- Monalizumab and IPH5201 developed in collaboration with
AstraZeneca advanced into Phase 3 and 2 clinical trials in lung
cancer, triggering $55M in milestone payments
- Second preclinical asset based on Sanofi’s proprietary
multifunctional CROSSDILES® platform and Innate’s proprietary
multi-specific NK cell engager platform, ANKETTM targeting BCMA,
selected by Sanofi for IND-enabling studies, with €3M milestone
payment
- Cash position of €158.2 million1 as of June 30, 2022,
anticipated cash runway into H2 2024
- Conference call to be held today at 2:00 p.m. CEST / 8:00
a.m. EDT
Regulatory News:
Innate Pharma SA (Euronext Paris: IPH; Nasdaq: IPHA)
(“Innate” or the “Company”) today reported its
consolidated financial results for the six months ended June 30,
2022. The consolidated financial statements are attached to
this press release.
“Based on our strong financial position, we continued the
momentum in our product pipeline during the second quarter of the
year. We are advancing our anti-CD39 blocking monoclonal antibody
IPH5201 to a Phase 2 clinical trial in lung cancer with
AstraZeneca, and Sanofi selected a second asset for development,
targeting BCMA, that benefits from ANKETTM, Innate’s proprietary
multi-specific NK cell engager platform and Sanofi’s CROSSDILES®
platform. The ANKETTM technology is the engine for development of
our robust pipeline of much needed novel solutions to treat
cancer.” said Mondher Mahjoubi, Chief Executive Officer of
Innate Pharma. “We continue to see progress for monalizumab in
the early non-small cell lung cancer setting, with the ongoing
PACIFIC-9 Phase 3 study, sponsored by AstraZeneca, and recent Phase
2 data presentations. We look forward to further clinical readouts
from the Phase 2 TELLOMAK trial for lacutamab and ANKETTM updates
in the second half of the year.”
Webcast and conference call
will be held today at 2:00 p.m. CEST (8:00 a.m. ET)
Access to live webcast:
https://event.on24.com/wcc/r/3824660/86089F900A17B3EA55F4BEE49AD268A8
Participants may also join via
telephone by registering in advance of the event at
https://registrations.events/direct/ID60133
Upon registration, participants
will be provided with dial-in numbers, a direct event passcode
and
a unique registrant ID that they
may use 10 minutes prior to the event start to access the call.
This information can also be
found on the Investors section of the Innate Pharma website,
www.innate-pharma.com.
A replay of the webcast will be
available on the Company website for 90 days following the
event.
Pipeline highlights:
Lacutamab (anti-KIR3DL2
antibody):
- The Phase 2 TELLOMAK study in Sézary syndrome and mycosis
fungoides continues to progress and the Company expects to report
preliminary data from both cohorts in the second half of 2022.
- Preliminary results from the TELLOMAK Phase 2 study of
lacutamab in patients with advanced mycosis fungoides according to
KIR3DL2 expression will be presented at the EORTC-CLTG (European
Organisation for Research and Treatment of Cancer - Cutaneous
Lymphoma Tumours Group) 2022 meeting in Madrid on Friday 23
September.
- Two clinical trials are underway evaluating lacutamab in
patients with KIR3DL2-expressing, relapsed/refractory peripheral
T-cell lymphoma (PTCL):
- Phase 1b trial: a Company-sponsored Phase 1b clinical trial to
evaluate lacutamab as a monotherapy in patients with
KIR3DL2-expressing relapsed PTCL.
- Phase 2 KILT (anti-KIR in T Cell Lymphoma) trial: The Lymphoma
Study Association (LYSA) investigator-sponsored, randomized trial
to evaluate lacutamab in combination with chemotherapy GEMOX
(gemcitabine in combination with oxaliplatin) versus GEMOX alone in
patients with KIR3DL2-expressing relapsed/refractory PTCL.
- On the 11 September, at the ESMO (European Society for Medical
Oncology) 2022 conference, the Company presented a poster on
ongoing lacutamab Phase 1b trial design in monotherapy in
PTCL.
ANKET™ (Antibody-based NK cell Engager
Therapeutics):
- The Phase 1/2 clinical trial by Sanofi continues, evaluating
IPH6101/SAR’579, the first NKp46/CD16-based NK cell engager, in
patients with relapsed or refractory acute myeloid leukemia (R/R
AML), B-cell acute lymphoblastic leukemia (B-ALL) or high-risk
myelodysplastic syndrome (HR-MDS).
- During the period, Sanofi informed the Company of the decision
to progress IPH6401/SAR’514 into investigational new drug
(IND)-enabling studies, triggering a €3 million milestone payment.
IPH6401/SAR’514 is a BCMA-targeting NK cell engager using Sanofi’s
proprietary CROSSODILE® multi-functional platform, which comprises
the Cross-Over-Dual-Variable-Domain (CODV) format. It induces a
dual targeting of the NK activating receptors, NKp46 and CD16, for
an optimized NK cell activation, based on Innate’s ANKETTM
proprietary platform. IPH6401/SAR’514 has shown anti-tumor activity
and promising drug properties in pre-clinical models. Sanofi will
be responsible for all future development, manufacturing and
commercialization of IPH6401/SAR’514.
- Innate plan to provide updates on IPH65, the tetra-specific
ANKETTM, throughout the year as progress is made toward
IND-enabling studies in 2023.
Monalizumab (anti-NKG2A antibody),
partnered with AstraZeneca:
- On April 29, Innate announced a $50 million milestone payment
from AstraZeneca was triggered for dosing the first patient in the
Phase 3 clinical trial, PACIFIC-9, evaluating durvalumab
(anti-PD-L1) in combination with monalizumab or AstraZeneca’s
oleclumab (anti-CD73) in patients with unresectable, Stage III
non-small cell lung cancer (NSCLC) who have not progressed
following definitive platinum-based concurrent chemoradiation
therapy (CRT).
- Detailed results from the randomized AstraZeneca-sponsored
Phase 2 COAST clinical trial, including monalizumab data in
combination with durvalumab, were published in the Journal of Clinical Oncology on April 22. The
results were initially presented during the ESMO Congress 2021. The
results of the interim analysis showed monalizumab in combination
with durvalumab improved progression-free survival (PFS) and
objective response rate (ORR) compared to durvalumab alone in
patients with unresectable, Stage III NSCLC who had not progressed
after concurrent CRT. The Journal of Clinical Oncology publication
now includes exploratory subgroup analysis.
- On April 11 at the American Association for Cancer Research
(AACR) Annual Meeting, there was an oral presentation from the
AstraZeneca-sponsored Phase 2 NeoCOAST randomized trial in
resectable, early-stage NSCLC. The presentation highlighted
improved disease responses with durvalumab in combination with
monalizumab, oleclumab or danvatirsen, when compared to durvalumab
alone. The follow-up randomized Phase 2 clinical trial, NeoCOAST-2,
is enrolling patients with resectable, stage IIA-IIIA NSCLC to
receive neoadjuvant durvalumab combined with chemotherapy and
either oleclumab or monalizumab, followed by surgery and adjuvant
durvalumab plus oleclumab or monalizumab.
- As a post-period event, on August 1, Innate announced that a
planned futility interim analysis of the INTERLINK-1 study Phase 3
sponsored by AstraZeneca did not meet a pre-defined threshold for
efficacy. The company announced that, based on the result and the
recommendation of an Independent Data Monitoring Committee, the
study was to be discontinued. There were no new safety findings.
AstraZeneca plan to share the data in due course. The INTERLINK-1
study, sponsored by AstraZeneca, evaluated monalizumab in
combination with cetuximab vs. cetuximab in patients with recurrent
or metastatic squamous cell carcinoma of the head and neck who have
been previously treated with platinum-based chemotherapy and
PD-(L)1 inhibitors.
- On the 12 September at the ESMO 2022 congress, AstraZeneca
presented an oral presentation on the Phase 2 NeoCOAST study
assessing the safety and efficacy of neoadjuvant durvalumab in
combination with chemotherapy and oleclumab or monalizumab and
adjuvant treatment in patients with resectable, early-stage
NSCLC.
IPH5201 (anti-CD39), partnered with AstraZeneca:
- On June 3, Innate announced that IPH5201, an anti-CD39 blocking
monoclonal antibody developed in collaboration with AstraZeneca,
will advance into a Phase 2 clinical trial in lung cancer. Innate
received in August 2022 a $5 million milestone payment from
AstraZeneca and will be responsible for conducting the study.
AstraZeneca and Innate will share study costs and AstraZeneca will
supply clinical trial drugs. AstraZeneca conducted a Phase 1 trial
in solid tumors with IPH5201 alone or in combination with
durvalumab. The data are expected to be presented at an upcoming
medical meeting in due course.
IPH5301 (anti-CD73):
- The investigator-sponsored Phase 1 trial of IPH5301 (CHANCES),
in collaboration with Institut Paoli-Calmettes is underway. The
trial will be conducted in two parts, Part 1, the dose escalation,
followed by a Part 2 safety expansion study cohort. Part 2 will
evaluate IPH5301 in combination with chemotherapy and trastuzumab
in HER2+ cancer patients.
Preclinical updates:
- During the period, the Company received from AstraZeneca a
notice that it will not exercise its option to license the four
preclinical programs covered in the "Future Programs Option
Agreement". This option agreement was part 2018 multi-term
agreement between AstraZeneca and Innate. Innate has now regained
full rights to further develop the four preclinical molecules.
Corporate Update:
- On May 03, Innate announced the commencement of an
At-The-Market (ATM) program, pursuant to which it may, from time to
time, offer and sell to eligible investors a total gross amount of
up to $75 million American Depositary Shares (“ADS”). Each ADS
representing one ordinary share of Innate. As of June 30, 2022, the
balance available under our May 2022 sales agreement remains at $75
million.
- Announced on 20 May 2022, as part of the resolutions voted by
shareholders, Dr Sally Bennett was appointed as new member of the
Supervisory Board. She was appointed as a member of the Audit
Committee during the Supervisory Board Meeting of May 20, 2022. On
the same day it was announced that Mr Patrick Langlois decided to
resign from his mandate of Supervisory Board member of Innate
Pharma.
Financial highlights for the first half of 2022:
The key elements of Innate’s financial position and financial
results as of and for the six-month period ended June 30, 2022 are
as follows:
- Cash, cash equivalents, short-term investments and financial
assets amounting to €158.2 million (€m) as of June 30, 2022
(€159.7m2 as of December 31, 2021).
- Revenue and other income from continuing operations3 amounted
to €45.6m in the first half of 2022 (€14.7m in the first half of
2021) and mainly comprise of:
- Operating expenses from continuing operations are €37.1m in the
first half of 2022 (€33.9m in the first half of 2021), of which
67.3% (€25.0m) are related to R&D.
- R&D expenses from continuing operations increased by €3.7m
to €25.0m in the first half of 2022 (€21.2m in the first half of
2021). This change mainly results from (i) a €0.7m increase in
direct R&D expenses relating to lacutamab clinical program and
to non-clinical programs, notably IPH65, partially offset by the
decrease in others clinical programs expenses; (ii) a €1.7m
increase in personnel expenses mainly explained by the increase in
share-based payments and (iii) the increase in other R&D
expenses explained by the provision relating to the payment to be
made to Orega Biotech SAS upon receipt of the $5.0m milestone
payment from AstraZeneca under the IPH5201 collaboration and
agreement following the amendment signed on June 1, 2022.
- General and administrative (G&A) expenses from continuing
operations decreased by €0.5m to €12.1m in the first half of 2022
(€12.6m in the first half of 2021).
- A loss on the Lumoxiti discontinued operations amounting to
€0.1m (€6.2m for the first half of 2021). As a reminder, the
Company recorded, as of June 30, 2021, a provision for charges
relating to the payment of €5.2 million ($6.2 million) to
AstraZeneca under the Lumoxiti transition and termination agreement
effective as of June 30, 2021. Persuant to the April 2022 underlied
agreement, the amount of €5.9 million ($6.2 million) was paid by
the Company.
- A net financial loss of €2.1m in the first half of 2022 (net
financial gain of €1.7m in the first half of 2021), principally as
a result of the decrease in fair value of certain of our financial
instruments due to the negative impact of the COVID-19 health
crisis as well as the Ukrainian crisis on the financial
markets.
- A net income of €6.3m for the first half of 2022 (net loss of
€23.7m for the first half of 2021).
The table below summarizes the IFRS consolidated financial
statements as of and for the six months ended June 30, 2022,
including 2021 comparative information.
In thousands of euros, except for data
per share
June 30, 2022
June 30, 2021 (1)
Revenue and other income
45,589
14,671
Research and development expenses
(24,956)
(21,208)
General and administrative expenses
(12,140)
(12,643)
Operating expenses
(37,096)
(33,851)
Operating income (loss)
8,494
(19,179)
Net financial income (loss)
(2,118)
1,709
Income tax expense
—
—
Net income (loss) from continuing
operations
6,376
(17,470)
Net income (loss) from discontinued
operations
(73)
(6,249)
Net income (loss)
6,303
(23,719)
Weighted average number of shares ( in
thousands) :
79,754
78,998
- Basic income (loss) per share
0.08
(0.30)
- Diluted income (loss) per share
0.08
(0.30)
-Basic income (loss) per share from
continuing operations
0.08
(0.22)
- Diluted income (loss) per share from
continuing operations
0.08
(0.22)
-Basic income (loss) per share from
discontinued operations
—
(0.08)
- Diluted income (loss) per share from
discontinued operations
—
(0.08)
(1) Comparative relating to the six months
ended June 30, 2021 have been restated to reflect the impact of the
classification of Lumoxiti's activities as discontinued operations
in 2021.
June 30, 2022
December 31, 2021
Cash, cash equivalents and financial
assets
158,156
159,714
Total assets
280,430
267,496
Total shareholders’ equity
116,333
107,440
Total financial debt
43,374
44,251
About Innate Pharma:
Innate Pharma S.A. is a global, clinical-stage oncology-focused
biotech company dedicated to improving treatment and clinical
outcomes for patients through therapeutic antibodies that harness
the immune system to fight cancer.
Innate Pharma’s broad pipeline of antibodies includes several
potentially first-in-class clinical and preclinical candidates in
cancers with high unmet medical need.
Innate is a pioneer in the understanding of Natural Killer cell
biology and has expanded its expertise in the tumor
microenvironment and tumor-antigens, as well as antibody
engineering. This innovative approach has resulted in a diversified
proprietary portfolio and major alliances with leaders in the
biopharmaceutical industry including Bristol-Myers Squibb, Novo
Nordisk A/S, Sanofi, and a multi-products collaboration with
AstraZeneca.
Headquartered in Marseille, France with a US office in
Rockville, MD, Innate Pharma is listed on Euronext Paris and Nasdaq
in the US.
Learn more about Innate Pharma at www.innate-pharma.com
Information about Innate Pharma shares:
ISIN code
FR0010331421
Ticker code
Euronext: IPH Nasdaq: IPHA
LEI
9695002Y8420ZB8HJE29
Disclaimer on forward-looking information and risk
factors:
This press release contains certain forward-looking statements,
including those within the meaning of the Private Securities
Litigation Reform Act of 1995. The use of certain words, including
“believe,” “potential,” “expect” and “will” and similar
expressions, is intended to identify forward-looking statements.
Although the company believes its expectations are based on
reasonable assumptions, these forward-looking statements are
subject to numerous risks and uncertainties, which could cause
actual results to differ materially from those anticipated. These
risks and uncertainties include, among other things, the
uncertainties inherent in research and development, including
related to safety, progression of and results from its ongoing and
planned clinical trials and preclinical studies, review and
approvals by regulatory authorities of its product candidates, the
Company’s commercialization efforts, the Company’s continued
ability to raise capital to fund its development and the overall
impact of the COVID-19 outbreak on the global healthcare system as
well as the Company’s business, financial condition and results of
operations. For an additional discussion of risks and uncertainties
which could cause the company's actual results, financial
condition, performance or achievements to differ from those
contained in the forward-looking statements, please refer to the
Risk Factors (“Facteurs de Risque") section of the Universal
Registration Document filed with the French Financial Markets
Authority (“AMF”), which is available on the AMF website
http://www.amf-france.org or on Innate Pharma’s website, and public
filings and reports filed with the U.S. Securities and Exchange
Commission (“SEC”), including the Company’s Annual Report on Form
20-F for the year ended December 31, 2021, and subsequent filings
and reports filed with the AMF or SEC, or otherwise made public, by
the Company.
This press release and the information contained herein do not
constitute an offer to sell or a solicitation of an offer to buy or
subscribe to shares in Innate Pharma in any country.
Summary of Interim Condensed Consolidated
Financial Statements and Notes as of JUNE 30, 2022
Interim Condensed Consolidated
Statements of Financial Position
(in thousand euros)
June 30, 2022
December 31, 2021
Assets
Current assets
Cash and cash equivalents
102,949
103,756
Short-term investments
20,401
16,080
Trade receivables and others
48,447
18,420
Total current assets
171,797
138,256
Non-current assets
Intangible assets
43,260
44,192
Property and equipment
9,556
10,174
Non-current financial assets
34,806
39,878
Other non-current assets
149
148
Trade receivables and others -
non-current
13,084
29,821
Deferred tax asset
7,778
5,028
Total non-current assets
108,633
129,241
Total assets
280,430
267,496
Liabilities
Current liabilities
Trade payables and others
18,667
28,573
Collaboration liabilities – current
portion
14,167
7,418
Financial liabilities – current
portion
30,851
30,748
Deferred revenue – current portion
9,094
12,500
Provisions - current portion
782
647
Total current liabilities
73,561
79,886
Non-current liabilities
Collaboration liabilities – non-current
portion
58,954
32,997
Financial liabilities – non-current
portion
12,523
13,503
Defined benefit obligations
2,696
2,975
Deferred revenue – non-current portion
8,333
25,413
Provisions - non-current portion
253
253
Deferred tax liabilities
7,778
5,028
Total non-current liabilities
90,537
80,169
Shareholders’ equity
Share capital
3,988
3,978
Share premium
377,998
375,220
Retained earnings
(272,241)
(219,404)
Other reserves
284
456
Net income (loss)
6,303
(52,809)
Total shareholders’ equity
116,333
107,440
Total liabilities and shareholders’
equity
280,430
267,496
Interim Condensed Consolidated
Statements of Income (loss)
(in thousand euros)
June 30, 2022
June 30, 2021 (1)
Revenue from collaboration and licensing
agreements
41,271
8,304
Government financing for research
expenditures
4,319
6,368
Revenue and other income
45,589
14,671
Research and development expenses
(24,956)
(21,208)
General and administrative expenses
(12,140)
(12,643)
Operating expenses
(37,096)
(33,851)
Net income / (loss) distribution
agreements
—
—
Operating income (loss)
8,494
(19,179)
Financial income
4,048
3,490
Financial expenses
(6,166)
(1,781)
Net financial income (loss)
(2,118)
1,709
Net income (loss) before tax
6,376
(17,470)
Income tax expense
—
—
Net income (loss) from continuing
operations
6,376
(17,470)
Net income (loss) from discontinued
operations
(73)
(6,249)
Net income (loss)
6,303
(23,719)
Weighted average number of shares : (in
thousands)
79,754
78,998
- Basic income (loss) per share
0.08
(0.30)
- Diluted income (loss) per share
0.08
(0.30)
-Basic income (loss) per share from
continuing operations
0.08
(0.22)
- Diluted income (loss) per share from
continuing operations
0.08
(0.22)
-Basic income (loss) per share from
discontinued operations
—
(0.08)
- Diluted income (loss) per share from
discontinued operations
—
(0.08)
(1) Comparative relating to the six months
ended June 30, 2021 have been restated to reflect the impact of the
classification of Lumoxiti's activities as discontinued operations
in 2021.
Interim Condensed Consolidated
Statements of Cash Flow
(in thousand euros)
June 30, 2022
June 30, 2021
Net income (loss)
6,303
(23,719)
Depreciation and amortization, net
2,030
2,168
Employee benefits costs
192
268
Change in provision for charges
134
4,952
Share-based compensation expense
2,596
853
Change in valuation allowance on financial
assets
2,255
(1,031)
Gains (losses) on financial assets
(1,333)
(443)
Change in valuation allowance on financial
instruments
(100)
(170)
Gains on assets and other financial
assets
(25)
(86)
Interest paid
194
160
Other profit or loss items with no cash
effect
(52)
(1,476)
Operating cash flow before change in
working capital
12,194
(18,524)
Change in working capital
(10,976)
(12,638)
Net cash generated from / (used in)
operating activities:
1,218
(31,162)
Acquisition of intangible assets, net
—
(33)
Acquisition of property and equipment,
net
(420)
(240)
Purchase of non-current financial
instruments
—
—
Disposal of property and equipment
—
2
Purchase of other assets
(1)
(63)
Interest received on financial assets
25
86
Net cash generated from / (used in)
investing activities:
(395)
(247)
Proceeds from the exercise / subscription
of equity instruments
192
61
Repayment of borrowings
(958)
(1,127)
Net interest paid
(194)
(160)
Net cash generated / (used in) from
financing activities:
(960)
(1,226)
Effect of the exchange rate changes
(670)
(178)
Net increase / (decrease) in cash and
cash equivalents:
(807)
(32,812)
Cash and cash equivalents at the beginning
of the year:
103,756
136,792
Cash and cash equivalents at the end of
the six-months period:
102,949
103,980
Revenue and other income
The following table summarizes operating revenue for the periods
under review:
In thousands of euros
June 30, 2022
June 30, 2021 (1)
Revenue from collaboration and licensing
agreements
41,271
8,304
Government funding for research
expenditures
4,319
6,368
Revenue and other income
45,589
14,671
(1) Comparative relating to the six months
ended June 30, 2021 have been restated to reflect the impact of the
classification of Lumoxiti's activities as discontinued operations
in 2021.
Revenue from collaboration and licensing agreements
Revenue from collaboration and licensing agreements increased by
€33.0 million, to €41.3 million for the six months ended June 30,
2022, as compared to revenues from collaboration and licensing
agreements of €8.3 million for the six months ended June 30, 2021.
These revenues mainly result from the partial or entire recognition
of the proceeds received pursuant to 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.
The evolution for the first half of 2022 is mainly due to:
- A €10.3 million increase in revenue related to monalizumab, to
€16.4 million for the six months ended June 30, 2022, as compared
to €6.1 million for the six months ended June 30, 2021. This change
mainly results from the transaction price increase of €13.4 million
($14.0 million) triggered by the launch of the “PACIFIC-9” Phase 3
trial on April 28, 2022. This change in the transaction price
generated a €12.5 million favorable cumulative adjustment in the
revenue related to monalizumab agreements for the first half of
2022, partially offset by effects of the decrease in direct
monalizumab research and development costs over the period as
compared to the first half of 2021, in connection with the Phase 1
& 2 trials maturity. As of June 30, 2022, the deferred revenue
related to monalizumab was €17.3 million (€9.0 million as “Deferred
revenue—Current portion” and €8.3 million as “Deferred
revenue—Non-current portion).
- A €4.8 million increase in revenue related to IPH5201 for the
six months ended June 30, 2022 amounted to and results from the
entire recognition in revenue of the $5.0 million milestone payment
received from AstraZeneca following the signature on June 1, 2022
of an amendment to the initial contract signed in October 2018.
This amendment sets the terms of the collaboration following
AstraZeneca’s decision to advance IPH5201 to a Phase 2 study. The
Company will conduct the study. Both parties will share the
external cost related to the study and incurred by the Company and
AstraZeneca will provide products necessary to conduct the clinical
trial.
- During the period, the Company received from AstraZeneca a
notice that it will not exercise its option to license the four
preclinical programs covered in the "Future Programs Option
Agreement". This option agreement was part of the 2018 multi-term
agreement between AstraZeneca and the Company under which the
Company received an upfront payment of $20.0m (€17.4m). Innate has
now regained full rights to further develop the four preclinical
molecules. Consequently, the entire initial payment of $20.0m, or
€17.4 million was recognized as revenue as of June 30, 2022.
- A €1.2 million decrease in revenue from invoicing of research
and development costs. Pursuant to our agreements with AstraZeneca,
clinical costs for the ongoing Phase 1 trial of avdoralimab and
external research and development costs related to IPH5201 are
equally shared between Innate Pharma and AstraZeneca, resulting in
periodic settlement invoices. These costs are invoiced back on a
quarterly basis. This change is mainly explained by the decrease in
research and development costs incurred by the Company under these
agreements.
- A €2.0 million increase in revenue from collaboration and
research license agreements with Sanofi, to €3.0 million for the
six months ended June 30, 2022, as compared to €1.0 million for the
six months ended June 30, 2021. During the period, the Company was
informed of Sanofi's decision to advance IPH6401/SAR'514 into
investigational new drug (IND)-enabling studies. As such, Sanofi
has selected a second multispecific antibody engaging NK cells as a
drug candidate. This selection triggered a €3.0 million milestone
payment from Sanofi to the Company, fully recognized in revenue as
of June 30, 2022. This amount was received by the Company on
September 9, 2022.
Government funding for research expenditures
Government financing for research expenditures decreased by €2.0
million, or 32.2%, to €4.3 million for the six months ended June
30, 2022 as compared to €6.4 million the six months ended June 30,
2021. This change is primarily a result of a decrease in the
research tax credit (CIR) of €0.7 million, which is mainly due to
(i) a decrease in eligible subcontracting costs included in
research tax credit calculation, in connection with the end of the
doubling of public subcontracting expenses eligible for the CIR
since January 1, 2022, but also to the decrease in private R&D
subcontracting over the period due to the maturity of clinical
trials. In addition, this decrease is also explained by the
deduction from the CIR calculation base of the remaining financing
received over the period relating to FORCE (FOR COVID-19
Elimination) trial ; (ii) in addition, there is a €1.4 million
decrease in grants in connection with the recording in revenue in
the first half of 2021 of the first tranche of the repayable
advance paid to the Company and linked to the BPI financing
contract signed in August 2020. This payment was received by the
Company at contract signing. This financing contract was set up as
part of the program set up by the French government to help develop
a therapeutic solution with a preventive or curative aim against
COVID-19. As of June 30, 2021, this financing was considered by the
Company to be non-refundable , in accordance with the terms of the
agreement, in light of the technical and commercial failure of the
project based on the results of the Phase 2 "Force" trial
evaluating avdoralimab in COVID-19, published on July 6, 2021.
The Company is again eligible to the SME status under European
Union criteria since December 31, 2021. Consecutively, the Company
is eligible for the early repayment by French treasury of the 2021
research tax credit during the fiscal year 2022.
Operating expenses
The table below presents our operating expenses from continuing
operations for the six months periods ended June 30, 2022 and
2021:
In thousands of euros
June 30, 2022
June 30, 2021 (1)
Research and development expenses
(24,956)
(21,208)
General and administrative expenses
(12,140)
(12,643)
Operating expenses
(37,096)
(33,851)
(1) Comparative relating to the six months
ended June 30, 2021 have been restated to reflect the impact of the
classification of Lumoxiti's activities as discontinued operations
in 2021.
Research and development expenses
Research and development (“R&D”) expenses from continuing
operations increased by €3.7 million, or 17.7%, to €25.0 million
for the six months ended June 30, 2022, as compared to €21.2
million for the six months ended June 30, 2021, representing a
total of 67.3% and 62.7% of the total operating expenses,
respectively. R&D expenses include direct R&D expenses
(subcontracting costs and consumables), depreciation and
amortization, and personnel expenses.
Direct R&D expenses increased by €0.7 million, or 5.9%, to
€12.4 million for the six months ended June 30, 2022, as compared
to €11.7 million for the six months ended June 30, 2021. This
increase is mainly explained by (i) an increase of 1.7 million
euros in expenses relating to the lacutamab program as well as (ii)
an increase of 1.4 million euros in expenses relating to the IPH65
preclinical program partially offset by (iii) the decrease expenses
related to the avdoralimab and monalizumab programs for
respectively 1.8 million euros and 0.7 million euros. These
decreases follow (i) the decision taken by the Company at the end
of the first half of 2020 to stop recruitment in trials evaluating
avdoralimab in oncology and (ii) the maturity of phase I/II
clinical trials entering the scope of the collaboration with
AstraZeneca regarding monalizumab.
Also, as of June 30, 2022, the collaboration liabilities
relating to monalizumab and the agreements signed with AstraZeneca
in April 2015, October 2018 and September 2020 amounted to €73.1
million, as compared to collaborations liabilities to €40.4 million
as of December 31, 2021. This increase of €32.7 million mainly
results from (i) the increase in the collaboration commitment for
an amount of €34.3 million ($36.0 million USD) in connection with
the launch of the PACIFIC-9 Phase 3 trial by AstraZeneca on April
28, 2022, and (ii) the increase in the collaboration commitment in
the amount of €3.7 million in connection with the observed exchange
rate fluctuations over the period for the euro-dollar parity,
partially offset by (iii) net reimbursements of €5.0 million made
in the first half of 2022 to AstraZeneca relating to the
co-financing of the monalizumab program, mainly including the Phase
3 INTERLINK-1 trial launched in October 2020.
Personnel and other expenses allocated to R&D increased by
€3.1 million, or 32.1%, to €12.6 million for the six months ended
June 30, 2022, as compared to an amount of €9.5 million for the six
months ended June 30, 2021. This increase is mainly due to (i) the
increase of €1.7 million in personnel expenses allocated to
research and development, of which €1.1 million related to
share-based payments (implementation of an employee savings plan
remunerated in free shares in particular) and (ii) the increase of
€1.6 million in other expenses allocated to research and
development in particular in connection with (a) the provision for
charges in the amount of €0.6 million expensed in respect of the
payment to be issued to the Company Orega Biotech SAS upon receipt
of the milestone payment of $5.0m from AstraZeneca, following the
signature on June 1, 2022 of an amendment to the initial IPH5201
contract signed in October 2018 and (b) the increase of €0.6
million in non-scientific fees allocated to research and
development in view of an increase in the use of external service
providers in the first half of 2022.
General and administrative expenses
General and administrative expenses from continuing activities
decreased by €0.5 million, or 4.0%, to €12.1 million for the six
months ended June 30, 2022, as compared to general and
administrative expenses of €12.6 million for the six months ended
June 30, 2021. Selling, general and administrative expenses
represented a total of 32.7% and 37.3% of the total operating
expenses for the six months ended June 30, 2022 and 2021,
respectively.
Personnel expense includes the compensation paid to our
employees, and increased by €0.6 million, to €5.8 million for the
six months ended June 30, 2022, as compared to €5.2 million for six
months ended June 30, 2021. This increase of €0.6 million is mainly
due to the increase in share-based payments, in particular in
connection with the implementation of an employee savings plan paid
in bonus shares.
Non-scientific advisory and consulting expenses mostly consist
of auditing, accounting, taxation and legal fees as well as
consulting fees in relation to business strategy and operations and
hiring services. Non-scientific advisory and consulting expenses
decreased by €0.3 million, or 10.4%, to €2.2 million for the six
months ended June 30, 2022 as compared to €2.5 million for the six
months ended June 30, 2021. This decrease is mainly due to the
decrease in fees in connection with (i) the services of lawyers
relating to the arbitration procedure between the Company and Orega
Biotech concerning the joint ownership of certain patents relating
to IPH5201, settled at the end of 2021 and (ii) the services
provided in 2021 as part of support for the application of internal
control standards in connection with the Sarbanes-Oxley Act
following the Nasdaq listing of the Company in October 2019.
The fall in other expenses of €0.8m mainly results from non
recurring provisions for liabilities and charges booked in the 1st
half of 2021 reversed in 1st half of 2022.
Financial income (loss),
net
We recognized a net financial loss of €2.1 million in the six
months ended June 30, 2022 as compared to a net financial gain of
€1.7 million in the six months ended June 30, 2021. This variance
mainly results from the variance in fair value of our financial
instruments (net gain of €1.0 million as compared to a net loss of
€2.3 million for the six months ended June 30, 2021 and 2022,
respectively). The decline in the fair value of our financial
instruments observed in the first half of 2022 results from the
impact of the COVID-19 health crisis as well as the Ukrainian
crisis on the financial markets.
Net loss from discontinued
operations
As a reminder, further to the decision to terminate the Lumoxiti
Agreement and termination notice sent in December 2020, a
Termination and Transition Agreement was discussed and executed,
effective as of June 30, 2021 terminating the Lumoxiti Agreement as
well as Lumoxiti related agreements (including the supply
agreement, the quality agreement and other related agreements) and
transferring of the U.S. marketing authorization and distribution
rights of Lumoxiti back to AstraZeneca. Consecutively, the
activities related to Lumoxiti are presented as a discontinued
operation as of October 1, 2021 (and for all subsequent and prior
period).
As a consequence, net loss from discontinued operations relating
to Lumoxiti for the six months ended June 30 2022, decreased by
€6.2m as compared to net loss from discontinued operations for the
six months ended June 30, 2021. Net loss for the six months ended
June 30, 2021 mainly resulted from the Settlement Amount of $6.2m
(€5.2m as of June 30, 2021) to be paid to AstraZeneca on April 30,
2022, as part of the Termination and Transition agreement.
Balance sheet items
Cash, cash equivalents, short-term investments and non-current
financial assets amounted to €158.2 million as of June 30, 2022, as
compared to €159.7 million as of December 31, 2021. Net cash as of
June 30, 2022 amounted to €92.5 million (€89.1 million as of
December 31, 2021). Net cash is equal to cash, cash equivalents and
short-term investments less current financial liabilities.
The other key balance sheet items as of June 30, 2022 are:
- Deferred revenue of €17.4 million (including €8.3 million
booked as ‘Deferred revenue – non-current portion’) and
collaboration liabilities of €73.1 million (including €59.0 million
booked as ‘Collaboration liabilities - non-current portion’)
relating to the remainder of the initial payment received from
AstraZeneca not yet recognized as revenue or used as part of the
co-financing of the monalizumab program with AstraZeneca;
- Receivables from the French government amounting to €44.4
million in relation to the research tax credit for 2019 to 2021 and
the six-month period ended June 30, 2022;
- Intangible assets for a net book value of €43.3 million, mainly
corresponding to the rights and licenses relating to the
acquisition of the monalizumab and avdoralimab;
- Shareholders’ equity of €116.3 million, including the net
income of the period of €6.3 million;
Cash-flow items
As of June 30, 2022, cash and cash equivalents amounted to
€102.9 million, compared to €103.8 million as of December 31, 2021,
corresponding in a decrease of €0.8 million.
The net cash flow used during the period under review mainly
results from the following:
- Net cash flow used by operations of €1.2 million for the six
months ended June 30, 2022 as compared to net cash flows used by
operations of €31.2 million for the six months ended June 30, 2021.
This increase mainly results from the collection of €47.7 million,
in June 2022, following the treatment of the first patient in the
second Phase 3 clinical trial evaluating monalizumab, “PACIFIC-9”.
This increase is partially offset by the €5.9 million payment to
AstraZeneca on April 20, 2022 persuant to the Lumoxiti termination
and transition agreement. As a reminder, net cash flow used in
operating activities for the first half of 2021 included €8.0
million of proceeds from Sanofi in January and February 2021, under
the IPH6101/SAR443579 agreement signed in 2016. Restated for these
transactions, net cash flow used in operating activities for the
first half of 2022 increases by €1.4 million as compared to the
first half of 2021. This change results from the increase of the
outflows in relation with the Company’s operating activities,
notably the net collaboration liabilities outflows related to the
monalizumab collaboration agreement. Net cash flow consumed by
operating activities in connection with the Lumoxiti discontinued
operation amounted to €5.5 million for the first half of 2022, as
compared to €4.4 million for the first half of 2021. The amount
consumed for the first half of 2022 relates to the payment of €5.5
million ($6.2 million) made to AstraZeneca in April 2022 in
accordance with the Lumoxiti termination and transition agreement
effective as of June 30, 2021.
- Net cash flow used in investing activities of €0.4 million, as
compared to €0.2 million for the first half of 2021. The Company
has not made any investments in tangible, intangible or significant
financial assets during the first half of 2022 and 2021. Net cash
flows consumed by investing activities in connection with the
Lumoxiti discontinued operation were nil for the first half of 2022
and 2021, respectively.
- Net cash flows used in financing activities for the six months
ended June 30, 2022, are stable as compared to the six months ended
June 30, 2021. These consumptions are mainly related to repayments
of financial liabilities. Net cash flows consumed by financing
activities in connection with the Lumoxiti discontinued operation
were nil for the first half of 2022 and 2021, respectively.
Post period events
On August 1, 2022, the Company announced that the combination of
monalizumab and cetuximab did not reach the pre-specified efficacy
threshold in the protocol-planned interim futility analysis of the
Phase 3 INTERLINK-1 clinical study conducted by AstraZeneca.
AstraZaneca has thus informed the Company that the study will be
discontinued. Consequently, the Company is not eligible for the
additional payment of $50.0 million as provided for in the
amendment signed in September 2020 relating to the monzalizumab
collaboration and license agreement entered into with AstraZeneca
in 2015. All other development and commercial milestone payments
related to the agreement remain unchanged.
In August 2022, the Company communicated to Société Générale and
BNP Paribas its desire to use the capital repayment extension
options of the two State-Guaranteed Loans (“PGE”) contracted in
December 2021. As a reminder, the Company had obtained non-dilutive
financing of 28.7 million in the form of two PGEs from Société
Générale (20.0 million euros) and BNP Paribas (8.7 million euros)
with a maturity initial of one year with an option to extend up to
five years. Discussions are currently underway with Société
Générale and BNP Paribas regarding the conditions for extending
repayment and the effective interest rate of loans. At the date of
this report, the Company has obtained agreements in principle from
Société Générale and BNP Paribas concerning financing rates after
extension option of 1.56% and 0.95% respectively, excluding
insurance and guarantee premium with an excess for the whole of
2023.
Nota
The interim consolidated financial statements for the six-month
period ended June 30, 2022 have been subject to a limited review by
our Statutory Auditors and were approved by the Executive Board of
the Company on September 14, 2022. They were reviewed by the
Supervisory Board of the Company on September 14, 2022. They will
not be submitted for approval to the general meeting of
shareholders.
Risk factors
Risk factors identified by the Company are presented in section
3 of the universal registration document (“Document
d’Enregistrement Universel”) submitted to the French stock-market
regulator, the “Autorité des Marchés Financiers”, on April 4, 2022
(AMF number D.22-0234). The main risks and uncertainties the
Company may face in the six remaining months of the year are the
same as the ones presented in the universal registration document
available on the internet website of the Company.
Furthermore, the conflict triggered by Russia's invasion of
Ukraine on February 24, 2022 had no significant direct or indirect
consequences on the Company's interim consolidated financial
statements for the first half of 2022. An update of that risk is
presented in note G) of the half-year management review as of June
30, 2022. The risks that are likely to arise during the remaining
six months of the current financial year could also occur during
subsequent years.
Related party
transactions:
Transactions with related parties during the periods under
review are disclosed in Note 19 to the interim condensed
consolidated financial statements for the period ended June 30,
2022 prepared in accordance with IAS 34.
___________________________
1 Including short term investments (€20.4
million) and non-current financial instruments (€34.8 million)
2 Cash and cash equivalents included
proceeds relating to State-Guaranteed Loans
3 Comparative relating to the six months
ended June 30, 2021 have been restated to reflect the impact of the
classification of Lumoxiti's activities as discontinued operations
in 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220914005962/en/
Investors Innate
Pharma Henry Wheeler Tel.: +33 (0)4 84 90 32 88
Henry.Wheeler@innate-pharma.fr
Media Relations
NewCap Arthur Rouille Tel. : +33 (0)1 44 71 00 15
innate@newcap.eu
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