2018 financial results and business update: landmark deal with AstraZeneca to support transition into a fully integrated oncology-focused biotech, strong clinical progress in lead assets
2018 FINANCIAL RESULTS AND BUSINESS UPDATE: LANDMARK DEAL WITH ASTRAZENECA TO SUPPORT TRANSITION INTO A FULLY INTEGRATED ONCOLOGY-FOCUSED BIOTECH, STRONG CLINICAL PROGRESS IN LEAD ASSETS
- Cash, cash equivalents and financial assets[*] amounted to €202.7m (million euros) as of December 31, 2018 (€176.6m in 2017)
- Revenue and other income amounted to €94.0m (€36.2m in 2017)
- Operating expenses amounted to €87.7m (€76.0m in 2017), in which approximately 79% dedicated to research and development
- Landmark deal with AstraZeneca accelerates Innate Pharma’s transition into a fully-integrated oncology-focused biotech and supports the continued development of its novel immuno-oncology discovery platform
- Acquisition of Lumoxiti is the first step towards building a hemato-oncology franchise, complementing Innate’s wholly-owned pipeline candidate IPH4102
- AstraZeneca obtained full oncology rights to monalizumab and expanded collaboration to gain option to IPH5201 and four preclinical assets
- Net proceeds totaled $192m[†]
- Significant clinical progress, with encouraging efficacy signals from lead partnered asset, monalizumab, and lead proprietary asset, IPH4102, support further clinical development in a maturing pipeline
- Strengthening of commercial team and expands presence in the US, appointing industry leaders, Jennifer Butler, as EVP, US General Manager and Hélène Arditti, as a Strategic Executive Advisor for commercialization to the Innate Executive Committee
Marseille, France, March 20, 2019 – 07:00 AM CET
Innate Pharma (the “Company” - Euronext Paris: FR0010331421 – IPH) today reports its consolidated financial results for the year ended December 31, 2018. The consolidated financial statements are attached to this press release.
“2018 was a remarkable year for Innate during which two of our lead programs, monalizumab and IPH4102, demonstrated promising efficacy in their lead indications. In addition to this, the transformational deal signed with AstraZeneca not only validates our novel science and clinical development expertise, but accelerates the transition of Innate Pharma to become a fully-integrated biotech company,” commented Mondher Mahjoubi, Chief Executive Officer of Innate Pharma. “The acquisition of FDA-approved Lumoxiti for third line Hairy Cell Leukemia patients complements our proprietary pipeline of promising assets. The planned commercial infrastructure in the US will not only provide Innate with the necessary footprint to support the continued roll-out of this product, but will also be leveraged for potential future products such as IPH4102. We are pleased to welcome Jennifer Butler to our leadership team as the US General Manager who will lead the strategy, operations, and hiring of talent in the US. In 2019, we are committed to executing a smooth commercial transition, expanding our presence in the US and will continue to secure financial resources to invest in our science to discover and develop novel therapeutics for oncology patients.”
A conference call will be held today at 2:00pm (CEST)
Management Participants: Mondher Mahjoubi, CEO, Laure-Helene Mercier, CFO, Pierre Dodion, CMO, and Jennifer Butler, US General Manager
Dial in numbers:
France and International: +33 (0)1 72 72 74 03 US only: +1 646 722 4916
PIN code: 45649727#
The presentation will be made available on the Company’s website 30 minutes before the conference begins.
A replay will be available on Innate Pharma’s website after the conference call.
Financial highlights for 2018:
The key elements[‡] are as follows:
- Cash, cash equivalents and financial assets amounting to €202.7m (million euros) as of December 31, 2018 (€176.6m as of December 31, 2017), including non-current financial instruments (€35.2m). This follows the receipt in October of €102.9m as a first tranche of the agreement signed with AstraZeneca in October 2018.
- At the same date, the financial liabilities amounted to €4.5m (€5.9m as of December 31, 2017).
- Revenue and other income amounting to €94,0m (€36.2m in 2017). This figure mainly results from licensing revenue (€79.9m) and from research tax credit (€13.5m).
- Revenue from collaboration and licensing agreements mainly results from the spreading of the initial payment of $250m received in 2015 by Innate Pharma in the context of the agreement with AstraZeneca for monalizumab signed in April 2015, extended in October 2018 with an additional $100m payment (€61.5m and €24.5m in 2018 and 2017 respectively) but also, €15.6m from the spreading of the initial payment of $50m for the agreement with AstraZeneca on IP5201 signed in October 2018
- Operating expenses amounting to €87.7m (€76.0 m in 2017) of which 79% related to research and development outgoings. The increase in R&D expenses between 2017 and 2018 reflects continued investment in the clinical and preclinical development programs, as well as support for the broader organization.
- Net income (loss) from distribution agreements amounting to a loss of €1.1 million, arising from the launch of Lumoxiti in the US.
- A net financial loss amounting to €2.4m.
- As a consequence of the items mentioned previously, the net profit for 2018 amounts to €3.0m, compared with a loss of €41.7m for 2017.
The table below summarizes the IFRS consolidated financial statements for fiscal year 2018, with a comparison to 2017:
In thousands of euros, except for data per share | December 31, 2018 | December 31, 2017 restated[§] | December 31, 2017 | |||
Revenue and other income | 93,952 | 36,221 | 44,033 | |||
Research and development | (69,555 | ) | (58,962 | ) | (67,000 | ) |
General and administrative | (18,142 | ) | (17,015 | ) | (17,015 | ) |
Net result from Lumoxiti agreement | (1,109 | ) | - | - | ||
Operating income/(loss) | 5,146 | (39,756 | ) | (39,983 | ) | |
Financial income (expense), net | (2,427 | ) | (1,609 | ) | (8,034 | ) |
Corporate tax | 333 | (368 | ) | (368 | ) | |
Net income (loss) | 3,049 | (41,733 | ) | (48,385 | ) | |
Weighted average number of shares outstanding (in thousands)[**] | 58,777 | 54,352 | 54,352 | |||
Net loss per share | 0.05 | (0.77 | ) | (0.89 | ) | |
| ||||||
December 31, 2018 | December 31, 2017 restated | December 31, 2017 | ||||
Cash, cash equivalents and financial assets[††] | 202,712 | 176,578 | 176,578 | |||
Total assets | 451,216 | 258,121 | 255,023 | |||
Shareholders’ equity | 167,240 | 99,444 | 85,956 | |||
Total financial debt | 4,522 | 5,864 | 5,864 |
Post Balance Sheet Events
- As of January 31, 2019, cash, cash equivalents and financial assets amounted to €256.6m following the definitive payments from and to AstraZeneca relating to the agreements signed in October 2018, including non-current financial instruments (€35.2m).
Pipeline update
Lumoxiti (CD22-directed cytotoxin):
Lumoxiti is a CD22-directed cytotoxin and a first-in-class medicine approved in the US for adult patients with relapsed or refractory Hairy Cell Leukemia (HCL) who have received at least two prior systemic therapies, including treatment with a purine nucleoside analog. Approximately 1,000 people are diagnosed with HCL in the US each year, a subset of which are eligible for Lumoxiti. Lumoxiti was approved by the US FDA on September 13, 2018.
- Innate has licensed the US and EU commercial rights of AstraZeneca’s FDA approved medicine for HCL, Lumoxiti, marking the first step of Innate’s strategy to become a fully integrated company.
- Innate and AstraZeneca are having a collaborative and staged transition of operations for the product, with AstraZeneca responsible for all aspects of the commercialization of Lumoxiti in the US up to mid-2020 at the latest, with a potential sooner transition. As of November 2018, AstraZeneca launched the commercialization of Lumoxiti in the US. Innate, with support from AstraZeneca, will continue EU development and commercialization, pending regulatory submission and approval.
- Under the terms of the agreement, AstraZeneca received $50 million upfront for Lumoxiti (paid in January 2019) and is eligible for $25 million for future commercial and regulatory milestones. Innate will reimburse AstraZeneca for costs incurred other than in 2019 where there will be some sharing of costs and will recognize profit (losses).
IPH4102 (anti-KIR3DL2 antibody):
IPH4102 is a first-in-class, humanized cytotoxicity-inducing antibody designed for treatment of T Cell Lymphoma. This group of lymphomas has a poor prognosis with few therapeutic options at advanced stages.
- In January 2019, the FDA granted IPH4102 Fast-Track Designation (FTD) for the treatment of adult patients with relapsed/refractory Sézary Syndrome. IPH4102 was previously granted orphan drug status in the European Union and in the United States for the treatment of CTCL.
- FTD was based on results of the Phase I dose-escalation and expansion study of IPH4102 in advanced CTCL (n=44). As of October 15, 2018, data from the subgroup of 35 SS patients revealed strong clinical activity, demonstrated by an overall response rate (ORR) of 42.9%, median duration of response (DoR) of 13.8 months and median progression-free survival (PFS) of 11.7 months. The ORR appeared to be higher (n=28, 53.6%) in patients with no histologic evidence of large cell transformation (LCT)[‡‡]. Importantly, clinical activity was associated with a substantial improvement in quality of life as assessed by the SkinDex29 and Pruritus Visual Analog Scale (VAS) scores. IPH4102 displayed a favorable safety profile, consistent with previous observations. Data from the subgroup of Sézary Syndrome patients (n=35) have been the subject of an oral presentation at ASH 2018.
- Innate Pharma expects to initiate a global Phase II study (“TELLOMAK”) in different subtypes of T-cell lymphomas in the first half of 2019. TELLOMAK is an open-label, multi-cohort Phase II study expanding the evaluation of the efficacy and safety of IPH4102 in larger patient populations expressing KIR3DL2, including PTCL. TELLOMAK is planned to recruit up to 250 patients, with IPH4102 evaluated as a single agent in patients with SS and Mycosis Fungoides (MF - approximately 150 patients) and in combination with standard chemotherapy (gemcitabine and oxaliplatin) in patients with PTCL (approximately 100 patients). In patients with MF and PTCL, the study is designed to evaluate the benefit of IPH4102 according to KIR3DL2 expression.
IPH5401 (anti-C5aR antibody):
IPH5401 is a first-in-class fully human therapeutic antibody that specifically binds and blocks C5a receptors (C5aR) expressed on subsets of myeloid-derived suppressor cells (MDSC) and neutrophils.
- In January 2018, the Company entered into a non-exclusive clinical trial collaboration with AstraZeneca that will accelerate development activities for IPH5401 in combination with PD-1/L1 blockers.
- In September 2018, a Phase I trial evaluating IPH5401 and durvalumab in solid tumors (STELLAR-001[§§]) was initiated and the first patient was enrolled. The multicenter, open label, dose-escalation and dose-expansion study will evaluate the safety, tolerability, and anti-tumor activity of IPH5401 in combination with durvalumab in solid tumors, including non-small-cell lung cancer (NSCLC) with secondary resistance to prior immuno-oncology (IO) treatment and IO-naïve hepatocarcinoma (HCC).
Monalizumab (anti-NKG2A antibody), partnered with AstraZeneca/MedImmune:
Monalizumab is a first-in-class checkpoint inhibitor, targeting the NKG2A inhibitory receptor expressed on tumor infiltrating cytotoxic CD8 T lymphocytes and NK cells. This monoclonal antibody is currently being investigated in an exploratory program of Phase I or I/II clinical trials in various cancer indications.
In October 2018, AstraZeneca exercised its option to obtain full rights to monalizumab in oncology, triggering a $100 million payment in January 2019. As previously announced in the original collaboration agreement from 2015, another $100 million milestone payment is due at the potential start of the first Phase III development.
- monalizumab and cetuximab:
During the year, Innate Pharma presented data from an expansion cohort of an ongoing Phase I/II trial evaluating the safety and efficacy of the combination of monalizumab with cetuximab (anti-EGFR) in patients with recurrent or metastatic squamous cell carcinoma of the head and neck (SCCHN), at the AACR Annual Meeting and updated on the full sample of patients enrolled at the ESMO Congress.
As of August 31, 2018, a total of 40 patients with R/M SCCHN were evaluable for safety and efficacy. In the study evaluating the combination of monalizumab and cetuximab the overall response rate was 27.5% (by RECIST) including 1 confirmed complete response (2.5%) and 10 partial responses (25%). Disease control rate at 24 weeks (DCR) was 35%. Median progression-free survival (PFS) and overall survival (OS) reached 5.0 and 10.3 months, respectively. In addition, there were 3 (18%) responders among the 17 patients who had been previously treated with PD-1/L1 antibodies.
In November 2018, Innate Pharma presented exploratory subgroup analyses and preliminary translational data from this Phase II trial at the SITC 2018 Annual Meeting.
Taken together, these data supports the advancement of the clinical program, starting with the enrollment of an additional cohort of patients who received both prior platinum-based chemotherapy and PD-1/L1 inhibitors (“IO-pretreated”). Recruitment in this cohort expansion is ongoing.
- monalizumab and durvalumab:
In June 2018, preliminary clinical data from an expansion cohort of an ongoing Phase I trial evaluating the safety and efficacy of the combination of monalizumab and durvalumab in patients with microsatellite-stable colorectal cancer (MSS-CRC) were presented at the annual meeting of the American Society of Clinical Oncology (ASCO) 2018. The safety profile of the combination was consistent with the monotherapy profiles. Among the 39 patients evaluable for efficacy, the overall response rate (ORR) was 8% with confirmed partial response in 3 patients and stable disease (SD) in 11 patients (28%), including 3 SD patients with tumor reduction who continued therapy for >200 days. The median duration of response was 16.1 weeks at the cut-off date. Data demonstrated a disease control rate (DCR) of 31% at 16 weeks.
These data have prompted AstraZeneca to further expand the study with additional patient cohorts to explore the novel combination of monalizumab with durvalumab on top of current standard of care therapies in patients with less heavily pretreated disease.
Translational data from the Phase I study has been presented at the European Society of Medical Oncology (ESMO) Congress in October by AstraZeneca.
IPH5201 (anti-CD39 antibody) and IPH5301 (anti-CD73 antibody):
CD39 and CD73 are membrane-bound extracellular enzymes which play a major role in promoting immunosuppression through the pathway degrading adenosine triphosphate (ATP) into adenosine. The blockade of CD39 and CD73 has the potential to promote anti-tumor immune responses across a wide range of tumors.
- During the first semester, drug candidates for both programs were chosen.
- In April 2018, preclinical data supporting the development of IPH5201 and IPH5301 for cancer immunotherapy, potentially in combination with chemotherapy or immune checkpoint blockade were presented at the AACR Annual Meeting.
- In October 2018, AstraZeneca entered into a development collaboration and option for further co-development and co-commercialization with Innate for IPH5201. AstraZeneca paid Innate $50 million upfront. Innate is eligible to additional option exercise fee, milestones, and royalties. Innate will have the potential for co-promotion and profit sharing in the EU. Innate expects an IND to be filed in the second half of 2019.
- Innate continues to advance IPH5301 and expects to file an IND in the first half of 2020.
Preclinical pipeline
As part of the agreement signed in October 2018, AstraZeneca has paid Innate $20 million upfront for an exclusive license option on four molecules from Innate’s preclinical portfolio. The targets have not been disclosed. These options can be exercised before the molecules reach clinical development, triggering an option exercise fee in addition to milestones and royalties. Innate will have the potential for co-promotion and profit sharing in the EU, dependent on future progress.
In 2018, the Company also continued to advance its pipeline of preclinical candidates and to develop its innovative technologies.
Corporate update:
- In October 2018, the company signed a multi-term agreement with AstraZeneca, building on an existing collaboration, aimed at accelerating each company’s oncology portfolio and bringing new medicines to patients more quickly. Under the terms of the agreement, Innate Pharma licensed the US and EU commercial rights to AstraZeneca’s recently FDA-approved Lumoxiti for hairy cell leukemia and agreed to a $50 million initial payment. AstraZeneca obtained full rights to the first-in-class humanized anti-NKG2A antibody, monalizumab, in oncology, by exercising the $100 million option included in the initial collaboration announced in 2015. AstraZeneca gained option rights to IPH5201, an antibody targeting CD39 including an initial payment of $50 million, as well as to four, non-disclosed pre-clinical molecules from Innate Pharma’s pipeline for a global $20 million initial payment. AstraZeneca also invested in a 9.8% equity stake (6,260,500 shares) in Innate at €10 per share. Further details on the financial terms of the agreements can be found here.
- As at December 31, 2018, the headcount was 195 employees.
- Hélène Arditti has joined as a Strategic Executive Advisor for commercialization to the Innate Executive Committee. Ms. Arditti brings over 20 years of global marketing and franchising expertise with a focus in oncology. Most recently she was the Global Uro-oncology Franchise Senior Vice President and previously the Endocrinology Marketing Director at Ipsen. In both of these positions, Ms. Arditti successfully developed the global launch, life cycle management, and business development strategies for two oncology products, Decapeptyl® and Cabometyx®. Ms. Arditti reports directly into Mondher Mahjoubi, Chief Executive Officer.
- Guillaume Gimonet joined as Senior Director, Launch Excellence for Lumoxiti. He is responsible for leading the launch of Lumoxiti across cross-functional teams to ensure smooth and timely projection execution. He was most recently the Director of Global Program Management and previously the Global Launch Management Director Oncology at Ipsen in which he secured Cabometyx® accelerated launch in Renal Cell Cancer.
- Jérôme Tiollier’s resignation as EVP and Chief Development Officer, comes after a 17 years at Innate Pharma in which he was instrumental in the pharmaceutical development and operations of the company.
Post period events:
- In March 2019, Jennifer Butler was appointed as the General Manager of Innate Pharma US Inc. and Executive Vice President, effective March 11, 2019. She brings over more than 20 years of strategic marketing and commercial leadership expertise across several therapeutic areas. Ms Butler will lead Innate Pharma’s US corporate activities focusing on establishing the US operations to fully support the commercialization of Lumoxiti®. Additionally, her role will support global commercial and clinical operations of a fully-integrated hemato-oncology franchise.
- In February 2019, Innate Pharma announced that its Supervisory Board has appointed Laure-Hélène Mercier, Chief Financial Officer, as a member of the Executive Board for a period of three years. The Supervisory Board has also renewed the appointments to the Executive Board of Dr. Mondher Mahjoubi, CEO, and Dr. Yannis Morel, EVP Business Development and Portfolio Strategy, for three additional years. As from January 31, 2019, the Executive Board is now composed of three members, appointed for a three-year period.
- Additionally, Odile Belzunce was appointed to the executive committee as SVP Compliance and Portfolio Management in January 2019. Odile Belzunce joined Innate Pharma in February 2005. She was Quality Manager during 10 years before becoming Head of Compliance. During her career at Innate, Odile Belzunce contributed to the structuration of the processes as the Company was growing, developing its portfolio and its activities.
About Innate Pharma:
Innate Pharma S.A. is a fully integrated 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 commercial-stage product, Lumoxiti, in-licensed from AstraZeneca, was approved by the FDA in September 2018. Lumoxiti is a first-in class specialty oncology product for hairy cell leukemia (HCL). Innate Pharma’s broad pipeline of antibodies includes several first-in-class clinical and preclinical candidates in cancers with high unmet medical need.
Innate Pharma has pioneered the discovery and development of checkpoint inhibitors, with a unique expertise and understanding of Natural Killer cell biology. This innovative approach has resulted in major alliances with leaders in the biopharmaceutical industry including Bristol-Myers Squibb, Novo Nordisk A/S, Sanofi, and a landmark and multi-products partnership with AstraZeneca/MedImmune.
Based in Marseille, France, Innate Pharma is listed on Euronext Paris.
Learn more about Innate Pharma at www.innate-pharma.com.
Information about Innate Pharma shares:
ISIN code Ticker code LEI | FR0010331421 IPH 9695002Y8420ZB8HJE29 |
Disclaimer:
This press release contains certain 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. For a 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 Document de Reference prospectus filed with the AMF, which is available on the AMF website www.amf-france.org or on Innate Pharma’s website.
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 Dr. Markus Metzger / Danielle Spangler / Jérôme Marino Tel.: +33 (0)4 30 30 30 30 investors@innate-pharma.com | International Media Consilium Strategic Communications Mary-Jane Elliott / Jessica Hodgson Tel.: +44 (0)20 3709 5700 InnatePharma@consilium-comms.com |
French Media ATCG Partners Solène Moulin Tel.: +33 (0)9 81 87 46 72 presse@atcg-partners.com |
APPENDIX
Innate Pharma SA
Consolidated financial statements
at December 31, 2018
The following consolidated balance sheet, income statement and statement of cash flows are prepared in accordance with International Financial Reporting Standards.
The audit procedures on the consolidated financial statements have been performed. The auditors’ report will be issued after the finalization of the required procedures relating to the filing of the annual report (‘Document de Référence’). The consolidated financial statements were approved by the Company's Executive board on March 19, 2019. These statements were reviewed by the Company's Supervisory board on March 19, 2019 and will be submitted for approval to the Shareholders' General Meeting on May 22, 2019.
Innate Pharma’s financial annual report, included in the reference document, will be available during the second quarter of 2018.
Statement of financial position
(in thousand euros)
As of December 31, | ||||
2018[***] | 2017 | |||
Assets | ||||
Cash and cash equivalents | 152,314 | 99,367 | ||
Short term investments | 15,217 | 16,743 | ||
Current receivables | 152,212 | 21,412 | ||
Total current assets | 319,643 | 137,521 | ||
Intangible assets | 84,529 | 46,192 | ||
Tangible assets | 10,216 | 10,729 | ||
Non-current financial assets | 35,181 | 60,469 | ||
Deferred tax asset | 1,561 | - | ||
Other non-current assets | 86 | 111 | ||
Total non-current assets | 131,574 | 117,501 | ||
Total assets | 451,216 | 255,023 | ||
Liabilities | ||||
Trade payables | 91,655 | 24,657 | ||
Collaboration liability - current portion | 20,987 | - | ||
Financial liabilities – current portion | 1,347 | 1,343 | ||
Deferred revenue – current portion | 82,096 | 47,909 | ||
Total current liabilities | 19,085 | 73,909 | ||
Financial liabilities – non-current portion | 3,175 | 4,521 | ||
Collaboration liability - non-current portion | 10,669 | - | ||
Defined benefit obligations | 3,697 | 2,621 | ||
Deferred revenue – non-current portion | 68,098 | 87,005 | ||
Provisions | 690 | 1,012 | ||
Deferred tax liability | 1,561 | - | ||
Total non-current liabilities | 87,890 | 95,158 | ||
Share capital | 3,197 | 2,880 | ||
Share premium | 299,932 | 234,874 | ||
Retained earnings | (137,840 | ) | (103,595 | ) |
Net income (loss) | 3,049 | (48,385 | ) | |
Other reserves | 1,099 | 180 | ||
Total shareholders’ equity attributable to equity holders of the Company | 167,240 | 85,956 | ||
Total liabilities and equity | 451,216 | 255,023 |
Statement of income (loss)
(in thousand euros)
Year ended December 31, | ||||
2018[†††] | 2017 | |||
Revenue from collaboration and licensing agreements | 79,892 | 32,631 | ||
Government financing for research expenditures | 14,060 | 11,402 | ||
Operating revenue | 93,952 | 44,033 | ||
Research and development | (69,555 | ) | <