Marseille, March 18, 2021 (GLOBE NEWSWIRE) --

 

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):

IPH6101 (NKp46-based NK cell engager), partnered with Sanofi:

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

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:

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):

Corporate Update:


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:

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 shareDecember 31, 2020December 31, 2019
Revenue and other income70,45185,814
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 agreements861(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)78,93566,908
Basic income (loss) per share(0.81)(0.31)
Diluted income (loss) per share(0.81)(0.31)
 
 December 31, 2020December 31, 2019
Cash, cash equivalents and financial asset190,571255,869
Total assets307,423401,361
Shareholders’ equity155,975217,416
Total financial debt19,08718,723


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: IPHA
9695002Y8420ZB8HJE29

Disclaimer on forward-looking information and risk factors:

This press release contains certain forward-looking statements, including those within the meaning of the Private Securities Litigation Reform Act of 1995.The use of certain words, including “believe,” “potential,” “expect” and “will” and similar expressions, is intended to identify forward-looking statements. Although the company believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks and uncertainties include, among other things, the uncertainties inherent in research and development, including related to safety, progression of and results from its ongoing and planned clinical trials and preclinical studies, review and approvals by regulatory authorities of its product candidates, the Company’s commercialization efforts, the Company’s continued ability to raise capital to fund its development and the overall impact of the COVID-19 outbreak on the global healthcare system as well as the Company’s business, financial condition and results of operations. For an additional discussion of risks and uncertainties which could cause the company's actual results, financial condition, performance or achievements to differ from those contained in the forward-looking statements, please refer to the Risk Factors (“Facteurs de Risque") section of the Universal Registration Document filed with the French Financial Markets Authority (“AMF”), which is available on the AMF website http://www.amf-france.org or on Innate Pharma’s website, and public filings and reports filed with the U.S. Securities and Exchange Commission (“SEC”), including the Company’s Annual Report on Form 20-F for the year ended December 31, 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 30
 Media

 

Innate Pharma 
Tracy Rossin (Global/US)
Tel.: +1 240 801 0076
Tracy.Rossin@innate-pharma.com

 

ATCG Press
Marie Puvieux (France)
Tel.: +33 (0)9 81 87 46 72
innate-pharma@atcg-partners.com



Summary of Consolidated Financial5 Statements and Notes
as of December 31, 2020



Consolidated Statements of Financial Position
(in thousand euros)


 December 31, 2020December 31, 2019
   
Assets  
   
Cash and cash equivalents136,792202,887
Short-term investments14,84515,978
Trade receivables and others - current21,69518,740
Total current assets173,332237,605
   
Intangible assets46,28996,968
Property and equipment11,69411,672
Non-current financial assets38,93437,005
Other non-current assets14789
Deferred tax assets7,0871,286
Trade receivables and others - non-current29,94016,737
Total non-current assets134,091163,756
   
Total assets307,423401,361
   
Liabilities  
Trade payables and others29,53949,504
Collaboration liabilities – Current portion1,83221,304
Financial liabilities – Current portion2,1422,130
Deferred revenue – Current portion12,50548,770
Provisions – Current portion676114
Total current liabilities46,694121,822
   
Collaboration liabilities – Non current portion44,854—
Financial liabilities – Non-current portion16,94516,593
Defined benefit obligations4,1773,760
Deferred revenue – Non-current portion31,46940,342
Provisions – Current portion221142
Deferred tax liabilities7,0871,286
Total non-current liabilities104,75362,123
   
Share capital3,9503,941
Share premium372,130369,617
Retained earnings(156,476)(134,912)
Other reserves355(472)
Net income (loss)(63,984)(20,759)
Total shareholders’ equity155,975217,416
   
Total liabilities and shareholders’ equity307,423401,361


Consolidated Statements of Income (loss)
(in thousand euros)


 December 31, 2020December 31, 2019
   
   
Revenue from collaboration and licensing agreements56,15568,974
Government financing for research expenditures13,61816,840
Sales678 
   
Revenue and other income70,45185,814
   
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 agreements861(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 income4,85511,269
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, 2020December 31, 2019
Net income (loss)(63,984)(20,759)
Depreciation and amortization56,79716,529
Employee benefits costs216685
Provisions for charges604(484)
Share-based compensation expense2,4753,826
Change in valuation allowance on financial assets577(4,065)
Gains (losses) on financial assets1,256(280)
Change in valuation allowance on financial assets372(237)
Gains (losses) on assets and other financial assets(962)(1,290)
Interest paid341204
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 equipment9-
Disposal of other assets(59)(10)
Disposal of non-current financial instruments-2,000
Interest received on financial assets9621,290
Net cash generated from / (used in) investing activities:(13,370)(62,121)
Proceeds from the exercise / subscription of equity instruments4844
Increase in capital, net-66,006
Proceeds from borrowings1,36013,900
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 changes2195
Net increase / (decrease) in cash and cash equivalents:(66,095)50,572
Cash and cash equivalents at the beginning of the year:202,887152,314
Cash and cash equivalents at the end of the year :136,792202,887


  

Revenue and other income

The following table summarizes operating revenue for the periods under review:

In thousands of euroDecember 31, 2020December 31, 2019
Revenue from collaboration and licensing agreements56,15568,974
Government financing for research expenditures13,61816,840
Sales678—
Revenue and other income70,45185,814

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:

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 eurosDecember 31, 2020December 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:

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:

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.


Attachment