Innate Pharma Reports Full Year 2022(1) Financial Results and Business Update

• Sanofi collaboration for Natural Killer cell engager therapeutics expanded to B7-H3 ANKET^® program and two additional targets, with €25 million payment
• Encouraging preliminary TELLOMAK Phase 2 efficacy data for lacutamab in advanced cutaneous T cell lymphoma in Sézary syndrome and mycosis fungoides
• First patient dosed in monalizumab PACIFIC-9 Phase 3 lung cancer clinical trial with $50M payment from AstraZeneca
• Cash position of €136.6 million² as of December 31, 2022 (not including the €25 million payment from Sanofi), anticipated cash runway into mid 2025
• Conference call to be held today at 2:00 p.m. CET / 9:00 a.m. EDT

MARSEILLE, France–(BUSINESS WIRE)–#ANKET–Innate Pharma SA (Euronext Paris: IPH; Nasdaq: IPHA) (“Innate” or the “Company”) today reported its consolidated financial results¹ for the year ending December 31, 2022. The consolidated financial statements are attached to this press release.

“In 2022 we made important progress in our pipeline, both on our clinical and preclinical projects as well as maintaining a strong financial position. We’re continuing to see encouraging efficacy signals for our proprietary program lacutamab in advanced cutaneous T cell lymphomas. In the meantime, our innovative R&D pipeline progression was marked by the expansion of our partnership with Sanofi to develop new NK Cell Engager Therapeutics from our ANKET^® platform, including solid tumors. The Sanofi collaboration is an example of how we use partnerships to build value at Innate, also underlined by our partnership with AstraZeneca for monalizumab which is in a Phase 3 trial for non-small cell lung cancer,” said Mondher Mahjoubi, Chief Executive Officer of Innate Pharma. “As we look to progress our pipeline in house or with partnerships, we look forward to new milestones in 2023 with important inflection points, including final readouts from the TELLOMAK Phase 2 trial with lacutamab and further updates for our ANKET^® assets.”

Webcast and conference call will be held today at 2:00pm CET (9:00am EDT) Access to live webcast: https://events.q4inc.com/attendee/611394672   Participants may also join via telephone using the registration link below: https://registrations.events/direct/Q4E60253   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.

1 This press release contains financial data approved by the Executive Board based on our consolidated financial statements for the year ended December 31, 2022. The audit is in progress at the date of this communication.

2 Including short term investments (€17.3m) and non-current financial instruments (€35.1m).

Pipeline highlights:

Lacutamab (IPH4102, anti-KIR3DL2 antibody):

• Innate continues to see progress for lacutamab with final data from the TELLOMAK Phase 2 trial for both mycosis fungoides and Sézary syndrome expected in H2 2023.
  • In preliminary results confirming clinical activity and a favorable safety profile in patients with mycosis fungoides (MF) who were previously treated with at least two lines of systemic therapy, lacutamab produced a global objective response rate (ORR) of 28.6% (95% confidence interval [CI]: 13.8-50.0) in the KIR3DL2-expressing MF patients (n=21), including 2 complete responses and 4 partial responses (EORTC-CLTG (European Organisation for Research and Treatment of Cancer – Cutaneous Lymphoma Tumours Group) 2022 meeting – September 2022).
  • In a preliminary analysis, lacutamab demonstrated clinical activity and a favorable safety profile in heavily pretreated, post-mogamulizumab patients with advanced Sézary syndrome. In the Intention To Treat (ITT) population (n=37), the global ORR was 21.6% (8/37). ORR in the blood was 37.8% (95% CI: 24.1-53.9), with 21.6% (8/37) achieving complete response (CR). ORR in the skin was 35.1% (95% CI: 21.8-51.2). In the Evaluable for Efficacy (EES) population (n=35), global objective response rate (ORR) was 22.9% (8/35). ORR in the blood was 40.0% (95% CI: 25.6-56.4) and ORR in the skin was 37.1% (95% CI: 23.2 53.7) (2022 ASH (American Society Hematology) Annual Meeting – December 2022).
• Two parallel clinical trials to study lacutamab in patients with KIR3DL2-expressing, relapsed/refractory peripheral T-cell lymphoma (PTCL) are ongoing. Initial PTCL data are expected in H2 2023.
  • Phase 1b trial: a Company-sponsored Phase 1b clinical trial to evaluate lacutamab as a monotherapy in patients with KIR3DL2-expressing relapsed PTCL. A poster on the trial design was presented at the ESMO (European Society for Medical Oncology) 2022 conference.
  • Phase 2 KILT (anti-KIR in T Cell Lymphoma) trial: The Lymphoma Study Association (LYSA) initiated an 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.

ANKET^® (Antibody-based NK cell Engager Therapeutics):

ANKET^® is Innate’s proprietary platform for developing next-generation, multi-specific NK cell engagers to treat certain types of cancer. Innate’s pipeline includes four public drug candidates born from the ANKET^® platform: IPH6101 (CD123-targeted), IPH6401 (BCMA-targeted), IPH62 (B7-H3-targeted) and tetra-specific IPH6501 (CD20-targeted). Several other undisclosed proprietary preclinical targets are being explored.

IPH6101, IPH6401 and IPH62 (partnered with Sanofi)

• The Phase 1/2 clinical trial by Sanofi is progressing well, evaluating IPH6101/SAR’579, the first NKp46/CD16-based CD123-targeted ANKET^® platform NK cell engager, in patients with relapsed or refractory acute myeloid leukemia (AML), B-cell acute lymphoblastic leukemia or high-risk myelodysplastic syndrome.
  • Preclinical data showing the control of AML cells by a trifunctional NKp46-CD16a-NK cell engager targeting CD123 were published in Nature Biotechnology in January 2023.
• On July 21, 2022, the Company announced that its partner Sanofi had made the decision to progress IPH6401/SAR’514, a BCMA-targeting NK cell engager into investigational new drug (IND)-enabling studies. Selection of IPH6401/SAR’514 triggered a €3M milestone payment to Innate.
• As announced on December 19, 2022, Sanofi licensed IPH62, a NK cell engager program targeting B7-H3 from Innate’s ANKET^® platform. Sanofi also have the option to add up to two additional ANKET^® targets. Upon candidate selection, Sanofi will be responsible for all development, manufacturing and commercialization. Under the terms of the agreement, Innate received a €25m upfront payment and is eligible for up to €1.35bn total in preclinical, clinical, regulatory and commercial milestones plus royalties on potential net sales.

IPH6501 (proprietary)

• Progress continues toward a Phase 1 clinical trial in 2023 for the proprietary CD20 targeted tetra-specific ANKET^®, IPH6501.
  • An October 2022 edition of Cell Reports Medicine described the development of Innate’s fit-for-purpose ANKET^® antibody-based tetra-specific molecule to harness the antitumor functions of NK cells, boosting their capacity to proliferate, to accumulate at the tumor site and to kill tumor cells.

Monalizumab (anti-NKG2A antibody), partnered with AstraZeneca:

• Innate continues to see progress for monalizumab in the early non-small cell lung cancer (NSCLC) setting, with the ongoing Phase 3 PACIFIC-9 study run by AstraZeneca. The study is evaluating durvalumab (anti-PD-L1) in combination with monalizumab or AstraZeneca’s oleclumab (anti-CD73) in patients with unresectable, Stage III NSCLC who have not progressed following definitive platinum-based concurrent chemoradiation therapy (CRT).
  • On April 29, 2022, Innate announced a $50 million milestone payment from AstraZeneca was triggered for dosing the first patient in the PACIFIC-9 Phase 3 clinical trial.
• 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 in April 2022. The results were initially presented during the European Society for Medical Oncology (ESMO) Congress 2021. The results of the interim analysis showed monalizumab in combination with durvalumab reduced the risk of disease progression by 58% (improved progression-free survival (PFS) with a hazard ratio of 0.42) and improved 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 includes exploratory subgroup analysis.
• Partner AstraZeneca presented data from Phase 2 NeoCOAST randomized trial in resectable, early-stage NSCLC at the 2022 American Association for Cancer Research (AACR) Annual Meeting and ESMO 2022 congress. The presentations 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-IIIB NSCLC to receive neoadjuvant durvalumab combined with chemotherapy and either oleclumab or monalizumab, followed by surgery and adjuvant durvalumab plus oleclumab or monalizumab.
• On August 1, 2022, Innate announced that a planned futility interim analysis of the Phase 3 INTERLINK-1 study 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 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.

IPH5201 (anti-CD39), partnered with AstraZeneca:

• The MATISSE Phase 2 clinical trial conducted by Innate in neoadjuvant lung cancer for IPH5201, an anti-CD39 blocking monoclonal antibody developed in collaboration with AstraZeneca, has started and is awaiting first patient dosed.
  • In August 2022 Innate received 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.
  • Preclinical data supporting the rationale for the Phase 2 development in NSCLC were presented at the 2022 ESMO Immuno-Oncology (IO) Annual Congress in December.
  • AstraZeneca conducted a Phase 1 trial in solid tumors with IPH5201 alone or in combination with durvalumab and presented a poster entitled “IPH5201 as Monotherapy or in Combination with Durvalumab in Advanced Solid Tumours” at the 2022 ESMO IO Annual Congress in December.

IPH5301 (anti-CD73):

• The investigator-sponsored CHANCES Phase 1 trial of IPH5301, in collaboration with Institut Paoli-Calmettes is ongoing. 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. The design of the Phase 1 study was highlighted at the 2022 ESMO IO congress in December.

Avdoralimab (anti-C5aR1):

• The Company has decided to discontinue the development of avdoralimab in bullous pemphigoid. The Company will continue to evaluate out-licensing as a potential next step.

Preclinical assets:

• Fueling the R&D engine, the Company continues to develop different approaches for the treatment of cancer utilizing its antibody engineering capabilities to deliver novel assets, with its innovative ANKET^® platform and continuing to explore Antibody Drug Conjugates (ADC) formats.
• 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 regained full rights to further develop the four preclinical molecules.

Corporate Update:

• On May 3, 2022 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 December 31, 2022, the balance available under our May 2022 sales agreement remains at $75 million.
• Dr Sally Bennett was appointed as new member of the Supervisory Board in May 2022. She was appointed as a member of the Audit Committee. On the same date it was announced that Mr Patrick Langlois decided to resign from his mandate of Supervisory Board member of Innate Pharma.
• In January 2023, Mrs Claire de Saint Blanquat, Vice President Legal and Corporate Affairs, and Mr Henry Wheeler, Vice President Investor Relations and Communications, were appointed to the Leadership Team.

Financial highlights for 2022:

The key elements of Innate’s financial position and financial results as of and for the year ended December 31, 2022 are as follows:

• Cash, cash equivalents, short-term investments and financial assets amounting to €136.6 million (€m) as of December 31, 2022 (€159.7m as of December 31, 2021), including financial instruments amounting to €35.1m (€39.9m as of December 31, 2021). Cash, cash equivalents as of December 31, 2022 do not include the €25.0 million payment received from Sanofi in March 2023.
• As of December 31, 2022, financial liabilities amount to €42.3m (€44.3m as of December 31, 2021). In August 2022, the Company obtained an extension for a period of five year (starting in 2022) with a one-year grace period (2023) of its State-Guaranted Loans (Prêts Garantis par l’Etat “PGE”) from Société Générale (€20.0m) and BNP Paribas (€8.7m).
• Revenue and other income from continuing operations amounted to €57.7m in 2022 (2021: €24.7m). It mainly comprises revenue from collaboration and licensing agreements (€49.6m in 2022 vs €12.1m in 2021), and research tax credit (€7.9m in 2022 vs €10.3m in 2021, -23.1%):
  • Revenue from collaboration and licensing agreements, which mainly resulted 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:
    • (i) Revenue from collaboration and licensing agreements for monalizumab increased by €14.9m to €22.4m in 2022 (€7.5m in 2021). This change mainly results from the transaction price increase of €13.4m ($14.0m) triggered by the launch of the “PACIFIC-9” Phase 3 trial announced on April 29, 2022. This change in the transaction price generated a €12.6 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;
    • (ii) Revenue related to IPH5201 for the year ended 2022 amounted to €4.7m and results from the entire recognition in revenue of the $5.0m milestone payment received in August 2022 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;
    • (iii) During 2022 first semester, 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 €17.4m was recognized as revenue in 2022.
    • (iv) During 2022 first semester, 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 €3.0m milestone payment from Sanofi. This amount was received by the Company on September 9, 2022.
  • The variation in the research tax credit mainly results from a decrease in the amortization for the intangible assets related to acquired licenses (monalizumab and IPH5201) and to the decrease in personnel expenses allocated to research and development operations. In addition, there was a decrease in public subcontracting included in the calculation of the CIR. This decrease is the consequence of the end of the doubling of public subcontracting expenses eligible for the CIR since January 1, 2022, partly offset by an increase in private subcontracting expenses with accredited suppliers.
• Operating expenses from continuing operations amounted to €74.1m in 2022 (2021: €72.5m, +2.2%):
  • General and administrative (G&A) expenses from continuing activities amounted to €22.4m in 2022 (2021: €25.5m, -12.1%). This variation results cumulatively from (i) a decrease in wages mainly resulting from restructuring costs and higher annual bonuses level in 2021, (ii) a decrease in non-scientific advisory fees and (iii) a decrease in other general and administrative expenses.
  • Research and development (R&D) expenses from continuing activities amounted to €51.7m in 2022 (2021: €47.0m, 9.9%). This variation mainly results from (i) an increase in direct research and development expenses (clinical and non-clinical) and (ii) an increase in other indirect research and development expenses, mainly linked to non-scientific and scientific fees.
• The avdoralimab intangible asset (anti-C5aR rights) total impairment of €41.0m (non-cash expense) following the Company’s decision to stop avdoralimab development in bullous pemphigoid indication in inflammation.
• A net financial income of €0.5m in 2022 (2021: €2.3m gain).
• A net loss from Lumoxiti discontinued operations of €0.1m in 2022 (2021: net loss of €7.3m, -98.2%). This decrease mainly resulted from the Settlement Amount of $6.2m (€5.5m as of December 31, 2021) paid to AstraZeneca in April 2022 for an amount of €5.9m under the Termination and Transition agreement.
• A net loss of €58.1m in 2022 (2021: net loss of €52.8m).

The table below summarizes the IFRS consolidated financial statements as of and for the year ended December 31, 2022, including 2021 comparative information.

In thousands of euros, except for data per share		December 31, 2022		December 31, 2021
Revenue and other income		57,674		24,703
Research and development		(51,663)		(47,004)
Selling, general and administrative		(22,436)		(25,524)
Total operating expenses		(74,099)		(72,528)
Operating income (loss) before impairment		(16,425)		(47,825)
Impairment of intangible asset		(41,000)		—
Operating income (loss) after impairment		(57,425)		(47,825)
Net financial income (loss)		(546)		2,347
Income tax expense		—		—
Net income (loss) from continuing operations		(57,972)		(45,478)
Net income (loss) from discontinued operations		(131)		(7,331)
Net income (loss)		(58,103)		(52,809)
Weighted average number of shares outstanding (in thousands)		79,640		79,543
Basic income (loss) per share		(0.73)		(0.66)
Diluted income (loss) per share		(0.73)		(0.66)
Basic income (loss) per share from continuing operations		(0.73)		(0.57)
Diluted income (loss) per share from continuing operations		(0.73)		(0.57)
Basic income (loss) per share from discontinued operations		—		(0.09)
Diluted income (loss) per share from discontinued operations		—		(0.09)
		December 31, 2022		December 31, 2021
Cash, cash equivalents and financial asset		136,604		159,714
Total assets		207,863		267,496
Shareholders’ equity		54,151		107,440
Total financial debt		42,251		44,251

About Innate Pharma:

Innate Pharma S.A. is a global, clinical-stage biotechnology company developing immunotherapies for cancer patients. Its innovative approach aims to harness the innate immune system through therapeutic antibodies and its ANKET^® (Antibody-based NK cell Engager Therapeutics) proprietary platform.

Innate’s portfolio includes lead proprietary program lacutamab, developed in advanced form of cutaneous T cell lymphomas and peripheral T cell lymphomas, monalizumab developed with AstraZeneca in non small cell lung cancer, as well as ANKET^® multi-specific NK cell engagers to address multiple tumor types.

Innate Pharma is a trusted partner to biopharmaceutical companies such as Sanofi and AstraZeneca, as well as leading research institutions, to accelerate innovation, research and development for the benefit of patients.

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 and follow us on Twitter and LinkedIn.

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. 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.

Contacts

Investors & Media
Innate Pharma
Henry Wheeler

Tel.: +33 (0)4 84 90 32 88

[email protected]

Newcap
Arthur Rouillé

Tel.: +33 (0)1 44 71 00 15

[email protected]

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