First half of
2016: building momentum through clinical development and new
partnerships
-
Cash, cash
equivalents and financial assets[*] for the
Company amounted to €243.6m (million euros) as of June 30,
2016
-
Company is
building foundations to become a commercial stage biopharmaceutical
company, with retained co-development and commercialization rights
to monalizumab and full rights to IPH4102
-
Continues to
invest in proprietary clinical and preclinical pipeline to position
Innate Pharma for a more mature phase
-
Continued
progress with key clinical trials:
-
First data for
all three clinical programs expected before the end of 2016,
including for lirilumab
-
Fifth clinical
trial of monalizumab program initiated; conducted by AstraZeneca,
this trial is testing monalizumab in combination with durvalumab in
solid tumors
-
Research
collaboration and licensing agreement with Sanofi on bispecific
antibodies and exclusive licensing agreement with OREGA Biotech
strengthen a key line-up of partnerships
Marseille, France, September 8, 2016
Innate Pharma SA (the "Company" -
Euronext Paris: FR0010331421 - IPH) today reports its consolidated
financial results for the first half of 2016. The summary of the
condensed half-year consolidated financial statements are attached
to this press release.
During the period, Innate Pharma
has made progress across its portfolio of innovative
immunotherapies designed to harness the innate immune system, both
in the three first-in-class antibodies in clinical trials and in
preclinical programs.
The clinical program of lirilumab,
Innate Pharma's most advanced candidate, continued to progress
well, with key data expected later in 2016.
The fifth clinical trial in the
initial development program with monalizumab was initiated by the
Company's partner AstraZeneca, testing monalizumab in combination
with durvalumab (anti-PD-L1) in solid tumors.
At the American Association of
Cancer Research (AACR) Annual Meeting in New Orleans, USA, the
Company's scientists presented data supporting the rationale of
four of Innate's clinical and preclinical programs, including the
rationale for combination treatment with monalizumab and an
anti-PD-1/PD-L1, and for IPH4301, its first-in-class anti-MICA/B
humanized antibody. Two new programs targeting the tumor
microenvironment were also presented.
Earlier in 2016, the Company
signed a research collaboration and licensing agreement with Sanofi
to apply Innate Pharma's new proprietary technology to the
development of innovative bispecific antibody formats engaging
natural killer (NK) cells to kill tumor cells. Innate Pharma and
OREGA Biotech announced that they entered into an exclusive
licensing agreement granting Innate Pharma full worldwide rights to
OREGA Biotech's first-in-class anti-CD39 checkpoint inhibitors.
Hervé Brailly,
Chief Executive Officer of Innate Pharma, commented: "Innate Pharma has made great progress in clinical
development and research across the portfolio in the first half of
the year. We have a solid cash position and look forward to the
several near-to-medium term value inflection points". He added: "With retained
co-development and commercialization rights to monalizumab as part
of the landmark agreement with AstraZeneca, full rights to IPH4102
and continued investment in the proprietary pipeline, Innate is
building the foundations to become a commercial stage
biopharmaceutical company."
A conference call will be held
today at 2:30pm (CEST)
Dial in
numbers: +33 (0)1 70 77 09 35
The
slideshow of 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
of the first half of 2016:
The key elements of Innate
Pharma's financial results for the first half of 2016 are as
follows:
-
Cash, cash equivalents and financial assets
(current and non-current) amounting to €243.6m (million euros) as
of June 30, 2016 (€273.7m as of December 31, 2015).
-
At the same date, the financial liabilities
amounted to €4.1m, including €3.2m of non-current liabilities
(€3.8m as of December 31, 2015, including €3.1m of non-current
liabilities).
-
Revenue and other income amounting to €20.7m
(€4.6 million for the first half of 2015). This amount results from
licensing revenue (€16.7m) and from research tax credit
(€4.0m).
-
Operating expenses amounting to €23.6m (€15.5m
for the first half of 2015), of which €20.3m (or 86%) related to
research and development. The variance of the research and
development costs (€20.3m compared to €12.8m for the first half of
2015) mainly results from the rise of the subcontracting costs,
increasing by €6.3m to €10.9m (+€4.6m). This increase mainly
results from the monalizumab program (+€4.3m).
-
As a consequence of the items mentioned
previously, the net loss for the first half of 2016 amounts to
€3.2m (€8.0m for the first half of 2015).
The table below summarizes the
IFRS consolidated financial statements for the six-month period
ended June 30, 2016, including 2015 comparative information.
The results of
the period ended June 30, 2015 presented below have been restated
to reflect the recognition from June 4, 2015 (instead of April 24,
2015) of the initial payment relative to the agreement with
AstraZeneca/MedImmune for monalizumab concluded in April 2015. The
impacts of this restatement are described in the Note
"Comparability of the interim consolidated financial statements"
attached in Appendix.
In thousands of euros, except
for data per share |
June 30, 2016 |
June 30,2015(1) |
Revenue and other income |
20,685 |
4,640 |
Research and development |
(20,273) |
(12,754) |
General and administrative |
(3,339) |
(2,728) |
Operating expenses |
(23,612) |
(15,482) |
Operating income/(loss) |
(2,927) |
(10,842) |
Financial income |
1,835 |
3,114 |
Financial expenses |
(2,080) |
(298) |
Net loss |
(3,171) |
(8,026) |
Weighted average number of shares outstanding (in
thousands) |
53,853 |
53,160 |
Net loss
per share |
(0.06) |
(0.15) |
|
|
|
|
June 30, 2016 |
December 31, 2015 |
Cash,
cash equivalents and financial instruments[1] |
243,597 |
273,704 |
Total
assets |
282,356 |
305,956 |
Shareholders' equity |
69,204 |
72,067 |
Total
financial debt |
4,084 |
3,754 |
(1) The results of the period
ended June 30, 2015 have been restated as explained in the Note
"Comparability of the interim consolidated financial statements"
attached in Appendix
Pipeline
update:
Lirilumab
(anti-KIR antibody), partnered with Bristol-Myers Squibb:
Lirilumab is a fully human
monoclonal antibody that is designed to act as a checkpoint
inhibitor by blocking the interaction between KIR2DL-1,-2,-3
inhibitory receptors and their ligands. Blocking these receptors
facilitates activation of NK cells and, potentially some subsets of
T cells, ultimately leading to destruction of tumor cells.
Lirilumab has been or is currently being tested in several
indications and combination settings.
-
EffiKIR (double-blind placebo-controlled
randomized Phase II trial of lirilumab as a maintenance treatment
in elderly patients with acute myeloid leukemia in first complete
remission - study IPH2102-201):
-
In March 2016, the DSMB completed its sixth
assessment of the EffiKIR study and recommended continuation of the
trial without modification. As a reminder, since March 2015, the
trial continues with one active arm and the placebo arm.
-
The Company expects that analysis on the primary
efficacy endpoint, leukemia-free survival, should occur in the
second half of 2016. Per protocol, this analysis is event
driven.
-
Six Phase I and II trials testing lirilumab in
combination in solid tumors and hematological malignancies are
ongoing.
-
Safety data for the combination of lirilumab
with nivolumab or with ipilimumab in two Phase I studies in
advanced refractory solid tumors will be presented in a poster
during the ESMO 2016 congress in Copenhagen, Denmark on October 9,
13:00 - 14:00.
-
Preliminary efficacy disclosures for lirilumab
in some of these settings, including the combination with nivolumab
in solid tumors, are expected in late 2016.
Monalizumab
(anti-NKG2A antibody), partnered with
AstraZeneca/Medimmune:
Monalizumab is a checkpoint
inhibitor targeting NKG2A, an inhibitory receptor expressed on
tumor infiltrating cytotoxic CD8 T lymphocytes and NK cells. This
monoclonal antibody is currently in Phase II development in various
cancer indications and combinations.
-
In February 2016, the fifth trial of the initial
development plan of monalizumab started. It tests monalizumab in
combination with durvalumab in solid tumors and is performed by
AstraZeneca/MedImmune. This trial is a multicenter, open-label,
dose-escalation and cohort-expansion study to evaluate the safety,
tolerability and antitumor activity of the combination in patients
with selected advanced solid tumors. It will include up to
208 patients and will be performed in the United States, in
Canada and in Europe.
-
In April 2016, at the American Association for
Cancer Research (AACR) 2016 Annual Meeting in New Orleans, USA,
Innate Pharma presented preclinical data demonstrating enhanced
anti-tumor efficacy and survival in a mouse tumor model by
combining anti-NKG2A with PD-1/PD-L1 pathway inhibitors. The data
provides in vivo preclinical validation of the
rationale for the clinical trial testing of monalizumab in
combination with durvalumab. The poster is available on Innate
Pharma's website at the following link: Poster #2342.
-
During the first half of 2016, the Phase I/II
trial testing monalizumab as a single agent in platinum-resistant
or -sensitive patients with high-grade ovarian cancer has been
extended to two additional cohorts of patients with epithelial
endometrial cancer and squamous cell carcinoma of the cervix (up to
98 patients for all cohorts). The trial is sponsored by the
Canadian Cancer Trials Group (formerly National Cancer Institute of
Canada) and conducted in Canada.
-
Safety and first activity data for the
dose-ranging part of this trial will be presented in a poster
during the EORTC-NCI-AACR Molecular Targets and Cancer Therapeutics
in Munich, Germany (November 29 - December 2, 2016).
Three additional trials are
expected to open within the next few months:
-
A Phase I trial testing monalizumab as a single
agent in a post-transplantation setting in hematological
malignancies;
-
A Phase I/II trial testing monalizumab in
combination with radiotherapy and chemotherapy in locally advanced
oesophageal cancer;
-
A Phase II trial testing monalizumab as a
single-agent in recurrent/metastatic head and neck cancer.
IPH4102
(anti-KIR3DL2 antibody):
IPH4102 is a first-in-class
cytotoxicity-inducing antibody currently being tested in a Phase I
clinical trial for the treatment of KIR3DL2-expressing cutaneous
T-cell lymphomas ("CTCL"), in particular their aggressive forms,
Sezary syndrome and transformed mycosis fungoides.
-
In June, Professor Martine Bagot, Head of the
Dermatology Department at the Saint-Louis Hospital in Paris,
discussed the protocol of the ongoing first-in-human study of
IPH4102 in patients with relapsed/refractory cutaneous T-cell
lymphomas (CTCL) in a "Trial in progress" poster at the 2016 ASCO
annual meeting in Chicago, USA. The poster is available on Innate
Pharma's website at the following link: Poster TPS2591.
The Company expects preliminary
clinical data for the Phase I trial to be presented at a scientific
meeting by the end of the year.
IPH4301
(anti-MICA/B antibody):
IPH4301 is a first-in-class
anti-MICA/B therapeutic antibody blocking the interaction between
NKG2D receptors on NK cells and CD8+ T cells and
their ligands MICA/B.
In April 2016, Innate Pharma
presented a new set of preclinical data further validating the
potential of its first-in-class anti-MICA/B antibody IPH4301 at the
AACR 2016 Annual Meeting in New Orleans, USA.
The data demonstrate dual
mechanism of action of IPH4301, including tumor antigen targeting
and immunomodulation. The poster is available on Innate Pharma's
website at the following link: Poster #1491.
The program has started
IND-enabling studies.
IPH52 (anti-CD39
antibody):
This program, currently in
preclinical development, aims at developing an anti-CD39 monoclonal
antibody. By targeting the adenosine immunosuppressive pathway, it
has potential to promote anti-tumor immune responses across a wide
range of tumors.
-
On January 10, 2016, Innate Pharma and OREGA
Biotech announced that they entered into an exclusive licensing
agreement by which OREGA Biotech granted Innate Pharma full
worldwide rights to their first-in-class anti-CD39 checkpoint
inhibitors.
-
In April 2016, Innate Pharma and OREGA Biotech
presented preclinical data on IPH52, at the AACR 2016 Annual
Meeting in New Orleans, USA. The posters are available on Innate
Pharma's website at the following links: Poster #3222 (Innate
Pharma) and Poster #3218 (OREGA Biotech).
Anti-CD73
antibody[2]:
In April 2016, Innate Pharma
presented data on a research program to develop a CD73 checkpoint
inhibitor in oncology at the AACR 2016 Annual Meeting in New
Orleans, USA. The anti-CD73 program complements Innate's
first-in-class anti-CD39 program and strengthens the Company's
positioning in targeting the tumor microenvironment. The poster is
available on Innate Pharma's website at the following link: Poster
#2344.
Research
collaboration and licensing agreement with Sanofi on new bispecific
NK cell engagers in Immuno-Oncology:
On January 11, 2016, Innate Pharma
and Sanofi announced that they have entered into a research
collaboration and licensing agreement to apply Innate Pharma's new
proprietary technology to the development of innovative bispecific
antibody formats engaging natural killer (NK) cells to kill tumor
cells through the activating receptor NKp46.
Under the terms of the license
agreement, Sanofi will be responsible for the development,
manufacturing and commercialization of products resulting from the
research collaboration. Innate Pharma will be eligible for up to
€400m in development and commercial milestone payments as well as
royalties on net sales.
Outlook:
Innate Pharma made significant
progress during the first half of the year, advancing key clinical
programs and preclinical assets whilst maintaining a solid cash
position. Looking ahead towards the second half of 2016, the
Company expects to report clinical data for the most advanced
programs including lirilumab, monalizumab and IPH4102. For
monalizumab, the Company expects to initiate three additional
trials within the next few months.
With retained co-development and
commercialization rights to monalizumab as part of the landmark
agreement with AstraZeneca, full rights to IPH4102 and continued
investment in the proprietary pipeline, the Company is building
foundations to become a commercial stage biopharmaceutical
company.
About Innate
Pharma:
Innate Pharma S.A. is a
clinical-stage biotechnology company with a focus on discovering
and developing first-in-class therapeutic antibodies that harness
the innate immune system to improve cancer treatment and clinical
outcomes for patients.
Innate Pharma specializes in
immuno-oncology, a new therapeutic field that is changing cancer
treatment by mobilizing the power of the body's immune system to
recognize and kill cancer cells.
The Company's aim is to become a
commercial stage biopharmaceutical company in the area of
immunotherapy and focused on serious unmet medical needs in cancer.
Innate Pharma has pioneered the discovery and development of
checkpoint inhibitors to activate the innate immune system. Innate
Pharma's innovative approach has resulted in three first-in-class,
clinical-stage antibodies targeting natural killer cell receptors
that may address a broad range of solid and hematological cancer
indications as well as additional preclinical product candidates
and technologies. Targeting receptors involved in innate immunity
also creates opportunities for the Company to develop therapies for
inflammatory diseases.
The Company's expertise and
understanding of natural killer cell biology have enabled it to
enter into major alliances with leaders in the biopharmaceutical
industry including AstraZeneca, Bristol-Myers Squibb and
Sanofi.
Based in Marseille, France, Innate
Pharma has more than 130 employees and is listed on Euronext
Paris.
Learn more about Innate Pharma at
www.innate-pharma.com.
Practical
Information about Innate Pharma shares:
ISIN code
Ticker code |
FR0010331421
IPH |
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 (http://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:
Innate Pharma |
Press Contacts |
Laure-Hélène Mercier
Director, Investor Relations |
ATCG Press (France)
Marie Puvieux |
Tel.:
+33 (0)4 30 30 30 87 |
Mob: +33 (0)6 10 54 36 72 |
investors@innate-pharma.com |
presse@atcg-partners.com |
|
Consilium Strategic Communications
(ROW) |
|
Mary-Jane Elliott / Sue Stuart /
Jessica Hodgson / Hendrik Thys |
|
Tel.: +44
(0)20 3709 5700 |
|
InnatePharma@consilium-comms.com |
Interim Consolidated Financial
Statements and Notes
Statement of financial position
(in thousand euros)
|
June 30, 2016 |
December 31, 2015 |
|
|
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
159,852 |
152,870 |
Short-term investments |
44,075 |
83,040 |
Current receivables |
20,944 |
16,216 |
Total current assets |
224,871 |
252,126 |
|
|
|
|
|
|
Intangible assets |
9,995 |
9,732 |
Tangible assets |
7,820 |
6,304 |
Non-current financial assets |
39,670 |
37,794 |
Total non-current assets |
57,485 |
53,830 |
|
|
|
Total assets |
282,356 |
305,956 |
|
|
|
Liabilities |
|
|
Trade payables |
13,622 |
18,631 |
Deferred revenue - Current portion |
64,765 |
40,910 |
Financial liabilities - Current portion |
852 |
622 |
Total current liabilities |
79,239 |
60,163 |
|
|
|
Deferred revenue - Non-current portion |
128,238 |
168,854 |
Financial liabilities - Non-current portion |
3,232 |
3,132 |
Defined benefit obligations |
2,430 |
1,740 |
Provisions |
13 |
- |
Total non-current liabilities |
133,913 |
173,726 |
|
|
|
Share capital |
2,695 |
2,692 |
Share premium |
186,489 |
186,337 |
Consolidated reserves |
(116,234) |
(109,525) |
Net income (loss) |
(3,171) |
(6,706) |
Other reserves |
(574) |
(730) |
Total shareholders' equity attributable
to equity holders of the Company |
69,204 |
72,067 |
|
|
|
Total liabilities and equity |
282,356 |
305,956 |
Statement of income
(in thousand euros)
|
June 30, 2016 |
June 30, 2015(1) |
|
|
|
|
|
|
Revenue from collaboration and licensing agreements |
16,659 |
1,296 |
Government financing for research expenditures |
4,025 |
3,344 |
|
|
|
Revenue and other income |
20,685 |
4,640 |
|
|
|
Research and development |
(20,273) |
(12,754) |
General and administrative |
(3,339) |
(2,728) |
|
|
|
Net operating expenses |
(23,612) |
(15,482) |
|
|
|
|
|
|
Operating income (loss) |
(2,927) |
(10,842) |
|
|
|
Financial income |
1,835 |
3,114 |
Financial expenses |
(2,080) |
(298) |
|
|
|
|
|
|
Net income (loss) before tax |
(3,171) |
(8,026) |
|
|
|
|
|
|
Income tax expense |
- |
- |
|
|
|
Net income (loss) |
(3,171) |
(8,026) |
|
|
|
Net income (loss) per share attributable
to the equity holders of the Company: |
|
|
(in € per share) |
|
|
-
basic |
(0.06) |
(0.15) |
-
diluted |
(0.06) |
(0.15) |
-
The results of the period ended June 30, 2015
have been restated as explained in the Note "Comparability of the
interim consolidated financial statements" attached in
Appendix
Statement of cash flows
(in thousand euros)
|
June 30, 2016 |
June 30,
2015(1) |
|
Net income (loss) |
(3,171) |
(8,026) |
Depreciation and
amortization |
1,563 |
977 |
Provisions for charges and
defined benefit obligations |
460 |
76 |
Share-based payments |
- |
272 |
(Gains) / losses on disposal of
fixed assets |
- |
13 |
Foreign exchanges (gains) /
losses on financial instruments |
1,027 |
- |
Variance of provision on
financial assets |
(600) |
- |
Gains on assets and other
financial assets |
(748) |
(351) |
Net interests paid |
65 |
72 |
Variance on accrued interests on
financial instruments |
(152) |
|
Operating cash flow before change in working
capital |
(1,555) |
(6,967) |
Change in working capital |
(20,513) |
215,557 |
Net cash generated from / (used in)
operating activities: |
(22,067) |
208,590 |
Acquisition of property, plant
and equipment |
(234) |
(233) |
Acquisition of intangible
assets |
(7,740) |
- |
Acquisition of current financial
assets |
(9,469) |
- |
Variance of assets in
progress |
(784) |
- |
Disposal of current financial
assets |
48,198 |
800 |
Acquisition of non-current
financial assets |
(1,527) |
- |
Gains on other financial
assets |
748 |
351 |
Net cash generated from / (used in)
investing activities: |
29,193 |
918 |
Transactions on treasury
shares |
14 |
101 |
Issue of own shares |
141 |
1,213 |
Repayment of financial
liabilities |
(240) |
(223) |
Net interests paid |
(65) |
(72) |
Net cash generated from financing
activities: |
(150) |
1,020 |
Effect of the exchange rate
changes |
7 |
(47) |
Net increase / (decrease) in cash and cash
equivalents: |
6,982 |
210,481 |
Cash and cash equivalents at the
beginning of the period: |
152,870 |
64,286 |
Cash and cash equivalents at the end of the
period: |
159,852 |
274,767 |
|
-
The results of the period ended June 30, 2015
have been restated as explained in the Note "Comparability of the
interim consolidated financial statements" attached in
Appendix
Key events since
January 1, 2016
-
On January 10, 2016, Innate Pharma and OREGA
Biotech announced that they have entered into an exclusive
licensing agreement by which OREGA Biotech grants Innate Pharma
full worldwide rights to its program of first-in-class anti-CD39
checkpoint inhibitors. This license agreement arose from a fruitful
research collaboration between the two companies initiated in 2014.
The accounting treatment of this operation is explained in Note 6
to the interim consolidated financial statements.
-
On January 11, 2016, Sanofi and Innate Pharma
announced that they have entered into a research collaboration and
licensing agreement to apply Innate Pharma's new proprietary
technology to the development of innovative bispecific antibody
formats engaging natural killer (NK) cells to kill tumor cells
through the activating receptor NKp46. Innate Pharma will be
eligible to receive up to €400m in development and commercial
milestone payments as well as royalties on net sales.
Comparability of
the interim consolidated financial statements
The Company entered into a
co-development and commercialization agreement with
AstraZeneca/MedImmune for monalizumab in April 2015. An initial
payment amounting to $250m was collected on June 30, 2015. This
amount is recognized in revenue on the basis of actual expenses
incurred during the period over the term of the on-going clinical
trials specified in the agreement.
The Company initially retained the
signature date of the agreement (April 24, 2015) as the effective
date for revenue recognition purposes and calculated the amount to
be recognized in the first half of 2015 on this basis. The Company
later revised its position and retained the date of June 4, 2015
when the agreement was approved by the Federal Trade Commission as
the effective date. The resulting impacts on the statement of
financial position and the statement of income as of and for the
six-month period ended June 30, 2015 are accounted for according to
IAS 8 - Accounting Policies, Changes in Accounting Estimates and
Errors and are presented below (in thousand euros):
Statement of income |
June 30, 2015
published |
IAS 8 - Restatement |
June 30, 2015
restated |
Revenue from collaboration and licensing agreements |
3,092 |
(1,796) |
1,296 |
Government financing for research expenditures |
3,344 |
- |
3,344 |
Revenue and other income |
6,436 |
(1,796) |
(4,640) |
Operating expenses |
(15,482) |
- |
(15,482) |
Operating income/(loss) |
(9,046) |
(1,796) |
(10,842) |
|
|
|
|
Financial income |
2,370 |
744 |
3,114 |
Financial expenses |
(298) |
- |
(298) |
|
|
|
|
Net loss |
(6,974) |
(1,052) |
(8,026) |
Net loss per share |
(0.13) |
(0.02) |
(0.15) |
Statement of financial
position |
June 30, 2015
published |
IAS 8 - Restatement |
June 30, 2015
restated |
Deferred revenue - Current portion |
47,381 |
394 |
47,775 |
Total current liabilities |
57,834 |
394 |
58,228 |
|
|
|
|
Deferred revenue - Non current portion |
173,347 |
657 |
174,004 |
Total non-current liabilities |
178,071 |
657 |
178,728 |
|
|
|
|
Net income/(loss) |
(6,974) |
(1,052) |
(8,026) |
Total shareholders' equity attributable to
equity holders of the Company |
69,178 |
(1,052) |
68,126 |
|
|
|
|
Total liabilities and equity |
305,083 |
- |
305,083 |
Revenue and other
income
The following table summarizes
operating revenue for the periods under review:
In thousands of
euros |
June 30,
2016 |
June 30,
2015(1) |
Revenue from collaboration and licensing agreements |
16,659 |
1,296 |
Government
funding for research expenditures |
4,025 |
3,344 |
Revenue and other income |
20,685 |
4,640 |
-
The results of the period ended June 30, 2015
have been restated as explained in the Note "Comparability of the
interim consolidated financial statements" above
The rise in revenue and other
income mainly results from the partial recognition of the initial
payment in relation to the co-development agreement signed with
AstraZeneca in April 2015. This revenue is spread over the costs of
the clinical trials the Company is in charge of. The amount
recognized for the first half of 2016 amounts to €16.1m (€0.7m for
the first half of 2015).
Government funding for research
costs is mainly composed of the research tax credit (€4.0m for the
six-month period ended June 30, 2016 compared to €3.3m for the same
period last year). This rise, mainly resulting from the increase of
the subcontracting costs, is however limited for the following
reasons:
-
A significant amount of the subcontracting costs
for the first half of 2016 is not eligible for the research tax
credit because they are related to clinical trials performed in the
U.S.;
-
Since 2015, the subcontracting costs expensed by
the Company exceed the limitation set by the Tax Administration for
the calculation of the research tax credit.
The 2015 research tax credit was
received in August 2016 (€7.0m).
Operating
expenses, by business function
The following table breaks down
the operating expenses by function for the periods under
review:
In thousands of
euros |
June 30, 2016 |
June 30, 2015 |
Research
and development expenses |
(20,273) |
(12,754) |
General and
administrative expenses |
(3,339) |
(2,728) |
Operating expenses |
(23,612) |
(15,482) |
Research and development
("R&D") expenses include the cost of employees assigned to
research and development operations (including employees assigned
to work under the collaboration and licensing agreements), product
manufacturing costs, subcontracting costs as well as costs of
materials (reagents and other consumables) and pharmaceutical
products.
The variance in R&D expenses
between the two periods under review (€20.3m as of June 30, 2016
compared to €12.8m as of June 30, 2015, or +59%) mainly results
from the subcontracting costs (+€6.3m). This rise mainly results
from the monalizumab program (+€4.3m).
R&D expenses accounted for 86%
of operating expenses for the six-month period ended June 30, 2016
(2015: 82%).
General and administrative
("G&A") expenses mostly comprise costs of the "support" staff
as well as external expenses for the management and development of
our business. The rise of these costs mainly results from an
increase in non-scientific costs (+€0.3m).
G&A expenses accounted for 14%
of operating expenses for the six-month period ended June 30, 2016
(2015: 18%).
Operating
expenses, by business nature
The following table breaks down
the operating expenses by nature of expense for the periods under
review:
In thousands of
euros |
June 30,
2016 |
June 30,
2015 |
Costs of supplies and consumable materials |
(1,568) |
(1,179) |
Intellectual property expenses |
(654) |
(566) |
Other purchases and external expenses |
(13,885) |
(7,202) |
Employee benefits other than share-based
compensation |
(5,363) |
(5,147) |
Share-based payments |
- |
(272) |
Depreciation and amortization |
(1,563) |
(977) |
Other income and (expenses), net |
(580) |
(139) |
Operating expenses |
(23,612) |
(15,482) |
The changes in the most
significant line items can be analyzed as follows:
-
Costs of supplies and consumable materials: the
rise in these expenses between the two periods (+€0.4m, or +33%)
mainly results from the increase in discovery activities;
-
Other purchases and external expenses: the
variance of the line item between the two periods results from the
increase of the subcontracting costs (+€6.3m, see previous
page);
-
Employee benefits other than share-based
compensation: the increase of the line item results from the rise
in the employees (127 as of June 30, 2016 vs. 110 as of June 30,
2015). This variance is however limited by an exceptional bonus
arising from the execution of the AstraZeneca/MedImmune, which was
granted during the first half of 2015 (€0.6m).
-
Depreciation and amortization: the rise of the
line item mainly results from the amortization relating to the
anti-NKG2A intangible asset (€1.2m for the first half of 2016 vs.
€0.5m for the first half of 2015). This increase results from the
recognition during the first half of 2015 of additional
consideration following the AstraZeneca/MedImmune.
-
Other income and expenses, net: the increase of
the other income and expenses mainly results from the "contribution
sociale de solidarité " based on the turnover of the fiscal year
2015 (€0.3m).
Financial
results
Financial income is mainly
composed of interest related to cash, cash equivalents and
financial assets. The decrease of the line item mainly results from
the recognition during the first half of 2015 of an exchange gain
relating to the collection of the initial payment from
AstraZeneca/MedImmune (€2.5m).
Financial expenses for the first
half of 2016 are mainly composed of exchange losses (€1.9m),
resulting from the recovery of the Euro versus the U.S. dollar as
of June 30, 2016 compared to December 31, 2015. This variance had
an adverse variance on the valuation in Euro of the cash, cash
equivalents and financial assets held in U.S. dollar.
Balance sheet
items
Cash, cash equivalents and
financial assets (current and non-current) amounted to €243.6m as
of June 30, 2016, as compared to €273.7m as of December 31, 2015.
Cash and cash equivalents do not include the reimbursement of the
2015 research tax credit which was received in August 2016 (€7.0m).
Consequently, the amount of net cash[§] as of June
30, 2016 amounted to €203.1m (€235.3m as of December 31, 2015).
Since its incorporation in 1999,
the Company has been primarily financed by revenue from its
licensing activities (mostly in relation to the agreements with
Novo Nordisk A/S and Bristol-Myers Squibb) and by issuing new
securities. The Company also generated cash from government
financing for research expenditure and repayable advances (BPI
France). As of June 30, 2016, these repayable advances amount to
€1.5m booked in non-current financial liabilities, of which €0.3m
classified as current financial liabilities and €1.2m as
non-current financial liabilities.
The other key balance sheet items
as of June 30, 2016 are as follows:
- Deferred revenue of €192.7m
relating to the remainder of the initial payment from Astra-Zeneca
not yet recognized as revenue (including €128.2m booked as
'Deferred revenue - non-current portion');
- Receivables from the French
government in relation to the research tax credit for 2015 and the
six-month period ended June 30, 2016 (€11.0m);
- Intangible assets for a net book
value of €10.0m, mainly corresponding to the rights and licenses
relating to the acquisition of the monalizumab and anti-CD39
programs;
- Shareholders' equity of €69.2m
including the net loss for the period (€3.2m).
Cash-flow
items
The net cash flow generated over
the six-month period ended June 30, 2016 amounted to +€7.0m,
compared to a net cash flow of +€210.5m generated for the same
year-ago period. Net cash flows generated during the first half of
2015 mainly resulted from the initial payment related to the
agreement signed with AstraZeneca/MedImmune on April 25, 2015
(€223.5m).
The cash flow generated during the
period under review mainly results from the following:
-
Net cash used in operating activities of €22.1m,
mainly resulting from research and development activities and
personnel expenses;
-
Net cash generated from investing activities for
an amount of €29.2m, mainly resulting from:
-
The disposal (net of acquisition) of financial
assets for an amount of €37.2m;
-
Acquisition of intangible assets for an amount
of €7.7m, mainly corresponding to the additional consideration
relating to monalizumab paid to Novo Nordisk A/S following the
agreement signed with AstraZeneca/MedImmune in 2015;
-
Net cash used in financing activities for an
amount of €0.2m, mainly resulting from the reimbursement of
finance-leases (principal and interest).
Precisions
The interim consolidated financial
statements for the six-month period ended June 30, 2016 have been
subject to a limited review by our Statutory Auditors and were
approved by the Executive Board of the Company on September 6,
2016. They were reviewed by the Supervisory Board of the Company on
September 7, 2016. They will not be submitted for approval to the
general meeting of shareholders.
Risk
factors
Risk factors identified by the
Company are presented in paragraph 1.8 of the registration document
("Document de Référence") submitted to the French stock-market
regulator, the "Autorité des Marchés Financiers", on April 25, 2016
(AMF number D.16-0397). The main risks and uncertainties the
Company may face in the six remaining months of the year are the
same as the ones presented in the registration document available
on the internet website of the Company. These risks and
uncertainties may occur not only during the six months remaining in
the financial year but also in the years to come.
Related party
transactions
Transactions with related parties
during the periods under review are disclosed in Note 18 to the
interim consolidated financial statements prepared in accordance
with IAS 34 revised.
No material transaction was
concluded with a member of the executive committee or the
supervisory board following the date of the 2015 registration
document.
[*] Including
current and non-current financial assets
[1] Current and
non-current
[2] This
program is developed within the TumAdoR project (www.tumador.eu),
coordinated by Dr C. Caux (Centre Léon Bérard and Centre de
Recherche en Cancérologie, Lyon, France), and funded under the
European Community's seventh framework Program (European
Community's Seventh Framework Program (FP7/2007-2013) under grant
agreement n°602200).
[§] Net cash is
equal to cash, cash equivalents and current financial assets less
current financial liabilities.
PR IPH financial results for the
first half of 2016
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: INNATE PHARMA via Globenewswire
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