Innate Pharma reports Full Year 2020 financial results and business
update
- Lacutamab received PRIME
designation from the European Medicines Agency in Sezary Syndrome;
clinical development program advances in mycosis fungoides and
peripheral T-cell lymphoma
- Company’s first NK cell engager selected by Sanofi as
drug candidate for development
- Monalizumab advanced to a Phase 3 clinical trial in
combination with cetuximab in IO-pretreated head and neck cancer
patients; triggered $50 million milestone payment from
AstraZeneca
- US and EU Lumoxiti commercialization rights returning
to AstraZeneca
- Cash position of €190.6 million2 as of December 31,
2020
Innate Pharma SA (Euronext Paris: IPH – ISIN:
FR0010331421; Nasdaq: IPHA) (“Innate” or the
“Company”) today reported its consolidated
financial results for the year ending December 31, 2020. The
consolidated financial statements are attached to this press
release.
“In 2020, we made the strategic decision to
re-prioritize our investments in our R&D portfolio, enabling us
to concentrate our resources and further strengthen our clinical
pipeline,” commented Mondher Mahjoubi, Chief Executive
Officer of Innate Pharma. “Our priority going forward is
to advance the clinical development of our lead proprietary
candidate, lacutamab, as well as leverage our multispecific NKCE
antibody platform, to create potential innovative therapeutics for
patients and provide long-term value to our shareholders.”
Webcast and conference call will be
held today at 2:00pm CET (9:00am EST)Access to live
webcast: https://edge.media-server.com/mmc/p/ua5uuvep
Participants may also join via telephone to ask questions by
registering in advance of the event at
http://emea.directeventreg.com/registration/2673359. 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 (IPH4102, anti-KIR3DL2
antibody):
- The TELLOMAK Phase 2 clinical trial, which is evaluating the
efficacy and safety of lacutamab in patients with advanced
cutaneous T-cell lymphomas, is now fully open to enrollment in
countries that had a partial regulatory hold following the
successful resolution of Good Manufacturing Practice issues.
- In November, the Company announced that the European Medicines
Agency (EMA) granted PRIME designation to lacutamab for the
treatment of patients with relapsed or refractory Sézary syndrome
(SS) who have received at least two prior systemic therapies. This
is the first time PRIME designation has been granted for a
potential treatment of any sub-type of T-cell lymphoma. This
follows the Fast Track designation that was awarded to lacutamab by
the U.S. Food and Drug Administration in 2019.
- In February 2021, the Company announced lacutamab demonstrated
a positive early signal in cohort 2 of KIR3DL2-expressing mycosis
fungoides patients in the TELLOMAK clinical trial earlier than
anticipated. This cohort reached the pre-determined number of
responses needed to advance to stage 2. The Company plans to
present this preliminary data at a scientific meeting in 2021.
- The Company will initiate two parallel clinical trials to study
lacutamab in KIR3DL2-expressing patients with relapsed/refractory
peripheral t-cell lymphoma (PTCL):
- Phase 1b trial: a Company-sponsored Phase 1b
clinical trial to evaluate lacutamab as a monotherapy in
KIR3DL2-expressing patients with relapsed PTCL.
- Phase 2 KILT (anti-KIR in T Cell Lymphoma)
trial: The Lymphoma Study Association (LYSA) will launch
an investigator-sponsored, randomized trial to evaluate lacutamab
in combination with chemotherapy GEMOX (gemcitabine in combination
with oxaliplatin) versus GEMOX alone in KIR3DL2-expressing
relapsed/refractory patients.
IPH6101 (NKp46-based NK cell engager),
partnered with Sanofi:
- Progress was made in the NKCE collaboration with Sanofi,
resulting in the decision announced in January 2021 that Sanofi
will transition IPH6101/SAR443579 into investigational new drug
(IND)-enabling studies. IPH6101 is a NKp46-based NK cell engager
(NKCE) using Innate’s proprietary multispecific antibody format
(Gauthier et al. Cell 2019). The decision triggered a €7 million
milestone payment from Sanofi to Innate.
- In January 2021, a GLP-tox study was initiated for the
IPH6101/SAR443579 program.
Monalizumab (anti-NKG2A antibody),
partnered with AstraZeneca:
- In October 2020, AstraZeneca (LES/STO/Nasdaq: AZN) dosed the
first patient in its randomized Phase 3 clinical trial,
INTERLINK-1, evaluating monalizumab in combination with cetuximab
vs. placebo and cetuximab in patients with recurrent or metastatic
squamous cell carcinoma of the head and neck (R/M SCCHN) who have
been previously treated with platinum-based chemotherapy and
PD-(L)1 inhibitors. Dosing of the first patient in this trial
triggered a $50 million milestone payment from AstraZeneca to
Innate. Innate is eligible to receive an additional $50 million
milestone payment after the interim analysis demonstrates the
combination meets a pre-defined threshold of clinical activity. To
date, the Company has received a total of $400 million from the
AstraZeneca partnership for monalizumab.
- The Company presented efficacy data on the Phase 2 expansion
cohort investigating the combination of monalizumab and cetuximab
in patients with recurrent or metastatic head and neck squamous
cell cancer (R/M SCCHN) who have been previously treated with
platinum-based chemotherapy and PD-(L)1 inhibitors at ASCO20
Virtual Scientific Conference held in May 2020. This data showed an
overall response rate in line with previously reported data and a
manageable safety profile. The Company presented updated results at
the ESMO Immuno-oncology Virtual Congress in December 2020.
- In 2020, the Company expanded a Phase 2 expansion cohort
(“cohort 3”), exploring the combination of monalizumab, cetuximab
and durvalumab in first-line IO naïve patients with R/M SCCHN, from
20 to 40 patients. Recruitment for cohort 3 is complete, and the
Company expects to publish data in 2021.
Avdoralimab in Inflammation (anti-C5aR1
antibody):
• In November
2020, the first patient was dosed in the investigator-sponsored
Phase 2 clinical trial in bullous pemphigoid (BP) where the C5aR1
pathway has been shown to be involved in the physiopathology of the
disease. The trial is investigating the clinical efficacy of
avdoralimab in addition to topical steroids compared to topical
steroids alone in BP patients.
Avdoralimab in COVID-19:
- The investigator-sponsored Phase 2 clinical trial, FORCE
(FOR COVID-19
Elimination), has completed enrollment and is
ongoing for patient follow-up and data analysis. More information
on this study can be found at clinical trials.gov.
- Results from the exploratory translational EXPLORE study
supporting this trial were published online in Nature on July 29,
2020.
- The investigator-sponsored Phase 2 clinical trial,
ImmunONCOVID-20, has resumed, and is currently recruiting. This
study is exploring the potential efficacy of monalizumab and
avdoralimab amongst other treatment arms, against COVID-19 in
cancer patients with mild symptoms and pneumonia respectively.
- In August 2020, the Company announced it obtained €6.8 million
in public funding from the French government for its COVID-19
R&D activities. This funding is part of the government’s PSPC
COVID call for COVID-19 related projects and will enable the
Company to cover the development of its current COVID-19
activities, which began in March 2020, including the EXPLORE
COVID-19 translational research study and its two Phase 2 clinical
trials, FORCE and ImmunONCOVID-20.
Avdoralimab in Oncology:
• In September
2020, the Company announced the decision to stop enrollment in
STELLAR‑001, a Phase 1 dose escalation and expansion study in
combination with durvalumab in three expansion cohorts: 1) NSCLC
patients with secondary resistance to prior immuno-oncology (IO)
treatment; 2) IO-naïve HCC patients; and 3) IO-pretreated HCC
patients. The decision was made based on the data from the
Company’s cohort expansions in NSCLC and IO-naïve HCC.
IPH5201 (anti-CD39 antibody), partnered
with AstraZeneca:
• In February
2020, the AstraZeneca sponsored, multicenter, open-label,
dose-escalation Phase I trial evaluating IPH5201 as monotherapy or
in combination with durvalumab (anti-PD-L1) with or without
oleclumab (anti-CD73) in advanced solid tumors started. Following
the dosing of the first patient in the trial on March 9, 2020,
AstraZeneca made a $5 million milestone payment to Innate under the
companies’ October 2018 multi-product oncology development
collaboration. Innate made a €2.7 million milestone payment to
Orega Biotech SAS pursuant to Innate’s exclusive licensing
agreement.
Lumoxiti (CD22-directed
immunotoxin):
- In December 2020, the Company announced that it will return the
US and EU commercialization rights of Lumoxiti (moxetumomab
pasudotox-tdfk) to AstraZeneca3. Innate licensed the US and EU
rights to AstraZeneca’s FDA-approved Lumoxiti for certain patients
with relapsed or refractory hairy cell leukemia in October
2018.
- Innate and AstraZeneca are currently in discussions regarding
the transition plan for the transfer of the US marketing
authorization and distribution of Lumoxiti to AstraZeneca,
including timing and costs (see Contingent liabilities).
Corporate Update:
- In July 2020, Dr. Joyson Karakunnel was appointed as Executive
Vice President and Chief Medical Officer (CMO). Dr. Pierre Dodion,
CMO since 2014, retired from this position. Dr. Karakunnel comes to
the Company with deep experience in immuno-oncology, and a proven
track record in drug development. Most recently, Dr. Karakunnel
served as CMO and Senior Vice President at Tizona Therapeutics,
where he led the development of the company’s biotherapeutics
pipeline.
- Laure-Helene Mercier, Executive Vice President, Chief Financial
Officer and member of the Executive Board, has decided to step down
from her position, after leading the Company through more than 14
years of growth, including an initial public offering in the US.
Frederic Lombard will join the company as CFO on April 1, 2021. Mr.
Lombard will be joining Innate with more than 20 years of financial
experience in the pharmaceutical industry, holding senior finance
roles at Ipsen, AstraZeneca and Novartis. Ms. Mercier will remain
at the Company until the end of the year to ensure a smooth
transition of responsibilities.
Financial highlights for
2020:
The key elements of Innate’s financial position and financial
results as of and for the year ended December 31, 2020 are as
follows:
- Cash, cash equivalents, short-term investments and financial
assets amounting to €190.6 million (€m) as of December 31,
2020 (€255.9m as of December 31, 2019), including non-current
financial instruments amounting to €38.9m (€37.0m as of
December 31, 2019).
- Cash and cash equivalents include the milestone payment of
$50.0m (€41.2m) following the inclusion by AstraZeneca of the first
patient in its Phase 3 randomized clinical trial evaluating
monalizumab, INTERLINK-1. It doesn’t include the milestone payment
of €7.0m from Sanofi relating to the progress of IPH6101/SAR443579
into new drug (IND)-enabling studies, received in February
2021.
- As of December 31, 2020, financial liabilities amount to €19.1m
(€18.7m as of December 31, 2019). This change is partly linked to
the receipt, in August 2020, of €1.4m in repayable advance in
connection with the financing contract signed with BPI Financement
(COVID-19).
- Revenue and other income amounted to €70.5m in 2020 (2019:
€85.8m, -17.9%). It mainly comprises revenue from collaboration and
licensing agreements (€56.2m in 2020 vs €69.0m in 2019, -18.6%),
and research tax credit (€13.1m in 2020 vs €16.7m in 2019,
-21.8%):
- Revenue from collaboration and licensing agreement with
AstraZeneca amounted to €49.0m in 2020 (€69.0m in 2019, -29.0%) and
mainly resulted from (i) the spreading of the upfront and opt-in
payments received from AstraZeneca and (ii) the invoicing to
AstraZeneca of certain fees for the work performed by Innate for
the partnered programs. The variation between the two periods is
notably explained by the completion of (i) the recruitment of the
Cohort 2 in the monalizumab Phase 2 trials performed by Innate in
2019, and (ii) the preclinical work related to the Phase 1
program of IPH5201, which started in 2020.
- Revenue of €7.0m from Sanofi for the progress of
IPH6101/SAR443579 into investigational new drug (IND)-enabling
studies.
- The variation in the research tax credit mainly results from a
decrease in the amortization for the intangible assets related to
acquired licenses (monalizumab, IPH5201).
- Operating expenses of €89.9m in 2020 (2019: €104.6m, -14.1%):
- Selling, general and administrative (SG&A) expenses
amounted to €31.2m in 2020 (2019: €25.8m, +21.1%). This increase
mainly results from the full-year effect of personnel costs related
to our US subsidiary, including personnel assigned to Lumoxiti
commercial activities.
- R&D expenses amounted to €58.6m in 2020 (2019: €78.8m,
-25.7%). This variation mainly results from a decrease in direct
R&D expenses (mainly related to Lumoxiti, IPH5201 and IPH5301)
and in depreciation and amortization of intangible assets acquired
by the Company (IPH5201 and monalizumab).
- Lumoxiti intangible asset full impairment of €43.5m, following
the Company's decision to return the US and EU commercialization
rights of Lumoxiti to AstraZeneca.
- The Lumoxiti distribution agreement generated a net income of
€0.9m in the first three quarters of 2020 (a net loss of €8.2m in
2019). During the 2020 fourth quarter, the Company recognized net
sales from Lumoxiti of €0.7m.
- A net loss of €64.0m in 2020 (2019: net loss of €20.8m).
The table below summarizes the IFRS consolidated
financial statements4 as of and for the year ended December 31,
2020, including 2019 comparative information.
In thousands of euros, except for data per
share |
December 31, 2020 |
December 31, 2019 |
Revenue and other income |
70,451 |
85,814 |
Research and development |
(58,613) |
(78,844) |
Selling, general and administrative |
(31,246) |
(25,803) |
Total operating expenses |
(89,859) |
(104,647) |
Net income (loss) from distribution agreements |
861 |
(8,219) |
Operating income (loss) before impairment |
(18,547) |
(27,052) |
Impairment of intangible assets |
(43,529) |
— |
Operating income (loss) after impairment |
(62,076) |
(27,052) |
Net financial income (loss) |
(1,908) |
6,293 |
Income tax expense |
— |
— |
Net income (loss) |
(63,984) |
(20,759) |
Weighted average number of shares outstanding (in thousands) |
78,935 |
66,908 |
Basic income (loss) per share |
(0.81) |
(0.31) |
Diluted income (loss) per share |
(0.81) |
(0.31) |
|
|
December 31, 2020 |
December 31, 2019 |
Cash, cash equivalents and financial asset |
190,571 |
255,869 |
Total assets |
307,423 |
401,361 |
Shareholders’ equity |
155,975 |
217,416 |
Total financial debt |
19,087 |
18,723 |
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 has been 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
Ticker code LEI |
FR0010331421 Euronext: IPH
Nasdaq: IPHA9695002Y8420ZB8HJE29 |
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, 2019,
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.
For additional information, please contact: |
Investors Innate
Pharma
Tel.: +33 (0)4 30 30 30 30investors@innate-pharma.com |
|
Media Innate Pharma
Tracy Rossin (Global/US)Tel.: +1 240 801
0076Tracy.Rossin@innate-pharma.com ATCG
Press Marie Puvieux (France)Tel.: +33 (0)9 81 87 46
72innate-pharma@atcg-partners.com |
Summary of Consolidated Financial5 Statements and
Notesas of December 31, 2020
Consolidated Statements of Financial Position |
(in thousand euros) |
|
December 31, 2020 |
December 31, 2019 |
|
|
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
136,792 |
202,887 |
Short-term investments |
14,845 |
15,978 |
Trade receivables and others -
current |
21,695 |
18,740 |
Total current
assets |
173,332 |
237,605 |
|
|
|
Intangible assets |
46,289 |
96,968 |
Property and equipment |
11,694 |
11,672 |
Non-current financial
assets |
38,934 |
37,005 |
Other non-current assets |
147 |
89 |
Deferred tax assets |
7,087 |
1,286 |
Trade receivables and others -
non-current |
29,940 |
16,737 |
Total non-current
assets |
134,091 |
163,756 |
|
|
|
Total
assets |
307,423 |
401,361 |
|
|
|
Liabilities |
|
|
Trade payables and others |
29,539 |
49,504 |
Collaboration liabilities –
Current portion |
1,832 |
21,304 |
Financial liabilities –
Current portion |
2,142 |
2,130 |
Deferred revenue – Current
portion |
12,505 |
48,770 |
Provisions – Current
portion |
676 |
114 |
Total current
liabilities |
46,694 |
121,822 |
|
|
|
Collaboration liabilities –
Non current portion |
44,854 |
— |
Financial liabilities –
Non-current portion |
16,945 |
16,593 |
Defined benefit
obligations |
4,177 |
3,760 |
Deferred revenue – Non-current
portion |
31,469 |
40,342 |
Provisions – Current
portion |
221 |
142 |
Deferred tax liabilities |
7,087 |
1,286 |
Total non-current
liabilities |
104,753 |
62,123 |
|
|
|
Share capital |
3,950 |
3,941 |
Share premium |
372,130 |
369,617 |
Retained earnings |
(156,476) |
(134,912) |
Other reserves |
355 |
(472) |
Net income (loss) |
(63,984) |
(20,759) |
Total shareholders’
equity |
155,975 |
217,416 |
|
|
|
Total
liabilities and shareholders’ equity |
307,423 |
401,361 |
Consolidated Statements of Income (loss) |
(in thousand euros) |
|
December 31, 2020 |
December 31, 2019 |
|
|
|
|
|
|
Revenue from collaboration and
licensing agreements |
56,155 |
68,974 |
Government financing for research
expenditures |
13,618 |
16,840 |
Sales |
678 |
|
|
|
|
Revenue and other income |
70,451 |
85,814 |
|
|
|
Research and development
expenses |
(58,613) |
(78,844) |
Selling, general and
administrative expenses |
(31,246) |
(25,803) |
|
|
|
Operating expenses |
(89,859) |
(104,647) |
|
|
|
Net income (loss) from
distribution agreements |
861 |
(8,219) |
|
|
|
Operating income (loss) before impairment of intangible
assets |
(18,547) |
(27,052) |
|
|
|
Impairment of intangible
assets |
(43,529) |
— |
|
|
|
Operating income (loss) after impairment of intangible
assets |
(62,076) |
(27,052) |
|
|
|
Financial income |
4,855 |
11,269 |
Financial expenses |
(6,763) |
(4,976) |
|
|
|
Net financial income (loss) |
(1,908) |
6,293 |
|
|
|
Net income (loss) before tax |
(63,984) |
(20,759) |
|
|
|
Income tax expense |
— |
— |
|
|
|
Net income
(loss) |
(63,984) |
(20,759) |
|
|
|
Net income (loss) per
share: |
|
|
(in € per share) |
|
|
- basic income (loss) per share |
(0.81) |
(0.31) |
- diluted income
(loss) per share |
(0.81) |
(0.31) |
Consolidated Statements of Cash Flows |
(in thousand euros) |
|
December 31, 2020 |
December 31, 2019 |
Net income (loss) |
(63,984) |
(20,759) |
Depreciation and
amortization |
56,797 |
16,529 |
Employee benefits costs |
216 |
685 |
Provisions for charges |
604 |
(484) |
Share-based compensation
expense |
2,475 |
3,826 |
Change in valuation allowance on
financial assets |
577 |
(4,065) |
Gains (losses) on financial
assets |
1,256 |
(280) |
Change in valuation allowance on
financial assets |
372 |
(237) |
Gains (losses) on assets and
other financial assets |
(962) |
(1,290) |
Interest paid |
341 |
204 |
Other profit or loss items with no cash effect |
(296) |
550 |
Operating cash flow before change in working
capital |
(2,604) |
(5,321) |
Change in working capital |
(49,204) |
40,245 |
Net cash generated from / (used in) operating
activities: |
(51,807) |
34,924 |
Acquisition of intangible assets,
net |
(10,375) |
(64,130) |
Acquisition of property and
equipment, net |
(907) |
(1,271) |
Acquisition of non-current
financial assets |
(3,000) |
- |
Disposal of property and
equipment |
9 |
- |
Disposal of other assets |
(59) |
(10) |
Disposal of non-current financial
instruments |
- |
2,000 |
Interest received on financial assets |
962 |
1,290 |
Net cash generated from / (used in) investing
activities: |
(13,370) |
(62,121) |
Proceeds from the exercise /
subscription of equity instruments |
48 |
44 |
Increase in capital, net |
- |
66,006 |
Proceeds from borrowings |
1,360 |
13,900 |
Repayment of borrowings |
(2,204) |
(1,982) |
Net interest paid |
(341) |
(204) |
Net cash generated from financing activities: |
(1,136) |
77,765 |
Effect of the exchange rate changes |
219 |
5 |
Net increase / (decrease) in cash and cash
equivalents: |
(66,095) |
50,572 |
Cash and cash equivalents at the beginning of the year: |
202,887 |
152,314 |
Cash and cash equivalents at the end of the year
: |
136,792 |
202,887 |
Revenue and other income
The following table summarizes operating revenue
for the periods under review:
In thousands of euro |
December 31, 2020 |
December 31, 2019 |
Revenue from collaboration and
licensing agreements |
56,155 |
68,974 |
Government financing for research
expenditures |
13,618 |
16,840 |
Sales |
678 |
— |
Revenue and other income |
70,451 |
85,814 |
Revenue from collaboration and licensing
agreements
Revenue from collaboration and licensing
agreements decreased by €12.8 million, or 18.6%, to €56.2 million
for the year ended December 31, 2020, as compared to €69.0 million
for the year ended December 31, 2019. Revenue from collaboration
and licensing agreements mainly results from the spreading of the
initial payments and the exercise of options related to the
agreements signed with AstraZeneca in April 2015 and October 2018,
on the basis of the completion of work that the Company is
committed to carry out. The evolution in 2020 is mainly due to:
- A €8.9 million decrease in revenue related to monalizumab to
€33.6 million for the year ended December 31, 2020, as compared to
€42.5 million for the year ended December 31, 2019. This decrease
is mainly explained by the decrease in direct monalizumab research
and development costs over the period in connection with the end of
the recruitment of Phase 2 Cohort 2 during 2019. As of December 31,
2020, the deferred revenue related to monalizumab amounts to €26.6
million (€11.3 million as “Deferred revenue—Current portion” and
€15.3 million as “Deferred revenue—Non-current portion”).
- A €5.4 million decrease in revenue related to IPH5201 to €13.4
million for the year ended December 31, 2020, as compared to €18.8
million for the year ended December 31, 2019. As of December 31,
2020, the Company having fulfilled all of its commitments on
preclinical work related to the start of Phase 1 of the IPH5201
program, the initial payment of $50.0 million and the milestone
payment of $5.0 million were fully recognized in revenue.
- A €4.4 million decrease in revenue from invoicing of research
and development costs to €2.5 million for the year ended
December 31, 2020, as compared to €6.9 million for the year ended
December 31, 2019. Pursuant to our agreements with AstraZeneca,
research and development costs related to avdoralimab in oncology
are equally shared between us and AstraZeneca and research and
development costs related to IPH5201 are fully borne by
AstraZeneca. The decrease between the two periods is mainly
explained by the decrease in research and development costs
relating to IPH5201 re-invoiced to AstraZeneca following the
transition of the program in Phase 1 clinical trial, supported
AstraZeneca.
- On January 8, 2016, the Company announced the signing of a
collaboration and research license agreement with Sanofi. As part
of this agreement, and on December 8, 2020, Sanofi informed the
Company of its intention to advance IPH6101/SAR443579 into
investigational new drug (IND)-enabling studies. This decision
triggered a milestone payment of €7.0 million from Sanofi to the
Company, fully recognized in revenue as of December 31, 2020.
Government funding for research
expenditures
Government funding for research expenditures
decreased by €3.2 million, or 19.1%, to €13.6 million for the
year ended December 31, 2020, as compared to €16.8 million for the
year ended December 31, 2019. This change is primarily a result of
a decrease in the research tax credit of €3.7 million, which is
mainly due to a decrease in the amortization expense relating to
the intangible assets related to the acquired licenses (see R&D
expenses).
The research tax credit is calculated as 30% of
the amount of research and development expenses, net of grants
received, eligible for the research tax credit for the fiscal year.
Following the loss of the SME status under European Union criteria
as of December 31, 2019, the CIR for the tax year 2020 will be
imputable on the tax expense of the following three tax years, or
refunded if necessary at the end of such period, in 2023 (see
Balance sheet items - Non-current receivables).
Sales
As of December 31, 2020, following the end of
the transition period relating to the commercialization of Lumoxiti
in the United States on September 30, 2020, the Company recognized
net sales of Lumoxiti for the fourth quarter for an amount of €0.7
million.
Operating expenses
The table below presents our operating expenses
for the years ended December 31, 2020 and 2019:
In thousands of euros |
December 31, 2020 |
December 31, 2019 |
Research and development
expenses |
(58,613) |
(78
844) |
Selling, general and
administrative expenses |
(31,246) |
(25
803) |
Operating expenses |
(89,859) |
(104 647) |
Research and development
expenses
Research and development (“R&D”) expenses
decreased by €20.2 million, or 25.7%, to €58.6 million for the
year ended December 31, 2020, as compared to €78.8 million for the
year ended December 31, 2019. R&D expenses represented a total
of 65.2% and 75.3% of the total operating expenses for the years
ended December 31, 2020 and 2019, respectively.
They include direct R&D expenses
(subcontracting costs and consumables), depreciation and
amortization, and personnel expenses. Direct expenses decreased by
€16.4 million, or 37.0%, to €28.0 million for the year ended
December 31, 2020, as compared to €44.4 million for the year ended
December 31, 2019. This decrease is mainly explained by lower
expenses on Lumoxiti (completion in 2019 of certain work in
relation to the regulatory submission in Europe) and IPH5201 and
IPH5301 (completion of certain preclinical work).
Personnel and other expenses allocated to
R&D decreased by €3.8 million, or 11.1%, to €30.6 million
for the year ended December 2020, as compared to an amount of €34.4
million for the year ended December 31, 2019. This decrease is
mainly due to the decrease by €3.5 million in depreciation and
amortization relating to monalizumab rights (extension of the
depreciation horizon due to a mechanical adjustment after the
completion of a cohort in 2020) and IPH5201 rights (full
amortization at December 31, 2020).
Selling, general and administrative
expenses
Selling, general and administrative (“SG&A”)
expenses increased by €5.4 million, or 21.1% to €31.2 million for
the year ended December 31, 2020 as compared to €25.8 million for
the year ended December 31, 2019. SG&A expenses represented a
total of 34.8% and 24.7% of the total operating expenses for the
years ended December 31, 2020 and 2019, respectively.
Personnel expenses (including share-based
compensation) include the compensation paid to our employees and
consultants, and increased by €2.1 million, or 20.3%, to €12.7
million for the year ended December 31, 2020, as compared to €10.6
million for the year ended December 31, 2019. This increase mainly
results from the full-year effect of personnel costs related to our
US subsidiary, including personnel assigned to Lumoxiti commercial
activities. This increase is partially offset by the drop in
share-based payments by €1.2 million.
SG&A expenses also include non-scientific
advisory and consulting expenses which mostly consist of auditing,
accounting, tax advisory, legal, business and hiring fees. These
expenses increased by €0.7 million, or 8.2%, to €9.1 million for
the year ended December 31, 2020, compared to an amount of €8.4
million for the year ended December 31, 2019. This increase results
mainly from the costs incurred for the marketing of Lumoxiti and
the operation of our US subsidiary until the decision to return the
US and EU commercialization rights to AstraZeneca at the end of
2020.
Other SG&A expenses relate to intellectual
property, the costs of maintaining laboratory equipment and our
premises, depreciation and amortization and other general,
administrative and commercial expenses. It notably includes
insurance costs, that increased following the listing of the
Company in the US in October 2019.
Net income (loss) from distribution
agreements
When product sales are performed by a partner in
the context of collaboration or transition agreements, the Company
must determine if the partner acts as an agent or a principal. The
Company concluded that AstraZeneca acted as a principal in the
context of the production and commercialization of Lumoxiti until
September 30, 2020. Consequently, the global inflows and outflows
received from or paid to AstraZeneca are presented on a single line
in the statement of income of Innate Pharma. This amount does not
include the R&D costs which are recognized as R&D operating
expenses.
We recognized a net income of €0.9 million from
the Lumoxiti license agreement in the year ended December 31, 2020,
covering the first three quarters, to be compared to a net loss of
€8.2 million for the year ended December 31, 2019, which reflected
revenue from sales of Lumoxiti in the period, less administrative
and selling expenses associated with the sales revenue allocated to
us, following the sale in the United States.
As of December 31, 2020, following the end of
the transition period for the commercialization of Lumoxiti in the
United States on September 30, 2020, the Company recognized fourth
quarter net sales of Lumoxiti in the total amount of €0.7
million.
Impairment of intangible
assets
As of December 31, 2020, impairment of
intangible assets is linked to the full depreciation of Lumoxiti
rights for an amount of €43.5 million, following the Company's
decision to return the US and EU commercialization rights of
Lumoxiti to AstraZeneca.
Financial income (loss),
net
We recognized a net financial loss of €1.9
million for the year ended December 31, 2020, as compared to €6.3
million net financial gain for the year ended December 31, 2019.
This change results mainly from the change in the fair value of
certain financial instruments (gain of €4.1 million in 2019 as
compared to a loss of €0.6 million in 2020) and a net foreign
exchange loss of €1,5 million in 2020 as compared to a net foreign
exchange gain of €0.8 million in 2019.
Balance sheet items
Cash, cash equivalents, short-term investments
and financial assets (current and non-current) amounted to €190.6
million as of December 31, 2020, as compared to €255.9 million as
of December 31, 2019. Net cash as of December 31, 2020 (cash, cash
equivalents and current financial assets less current financial
liabilities) amounted to €149.5 million (€216.7 million as of
December 31, 2019).
The other key balance sheet items as of December
31, 2020 are:
- Deferred revenue of €44.0 million (including €31.5 million
booked as ‘Deferred revenue – non-current portion’) and
collaboration liabilities of €46.7 million (including €44.9 million
booked as ‘Collaboration liability – non-current portion’) relating
to the remainder of the initial payment received from AstraZeneca
with respect to monalizumab, not yet recognized as revenue or used
to co-fund the research and the development work performed by
AstraZeneca including co-funding of the monalizumab program with
AstraZeneca, notably the INTERLINK-1 Phase 3 trial;
- Deferred revenue of €17.4 million relating to the initial
payment for preclinical molecules, entirely classified as ‘Deferred
revenue – non-current portion’;
- Intangible assets for a net book value of €46.3 million, mainly
corresponding to the rights and licenses relating to the
acquisitions relating to the monalizumab, IPH5201, avdoralimab
(€97.0 million as of December 30, 2019); variation between the two
periods is mainly explained by the full depreciation of Lumoxiti
rights for an amount of €47.2 million, following the Company's
decision to return the US and EU commercialization rights of
Lumoxiti to AstraZeneca.
- Non-current receivables from the French government in relation
to the research tax credit for 2019 and 2020 of €29.9 million;
- Shareholders’ equity of €156.0 million, including the net loss
of the period of €64.0 million;
- Financial liabilities amounting to €19.1 million (€18.7 million
as of December 31, 2019).
Cash-flow items
The net cash flow used over the year ended
December 31, 2020 amounted to €66.1 million, compared to a net
cash flow generated of €50.6 million for the year ended
December 31, 2019.
The net cash flow used during the period under
review mainly results from the following:
- Net cash used from operating activities of €51.8 million,
mainly explained by the net cash consumption of operating
activities less the receipt in December 2020 of the milestone
payment of $50.0m (€41.2m) following the inclusion by AstraZeneca
of the first patient in the Phase 3 clinical trial INTERLINK-1. In
April 2020, Innate Pharma received €4.6 million payment from
AstraZeneca following the dosing of the first patient in the
IPH5201 Phase 1 clinical trial.
- Net cash used in investing activities for an amount of €13.4
million, which mainly resulted from (i) a €13.4 million ($15.0
million) additional consideration paid to AstraZeneca regarding
Lumoxiti following the submission of the Biologics License
Application to the European Medicine Agency (EMA) in November 2019
(ii) a €2.7 million additional consideration paid to Orega Biotech
in April 2020 relating to IPH5201 following the dosing of a first
patient in a Phase 1 clinical trial and (iii) the acquisition of
financial assets for a net amount of €3.0 million. Such items were
partially offset by the reimbursement by AstraZeneca in relation to
the 2019 cost sharing mechanism for the commercialization of
Lumoxiti (€7.0 million).
- Net cash flows used in financing activities for an amount of
€1.1 million. On August 11, 2020, following the signing of a
financing contract with BpiFrance Financement 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, the Company received a repayable advance of €1.4 million.
Loan repayments amounted to €2.2 million for the year ended
December 31, 2020 compared to 2.0 million euros for the year
ended December 31, 2019.
Post period event
• Laure-Helene
Mercier, Executive Vice President, Chief Financial Officer and
member of the Executive Board, has decided to step down from her
position, after leading the Company through more than 14 years of
growth, including an initial public offering in the US. Frederic
Lombard will join the company as CFO on April 1, 2021. Mr. Lombard
will be joining Innate with more than 20 years of financial
experience in the pharmaceutical industry, holding senior finance
roles at Ipsen, AstraZeneca and Novartis. Ms. Mercier will remain
at the Company until the end of the year to ensure a smooth
transition of responsibilities.
Contingent liabilities
At the date of this press release, discussions
on the transition plan with AstraZeneca are ongoing including
timing and costs, notably the split of certain manufacturing costs
which are to date estimated at a maximum of $12.8 million.
Nota
This press release contains financial data not
yet approved by the Executive Board based on our consolidated
financial statements for the year ended December 31, 2020. The
audit is in progress at the date of this communication.
Our consolidated financial statements for the
year ended December 31, 2020 will be approved by the Executive
Board and reviewed by the Supervisory Board of the Company on April
26, 2021.
Risk factors
Risk factors (“Facteurs de Risque”) identified
by the Company are presented in section 3 of the registration
document (“Universal Registration Document”) filed with the French
Financial Markets Authority (“Autorité des Marchés Financiers” or
“AMF”), which is available on the AMF website
http://www.amf-france.org or on the Company’s website as well as in
the Risk Factors section of the Company’s Annual Report on Form
20-F for the year ended December 31, 2019 filed with the U.S.
Securities and Exchange Commission, and subsequent filings and
reports filed with the AMF or SEC, or otherwise made public, by the
Company.
1 This press release contains financial data not
yet approved by the Executive Board based on our consolidated
financial statements for the year ended December 31, 2020. The
audit is in progress at the date of this communication.
2 Including short term investments (€14.8m) and non-current
financial instruments (€38.9m).
3 Lumoxiti is licensed from MedImmune, a subsidiary of
AstraZeneca.
4 This press release contains financial data not yet approved by
the Executive Board based on our consolidated financial statements
for the year ended December 31, 2020. The audit is in progress at
the date of this communication.
5 This press release contains financial data not
yet approved by the Executive Board based on our consolidated
financial statements for the year ended December 31, 2020. The
audit is in progress at the date of this communication.
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