Innate Pharma (NASDAQ:IPHA) held its quarterly earnings conference call on Thursday. Below is the complete transcript from the call.

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Summary

Innate Pharma announced a strategic partnership with SOBI for the development of lacutamab in T-cell lymphoma, with a $75 million upfront payment and potential for significant milestone payments.

The company completed Phase 1 dose escalation for IPH4502, observing preliminary antitumor activity in various cancers, with Phase 1 data to be presented in November 2026.

Enrollment for the PACIFIC-9 Phase 3 study of monalizumab is complete, with results expected in the second half of 2026.

Financially, the company strengthened its position with a €30 million equity financing and the SOBI payment, extending its cash runway through Q1 2028.

Management highlighted significant upcoming catalysts, including the initiation of TELLOMAK 3 for lacutamab and upcoming data presentations for IPH4502.

Full Transcript

OPERATOR

Hello everyone. Thank you for joining us and welcome to the Innate Pharma first half 2026 business update and financial results. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Stephanie Cornyn, Vice President, Investor Relations, Communication and Commercial.

Stephanie, please go ahead.

Stephanie Cornyn, Vice President, Investor Relations, Communication and Commercial

Good morning and good afternoon everyone. Thank you for joining us for Innate Pharma's first half 2026 business updates and financial results conference call. The press release and today's presentation are both available on the IR section of our website. Before we begin, I would like to remind everyone that today's presentation includes forward-looking statements based on current expectations. These statements involve risks and uncertainties that could cause actual results to differ materially.

To briefly cover today's agenda, our CEO Jonathan Dickinson will begin with a strategic overview and outlook. Marcus Jensen, our Chief Medical Officer, and Yanis Morel, our Chief Operating Officer, will then take us through updates on lacutamab, IPH4502, monalizumab and our preclinical ADC pipeline. Frederic Lombard, our Chief Financial Officer, will then review our financial results. Jonathan will return for our upcoming catalysts and closing remarks before we open the call for Q&A. With that, I will now hand it over to Jonathan.

Jonathan Dickinson, Chief Executive Officer

Thank you Stephanie. Good morning to those joining from the US and good afternoon to our European participants. Turning to slide 5, the first half of 2026, together with developments since the end of the period, has been marked by important progress across our focused portfolio, starting with lacutamab. In August, we announced our strategic partnership with SOBI to advance the program in T-cell lymphoma. As announced yesterday, that partnership is now effective following the closing of the deal and the TELLOMAK 3 Phase 3 has been initiated.

We are targeting the first patient in the study in Q1 2027 as we work toward a filing for accelerated approval in Sézary syndrome in H2 2027. For IPH4502, as announced in July, we completed Phase 1 dose escalation and cohort enrichment enrollment and have seen preliminary antitumor activity, including objective responses, in post-EV urothelial cancer as well as in non-small cell lung cancer and head and neck cancer, with a favorable safety profile observed to date.

We will share initial Phase 1 dose escalation data at the EORTC-NCI-AACR meeting on November 18, 2026 in Barcelona. Turning to monalizumab, enrollment in the PACIFIC-9 Phase 3 study has been completed and we continue to expect the Phase 3 readout in the second half of 2026. Financially, our position has been strengthened by the 75 million SOBI upfront payment associated with the closing of the deal and the €30 million equity financing. Together these are expected to extend our projected cash runway through the end of the first quarter of 2028.

Taken together, we believe these developments position Innate for several important catalysts in the second half of 2026. Let me start with lacutamab. Lacutamab is our anti-KIR3DL2 antibody being developed in cutaneous T-cell lymphoma, or CTCL. Turning to slide 7, as I mentioned, in August we announced a strategic partnership with SOBI to license lacutamab in T-cell lymphoma. The transaction has now closed. TELLOMAK 3, our confirmatory Phase 3 study in CTCL, has been initiated, with the first patient expected in the first quarter of 2027.

Innate will conduct the Phase 3 study and we will file for accelerated approval in Sézary syndrome based on the existing Phase 2 TELLOMAK data. Upon the potential accelerated approval, SOBI will receive exclusive global rights to commercialize lacutamab. Following positive Phase 3 results, SOBI will be eligible to obtain full global development rights under the terms of the agreement. The transaction includes a $75 million upfront payment, up to $40 million in near-term milestones connected to Sézary syndrome, and up to an additional $465 million related to SOBI's option to obtain full development rights and future regulatory and commercial milestones. The agreement also includes tiered double-digit royalties on future net sales. I'll now hand it over to Marcus to review the regulatory and development path forward.

Markus Jensen, Chief Medical Officer

Thank you Jonathan. Lacutamab is now progressing towards Phase 3 TELLOMAK initiation and the accelerated approval filing. So from a regulatory and development perspective, the path forward is well defined. We have FDA clearance to proceed with TELLOMAK 3, which now has been initiated, with the first patient expected in the first quarter of 2027. The study includes a confirmatory cohort in Sézary syndrome and a registration cohort in mycosis fungoides.

The existing Phase 2 TELLOMAK data are intended to support an accelerated approval filing in Sézary syndrome once TELLOMAK 3 is underway, with the filing currently planned for the second half of 2027. As a reminder, lacutamab has received Breakthrough Therapy designation from the FDA for relapsed or refractory Sézary syndrome, as well as Fast Track designation from the FDA, PRIME designation from the EMA, and orphan drug status in both the United States and Europe.

So with the regulatory pathway established and the SOBI partnership now effective, our focus is on advancing TELLOMAK 3 towards first patient enrollment in the first quarter of 2027. Turning slide please, I now move to IPH4502, our differentiated Nectin-4 ADC which is in Phase 1 clinical development for advanced solid tumors. IPH4502 was designed to address some of the key limitations of the first generation of Nectin-4 ADCs. The molecule combines an exatecan topoisomerase I payload with our proprietary stable linker and a high-affinity Nectin-4 antibody that binds a non-overlapping epitope compared with enfortumab vedotin.

We believe these features provide an important point of differentiation as the Nectin-4 ADC landscape continues to evolve. Importantly, we are now beginning to see that profile translate clinically and have observed preliminary antitumor activity with objective responses in heavily pretreated patients, including patients with urothelial cancer following prior enfortumab vedotin treatment, as well as non-small cell lung cancer and head and neck cancer.

The safety profile observed to date has been favorable with limited hematological toxicity. We completed dose escalation in July and are broadly tracking in line with our expectations across expansion cohorts, with approximately 15 patients enrolled in both post-EV urothelial cancer and head and neck cancer, and somewhat lower enrollment in the non-small cell lung cancer cohort. Data cleaning is ongoing and we look forward to presenting the initial Phase 1 dose escalation data set at the EORTC-NCI-AACR symposium on 11-18-26.

Next slide please. Our area of particular interest for IPH4502 is urothelial cancer following prior EV treatment. While EV plus pembrolizumab has significantly changed the treatment landscape, most patients progress within two years and there remains no established second-line standard treatment after progression on this regimen. Against that backdrop, the preliminary activity we have observed with IPH4502 in heavily pretreated post-EV patients, including objective responses, is encouraging.

These remain early Phase 1 observations and the upcoming data set will help us to determine how to best advance the program. Slide 12 please. I now move forward to monalizumab, which is our NKG2A antibody being co-developed with AstraZeneca in non-small cell lung cancer. PACIFIC-9 is a randomized Phase 3 trial with unresectable stage III non-small cell lung cancer patients who have not progressed following definitive platinum-based concurrent chemoradiotherapy.

The study enrolled 1,051 patients and compares durvalumab plus oleclumab, durvalumab plus monalizumab, and durvalumab plus placebo as a control, with progression-free survival as the primary endpoint. The program is supported by three earlier Phase 2 studies in non-small cell lung cancer, including COAST, NeoCOAST and NeoCOAST-2. With enrollment complete, Phase 3 data remain expected in the second half of 2026. I now hand over to Yanis to briefly review the economics of our partnership with AstraZeneca.

Yannis Morel, Chief Operating Officer, EVP

Thank you Markus. As a reminder, under our monalizumab partnership with AstraZeneca, we have received to date $450 million, and the additional potential milestones in the agreement are up to $825 million, together with double-digit royalties outside Europe and 50% profit sharing in Europe. Turning to slide 15, I move now to our next-generation ADC pipeline. Beyond IPH4502, we are using our internal capabilities and technology to build a broad portfolio of differentiated ADC candidates.

Turning to slide 16, leveraging our antibody discovery and engineering expertise, we have built a comprehensive ADC platform to develop a portfolio of next-generation ADCs designed to overcome the limitations of the current ones. Building on the IPH4502 linker, whose stability in patients is demonstrated by our emerging clinical data, we are developing a drug candidate portfolio around three approaches. First, dual-targeted bispecific ADCs to address tumor antigen heterogeneity and to expand addressable indications compared to single tumor antigen targeting.

Second, bispecific ADCs with enhanced internalization to unlock activity in antigen low-expressing tumors. And finally, dual-payload ADCs using complementary mechanisms of action to overcome resistance. I now hand over to Frederic for our financial results.

Frederic LOMBARD, Chief Financial Officer

Thank you Yanis. I'll now provide a brief overview of our financial position for the first half of 2026. Turning to slide 18, so as of June 30, 2026, our cash, cash equivalents and financial assets were amounting to €121.4 million. That balance does not include the $75 million SOBI upfront payment, equivalent to approximately €65 million, nor the proceeds from the €30 million equity offering. The offering represents €30 million in gross proceeds, or approximately €28 million in expected net proceeds.

The primary use of proceeds is the continued clinical development of IPH4502, the advancement of our preclinical ADC portfolio, as well as general corporate purposes. Together with the SOBI upfront payment, these proceeds are expected to extend our cash runway through the end of the first quarter of 2028. I'll now hand over to Jonathan.

Jonathan Dickinson, Chief Executive Officer

Thank you, Frederic. Moving to slide 20 and turning to our key catalysts for the remainder of 2026. For lacutamab, following closing of the strategic partnership with SOBI, TELLOMAK 3 has been initiated, with the first patient planned for the first quarter of 2027, followed by a planned filing for accelerated approval in the second half of 2027. For IPH4502, dose escalation enrollment is complete, with preliminary antitumor activity and a favorable safety profile observed to date.

We will report initial Phase 1 dose escalation data at the EORTC-NCI-AACR meeting on November 18, 2026. And for monalizumab PACIFIC-9, enrollment is complete, with the Phase 3 readout expected in the second half of this year. So we have three important near-term catalysts across our focused portfolio, together with a strengthened financial position that supports our continued execution of these priorities. With that, operator, we are ready to open the call for questions.

OPERATOR

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Dana Graybosch with Leerink Partners.

Your line is open. Dana, please go ahead.

Bill (for Dana Graybosch), Analyst at Leerink Partners

Good morning everyone. Got plenty of updates, so just one for me. I’ve got Bill on for Dana. So we’ve seen the prior exatecan-based ADC show some pretty good activity in the post-EV setting, but it did have some pretty high heme toxicities. And so can you talk about IPH4502’s stable linker design and sort of what gives you confidence you won’t see the same sort of issues? Thank you.

Jonathan Dickinson, Chief Executive Officer

Thank you for the question. Maybe Yanis, you can take that one.

Yannis Morel, Chief Operating Officer, EVP

Yeah, maybe I can start and let Markus comment. I mean, we have worked on the design of the linker, and based on what we have seen at ASCO, published by others with their own linker, it seems that the stability of our linker that we have seen in preclinical models, including in non-human primates, seems to be translated into the human situation, leading to a very limited release of free payload, which is one of the reasons for the systemic hematological toxicity of some ADCs.

Markus Jensen, Chief Medical Officer

Yeah. What we can add is the Lilly data that have been released recently actually stated, based on their own data that they have seen in the trial, that an unstable linker was used as an explanation for the hematologic toxicity in this data set.

Bill (for Dana Graybosch), Analyst at Leerink Partners

Great, thank you.

OPERATOR

Your next question comes from the line of Jeet Mukherjee with BTIG. Your line is open, Jeet. Please go ahead.

Jeet Mukherjee, Analyst at BTIG

Great. Good morning, and thanks for taking the question. So pending, you know, an accelerated approval there, could you speak to the potential for frontline off-label use for lacutamab in Sézary syndrome, given that seems to be the case with mogamulizumab? And I have a follow-up question.

Jonathan Dickinson, Chief Executive Officer

Maybe I will take that question. So our expectation is that lacutamab will be listed in the NCCN guidelines following the accelerated approval for both Sézary syndrome and for mycosis fungoides. I think with that listing it seems to leave it open for physicians to be able to use the product across the different lines of therapy. So our expectation, based on the safety profile of lacutamab, which is pretty benign, we expect that you will see some off-label usage in the first-line setting.

And so, yeah, I mean I think there's an expectation you will see that. And also, despite the fact that the accelerated approval will be in Sézary syndrome, there will also be an expectation, based on the potential listing in the NCCN guidelines for mycosis fungoides, that you will also see usage in MF. Hopefully that answers your question.

Jeet Mukherjee, Analyst at BTIG

Great, appreciate that. Maybe just two other quick follow-ups. Just any initial thoughts on pricing? Do you think you could price at a premium to mogamulizumab? And then, separately, on PACIFIC-9 in terms of just the update formats, you know, we anticipate perhaps a press release at minimum from AstraZeneca, but will Innate have their own press release and analyst call as well? Thank you.

Jonathan Dickinson, Chief Executive Officer

Yeah. So in terms of pricing, we have completed pricing research in the US which was conducted by ZS Associates. And what we were able to establish with US payers was that we can price lacutamab between $500,000 and $625,000 per patient per annum, and that would be supported by our clinical data and the NCCN listing. So there is an expectation here that you would be able to achieve premium pricing, particularly in an indication like Sézary syndrome with a relatively low incidence, and then be able to carry that forward into the mycosis fungoides indication, which is a larger indication but still an orphan disease.

So that's pricing. And then with respect to PACIFIC-9, you're correct. The expectation is that there will be a press release from AstraZeneca when the results are available. And we would also look to press release that as well and potentially do some analyst calls following the availability of that primary endpoint data.

Jeet Mukherjee, Analyst at BTIG

Thank you.

Jonathan Dickinson, Chief Executive Officer

Hopefully that answers the question.

OPERATOR

The next question will be read by Stephanie Cornyn. Stephanie, please go ahead.

Stephanie Cornyn, Vice President, Investor Relations, Communication and Commercial

Yes. So we have a question from Clement Stiers. From Stephen, the first question is, as dose escalation and cohort expansion enrollment are now complete, should we expect the initial ENA data set to be primarily a safety/pharmacology update, or mature enough to inform subsequent development decisions?

Jonathan Dickinson, Chief Executive Officer

So, Markus, maybe you can take that question.

Markus Jensen, Chief Medical Officer

Yeah, the question is almost the answer. So this is out of 11 different indications and 76 patients. So we are expecting to see relevant and informative safety data, and we are also expecting response data from patients. And this will inform our next steps. We need to fully run the tables and we will review and disclose that as proposed at the ENA meeting.

Stephanie Cornyn, Vice President, Investor Relations, Communication and Commercial

Thank you. And there is another question from Clemence. With the strengthened balance sheet following the recent financing, how far along the development path could you advance IPH4502 on your own?

Jonathan Dickinson, Chief Executive Officer

So maybe I can take that. So I think you're all aware that we did a small equity raise of €30 million a couple of weeks ago. The rationale behind that equity raise was to be able to progress seamlessly into the next steps for 4502. So we're well positioned now to be able to move into the next steps, whatever that will be. The data will dictate what that is, whether it's dose optimization, and we're equipped to be able to do that. If we would need to broaden the program, if the data supports going to potentially additional tumor types, then that would require additional funding to be able to conduct multiple dose optimizations across different tumor types. But at least for the initial steps, we're funded to be able to take those steps and take the product forward seamlessly into dose optimization. Hopefully that answers the question.

OPERATOR

We have now reached the end of the Q&A session. I will turn the call back to Jonathan Dickinson, CEO, for closing remarks.

Jonathan Dickinson, Chief Executive Officer

So thank you very much everybody for joining us today for our update following our H1 results. We look forward to updating you as we progress through the important catalysts that we outlined today, which come across the remainder of the year. So thank you for your time and see you soon.

OPERATOR

This concludes today's call. Thank you for attending. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.