iTeos with prepared remarks are Michel Detheux, President and Chief Executive Officer; Joe Lager, Chief Medical Officer; and Matthew Gall, Chief Financial Officer.

Before we begin, the team will be making forward-looking statements in the prepared remarks and during the Q&A Session.

Any statements made during this call that are not statements of historical or current facts are intended to be forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

We want to emphasize that such forward-looking statements reflect our current expectations and assumptions regarding timing, progress and success of our clinical trials, therapeutic potential thereof, expected milestones, our financial condition, including cash runaway, our business operation, development efforts and potential benefits of our collaborations and are neither predictions nor guarantees of future events or performance.

Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with our business, including those under the heading entitled Risk Factors in our quarterly report on Form 10-Q for the quarter ended September 30, 2021, which was filed with the SEC as well as in subsequent reports, including our current reports on Form 8-K. The Company disclaims any obligation to update or revise any forward-looking statements except as required by law.

Michel will start today’s call by sharing with you the significant progress of our team here at iTeos has made the past quarter. So recap our corporate strategy and provide an overview of our robust clinical development plans for our pipeline programs. And then our chief medical officer Joe Wagner will provide a more detailed update on our clinical programs. We’ll wrap up our comments with our CFO Matthew Gall, who will provide an update on our financial status, followed by Michele’s closing remarks. We’ll then open the line for the Q&A session.

With that I will hand it over to Michele.

[Michel Detheux, President and CEO]

Thank you, Ryan. Hello, everyone. Thanks for joining us for our third quarter 2021 earnings call. At iTeos our team is dedicated to understanding the biology of the tumor microenvironment. We use that deep understanding to design what we believe our betting plus assets to the immune system to patients with cancer live longer and better lives. We are continuing to covert our preclinical programs EOS-448 anti-TIGIT antibody which we partner with GlaxoSmithKline to jointly develop and commercialize and independent them on CD form inhibitor. Both of these therapies as demonstrated single agent efficacy and excellence -- and both targets are CD19 to our own data, as well as external randomized data.

We are really excited by these programs and their potential to significantly impact patients lives. This is what drives us here at iTeos every day. Let’s start by discussing our strategic collaboration with GlaxoSmithKline on our anti-TIGIT antibody EOS-448 this collaboration is an opportunity to accelerate and expand the development plan of EOS-448. In the third quarter of 2021 we chose the co-development and co-commercialization collaboration agreement and receive a 625 million upfront payment. Beyond the upfront payment, we are eligible to receive up to 1.45 billion in additional development and commercial milestones payments should the program achieve certain milestones. This partnership validates our view that TIGIT is the most promising new target in the coming generation of new IO therapies and the EOS-448 potential to be differentiated to the other asset in the class.

The GSK partnership has brought enormous value to iTeos in many ways. To highlight a company in partnership brings together the best expertise, capabilities and portfolio of the two companies and enables us to get the opportunity of a combination into the combination in the access in ways no other company can. It’s an example, we will be evaluating the combination of [Indiscernible] with both of our highly differentiated this is just one of the many unique combination we are available to explore. Also, the structure of this partnership provides strategic flexibility which we aim to become an industry leader in the profit share and co-commercialization rights in the U.S.

Now, turning to [Indiscernible] driven in sequential. In work with reported to -- is data continue to validate our antigens for this pathway and target. There on our use, and depending of the specific condition, to selectively receptor in the specific conditions of [Indiscernible] what we are working on at iTeos. Our [Indiscernible] continue to a range of diverse and exciting programs put us on further harnessing the power of the immune system to protect cancer. Program against a new target is identified by our demonstrating our capabilities in higher discovery. We continue to capitalize on our demonstrated track record of success in building a differentiated pipeline.

In summary, our 2021 has laid the groundwork for [Indiscernible] plan. With expansion on the way for both our [Indiscernible] we have demonstrated our ability to conflate innovation into clinical programs with the potential to improve outcomes for people who have cancer. We leverage our deep understanding of cancer immunology and pathway to build our pipeline and attractive partnership will provide us with additional opportunities. We are now focused on delivering on the promise we have made patients with advanced cancer.

With that I will hand over to Joe Lager our Chief Medical Officer to provide further details on with this exciting content.

[Joe Lager, CMO]

Thanks Michele. I’ll begin with key updates on our anti-TIGIT antibody EOS-448. EOS-448 has the potential to achieve significant anti tumor immune response through a multifaceted mechanisms. The antibody blocks the binding of TIGIT resulting in the immune mediated killing of tumor cells by T-cells and NK-cells. It also engages the FC gamma receptor, further promoting anti tumor immune response through the release of pro inflammatory cytokine and chemokine and the activation of antigen presenting cells. Also, the antibody causes depletion of immunosuppressive T-regs and exhausted T-cells, cells that are known to dampen the immune response.

We are pursuing a clinical development plan based on this multifaceted mechanism of action of EOS-448 which is focused on the indications and combinations that we see the greatest potential to benefit patients. Given the encouraging monotherapy data we presented earlier this year, we are progressing the next set of trials for this program. We are pleased to share that we have initiated dosing and two combination cohorts in patients with solid tumors in our phase 1/2 clinical trial of EOS-448. The first in combination with pembrolizumab and the second in combination with inupadenant. As a reminder, we had planned to initiate this combination study with pembrolizumab prior to entering into the collaboration with GSK. And both parties agreed that it made sense to generate data on this combination. This will inform our clinical strategy with dostarlimab.

Over the next several months, we will indicate additional studies exploring the safety and efficacy of EOS-448. This will include the combination with GSK approved anti-PD-1 dostarlimab. We will also evaluate EOS-448 in monotherapy and in combination with Bristol Myers Squibb’s iberdomide in multiple myeloma. We look forward to providing updates on the clinical development plan for EOS-448 as we progress.

Turning to independence, we have a unique drug candidate in three ways. First, unlike the other adenosine receptor antagonist inupadenant was designed to inhibit the HLA receptor in the high concentrations of adenosine found within tumors. Second, inupadenant was designed to be highly selected for the A2A receptor, which plays a key role in regulating adenosine in the suppressive effects within the tumor. And third inupadenant does not penetrate the central nervous systems, reducing the potential for off target safety effects and improving its therapeutic index. We continue to make significant progress in our clinical developments and have several updates to share. We have completed enrollment in the initial evaluation of inupadenant in combination with chemotherapy and with pembrolizumab and it found a profile that supports future development. We have also completed enrollment in the cohort exploring inupadenant and monotherapy in castrate resistant prostate cancer, and have initiated an expansion of the combination of inupadenant with pembrolizumab in PD1 resistance melanoma.

Finally, as we mentioned earlier, while discussing the updates on the EOS-448 we have initiated the evaluation of the combination of inupadenant with EOS-448 and we’ll also be evaluating the triple combination of EOS-448 with inupadenant and GSK dostarlimab. In addition, we are building on the identification of potential patient selection biomarkers identified in our monotherapy study, and plan to open a new cohort in our ongoing phase 1/2a trial in patients with high biomarker expression. Our initial trial is a rich source of translational data that we continue to use to optimize the inupadenant clinical development programs to evaluate independent in the patient and tumor types, most likely to benefit from treatment. With the data we already have in hand, and that we are generating and ongoing studies and validation from other approaches in the adenosine pathway we are initiating the next phase of development. We will have data in several indications and combinations that we expect will provide many attractive options as we move into the randomized controlled setting. I will now hand the call over to Matthew Gall our Chief Financial Officer.

[Matthew Gall, CFO]

Thanks Joe. I’d like to provide an update on our financial results for the third quarter of 2021. The company’s cash and cash equivalent position was 899.8 million as of September 30, 2021 as compared to 340 million as of September 30 of 2020. iTeos is well capitalized to support the programs we just detailed following receipt of the upfront payment from GSK pursuant to our collaboration and license agreements in August of 2021 we believe that our existing cash and cash equivalents would enable us to fund our operating expenses and capital expenditure requirements into 2026. Revenues, nearly all of which were associated with recognition of a portion of the upfront payment received from GSK were 104.3 million for the quarter while we recorded no revenue in the third quarter of 2020. We expect to recognize the full upfront payment through revenue over the next few years. Additional information regarding revenue recognition related to the collaboration agreement will be included in our form 10-Q for the quarter ended September 30, 2021.

Research and Development expenses were 16.1 million for the quarter ended September 30, 2021 as compared to 8.7 million for the third quarter of 2020. This increase was primarily due to an increase in activities related to clinical trials for EOS-448 and inupadenant, our preclinical pipeline, and the expansion of our team. General and administrative expenses were $8.8 million for the quarter ended September 30, 2021, as compared to 4.8 million for the third quarter of 2020. This increase was primarily due to more hires, professional fees, and other costs associated with becoming a public company. The net income attributable to common shareholders was 69.6 million, or net income of $1.98 per basic share, and $1.86 per diluted share for the quarter ended September 30, 2021, as compared to a net loss of 11.6 million, or net loss of $0.48 per basic and diluted share for the third quarter of 2020. I’ll now turn the call back over to Michele for closing remarks.

[Michel Detheux, President and CEO]

Thank you Matt. As we are continuously on our activity clinical development plans for both of our highly differentiated in anti-TIGIT antibody EOS-448 and inupadenant receptor antagonist that has been optimized for the clues on scientific innovation to improve clinical outcomes for patients with our deep understanding of tumor immunology we will continue to advance our purine pipeline and accelerate our R&D efforts to discover new targets and strategies to advance cancer immunotherapy. [Indiscernible] the pipeline and the team we assembled we are in a better position than ever to be among the entrepreneurs to develop this new generation of [Indiscernible] and we remain focused on our ambition to be a leader in being happy to patient.

Thank you very much for joining today’s call. I’d like to now turn the call back to open the line for questions.

[Operator]

Thank you. [Operator Instructions] We have our first question from Daina Graybosch from SVB Leerink. Please go ahead.

[Daina Graybosch, SVB Leerink]

Thank you. Two for Joe. So you talked about completing enrollments for inupadenant combination of chemo and [Indiscernible]. Two questions on that. One I think you said there the profile supportive of further development. Can you better more fully characterize what you mean by profile supportive? And then you also mentioned expansion in melanoma PD1 pretreated. Have you made a go no go decision on expanding and prostate and CMBS?

[Joe Lager, CMO]

Yes. Thanks Daina. So in terms of the first question, yes, for inupadenant we’ve completed the safety evaluation or those evaluations for the combination with both pembrolizumab and with chemotherapy. For pembrolizumab we have dose where what are our criteria for saying that the profile is suitable for moving forward, we have a dose that is safe. We have PK as expected for the drug. And we have initial evidence of efficacy in that cohort that makes us interested in moving forward with and as we said we are moving forward with pembrolizumab combo in melanoma. The same is true for chemotherapy that we have selected a dose where we have good safety and we have preliminary evidence of activity and in terms of the other cohorts for prostate cancer we’ve completed the monotherapy evaluation in prostate cancer and we have decided not at this time to open the cohort in prostate cancer in combination with pembrolizumab.

We think that there are better options for development of the drug at this time. And in terms of the combination with chemotherapy we are moving that forward. We are have designed different indications including triple negative breast cancer, and has chosen the indication to move forward. And we will be giving an update on that as that study began ready to start.

[Operator]

Chris your line is open. Please ensure you’re un-muted locally.

[Chris Raymond]

Thanks guys, for taking the question. Just to, sorry, strategic question here on inupadenant I know you’re taking the first agent, the first generation agent here into randomized trials. And you talked about this next generation, you kind of think you’ve addressed this before, but maybe just remind us, how do these two agents coexist? What’s the strategy there in terms of bringing both of them forward? And then I also, I don’t think I heard you guys for talk about this triplet combo 448, the GSK PD1 in inupadenant. Can you maybe talk a little bit about what led you to begin that trial and what data to prompt of that? Thanks.

[Joe Lager, CMO]

Yes, Chris. So on your first question about our drugs targeting the adenosine pathway inupadenant is our lead there it is the A2A receptor antagonist that we think is optimized for use in the tumor microenvironment to really optimize the anti tumor response of the immune system. And, as you mentioned, we have selected candidates for a new mechanism of action that is also in the adenosine pathway. Our preclinical data has shown that these two targets are both effective ways to restore the immune system, and also may well work well together. So that is why both, they should work independently and should also work well together. So that’s why we’re progressing both of these drugs. So inupadenant which has been clinic and the new drug candidate that we’ve recently selected.

In terms of your second question around the triplet of PD1 plus TIGIT, this is something we’ve been interested in for a while, as we’ve previously disclosed, we were moving forward with the doublet of TIGIT and inupadenant and it makes sense to also evaluate the triple combination of PD2 plus TIGIT inupadenant. There also has been some recent data or not data, but some information from the ongoing trial in non small cell lung cancer, where they have suggested that they have interesting data on us triplets, including a PD1 TIGIT and adenosine receptor antagonists, and that also increased our interest in moving forward with that company.

[Chris Raymond]

And I’m sorry, I want to make sure that I understand that the answer that you had to the first question. Did I hear you say that you’re not taking 854 in the prostate cancer? Is that correct? Or did I miss hear that?

[Joe Lager, CMO]

That is correct. We’re not moving forward in prostate cancer into the company. We’re not going to evaluate the combination with pembrolizumab in prostate cancer at this time. We’ve decided to prioritize other developments.

[Operator]

The next question comes from Anupam Rama from JP Morgan. Please go ahead.

[Anupam Rama, JP Morgan]

Hey, guys, hope you’re all well. And thanks so much for taking the question. On EOS-448 so what do you along with lines of some of the prior questions, what are you trying to learn specifically from the pembro combination study that you might be able to apply to dostarlimab combination study. Thanks so much.

[Joe Lager, CMO]

Thanks, Anupam. So we had plans had started initiating that trial of EOS-448 with pembrolizumab prior to entering into the partnership with GSK. And when we looked at the timelines, we realized that we could initiate that study sooner than we could initiate the study with dostarlimab. We think having the data from that study in combination with pembrolizumab will help us as we are initiating the combination trial with dostarlimab to select the dose and perhaps move a bit faster in that combination based on having data already with anti-PD1. So it mainly was about speed. I think as we move forward, we also think it could be valuable to have data on how the drug performs with different anti-PD1 partners.

[Operator]

Our next question comes from David Nierengarten from Wedbush Securities, please go ahead.

[David Nierengarten, Wedbush Securities]

Thanks for taking my questions. First, regarding the combination with pembro and GS K’s work with the [Indiscernible] I’m assuming but correct me if I’m wrong, that there’s no gating mechanism so that they’re not going to wait for data from your pembro study in order to begin the combination studies with [Indiscernible] and the second question that I had, was do you plan or is there a plan for incorporating the adenosine assay that you have been working on from the monotherapy study into the combination studies and maybe trying to look at having an arm or two where you stratify according to expression effects.

[Joe Lager, CMO]

Thanks, David. So yes, on the combination with pembrolizumab and combination with 448 we are going full speed ahead with initiating the combination with dostarlimab and the initial data from the combination with pembrolizumab will not be gating. And on the second question on the assay that we’ve identified, that may help to predict the patients that benefit from inupadenant, we are incorporating that in our future studies. So we are planning to do cohorts, with monotherapy to enroll patients who are biomarker high to better define the benefit that we see in that population. And we are including the assays in our study in melanoma, and we’ll also include it in the plans randomized trial for next year.

[Operator]

[Operator Instructions] The next question comes from Swayampakula Ramakanth with H.C. Wainwright. Please go ahead.

[Swayampakula Ramakanth, H.C. Wainwright]

Thank you. Thanks for taking my questions. Just trying to understand the rationale behind combining 448 with [Indiscernible] for multiple myeloma, if you could, please comment on it.

[Joe Lager, CMO]

Yes. So we are planning to do a study of EOS-448 as monotherapy and in combination with iberdomide and relapsed refractory multiple myeloma. We have had collaboration with Jeff Hill at Fred Hutch in Seattle, where we’ve demonstrated that there does seem to be significant benefits of the combination of EOS-448 or FC engaging TIGIT antibody with an image. And iberdomide is a potent drug. It has data in relapsed refractory myeloma that serves as a useful historical control. And it’s an attractive study to do because it’s giving patients an image that they haven’t already seen before in that late setting where regulatory agencies require to start development in myeloma.

[Swayampakula Ramakanth, H.C. Wainwright]

Thank you, and then regarding the biomarkers that you’re looking for specifically in the inupadenant studies, what sort of biomarkers are you looking for?

[Joe Lager, CMO]

So we disclosed at ASCO, the data that we had from our initial study in monotherapy, where we found that the adenosine receptor A2A receptor itself, those levels of that expression, number of cells expressing A2A are in the tumor was correlated with clinical benefit in the patients in that study. That is IHC markers. We have also looked at other markers both by IHC and by Nano String, looking at the mRNA markers. And so we have identified other markers that also potentially identify the patients that benefits using those methods as well.

[Operator]

[Operator Instructions] I can confirm we have no further questions currently registered. So I’ll hand it back to the team for any closing remarks. Thank you.

[Michel Detheux, President and CEO]

Thank you very much everyone. Have a great day, thank you.

[Operator]

This now concludes today’s call. Thank you all for joining, you may now disconnect your lines.