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Hello, and welcome to the Innate Pharma First Half 2023 Financial Results and Business Update Conference Call. I would like to advise all participants that this call is being recorded.
I'd now like to welcome Henry Wheeler to begin the conference. Henry, over to you.
Welcome, everyone. This morning, Innate issued a press release providing a business update for our H1 2023 financial results and business update. We look forward to highlighting the progress made during the year to-date as well as addressing future goals and milestones. The press release and today's presentation are both available on the IR section of our website.
On Slide 2, before we start, I'd like to remind you that we will make forward-looking statements regarding the financial outlook in addition to regulatory and product plan development. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted.
On Slide 3, on today's call we will be joined by Mondher Mahjoubi, our Chief Executive Officer, who will then hand over to Joyson Karakunnel, Interim Chief Medical Officer, who will cover updates on lacutamab and monolizumab. Yannis Morel, EVP of BD and Product Portfolio Strategy will then discuss our ANKET and ADC platforms. And then we have our CFO, Frederic Lombard to cover the financials.
Mondher, I'll now hand over to you.
Thank you, Henry. Good morning, good afternoon, everyone.
Please move to Slide 4. Let me start by welcoming Dr. Sonia Quaratino to Innate Pharma as Chief Medical Officer, as we announced at this moment. We are looking forward to Sonia joining the team next month with her wealth of expertise in the field of oncology product development. Dr. Quaratino joins us at an exciting time of clinical momentum for Innate Pharma and we look forward to working together to advance Innate pipeline and you will have the opportunity to meet with Dr. Quaratino at our next quarterly earning calls.
I would, of course, like to extend a great thanks to Joyson for all his contribution over the last years, and wish him well in his next steps. Joyson will ensure a smooth transition period as Sonia comes on board.
Turning to Slide 5, I would like to remind you of our strategy. As an early clinical stage company, our business model centers around three key priorities where we look to drive value from our early R&D efforts through later stage partnerships where it makes sense to do so. Our ambition remains to develop innovative drug candidates that contribute to transform cancer care through a strong pipeline of differentiated antibodies.
Firstly, we look to create near-term value driven by our lead proprietary product candidate, lacutamab, which is in development for T-cell lymphoma, with final CTCL and early PTCL readouts expected by the end of the year.
As a reminder, our focus remains to leverage the value of our products as much as possible, which we will further validate our science and offer capital that we can reinvest to advance our early R&D engine. We want to ensure that if we can gain valuable competence via a partner agreement for lacutamab, we will consider that in our development plans for the product, as we look to later stage, prior as we have done in the past for other partner assets.
Second, we continue to fuel our pipeline and create longer-term value by leveraging our antibody engineering capabilities in order to develop innovative molecules with a primary focus on our multi-specific NK cell engager proprietary platform we call ANKET. We are pleased to announce today that our lead proprietary ANKET IPH65 has passive IND and progress towards Phase 1 trial.
As we develop antibody targets for our ANKET platform, we recognize that some of these binders may be more applicable for ADC technology and we have now some advancement in our ADC pipeline today.
Last but not least, we are building a strong and sustainable foundation for our business with various partnerships across industry and academia. Here, our AstraZeneca partnership with monalizumab is continuing in lung cancer.
Please move to Slide 6. And before I hand over to Joyson, I would like to share with you an overview of our pipeline which shows how we continue to translate our science into a robust portfolio of proprietary and partnered assets. It also illustrates how we are executing against our strategy with our lead proprietary asset lacutamab but also ANKET and the emerging ADCs, supported by partnered products with AstraZeneca, Sanofi, and now Takeda from late to early stage development.
We anticipate a series of potential clinical data readouts and catalysts in the upcoming couple of years as our R&D engine looks to leverage our scientific know-how in order to create a sustainable business.
I would like now to pass the call over to Joyson who will review the progress made with our portfolio, starting with lacutamab, our most advanced proprietary asset. Joyson, over to you.
Thank you, Mondher.
On Slide 7, let me summarize the progress we are making with lacutamab. We are pursuing a fast-to-market strategy for lacutamab in the niche setting of SĂ©zary syndrome, where lacutamab was granted U.S. Fast Track designation and EU PRIME designation in 2020.
We have expanded past SĂ©zary syndrome to mycosis fungoides, where we have seen encouraging preliminary data from our Phase 2 trial in both cohorts. For the SĂ©zary syndrome and mycosis fungoides, final data is due for both cohorts in the second half of 2023.
Finally, we are continuing to enroll into peripheral T-cell lymphoma in the Phase 1b and 2 monotherapy in combination trials in the relapse setting, with initial data expected later this year.
On Slide 8, we have the preliminary Phase 2 data published last year in SĂ©zary syndrome and mycosis fungoides. On the top half of the slide, in SĂ©zary syndrome, at the ASH Annual Congress 2022 in December, the presentation showed that in heavily pretreated post-mogamulizumab patient pool with a median prior line of therapy of 6, the ORR in the ITT population was 21.6%, with an ORR of 35.1% in the skin and 37.8% in the blood.
It was very encouraging to see activity replicated in the larger Phase 2 trial in these late-line patients. A favorable safety profile was also seen. We look forward to further interactions with regulators as we get the final data later this year.
The lower half of the slide summarizes the preliminary Cohort 2 and 3 data in mycosis fungoides where we presented updated data based on the revised Olsen criteria at ICML this year. In the updated data presentation based on the Olsen 2022 criteria, in the KIR3DL2 expressing cohort, we were encouraged to see that in these late-line patients with the median of four prior treatments, lacutamab demonstrated a 42.9% ORR and nine responses. We are particularly encouraged by the responses in the skin where we saw a 57.1% ORR and 12 responses. A reminder that a skin response is an important response in this disease.
On Slide 9, I would like to update you on monalizumab. To remind you, monalizumab is an anti NKG2A, which acts upon the checkpoint pathway to potentiate NK cell activation that we have licensed to AstraZeneca for oncology.
On this slide, you can see an overview of the late-stage development plan for monalizumab in lung cancer. Based on the AstraZeneca sponsored Phase 2 COAST data AstraZeneca commenced PACIFIC 9 a Phase 3 trial evaluating the combination of either monalizumab or oleclumab plus durvalumab in the unresectable Stage 3 non-small cell lung cancer setting. Who have not progressed after concurrent chemo-radiation therapy.
For the Phase 2 COS study, the three arms evaluated the combination of durvalumab plus monalizumab, avdoralimab plus oleclumab, AstraZeneca's anti-CD 73. As published in the Journal of Clinical Oncology by AstraZeneca after a median follow-up of 11.5 months, the results of an interim analysis showed a hazard ratio of 0.42 for durvalumab plus monalizumab versus durvalumab alone.
The results also showed an increase in the primary endpoint of confirmed ORR for durvalumab plus monalizumab over durvalumab alone of 36% versus 18%, respectively. The AstraZeneca-sponsored NeoCOAST 2 study is also underway in an earlier lung setting. Evaluating monalizumab and durvalumab with chemo in neoadjuvant non-small cell lung cancer patients.
I will now hand over to Yannis to cover our ANKET and ADC platform.
Thank you, Joyson.
On Slide 10, I wanted to highlight our proprietary NK cell engager platform that we call ANKET, ANKET standing for antibody-based NK cell engager therapeutics. ANKET is a versatile fit-for-purpose technology made of various building blocks that is creating an entirely new class of multi-specific engager to induce synthetic immunity against cancer.
This technology platform, which is leveraging our scientific expertise in the NK cell space, will be an engine for our pipeline, creating value via a series of drug candidates addressing multiple tumor targets. The backbone of the ANKET platform is based on the unique engagement of the activating NK cell receptor, NKp46 and CD16 on NK cells, which allows for optimal harnessing of the NK cell effector functions, which can be further increased by the addition of an IL-2 variant to induce NK cell proliferation.
On Slide 11, I wanted to share our enthusiasm for this ANKET platform. As you can see, our pipeline of ANKET molecules is significantly growing, with Sanofi having now licensed three molecules with two in the clinic and having an option on two other undisclosed targets. Also, today, we disclosed that our most advanced proprietary ANKET IPH65 which started to CD20 as clear IND, and we look forward to start the Phase 1.
In addition, we have proprietary preclinical program against multiple targets. On the right panel, you can see the detailed mechanism of action of the ANKET molecules, which we have recently published in a couple of articles in high-impact journals. Our Nature Biotechnology paper published in January this year described the joint work with Sanofi on the CD123 NK cell engager, IPH6101 or also called SAR'579.
SAR'579 is co-engaging NKp46 and CD16 on NK cells and, therefore, triggers potent antigen-dependent killing of AML tumors as well as production of cytokines of the antitumor response, but without inducing systemic cytokine release, which is a dose-limiting for NK cell engagers - for our T-cell engagers. Moreover, we have shown that in our Cell Reports Medicine paper that the incorporation of an IL-2 variant into an ANKET induce a potential NK cell proliferation within the tumor microenvironment, increasing, therefore, the number of antitumor effect of cells.
On Slide 12, you can see another view of the clinical data presented this year at ASCO for IPH6101 ANKET program, also named SAR'579. In this dose escalation, we were encouraged to see initial preliminary single-agent activity and safety for SAR'579in relapsed recurrent AML patients. At the 1 mg/kg dose, three complete responses were out of 8 patients with two responders remaining in remission at the data cutoff at 6.7 and 7.6 months of treatment.
SAR'579 was well tolerated with no dose-limiting toxicity of cell and only 1 grade 1 CRS observed out of 23 patients. The FDA awarded SAR'579 Fast Track designation in May and Sanofi plans to evaluate further those levers. We look forward to further updates from Sanofi in due course.
On Slide 13, you can see a summary of our Sanofi Alliance. In 2016, we signed an initial agreement for 2 ANKET 22 up to $400 million milestone among which we announced $60 million to date. Both programs have progressed with SAR'579 and SAR'514 in Phase 1 trial. In December last year, we signed a further agreement whereby Sanofi license, the IPH-62 ANKET program, targeting B7-H3, a solid or target with an option of two other undisclosed targets. Sanofi paid $25 million upon with $1.35 billion in potential milestones and royalties. This now takes the total milestone package up to €1.75 billion plus royalty. We look forward to working with Sanofi team as we bring this molecule to the clinic.
Slide 14 highlights our growing ADC pipeline. As we continue to develop next-generation therapeutics, utilizing our antibody engineering platform, we find that for some tumor targets, we can generate antibodies more fleeted for ADC than for ANKET. Especially when they show good internalizing properties.
Our recent agreement with Takeda in the field is providing a validation to this research approach and highlights our capability to generate differentiated ADC candidates. Today, we disclosed that our lead proprietary ADC program, IPH45 is targeting nectin-4. We look forward to further update on this molecule as we prepare for IND filling. In addition, we have several other targets in early ADC research.
Slide 15 highlights the terms of the recent deal with Takeda. We entered into an agreement whereby Takeda gained exclusive license to a panel of selective antibodies against an undisclosed target to develop ADCs with a primary focus in Celiac disease which is outside of our oncology focus. The terms include a $5 million upfront and up to $410 million in milestone and royalties on net sales. This deal also demonstrates our ability to monetize pipeline assets in therapeutic areas outside of our area of expertise.
I will now hand over to Frederic for a summary of the financials.
Thank you, Yannis.
On Slide 16, as usual, you can find the consolidated financial statements for the first half of 2023 in our press release for further information. I will cover the highlights on this slide. Cash, cash equivalents, short-term investment and financial assets amounted to $124.7 million as of June 30. This does not include the expected $39 million of reserve tax credit due in H2 2023 and '24.
We believe this cash position is sufficient to fund our operations into H2 2025. Revenue and other income from continuing operations amounted to $40 million in the first half of the year compared to $45.6 million in the first half of last year. And mainly comprised revenue from collaboration and licensing agreements. These mainly resulted from the partial or entire recognition of the proceeds received pursuant the agreements with AstraZeneca and Sanofi and which are recognized on the basis of the percentage of completion of the works performed by the company under such agreements.
Governmental funding for research expenditure were €4.9 million in the first half of the year. Operating expenses from continuing operations were €40.6 million in the first half of the year, of which 77.5% or €31.5 million are related to R&D.
R&D expenses from continuing operations increased by €6.5 million. This change mainly results from an increase in direct R&D expenses related to programs notably for our first Antibody Drug Conjugates targeting nectin-4. General and administrative expenses from continuing operations decreased by €3 million to €9.1 million in the first half of the year. This increase mainly results from efficiency measures.
I will now turn to Mondher for summary.
Thank you, Frederic.
Please move to Slide 17. As you can see, we are working diligently to execute across all our strategic plan. And believe that we are laying the foundation to drive near and long-term value for the company and the shareholders.
Looking at our clinical program, we expect to achieve a number of milestones over the next two years. As you heard from Joyson, lacutamab, oleclumab Phase 2 final data is due at the end of this year, in addition to initial PTCL data readout.
In parallel, we continue to develop our ANKET platform, further reinforced by our partner Sanofi, and we are very encouraged by the initial clinical data at ASCO and the IND clearance from our proprietary ANKET and the progress in the clinic. We believe that this represents a natural evolution of our platform.
Finally, for monalizumab, the non-cancer trials are well underway, and we continue to advance the adenosine pathway in the clinic, where the Phase 2 for IPH5201 in early lung cancer is underway.
Let's move now to the conclusion slide. Slide 18 as you can tell, we continue our exciting journey at Innate. We look to build our business to create value for patients and stakeholders. In summary, we have positioned the company for the future with our strategy and made meaningful progress across all three strategic pillars.
With our R&D engine an antibody expertise, our science is producing more candidates to progress to the clinic. Some we are developing alone and some our partners. We have a focus on our NK cell engager platform, ANKET as well as ADCs.
In parallel, our late-stage portfolio continues to advance as we look to maximize the late-stage portfolio assets of lacutamab and monalizumab. Our partnership strategy continues to evolve with the recent Takeda deal adding to those of AstraZeneca and Sanofi. And we have carefully managed our resource so we can continue a sustainable business to invest in progressing our pipeline. I'm very pleased that we continue to have a very strong cash position with a runway into the second half of 2024.
Collectively, we are driving value across our business and ultimately advancing our goal to deliver innovative medicine to patients. We look forward to keeping you updated on our progress, and that concludes our prepared remarks.
We will now open the call to questions.
[Operator Instructions] Our first question comes from Yigal Nochomovitz from Citi. Your line is now open.
Hi team. This is Ashik Mubarack on for Yigal. Thanks for taking my questions. My first one is on the choice of rationale for the Nectin-4 ADC. I guess where do you think the unmet need with PADCEV is? Or how do you think this molecule could be differentiated or approved? And do you think you'll be focused on tumor types like urothelial cancer, bladder cancer or perhaps some more novel indications? Thanks.
Thank you for the question. I'm going to hand over to Yannis to provide the rationale and the competitive position for our ADC targeting Nectin-4.
Yes. So as you know, Nectin-4 is a validated target for the ADC mechanism of action. And through our antibody platform, we are able to generate potential best-in-class antibodies with unique properties. And we are following the field of ADC for several years now, and it came out to a point where we can really well understand, which kind of payroll and income we can couple to our - I would say, potential best-in-class antibodies. And we really see that after PADCEV or in other tumor types, as you know, Nectin-4 as we hear - what expressed across much more as there is potential for next-generation Nectin-4 ADC.
Okay. Got it. And maybe a similar question on IPH65 to CD20 ANKET. I guess what tumor types of things you think make the most sense to target? Should we be thinking about this in the same subset of indications that Rituxan is approved for? Or do you think you'll be targeting more broadly than that?
Yes. So we actually studied, IPH65, just to remind you, is using the new version of the ANKET technology, which is incorporating the [indiscernible]. So, we decided to go after CD20 to test the potency, and the efficacy of this new technology into patients in order to limit the variables.
And as you know, CD20 is expressed in NHL and it has the advantage of other tumor antigen to be pretty stable across different lines of treatment, even after rituximab or after CAR-T or after T-cell engager. So, there is still an unmet need after in this relapsing patients. And then depending on the efficacy, and safety profile of the drug, we can then address the clinical development plan.
Okay. Great. Thanks for taking my questions.
Our next question comes from Liisa Bayko from Evercore ISI. Your line is now open.
Hi. This is Jingming on for Liisa. Thanks for taking our questions. My first question is, in what cadence should we expect lacutamab data later this year? And do you expect to return at a conference or just a press release? And then my second question is, what do, you expect to be the next steps for lacutamab and CTCL. For example, do you plan to go ahead, and file with if data is positive, do you plan to go ahead with the customer syndrome first or do you plan to combined trial, Phase 3 trial? Thank you.
Thank you. I'm going to hand over to Joyson to answer the two questions. You can understand for the first one that - we didn't. We never communicated on a specific conference. There are multiple, of course, conference happening in the second half of 2023. And of course, we will be in a position to communicate when we have certainty about the acceptance of the abstracts, I'll keep it at this level.
But clearly, the best on the most appropriate, I should say, form to present this data on medical conferences as you say. Now the second question is indeed very important and then I'll ask Joyson maybe to provide a high level view on the regulatory path for lacutamab, both in CTCL, but also as we said to PTCL and how we could see the full potential of this asset. Joyson?
Thanks, Mondher. So what are the next steps basically for lacutamab. Our aim is to basically pursue clinical strategies that would support getting lacutamab to patients who need it as quickly as possible. While ensuring a good PTRS discussions with the FDA will enable us to firm up these Phase 3 plans in the context of the upcoming data readouts. Ongoing dialogue with potential partners is also being explored to identify the perfect fit for the drug for Innate, and for patients that may benefit from this potential medicine.
The ideal partner for lacutamab is one that can realize, the full potential of the drug for patients with T-cell lymphoma. As mentioned before, our focus remains to leverage, the value of our products as much as possible, which will further validate our science, and offer capital that we can reinvest to advance our early R&D engine. We want to ensure that if we can gain valuable competencies by a partner agreement for lacutamab, we will consider that in our development plans for the product as we look to later stage trials.
Got it. Thank you.
Our next question comes from Daina Graybosch from Leerink Partners. Your line is now open.
Hi. Thank you for the question. I have one on ANKET. I wonder if you could talk about what you've learned from the preclinical data for the CD123 ANKET on where the optimal dose may be. Specifically, how, if there is a bell-shaped dose curve, how much room do you have at the top of that bell for flexibility or how much room could Sanofi have? And then more broadly, as you look across the other ANKET programs, how much work have you done optimizing affinity with ability to extend the plateau of potential bell-shaped dose curve? And how difficult is that or different is that for the ANKET 4 versus the ANKET 3? Thank you.
Hi Daina, Yannis speaking. Yes, actually, in processing, it's something that we can observe bell-shaped curve and the needs as you may know, it's not unique to NK cell engager something that has been seen also with some T-cell engagers. It's something that can be modeled and it's confirmed by experience. There are several parameters that are influencing these the bell - the shape of the bell.
There will be the density of the antigen on one side, the density of activating the set on the other side, and the affinity of - those binders. So it's quite easy to build a model. It's confirmed by the experimental - assays in before, and it's really part of the, I would say, the lead optimization part phase of the candidate identification.
So having said that, we, now it's more in the end of Sanofi, who is running the Phase 1 and is also informing all these models with the PK/PD data that they will correct. And we may hear more also at ESMO. As you know, they have an abstract on this topic for the CD123. Does that address your question?
Yes, I think so. So, the CD123. So, I just wonder how you thought about it for the ones that follow, particularly your CD20? And how you're going - what you expect and what we should expect with that line?
It's something also that we have looked at in the - and the candidate identification for the 65 program, but again, it's very experimental. I mean we are starting with the experiment the next data, and it's part of the binder selection that we are doing. And we are testing multiple binders with different affinities, different epitopes. And we are also posting that with some others.
So, we think that the candidate that we have selected to move into the clinic is, I would say, is having good properties. And it also - as Eric has presented some of his presentation at ASH and Annual Scientific Congress. This format and the advantage also to show a pretty good efficacy even at very low receptor occupancy. So, we are really increasing the potency of the drug. So, this question on the bell-shaped might be a little bit different with the ANKET 4, because we may not need so high concentration of ANKET [ph] - for the ANKET 3. But again, I mean data will tell us, clinical data.
Yes that's right. Okay. Thank you.
Thank you, Daina. Operator?
It seems like we don't have any questions from our end right now. I'd now like to hand back to Henry Wheeler. Thank you.
Thank you. It appears, we don't have any further questions on the web chat either. So I think this concludes the call. Thank you very much.
Thank you for attending today's session. We hope we can be useful. You may now all disconnect. Have a wonderful day.