Innate Pharma S.A. (IPHA) Q3 2021 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen. And welcome to Innate Pharma Third Quarter 2021 Business Update and Conference Call. At this time, all participants are in listen-only mode. As a reminder, this conference call is being recorded. [Operator Instructions]. I will now hand over to Innate's Chairman of the Executive Board and Chief Executive Officer, Mondher Mahjoubi. Please go ahead, sir.

Thank you. Good morning. Good afternoon and welcome everyone. This morning, we issued a press release providing a business update for the third quarter of 2021. I look forward to explaining the progress we 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 site. Let us move to slide number 2. And before we start, I would like to remind you that we will make forward-looking statements regarding 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 what's forecasted. On slide number 3, on today's call, I'm delighted to be joined for the presentation by Dr. Joyson Karakunnel, EVP and Chief Medical Officer. We will have our CFO, Frédéric Lombard, and Yannis Morel, Head of Business Development and Portfolio Strategy, join for the Q&A session. Let's move to slide number 4. Our pipeline shows how we have translated this into a robust portfolio of proprietary and patented assets. It also illustrates how we are executing against our strategy with our lead proprietary assets lacutamab, but also supported by partners and earlier stage products. We are pleased to see the progress of monalizumab in early lung cancer and we await more data in head and neck cancer later this year. The adenosine pathway continues to progress with two antibodies in the clinic, anti-CD73 IPH5301 and IPH5201 which targets CD39 and is in partnership with AstraZeneca. In addition, we have a pool of technical projects, including ANKET NK cell Engager platform, which we are excited to see nearing the clinic with our partner, Sanofi. Slide 5. Let me remind you our strategy. As you know, our strategy centers around three core priorities where we look to drive value from early R&D efforts through later stage partnership, where it makes sense to do so. Firstly, we look to create near-term value, driven by our lead proprietary product candidate, lacutamab, which is in development for T-cell lymphoma. As you may remember, we presented exciting data earlier this year at the Lugano meeting in mycosis fungoides and we look forward to further readouts next year along with the advancement of the peripheral T-cell lymphoma program. Second, we're sure pipeline can create longer term value by leveraging our antibody engineering capabilities to develop innovative molecules with a primary focus on our multi-specific NK cell engager proprietary platform called ANKET. The lead compound selected by Sanofi with an anti-CD123 tumor antigen will be investigated in acute myeloid leukemia in the clinic very soon. Third, we are building a strong and sustainable foundation for our business, leveraging various partnerships across industry and academia. We will look to partner, including in late stage, when it makes sense to do so. This will further validate our science and offer capital that we can reinvest to advance our early portfolio. As we turn to monalizumab, which Joyson will cover in a minute, I would like to remind you that, in 2018, we out-licensed the rights in oncology to AstraZeneca and that we have received in aggregate €400 million in milestones to date with further potential milestones due. We were very pleased to see our partner AstraZeneca announce plans to advance monalizumab into another registration trial and continue to explore its potential in other settings. I would like now to pass the call over to Joyson who will review the progress made with our portfolio starting with monalizumab, our most advanced asset. Joyson?

Thank you. Thanks, Mondher. To remind you, monalizumab is an anti-NKG2A which acts upon the checkpoint pathway to potentiate NK cell activation. This is being trialed in combination with cetuximab in head and neck cancer, and also in combination with the anti-PD-L1 durvalumab in lung cancer. On this slide, I wanted to recap the results for the randomized Phase II study that AstraZeneca conducted in unresectable, stage 3 non-small cell lung cancer presented at ESMO in September. The three-arm study evaluated the combinations of durvalumab plus monalizumab and durvalumab plus oleclumab, AstraZeneca's anti-CD73. As you can see from the results here, both arms performed well versus the standard of care arm, durvalumab. After a median follow up of 11.5 months, the results of an interim analysis showed a 10-month PFS rate of 72.7% in durvalumab plus monalizumab versus 39.2% with 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%. The discussion at ESMO also highlighted a matched propensity score analysis, which matched certain variables which are known prognostic indicators. This demonstrated that the COAST study may have recruited patients with the worst prognosis, explaining the durvalumab arm underperformance versus the Phase III PACIFIC trial. On slide number 7, you can see an overview of the late stage development plan for monalizumab in lung cancer. As mentioned, based on the Phase II COAST data, AstraZeneca announced plans to initiate a Phase III trial for both combinations of monalizumab and oleclumab plus durvalumab in the unresectable, stage 3 non-small cell lung cancer setting who had not progressed after concurrent chemo or radiation therapy. We look forward to seeing the trial announcement in due course. Separately, AstraZeneca also announced that it is starting a Phase II clinical trial in the earlier stages, IIa to IIIa non-small cell lung cancer, NeoCOAST-2, that includes a treatment arm with monalizumab in combination with durvalumab and chemotherapy. We still await the data from the Phase III NeoCOAST-2 trial in stage 1 to 3A non-small cell lung cancer patients. On slide number 8, moving to head and neck cancer, we presented data from cohort 3 of the Phase II trial later this year at ESMO IO for the triplet of monalizumab plus durvalumab plus cetuximab in the first line head and neck cancer. As a reminder, the standard of care in this setting is KEYNOTE-048 trial of pembrolizumab with or without chemotherapy depending on the PD-L1 status as determined by CPS score. Additionally, the Phase III INTERLINK-1 of monalizumab plus cetuximab in IO pretreated head and neck cancer is ongoing. We look to work further with our partners AstraZeneca on this potential new treatment. Turning to slide 9. We are pleased to have presented our latest innovation in our proprietary multi-specific NK cell Engager platform that we call ANKET, which Eric Vivier has presented at several meetings this year, including ESMO and SITC this last week. ANKET stands for antibody-based NK cell Engager therapeutics. And these multi-specific molecules are made of various building blocks as illustrated here. The reason why we are so excited about the ANKET is because we are announcing two breakthroughs. First, a technological breakthrough, and second, an efficacy breakthrough, which is leading to the harnessing of NK cell effector function against cancer and also provides proliferation. So, on the technological breakthrough, as you can see on this slide, ANKET is a versatile, fit-for-purpose technology that is creating an entirely new class of tri and tetra-specific molecules to induce strategic immunity against cancer. On the preclinical efficacy breakthrough, this unique NK cell Engager engages for the first time to activating NK cell receptors, namely NKp46 and CD16, but also the combination of receptors for IL-2, IL-2R beta and IL-2R gamma, with the IL-2 variant and tumor antigen in a single tetra-specific molecule. Overall, it demonstrates a better antitumor efficacy than clinically approved antibodies within the limit of preclinical models. On slide 10 is a summary of the data presented at SITC this weekend on our lead ANKET asset as selected by Sanofi. This is the first NKp46, CD16 based NK cell engager to enter the clinic. On the left side of this slide, we demonstrated preclinical data showing that CD123 targeted IPH6101 ANKET demonstrated consistent potent antitumor activity against all AML cell lines and primary AML, which were resistant to ADCC by a competitor anti-CD123 antibody. On the right side of the slide, we demonstrate that, in non-human primates, there is a sustained pharmacodynamic effect, combining efficient depletion of CD123 expressing cells with minor cytokine release and a favorable safety profile in comparison to T-cell engagers. We await the first clinical trial start with Sanofi. On slide 11, we wanted to highlight the data on our recent generation of tetra-specific ANKET, which is made up of four components. In yellow, an antibody fragment that recognizes the tumor antigen; in green, an antibody fragment that recognizes NKp46; and in red, an Fc portion that will interact with the CD16; and then in blue, a variant of the interleukin-2. On the left, we show you the contribution of the tetra-specific ANKET with the IL-2 variant. The black graph on the far left is the vector. The green graph is the tetra-specific ANKET. And the red graph on the right is the tri-specific ANKET and the IL-2 separated. You can see the benefit with the green graph, which is including the tetra-specific ANKET with the IL-2 variant. On the right, you see the benefit of the tetra-specific versus the vehicle obinutuzumab in lung mouse models. On top, you have the vehicle. In the middle, the tetra-specific ANKET. And on the bottom, the CD20 obinutuzumab. Activity is seen with the tetra-specific model that is not seen with obinutuzumab. We'd look to further update on the ANKET throughout next year. On slide 12, let me summarize the progress we are making with lacutamab, our first-in-class, humanized monoclonal antibody that targets the immune receptor KIR3DL2. As you may remember, KIR3DL2 is an inhibitory receptor found in approximately 65% of patients across all cutaneous T-cell lymphomas and even more in certain aggressive subtypes, but with limited expression in healthy tissue. To date, data from lacutamab have shown promise, demonstrating compelling single agent activity and offering immense potential in lymphomas historically associated with a poor prognosis for which there are few therapeutic options at an advanced stage. We are pursuing a fast-to-market strategy for lacutamab in T-cell lymphomas with a potentially pivotal trial underway in the niche indication of Sézary Syndrome, where lacutamab was granted US fast track designation and EU prime designation last year. We are also looking to potentially expand past Sézary Syndrome to mycosis fungoides, where we have seen encouraging preliminary data from our Phase II trial. For the Sézary Syndrome, cohort enrollment is on track and we still expect to be able to report topline preliminary data in 2022. In mycosis fungoides, firstly, we moved the KIR3DL2 expressing cohort from stage 1 to stage 2, earlier than anticipated. The data presented at Lugano demonstrated a 35% ORR in KIR3DL2 expressing late line patients. The next preliminary MF data update is due in 2022. Finally, we are advancing into peripheral T-cell lymphoma by starting two clinical trials in the relapse setting. With that, I turn back to Mondher.

Thank you, Joyson. Before we conclude, let me remind you our key news flow for the remainder of the year and for next year on slide 13. As you can see, we are working diligently to execute across all our strategic pillars and we believe that we are laying the foundation to drive near and long term value for patients and shareholders. Looking at our clinical program, we expect to achieve a number of milestones over next year. As you've heard from Joyson, our Phase II TELLOMAK study for lacutamab continues to progress. We continue to expect to report preliminary data from the potentially pivotal trial in Sézary Syndrome, as well as data in mycosis fungoides next year. We're also moving our PTCL program into the clinic with initial data expected next year. For monalizumab, we look forward to further clinical development in early lung cancer, both unresectable and locally advanced neo-adjuvant, as well as the update from the Phase II study in head and neck cancer by the end of this year. We continue to advance the adenosine pathway agents in the clinic where we are starting a Phase I trial for IPH5301, the anti-CD73, and we look forward to data from the anti-CD39 IPH5201 in 2022. In parallel, we continue to develop our ANKET technology platform. And we are very encouraged by the presented results from our next generation NK cell Engager. We look forward to our lead ANKET entering the clinic soon with Sanofi and also for updates on our proprietary ANKET throughout 2022. Let's move to the conclusion slide please. As you can tell, we continued our exciting journey at Innate. We look to build our business to create value for patient and stakeholders. And in summary, we have positioned Innate Pharma for the future with our strategy and we have made meaningful progress throughout the year. Just to recap, in summary, on lacutamab, we moved forward with our TELLOMAK trial with encouraging mycosis fungoides data and our advance into peripheral T-cell lymphoma with two clinical trials in the relapsed setting. Second, our R&D engine was further validated as Sanofi advanced IPH6101 into the clinic and we look to further develop our proprietary ANKET NK cell engagers molecules. Third, we look forward to seeing AstraZeneca's upcoming plan for monalizumab registrational study in unresectable, stage 3 non-small cell lung cancer. Finally, we maintain a strong cash position with €141.8 million as of September 30. As a reminder, costs and expenses jumped around a bit on a quarterly basis as revenue and milestones vary from quarter to quarter. That concludes our prepared remarks and we will now open the call to questions. Thank you.

[Operator Instructions]. Our first question comes from Yigal Nochomovitz from Citigroup.

I'm not sure how much you'll be able to say on this question, but could you elaborate on AstraZeneca's strategy with respect to the Phase III in unresectable stage 3 non-small cell lung cancer, meaning assuming the Phase III trial works for both the combo of mona plus durva and oleclumab and durva, do you believe that both combinations are going to be taken forward to commercialization or will this be more like a bake off situation where AstraZeneca will select the combination with the best data versus durva monotherapy?

I think Joyson is the right person to address this question. AstraZeneca didn't communicate much on their plans and I would stick to what they have announced at the ESMO conferences they are planning to move on with a registrational trial. But, Joyson, in your view, any more color to provide on the Phase III program that AstraZeneca is planning?

No. As the study is being sponsored by AstraZeneca, we also don't have any further information than what is publicly available.

Are you able to answer this? When should we expect the final results from the COAST trial? And do you think we're going to have those results before the Phase III starts?

Again, I would stick to what AstraZeneca announced in September that they are moving ahead with the Phase III planning for stage 3 unresectable cancer and they will present final results in due time. They did not communicate on the precise timing of that.

Our next question comes from Daina Graybosch from SVB Leerink.

Two for me. The first is, I know you've communicated in the past, but I wonder if there's any update for our expectations for ESMO IO for the triplets. And in terms of number of patients, whether we should expect patients PD-L1 low and high, CD16 positive/negative, that would be helpful.

Joyson, I know that [indiscernible] question. The meeting is two days away. And I'm not sure Joyson can provide more details other than what is on the public website. Go ahead, Joyson.

Correct. As Mondher said, we will be presenting the preliminary data for cohort 3 at ESMO IO. As the meeting is only a few days away, there's no further information we could provide, at least until the [indiscernible].

The second question is another one on AstraZeneca. So, AstraZeneca has been developing the CD39 that they licensed from Innate Pharma and a rather big trial on clinicaltrials.gov. They recently modified that trial to stop recruiting after about 60 patients. And I wonder if you could give us any context on that decision or that change from AstraZeneca.

Actually, thanks, Daina, for again giving us the opportunity to address the partnership around IPH5201. It is true that the trial [indiscernible], but the position of AstraZeneca is that the data for the Phase I trial in solid tumors of IPH5201 alone or in combination with oleclumab are expected to be presented next year. Following the review of the data in full, AZ will be the determining the appropriate path forward for this medicine within their portfolio.

Our next question today comes from Keyur Parekh from Goldman Sachs.

Two please, if I may. The first one on lacutamab. Just wondering, Mondher, if you can talk to us about the probability of the data you see in 2022 being acceptable from filing purposes. So, could this molecule potentially be on the market in 2023? That's kind of question number one. And then, separately, you guys have a lot of kind of interesting Phase I, Phase II studies that you're currently starting kind of next year. So, would be keen to understand how you're thinking about ballpark R&D costs into next year.

I'll start with the second one and then I'll hand over to Joyson for lacutamab. I think it's probably important to also remind you that our strategy is really to develop proof of concept, but at the same time partner whenever it makes sense to do so, even at a later stage. And the fact of the matter is that we have development program with AstraZeneca around monalizumab, but we have room within our finance to deliver our own clinical development program and our own Phase I/II program both for lacutamab and for our anti-CD73. I think we have a very strong cash position to cover the various milestones that we have and to execute on our strategy. We are not worried about the ability to execute those clinical trials, with the limitation that you know. In this field, a lot of competition and we are not only competing for the same patient, but sometimes it's challenging within the COVID environment. However, I think it's now more easier for an anti-CD73 to be developed, given the proof of concept that AstraZeneca has made in the COAST trial. And similarly, I think for the peripheral T-cell lymphoma, I think the data we presented at the Lugano meeting were another proof point that this drug works beyond Sézary Syndrome and, of course, makes a strong case for further development in peripheral T-cell lymphoma. And as you know, we are doing this development in two ways. A company sponsored trials testing the agents in monotherapy in a sort of Phase I/IIb trial in second line or relapsed PTCL essentially in the US. And we have a second time that is mainly in Europe that is sponsored by the [indiscernible] and it's a randomized Phase II trial based versus the combination with chemotherapy. I hope it addresses your question about the bandwidth and the ability to [indiscernible] three programs. Joyson, can you provide a refresh on our registrational strategy and first to market strategy for lacutamab and the data we are generating for Sézary and beyond Sézary in MF.

In regards to question number one, as was mentioned during the slide and as Mondher mentioned, we do have a first to market strategy with SS as well as mycosis fungoides, with close follow-on indication. We are anticipating preliminary data in 2022 and recruitments are on track right now. Our final data is expected in 2023. The potential for the SS, for the Sézary Syndrome to be – it is pivotal. So the cohort in Sézary Syndrome can be a pivotal cohort. And just keeping in mind, we do have fast track designation the US and prime designation in the EU for potential for proactive support from the regulatory authorities and for accelerated assessments. At least right now, it's too early to speculate on a potential launch timeline and go make sort of data-driven decisions and follow through with these discussions as we continue to speak with the regulatory authorities.

[Operator Instructions]. Our next question comes from Olga Smolentseva from Bryan Garnier & Co.

I have a few on 6101. Basically, multiple therapeutic modalities that targets CD123 did not achieve adequate risk/benefit ratio, starting from anti CD123 antibodies to bispecifics and ADCs. So, for you, what maybe are the key differentiating factors for NK cell engagers to sort of balance risk/benefit ratio in this context?

I'm going to hand over the question to Yannis Morel who is leading the portfolio strategy and provide more color on the IPH6101 development.

The two key feature of our molecule and our approach that we actually presented at SITC this weekend in the poster in collaboration with Sanofi is that our molecule is able to induce a very potent killing on the AML blast on patients, irrespective of the subset of the patients. And we found out that some blasts are resistant to killing by a traditional antibody, inducing ADCC, inducing antibody, because of the expression of some Fc gamma receptors on the AML cell. That's the first point, meaning that we can potentially have efficacy in a broader subset of population of patients in AML. And the other key differentiating factor that you can see in the data that we have obtained both in non-human primates, but also in in vitro using human cells and comparing our NK cell engager with T-cell engages is that we are able to induce killing of cells that results inducing systemic cytokine release. We are inducing very low cytokine, meaning that we can potentially dose pretty high here the molecule without inducing the systemic side effects of the of the unwanted cytokine release, which is, by the way, one of the limitations for the T-cell engager. You may have noticed that, for example, [indiscernible] Novartis terminated the agreement with [indiscernible] the cell engager in the same target, mainly for these kinds of reasons of dosing.

Maybe considering recent data from competitor in AML sort of pointing towards a need for improved proliferation signaling, I'm just curious if tetra-specific ANKET in this disease setting would sort of be a better choice.

I think it's probably too early to start to elaborate about the positioning of such antibody, but it's clear that the medical need in this field is still extremely high. And we are really looking forward to initiating the Phase I, defining the safety profile of the drug and looking at the efficacy signal in this early stage before giving more perspective on the role that these two can play. From preclinical data and the package that we develop with our partner, it's quite convincing, and of course, convincing Sanofi to select our format and to move it into the clinic. So, I think we need to be very cautious and wait for the clinical data to emerge first before having a more clear idea on the potential of this drug in the management of AML patients, of course, as a single agent, but more important as you can get in combination with other key standard treatment in AML and various subtypes of this disease.

Congratulations on the progress.

We currently have no further questions. So, I'll hand back to Mondher Mahjoubi for closing remarks.

Thank you very much. So, as you as you can tell, collectively, we are really driving value across our business. And as I mentioned, yeah, I think we are advancing our goal to deliver innovative medicine to patients. We look forward to keeping you all updated on our progress and thank you for your interest and participation to this call. Have a good day.

This now concludes today's call. Thank you for joining. You may now disconnect your lines.