2018 financial results and business update: landmark deal with
AstraZeneca to support transition into a fully integrated
oncology-focused biotech, strong clinical progress in lead assets
2018 FINANCIAL RESULTS AND BUSINESS
UPDATE: LANDMARK DEAL WITH ASTRAZENECA TO SUPPORT TRANSITION INTO A
FULLY INTEGRATED ONCOLOGY-FOCUSED BIOTECH, STRONG CLINICAL PROGRESS
IN LEAD ASSETS
- Cash, cash equivalents and financial assets[*] amounted
to €202.7m (million euros) as of December 31, 2018 (€176.6m in
2017)
- Revenue and other income amounted to €94.0m (€36.2m in
2017)
- Operating expenses amounted to €87.7m (€76.0m in 2017),
in which approximately 79% dedicated to research and
development
- Landmark deal with AstraZeneca accelerates Innate
Pharma’s transition into a fully-integrated oncology-focused
biotech and supports the continued development of its novel
immuno-oncology discovery platform
- Acquisition of Lumoxiti is the first step towards
building a hemato-oncology franchise, complementing Innate’s
wholly-owned pipeline candidate IPH4102
- AstraZeneca obtained full oncology rights to
monalizumab and expanded collaboration to gain option to IPH5201
and four preclinical assets
- Net proceeds totaled $192m[†]
- Significant clinical progress, with encouraging
efficacy signals from lead partnered asset, monalizumab, and lead
proprietary asset, IPH4102, support further clinical development in
a maturing pipeline
- Strengthening of commercial team and expands presence
in the US, appointing industry leaders, Jennifer Butler, as EVP, US
General Manager and Hélène Arditti, as a Strategic Executive
Advisor for commercialization to the Innate Executive
Committee
Marseille,
France, March 20, 2019 – 07:00 AM CET
Innate Pharma (the “Company” - Euronext Paris:
FR0010331421 – IPH) today reports its consolidated financial
results for the year ended December 31, 2018. The consolidated
financial statements are attached to this press release.
“2018 was a remarkable year for Innate during
which two of our lead programs, monalizumab and IPH4102,
demonstrated promising efficacy in their lead indications. In
addition to this, the transformational deal signed with AstraZeneca
not only validates our novel science and clinical development
expertise, but accelerates the transition of Innate Pharma to
become a fully-integrated biotech company,”
commented Mondher Mahjoubi, Chief
Executive Officer of Innate Pharma. “The acquisition of
FDA-approved Lumoxiti for third line Hairy Cell Leukemia patients
complements our proprietary pipeline of promising assets. The
planned commercial infrastructure in the US will not only provide
Innate with the necessary footprint to support the continued
roll-out of this product, but will also be leveraged for potential
future products such as IPH4102. We are pleased to welcome Jennifer
Butler to our leadership team as the US General Manager who will
lead the strategy, operations, and hiring of talent in the US. In
2019, we are committed to executing a smooth commercial transition,
expanding our presence in the US and will continue to secure
financial resources to invest in our science to discover and
develop novel therapeutics for oncology patients.”
A conference
call will be held today at 2:00pm (CEST)
Management
Participants: Mondher Mahjoubi, CEO, Laure-Helene Mercier, CFO,
Pierre Dodion, CMO, and Jennifer Butler, US General
Manager
Dial in numbers:
France and
International: +33 (0)1 72 72 74 03 US only:
+1 646 722 4916
PIN code: 45649727#
The presentation will
be made available on the Company’s website 30 minutes before
the conference begins.
A replay will be
available on Innate Pharma’s website after the conference call.
Financial highlights for
2018:
The key elements[‡] are as follows:
- Cash, cash equivalents and financial assets amounting to
€202.7m (million euros) as of December 31, 2018 (€176.6m as of
December 31, 2017), including non-current financial instruments
(€35.2m). This follows the receipt in October of €102.9m as a first
tranche of the agreement signed with AstraZeneca in October 2018.
- At the same date, the financial liabilities amounted to €4.5m
(€5.9m as of December 31, 2017).
- Revenue and other income amounting to €94,0m (€36.2m in 2017).
This figure mainly results from licensing revenue (€79.9m) and from
research tax credit (€13.5m).
- Revenue from collaboration and licensing agreements mainly
results from the spreading of the initial payment of $250m received
in 2015 by Innate Pharma in the context of the agreement with
AstraZeneca for monalizumab signed in April 2015, extended in
October 2018 with an additional $100m payment (€61.5m and €24.5m in
2018 and 2017 respectively) but also, €15.6m from the spreading of
the initial payment of $50m for the agreement with
AstraZeneca on IP5201 signed in October 2018
- Operating expenses amounting to €87.7m (€76.0 m in 2017) of
which 79% related to research and development outgoings. The
increase in R&D expenses between 2017 and 2018 reflects
continued investment in the clinical and preclinical development
programs, as well as support for the broader organization.
- Net income (loss) from distribution agreements amounting to a
loss of €1.1 million, arising from the launch of Lumoxiti in the
US.
- A net financial loss amounting to €2.4m.
- As a consequence of the items mentioned previously, the net
profit for 2018 amounts to €3.0m, compared with a loss of €41.7m
for 2017.
The table below summarizes the IFRS consolidated
financial statements for fiscal year 2018, with a comparison to
2017:
In thousands of euros, except for data per
share |
December 31, 2018 |
December 31, 2017 restated[§] |
December 31, 2017 |
Revenue and other income |
93,952 |
|
36,221 |
|
44,033 |
|
Research and development |
(69,555 |
) |
(58,962 |
) |
(67,000 |
) |
General and administrative |
(18,142 |
) |
(17,015 |
) |
(17,015 |
) |
Net result from Lumoxiti agreement |
(1,109 |
) |
- |
|
- |
|
Operating income/(loss) |
5,146 |
|
(39,756 |
) |
(39,983 |
) |
Financial income (expense), net |
(2,427 |
) |
(1,609 |
) |
(8,034 |
) |
Corporate tax |
333 |
|
(368 |
) |
(368 |
) |
Net income (loss) |
3,049 |
|
(41,733 |
) |
(48,385 |
) |
Weighted average number of shares outstanding (in
thousands)[**] |
58,777 |
|
54,352 |
|
54,352 |
|
Net loss per share |
0.05 |
|
(0.77 |
) |
(0.89 |
) |
|
|
December 31, 2018 |
December 31, 2017 restated |
December 31, 2017 |
Cash, cash equivalents and financial assets[††] |
202,712 |
|
176,578 |
|
176,578 |
|
Total assets |
451,216 |
|
258,121 |
|
255,023 |
|
Shareholders’ equity |
167,240 |
|
99,444 |
|
85,956 |
|
Total financial debt |
4,522 |
|
5,864 |
|
5,864 |
|
Post Balance Sheet Events
- As of January 31, 2019, cash, cash equivalents and financial
assets amounted to €256.6m following the definitive payments from
and to AstraZeneca relating to the agreements signed in October
2018, including non-current financial instruments (€35.2m).
Pipeline update
Lumoxiti (CD22-directed
cytotoxin):
Lumoxiti is a CD22-directed
cytotoxin and a first-in-class medicine approved in the US for
adult patients with relapsed or refractory Hairy Cell Leukemia
(HCL) who have received at least two prior systemic therapies,
including treatment with a purine nucleoside analog. Approximately
1,000 people are diagnosed with HCL in the US each year, a subset
of which are eligible for Lumoxiti. Lumoxiti was approved by the US
FDA on September 13, 2018.
- Innate has licensed the US and EU commercial rights of
AstraZeneca’s FDA approved medicine for HCL, Lumoxiti, marking the
first step of Innate’s strategy to become a fully integrated
company.
- Innate and AstraZeneca are having a collaborative and staged
transition of operations for the product, with AstraZeneca
responsible for all aspects of the commercialization of Lumoxiti in
the US up to mid-2020 at the latest, with a potential sooner
transition. As of November 2018, AstraZeneca launched the
commercialization of Lumoxiti in the US. Innate, with support from
AstraZeneca, will continue EU development and commercialization,
pending regulatory submission and approval.
- Under the terms of the agreement, AstraZeneca received $50
million upfront for Lumoxiti (paid in January 2019) and is eligible
for $25 million for future commercial and regulatory milestones.
Innate will reimburse AstraZeneca for costs incurred other than in
2019 where there will be some sharing of costs and will recognize
profit (losses).
IPH4102 (anti-KIR3DL2
antibody):
IPH4102 is a first-in-class,
humanized cytotoxicity-inducing antibody designed for treatment of
T Cell Lymphoma. This group of lymphomas has a poor prognosis with
few therapeutic options at advanced stages.
- In January 2019, the FDA granted IPH4102 Fast-Track Designation
(FTD) for the treatment of adult patients with relapsed/refractory
Sézary Syndrome. IPH4102 was previously granted orphan drug status
in the European Union and in the United States for the treatment of
CTCL.
- FTD was based on results of the Phase I dose-escalation and
expansion study of IPH4102 in advanced CTCL (n=44). As of October
15, 2018, data from the subgroup of 35 SS patients revealed strong
clinical activity, demonstrated by an overall response rate (ORR)
of 42.9%, median duration of response (DoR) of 13.8 months and
median progression-free survival (PFS) of 11.7 months. The ORR
appeared to be higher (n=28, 53.6%) in patients with no histologic
evidence of large cell transformation (LCT)[‡‡]. Importantly,
clinical activity was associated with a substantial improvement in
quality of life as assessed by the SkinDex29 and Pruritus Visual
Analog Scale (VAS) scores. IPH4102 displayed a favorable safety
profile, consistent with previous observations. Data from the
subgroup of Sézary Syndrome patients (n=35) have been the subject
of an oral presentation at ASH 2018.
- Innate Pharma expects to initiate a global Phase II study
(“TELLOMAK”) in different subtypes of T-cell lymphomas in the first
half of 2019. TELLOMAK is an open-label, multi-cohort Phase II
study expanding the evaluation of the efficacy and safety of
IPH4102 in larger patient populations expressing KIR3DL2, including
PTCL. TELLOMAK is planned to recruit up to 250 patients, with
IPH4102 evaluated as a single agent in patients with SS and Mycosis
Fungoides (MF - approximately 150 patients) and in combination with
standard chemotherapy (gemcitabine and oxaliplatin) in patients
with PTCL (approximately 100 patients). In patients with MF and
PTCL, the study is designed to evaluate the benefit of IPH4102
according to KIR3DL2 expression.
IPH5401 (anti-C5aR
antibody):
IPH5401 is a first-in-class
fully human therapeutic antibody that specifically binds and blocks
C5a receptors (C5aR) expressed on subsets of myeloid-derived
suppressor cells (MDSC) and neutrophils.
- In January 2018, the Company entered into a non-exclusive
clinical trial collaboration with AstraZeneca that will accelerate
development activities for IPH5401 in combination with PD-1/L1
blockers.
- In September 2018, a Phase I trial evaluating IPH5401 and
durvalumab in solid tumors (STELLAR-001[§§]) was initiated and the
first patient was enrolled. The multicenter, open label,
dose-escalation and dose-expansion study will evaluate the safety,
tolerability, and anti-tumor activity of IPH5401 in combination
with durvalumab in solid tumors, including non-small-cell lung
cancer (NSCLC) with secondary resistance to prior immuno-oncology
(IO) treatment and IO-naïve hepatocarcinoma (HCC).
Monalizumab (anti-NKG2A antibody),
partnered with AstraZeneca/MedImmune:
Monalizumab is a first-in-class
checkpoint inhibitor, targeting the NKG2A inhibitory receptor
expressed on tumor infiltrating cytotoxic CD8 T lymphocytes and NK
cells. This monoclonal antibody is currently being investigated in
an exploratory program of Phase I or I/II clinical trials in
various cancer indications.
In October 2018, AstraZeneca exercised its
option to obtain full rights to monalizumab in oncology, triggering
a $100 million payment in January 2019. As previously announced in
the original collaboration agreement from 2015, another $100
million milestone payment is due at the potential start of the
first Phase III development.
- monalizumab and cetuximab:
During the year, Innate Pharma presented data
from an expansion cohort of an ongoing Phase I/II trial evaluating
the safety and efficacy of the combination of monalizumab with
cetuximab (anti-EGFR) in patients with recurrent or metastatic
squamous cell carcinoma of the head and neck (SCCHN), at the AACR
Annual Meeting and updated on the full sample of patients enrolled
at the ESMO Congress.
As of August 31, 2018, a total of 40 patients
with R/M SCCHN were evaluable for safety and efficacy. In the study
evaluating the combination of monalizumab and cetuximab the overall
response rate was 27.5% (by RECIST) including 1 confirmed complete
response (2.5%) and 10 partial responses (25%). Disease control
rate at 24 weeks (DCR) was 35%. Median progression-free survival
(PFS) and overall survival (OS) reached 5.0 and 10.3 months,
respectively. In addition, there were 3 (18%) responders among the
17 patients who had been previously treated with PD-1/L1
antibodies.
In November 2018, Innate Pharma presented
exploratory subgroup analyses and preliminary translational data
from this Phase II trial at the SITC 2018 Annual Meeting.
Taken together, these data supports the
advancement of the clinical program, starting with the enrollment
of an additional cohort of patients who received both prior
platinum-based chemotherapy and PD-1/L1 inhibitors
(“IO-pretreated”). Recruitment in this cohort expansion is
ongoing.
- monalizumab and durvalumab:
In June 2018, preliminary clinical data from an
expansion cohort of an ongoing Phase I trial evaluating the safety
and efficacy of the combination of monalizumab and durvalumab in
patients with microsatellite-stable colorectal cancer (MSS-CRC)
were presented at the annual meeting of the American Society of
Clinical Oncology (ASCO) 2018. The safety profile of the
combination was consistent with the monotherapy profiles. Among the
39 patients evaluable for efficacy, the overall response rate (ORR)
was 8% with confirmed partial response in 3 patients and stable
disease (SD) in 11 patients (28%), including 3 SD patients with
tumor reduction who continued therapy for >200 days. The median
duration of response was 16.1 weeks at the cut-off date. Data
demonstrated a disease control rate (DCR) of 31% at 16 weeks.
These data have prompted AstraZeneca to further
expand the study with additional patient cohorts to explore the
novel combination of monalizumab with durvalumab on top of current
standard of care therapies in patients with less heavily pretreated
disease.
Translational data from the Phase I study has
been presented at the European Society of Medical Oncology (ESMO)
Congress in October by AstraZeneca.
IPH5201 (anti-CD39 antibody) and IPH5301
(anti-CD73 antibody):
CD39 and CD73 are membrane-bound extracellular
enzymes which play a major role in promoting immunosuppression
through the pathway degrading adenosine triphosphate (ATP) into
adenosine. The blockade of CD39 and CD73 has the potential to
promote anti-tumor immune responses across a wide range of
tumors.
- During the first semester, drug candidates for both programs
were chosen.
- In April 2018, preclinical data supporting the development of
IPH5201 and IPH5301 for cancer immunotherapy, potentially in
combination with chemotherapy or immune checkpoint blockade were
presented at the AACR Annual Meeting.
- In October 2018, AstraZeneca entered into a development
collaboration and option for further co-development and
co-commercialization with Innate for IPH5201. AstraZeneca paid
Innate $50 million upfront. Innate is eligible to additional option
exercise fee, milestones, and royalties. Innate will have the
potential for co-promotion and profit sharing in the EU. Innate
expects an IND to be filed in the second half of 2019.
- Innate continues to advance IPH5301 and expects to file an IND
in the first half of 2020.
Preclinical pipeline
As part of the agreement signed in October 2018,
AstraZeneca has paid Innate $20 million upfront for an exclusive
license option on four molecules from Innate’s preclinical
portfolio. The targets have not been disclosed. These options
can be exercised before the molecules reach clinical development,
triggering an option exercise fee in addition to milestones and
royalties. Innate will have the potential for co-promotion and
profit sharing in the EU, dependent on future progress.
In 2018, the Company also continued to advance
its pipeline of preclinical candidates and to develop its
innovative technologies.
Corporate update:
- In October 2018, the company signed a multi-term agreement with
AstraZeneca, building on an existing collaboration, aimed at
accelerating each company’s oncology portfolio and bringing new
medicines to patients more quickly. Under the terms of the
agreement, Innate Pharma licensed the US and EU commercial rights
to AstraZeneca’s recently FDA-approved Lumoxiti for hairy cell
leukemia and agreed to a $50 million initial payment. AstraZeneca
obtained full rights to the first-in-class humanized anti-NKG2A
antibody, monalizumab, in oncology, by exercising the $100 million
option included in the initial collaboration announced in 2015.
AstraZeneca gained option rights to IPH5201, an antibody targeting
CD39 including an initial payment of $50 million, as well as to
four, non-disclosed pre-clinical molecules from Innate Pharma’s
pipeline for a global $20 million initial payment. AstraZeneca also
invested in a 9.8% equity stake (6,260,500 shares) in Innate at €10
per share. Further details on the financial terms of the agreements
can be found here.
- As at December 31, 2018, the headcount was
195 employees.
- Hélène Arditti has joined as a Strategic Executive Advisor for
commercialization to the Innate Executive Committee. Ms. Arditti
brings over 20 years of global marketing and franchising expertise
with a focus in oncology. Most recently she was the Global
Uro-oncology Franchise Senior Vice President and previously the
Endocrinology Marketing Director at Ipsen. In both of these
positions, Ms. Arditti successfully developed the global launch,
life cycle management, and business development strategies for two
oncology products, Decapeptyl® and Cabometyx®. Ms. Arditti reports
directly into Mondher Mahjoubi, Chief Executive Officer.
- Guillaume Gimonet joined as Senior Director, Launch Excellence
for Lumoxiti. He is responsible for leading the launch of Lumoxiti
across cross-functional teams to ensure smooth and timely
projection execution. He was most recently the Director of Global
Program Management and previously the Global Launch Management
Director Oncology at Ipsen in which he secured Cabometyx®
accelerated launch in Renal Cell Cancer.
- Jérôme Tiollier’s resignation as EVP and Chief Development
Officer, comes after a 17 years at Innate Pharma in which he was
instrumental in the pharmaceutical development and operations of
the company.
Post period events:
- In March 2019, Jennifer Butler was appointed as the General
Manager of Innate Pharma US Inc. and Executive Vice President,
effective March 11, 2019. She brings over more than 20 years of
strategic marketing and commercial leadership expertise across
several therapeutic areas. Ms Butler will lead Innate Pharma’s US
corporate activities focusing on establishing the US operations to
fully support the commercialization of Lumoxiti®.
Additionally, her role will support global commercial and
clinical operations of a fully-integrated hemato-oncology
franchise.
- In February 2019, Innate Pharma announced that its Supervisory
Board has appointed Laure-Hélène Mercier, Chief Financial Officer,
as a member of the Executive Board for a period of three years. The
Supervisory Board has also renewed the appointments to the
Executive Board of Dr. Mondher Mahjoubi, CEO, and Dr. Yannis Morel,
EVP Business Development and Portfolio Strategy, for three
additional years. As from January 31, 2019, the Executive Board is
now composed of three members, appointed for a three-year
period.
- Additionally, Odile Belzunce was appointed to the executive
committee as SVP Compliance and Portfolio Management in January
2019. Odile Belzunce joined Innate Pharma in February 2005. She was
Quality Manager during 10 years before becoming Head of Compliance.
During her career at Innate, Odile Belzunce contributed to the
structuration of the processes as the Company was growing,
developing its portfolio and its activities.
About Innate Pharma:
Innate Pharma S.A. is a fully integrated
oncology-focused biotech company dedicated to improving treatment
and clinical outcomes for patients through therapeutic antibodies
that harness the immune system to fight cancer.
Innate Pharma’s commercial-stage product,
Lumoxiti, in-licensed from AstraZeneca, was approved by the FDA in
September 2018. Lumoxiti is a first-in class specialty oncology
product for hairy cell leukemia (HCL). Innate Pharma’s broad
pipeline of antibodies includes several first-in-class clinical and
preclinical candidates in cancers with high unmet medical need.
Innate Pharma has pioneered the discovery and
development of checkpoint inhibitors, with a unique expertise and
understanding of Natural Killer cell biology. This innovative
approach has resulted in major alliances with leaders in the
biopharmaceutical industry including Bristol-Myers Squibb, Novo
Nordisk A/S, Sanofi, and a landmark and multi-products partnership
with AstraZeneca/MedImmune.
Based in Marseille, France, Innate Pharma is
listed on Euronext Paris.
Learn more about Innate Pharma at
www.innate-pharma.com.
Information about Innate Pharma
shares:
ISIN codeTicker
codeLEI |
FR0010331421IPH9695002Y8420ZB8HJE29 |
Disclaimer:
This press release contains certain
forward-looking statements. Although the company believes its
expectations are based on reasonable assumptions, these
forward-looking statements are subject to numerous risks and
uncertainties, which could cause actual results to differ
materially from those anticipated. For a discussion of risks and
uncertainties which could cause the company's actual results,
financial condition, performance or achievements to differ from
those contained in the forward-looking statements, please refer to
the Risk Factors (“Facteurs de Risque") section of the Document de
Reference prospectus filed with the AMF, which is available on the
AMF website www.amf-france.org or on Innate Pharma’s website.
This press release and the information contained
herein do not constitute an offer to sell or a solicitation of an
offer to buy or subscribe to shares in Innate Pharma in any
country.
For additional information, please
contact:
Investors Innate
Pharma Dr. Markus Metzger / Danielle Spangler
/Jérôme Marino Tel.: +33 (0)4 30 30 30 30
investors@innate-pharma.com |
International Media
Consilium Strategic Communications Mary-Jane
Elliott / Jessica Hodgson Tel.: +44 (0)20 3709 5700
InnatePharma@consilium-comms.com |
|
French Media ATCG
Partners Solène Moulin Tel.: +33 (0)9 81 87 46 72
presse@atcg-partners.com |
APPENDIX
Innate Pharma SA
Consolidated
financial statements at December 31,
2018
The following consolidated balance sheet, income
statement and statement of cash flows are prepared in accordance
with International Financial Reporting Standards.
The audit procedures on the consolidated
financial statements have been performed. The auditors’ report will
be issued after the finalization of the required procedures
relating to the filing of the annual report (‘Document de
Référence’). The consolidated financial statements were approved by
the Company's Executive board on March 19, 2019. These statements
were reviewed by the Company's Supervisory board on March 19, 2019
and will be submitted for approval to the Shareholders' General
Meeting on May 22, 2019.
Innate Pharma’s financial annual report,
included in the reference document, will be available during the
second quarter of 2018.
Statement of financial
position(in thousand euros)
|
As of December 31, |
|
2018[***] |
2017 |
|
Assets |
|
|
Cash and cash equivalents |
152,314 |
|
99,367 |
|
Short term investments |
15,217 |
|
16,743 |
|
Current receivables |
152,212 |
|
21,412 |
|
Total current assets |
319,643 |
|
137,521 |
|
|
|
|
Intangible assets |
84,529 |
|
46,192 |
|
Tangible assets |
10,216 |
|
10,729 |
|
Non-current financial assets |
35,181 |
|
60,469 |
|
Deferred tax asset |
1,561 |
|
- |
|
Other non-current assets |
86 |
|
111 |
|
Total non-current assets |
131,574 |
|
117,501 |
|
|
|
|
Total assets |
451,216 |
|
255,023 |
|
|
|
|
Liabilities |
|
|
Trade payables |
91,655 |
|
24,657 |
|
Collaboration liability - current portion |
20,987 |
|
- |
|
Financial liabilities – current portion |
1,347 |
|
1,343 |
|
Deferred revenue – current portion |
82,096 |
|
47,909 |
|
Total current liabilities |
19,085 |
|
73,909 |
|
|
|
|
Financial liabilities – non-current portion |
3,175 |
|
4,521 |
|
Collaboration liability - non-current portion |
10,669 |
|
- |
|
Defined benefit obligations |
3,697 |
|
2,621 |
|
Deferred revenue – non-current portion |
68,098 |
|
87,005 |
|
Provisions |
690 |
|
1,012 |
|
Deferred tax liability |
1,561 |
|
- |
|
Total non-current liabilities |
87,890 |
|
95,158 |
|
|
|
|
Share capital |
3,197 |
|
2,880 |
|
Share premium |
299,932 |
|
234,874 |
|
Retained earnings |
(137,840 |
) |
(103,595 |
) |
Net income (loss) |
3,049 |
|
(48,385 |
) |
Other reserves |
1,099 |
|
180 |
|
Total shareholders’ equity attributable to equity holders
of the Company |
167,240 |
|
85,956 |
|
Total liabilities and equity |
451,216 |
|
255,023 |
|
Statement of income (loss)
(in thousand euros)
|
Year ended December 31, |
|
2018[†††] |
2017 |
|
|
|
|
Revenue from collaboration and licensing agreements |
79,892 |
|
32,631 |
|
Government financing for research expenditures |
14,060 |
|
11,402 |
|
Operating revenue |
93,952 |
|
44,033 |
|
Research and development |
(69,555 |
) |
(67,000 |
) |
General and administrative |
(18,142 |
) |
(17,015 |
) |
Operating expenses |
(87,697 |
) |
(84,015 |
) |
Net income (loss) from distribution agreements |
(1,109 |
) |
- |
|
|
|
|
Operating income (loss) |
5,146 |
|
(39,983 |
) |
Financial income |
6,002 |
|
2,501 |
|
Financial expenses |
8,429 |
|
(10,535 |
) |
|
|
|
Net income (loss) before tax |
2,718 |
|
(48,016 |
) |
Income tax expense |
333 |
|
(368 |
) |
Net income (loss) |
3,049 |
|
(48,385 |
) |
Net income (loss) per share
attributable to equity holders of the Company: |
|
|
Weighted average number of shares (in thousand): |
58,777 |
|
54,352 |
|
(in € per share) |
|
|
- Basic gain (loss) per share |
0.05 |
|
(0.89 |
) |
- Diluted gain (loss) per share |
0.05 |
|
(0.89 |
) |
Statement of cash
flows(in thousand euros)
|
Year ended December 31, |
|
2018 |
|
2017 |
|
Net income (loss) |
3,049 |
|
(48,385 |
) |
Depreciation and amortization |
7,401 |
|
4,393 |
|
Provisions for defined benefit obligations |
477 |
|
381 |
|
Provisions for charges |
(322 |
) |
877 |
|
Share-based compensation expense |
2,707 |
|
9,829 |
|
Change in valuation allowance on financial assets |
3,786 |
|
(26 |
) |
Gains (losses) on financial assets |
(1,341 |
) |
3,381 |
|
Change in valuation allowance on financial instruments |
152 |
|
(204 |
) |
Gains on assets and other financial assets |
(1,445 |
) |
(1,442 |
) |
Interest paid |
102 |
|
113 |
|
Operating cash flow before change in working
capital |
14,566 |
|
(31,080 |
) |
Change in working capital(1) |
(60,584 |
) |
(16,980 |
) |
Impact of IFRS 15 |
13,488 |
|
- |
|
Net cash generated from / (used in) operating
activities |
(32,531 |
) |
(48,060 |
) |
Acquisition of property and equipment |
(1,041 |
) |
(2,968 |
) |
Variance on liabilities related to property and equipment |
168 |
|
4 |
|
Acquisition of intangible assets |
(556 |
) |
(3,062 |
) |
Purchase of current financial instruments |
- |
|
(2,543 |
) |
Purchase of non-current financial instruments |
- |
|
(40,729 |
) |
Disposal of property and equipment |
22 |
|
50 |
|
Disposal of current financial instruments |
2,704 |
|
5,646 |
|
Disposal of non-current financial instruments |
21,513 |
|
11,895 |
|
Disposal of other non-current assets |
25 |
|
- |
|
Gains on assets and other financial assets |
1,445 |
|
1,442 |
|
Net cash generated from / (used in) investing
activities |
24,279 |
|
(29,460 |
) |
Proceeds from the exercise / subscription of equity instrument |
111 |
|
491 |
|
Capital increase |
62,557 |
|
- |
|
Collection of new loans |
- |
|
1,739 |
|
Repayment of financial liabilities |
(1,343 |
) |
(1,202 |
) |
Interest paid |
(102 |
) |
(113 |
) |
Net cash generated from / (used in) financing
activities |
61,222 |
|
915 |
|
Effect of the exchange rate changes |
(26 |
) |
66 |
|
Net increase / (decrease) in cash and cash
equivalents |
52,920 |
|
(76,539 |
) |
Cash and cash equivalents at the beginning of the year |
99,367 |
|
175,906 |
|
Cash and cash equivalents at the end of the
year |
152,314 |
|
99,367 |
|
Management discussion on annual results for
2018:
Note on change of accounting standards
during the period
During the period, two new standards IFRS 15
“Revenue from contracts with customers” and IFRS 9 “Financial
instruments” became mandatory from January 1, 2018.
- IFRS 15 supersedes IAS 18 “Revenue”, changes the accounting
treatment of the revenue relating to the licensing and
collaboration agreement signed with AstraZeneca in 2015. Under IFRS
15, the portion of the co-funding of R&D works performed by
AstraZeneca is no longer recognized in R&D expenses but
deducted from the recognition of the payment received by Innate
Pharma at signing. This portion of co-funding is now recognized as
a liability and no longer as a deferred revenue in the balance
sheet.
- The Company has opted for the cumulative effect approach. In
order to provide the most relevant comparison, it presents a 2017
restated column including the impact of the first application of
IFRS 15. In all comments, the Company refers to the 2017 restated
figures.
- Regarding financial instruments, IFRS 9 requires for
non-derivative financial assets a change of name of the
sub-categories of financial assets without, however, modifying the
valuation principles of these assets, which remain either at fair
value or amortized cost. The valuation models used by Innate Pharma
remain unchanged.
Revenue and other income
Revenue and other income results from
collaboration and licensing agreements and government financing for
research expenditures. The Company’s revenue and other income were
€36.2 million and €94.0 million for the fiscal years ended December
31, 2017 and 2018 from the following sources:
Year ended December 31 (in thousand euros) |
2018 |
2017 restated |
2017 |
Revenue from collaboration and licensing agreements |
79,892 |
24,819 |
32,631 |
Government financing for research expenditures |
14,060 |
11,402 |
11,402 |
Revenue and other income |
93,952 |
36,221 |
44,033 |
Revenue from collaboration and licensing
agreements
Revenue from collaboration and licensing
agreements amounted to €79.9 and €24.8 million for the fiscal years
ended December 31, 2018 and 2017, respectively. These revenues
mainly result from the agreements signed with AstraZeneca in April
2015 and October 2018.
IPH2201 (monalizumab)
The amounts recognized for the fiscal year 2018
and 2017 are €61.5 million and €24.5 million respectively. The
percentage of completion has been determined on the basis of the
costs recognized during the period compared to the total expected
costs. As at December 31, 2018, the amount not yet recognized in
revenue is €150.2 million (€82.1 million as “Deferred revenue –
Current portion” and €68.1 million as “Deferred revenue –
Non-current portion”).
IPH5201 (anti-CD39)
The amount recognized for the fiscal year 2018
is €15.6 million. In addition to the recognition of the upfront
payment, the Company invoiced back R&D costs to AstraZeneca.
The percentage of completion has been determined on the basis of
the costs recognized during the period compared to the total
expected costs. As at December 31, 2018, the amount not yet
recognized in revenue amounts to €27.9 million, classified as
“Deferred revenue – Current portion”.
IPH5401 (anti-C5aR)
On January 30, 2018, Innate Phama announced that
it had entered into a clinical trial collaboration with
AstraZeneca. The Phase I/II study (STELLAR-001) will evaluate the
safety and efficacy of durvalumab, an anti-PD-L1 immune checkpoint
inhibitor, in combination with IPH5401, as a treatment for patients
with selected solid tumors. Innate will sponsor the study with
costs equally shared by both parties.
Government funding for research expenditures
The table below details the government financing
for research expenditure for the fiscal years ended December 31,
2017 and 2018:
Year ended December 31 (in thousand euros) |
2018 |
2017 |
Research tax credit |
13,527 |
11,041 |
French and foreign public grants |
533 |
361 |
Government financing for research
expenditures |
14,060 |
11,402 |
The calculation of the research tax credit is
based on 30% of the amount of eligible expenses for the fiscal
year.
The table below shows the amount of R&D
expenses (net of grants) eligible for the fiscal years ended
December 31, 2017 and 2018:
Year ended December 31 (in thousand euros) |
2018 |
|
2017 |
|
R&D expenses eligible for the research tax credit |
45,395 |
|
37,075 |
|
Grants received, net |
(386 |
) |
(334 |
) |
Net expenses eligible for the research tax
credit |
45,009 |
|
36,741 |
|
Net expenses eligible for the research tax
credit increased by 23% compared to the fiscal year 2017. For the
fiscal year 2018, the rise in eligible expenses mainly results from
the increase in staff costs and amortization expense relating to
the anti-NKG2A intangible asset. The inclusion of this amortization
expense for the calculation of the research tax credit results from
the decision of the Administrative appeal court of Bordeaux to
include this type of expenses (judgement date March 16, 2016 and
confirmed by the State Council in December 2017).
The research tax credit is generally reimbursed
by the French government four years after the fiscal year for which
it is determined. However, since 2011, companies that meet the
definition of small and medium sized enterprises (“SMEs”) according
to the European Union criteria are eligible for early reimbursement
of their research tax credit receivable. The status of SME is lost
when the criteria for eligibility are exceeded during two
consecutive years. The Company meets these criteria and is able to
benefit of this status and related advantages and in particular the
early tax credit reimbursement. According to Management forecasts,
the status may be lost at the end of the fiscal year
2019.
During the fiscal years 2017 and 2018, the
income resulting from grants relates to an European grant in the
context of the FP-7 Program and a grant under the FEDER Program.
These grants directly impact our income statement, as opposed to
repayable loans which are recorded as debt and thus only impact our
balance sheet.
Operating expenses by business
function
The table below gives a breakdown of net
operating expenses by business function for the fiscal years ended
December 31, 2017 and 2018:
Year ended December 31 (in thousand euros) |
2018 |
|
2017 restated |
2017 |
|
Research and development expenses |
(69,555 |
) |
(58,962 |
) |
(67,000 |
) |
General and administrative expenses |
(18,142 |
) |
(17,015 |
) |
(17,015 |
) |
Net operating expenses |
(87,697 |
) |
(75,977 |
) |
(84,015 |
) |
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.
R&D expenses amounted to €59.0 million and
€69.6 million for the fiscal years ended December 31, 2017 and
2018, respectively, representing 79% of net operating expenses. The
increase in R&D expenses between 2017 and 2018 mainly results
from an increase in subcontracting costs relating to the progress
of the preclinical and clinical programs and staff growth.
General and administrative expenses include
expenses for employees not directly working on R&D, as well as
the expenses necessary for the management of the business and its
development. General and administrative expenses were €17.0 and
€18.1 million for the fiscal years ended December 31, 2017 and
2018, respectively, representing 21% of the net operating expenses.
This increase mainly results from the fees incurred by the Company
relating to the advisory services in the context of the agreements
signed with AstraZeneca in October 2018.
Operating expenses by
nature
The table below gives a breakdown of net
operating expenses by nature of expenses for the fiscal years ended
December 31, 2017 and 2018:
Year ended December 31 (in thousand euros) |
2018 |
|
2017 restated |
2017 |
|
Other purchases and external expenses |
(51,766 |
) |
(39,571 |
) |
(47,609 |
) |
Employee benefit other than share-based compensation |
(19,121 |
) |
(15,163 |
) |
(15,163 |
) |
Share-based compensation |
(2,707 |
) |
(9,985 |
) |
(9,985 |
) |
Depreciation and amortization |
(7,402 |
) |
(4,396 |
) |
(4,396 |
) |
Cost of supplies and consumable materials |
(3,820 |
) |
(4,287 |
) |
(4,287 |
) |
Intellectual property expenses |
(1,380 |
) |
(1,499 |
) |
(1,499 |
) |
Other income and (expenses), net |
(1,502 |
) |
(1,076 |
) |
(1,076 |
) |
Net operating expenses |
(87,697 |
) |
(75,977 |
) |
(84,015 |
) |
Other purchases and external
expenses
Other purchases and external expenses amounted
to €47.6 million and €51.7 million during the fiscal years ended
December 31, 2017 and 2018, respectively, broken down as
follows:
Year ended December 31 (in thousand euros) |
2018 |
|
2017 restated |
2017 |
|
Sub-contracting |
(42,327 |
) |
(29,958 |
) |
(37,996 |
) |
Non-scientific consultancy |
(5,260 |
) |
(4,357 |
) |
(4,357 |
) |
Leases, maintenance and utility |
(1,968 |
) |
(1,781 |
) |
(1,781 |
) |
Travel and conference costs |
(992 |
) |
(1,294 |
) |
(1,294 |
) |
Scientific consultancy and services |
(349 |
) |
(845 |
) |
(845 |
) |
Marketing, communication and public relations |
(518 |
) |
(649 |
) |
(649 |
) |
Attendance fees |
(212 |
) |
(205 |
) |
(205 |
) |
Others |
(140 |
) |
(313 |
) |
(482 |
) |
Other purchases and external expenses |
(51,978 |
) |
(39,571 |
) |
(47,609 |
) |
Sub-contracting expenses involve discovery
research costs (financing of research conducted externally,
particularly academic research, manufacturing process development,
etc.), preclinical development (pilot manufacturing, tolerance and
pharmacology studies, etc.) and clinical costs (clinical trial
management, etc.) outsourced to third parties. The increase in
these costs mainly results from the growth and progress of the
portfolio of preclinical and clinical programs.
Non-scientific consultancy expenses are mostly
fees paid to audit firms, to our certified public accountant for
his assistance in accounting, tax and employee matters, to our
lawyers, to business strategy or development consultants and
recruitment fees. The increase in these expenses between 2017 and
2018 mainly results from the advisory fees incurred in the context
of the agreements signed with AstraZeneca in October 2018.
Leases, maintenance and utility costs are mainly
maintenance costs for laboratory equipment and the building.
Travel and conference costs mainly include
expenses for employees travelling and attending conferences,
particularly scientific, medical, business development and
financial conferences.
Scientific consultancy and services consist of
costs related to external consultants assisting in the research and
development of our products. It also covers fees paid to members of
our Scientific Advisory Board.
Employee benefits other than share-based
compensation
Employee benefit expenses other than share-based
compensation came to €15.2 million and €19.1 million for the fiscal
years ended December 31, 2017 and 2018, respectively. This rise
mainly results from the impact of the recruitments of new employees
in both 2017 and 2018.
This includes salaries and social benefit costs.
On average, Innate Pharma had 171 and 193 employees during the
fiscal year ended December 31, 2017 and 2018, respectively.
The proportion of total staff, excluding
Executive committee members, allocated to R&D operations was
80% and 79% for the fiscal years ended December 31, 2017 and 2018
respectively.
The average amount of staff costs per employee
was €88 and €99 thousand for fiscal years ended December 31, 2017
and 2018 respectively. This rise results from general and
individual pay rises, a higher percentage of achievement of the
corporate objectives used in the computation of the collective
bonus compared to 2017 and the payment of an exceptional bonus in
relation to the agreement signed with AstraZeneca in 2018.
Share-based compensation
Share-based compensation amounted to €10.0
million and €2.7 million euros for the fiscal years ended December
31, 2017 and 2018, respectively.
In accordance with IFRS 2, these costs
correspond to the fair value of the equity instruments allocated to
directors and employees.
The cost recognized in 2017 results from the
issuance in 2016 an exceptional number of free shares and free
preferred shares including a condition requiring presence in the
context of the evolution of the management team, and from warrants
issued in 2017.
Depreciation and amortization
Depreciation and amortization amounted €4.4
million and €7.4 million for the fiscal years ended December 31,
2017 and 2018, respectively. This variance mainly results from the
amortization of the monalizumab intangible asset due to a price
complement to be paid to Novo Nordisk A/S following the agreement
signed with AstraZeneca. The amortization expense relating to this
asset amounts to €3.0 million and €4.8 million for fiscal years
2017 and 2018, respectively. The amortization of the Lumoxiti and
anti-CD39 assets amounts to €0.5 million and €0.3 million,
respectively (none in for 2017).
Cost of supplies and consumable materials
The cost of supplies and consumable materials
amounted to €4.3 million and €3.8 million for the fiscal years
ended December 31, 2017 and 2018, respectively. This change mainly
results from the purchase in 2017 of some drug in relation to the
performance of clinical trials.
Intellectual property expenses
Intellectual property expenses amounted to €1.5
million and €1.4 million for the fiscal years ended December 31,
2017 and 2018, respectively.
These expenses include the cost of filing and
protecting patents (including patents that were acquired from third
parties and where the agreements specified that Innate Pharma is
responsible for the relevant costs) as well as the costs for
obtaining an option or license for intellectual property. In
accordance with IAS 38, considering the degree of maturity of the
Company and the uncertainty that exists as to the outcome of its
research and development projects, intellectual property expenses
are recorded in expenses.
Other income and expenses, net
This item represented a net expense that
amounted to €0.5 million and €1.5 million for the fiscal years
ended December 31, 2017 and 2018, respectively.
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 acts as a principal in the
context of the production and commercialization of Lumoxiti.
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 research
and development costs which are recognized as R&D operating
expenses).
The commercialization of Lumoxiti began on
October 29, 2018 in the US. In the context of this launch, net
result from distribution agreements in 2018 amounts to a loss of
€1.1 million.
Net financial income
The net financial result amounted respectively
to a €1.6 million and a €2.4 million loss for the fiscal year ended
December 31, 2017 restated and 2018, respectively.
The Company’s cash investment policy favors the
minimum risk and, whenever possible, seeks guaranteed minimum
performance on capital. Therefore it is preferentially directed to
instruments with an absence of risk on principal and, wherever
possible, guaranteed minimum performance. For the instruments of
which the valuation can be impacted by some events, the Company
ensured that no such event occurred as of the closing date of the
consolidated financial statements.
The balance of cash, cash equivalents and short
term investments was €116.1 million and €167.5 million for the
fiscal years ended December 31, 2017 and 2018, respectively. In
addition, the Company held €60.5 million and €35.2 million of
non-current financial assets as at December 31, 2017 and 2018,
respectively. This increase in its cash position results from the
proceeds of the agreements signed in October 2018 with
AstraZeneca.
Income tax expense
For the first time, the taxable income of the
Company was positive for the year ended December 31, 2016. The tax
payable in respect of this exercise amounted to €301 thousand.
According to the nature of its revenues, the Company concluded that
it was subject to the law of capital gains income from intellectual
property and therefore benefits from the reduced 15% tax rate.
During the fiscal year 2017, the Company finally concluded that,
this law shall not apply and recorded an additional tax expense
amounting to €368 thousand which refers the difference between the
standard tax rate of 33% and the 15% tax rate.
Following the application of IFRS 15, the
Company recognized deferred tax asset and liability for an amount
of €1.6 million as of December 31, 2018.
During the fiscal year 2018, the Company opted
for the carry back mechanism (also called deferral of deficits).
This accounting and tax mechanism consists in deferring the tax
loss of a company over the profits of the three following years
(maximum) and generates a receivable from the tax administration
(€0.3m tax credit).
In accordance with IFRS, the research tax credit
is classified as an ‘Other revenue’ and not in the line ‘Income tax
expense’.
Net income/(loss) per share
The net result per authorized and issued share
came to a €0.89 loss per share and a €0.05 gain per share for the
fiscal years ended December 31, 2017 and 2018, respectively.
Balance sheet items
Cash, cash equivalents and financial instruments
(current and non-current) amounted to €202.7 million as of December
31, 2018, including non-current financial instruments (€35.2
million), compared with €176.6 million as of December 31, 2017. Net
cash at the same date amounted to €166.2 million (€114.8 million as
of December 31, 2017). Net cash is defined as the cash, cash
equivalent and current financial assets minus the current financial
liabilities. Cash and cash equivalents do not include the 2018
research tax credit which should be collected during the third
quarter of 2019 (€13.5 million) neither some receivables from
AstraZeneca resulting from the agreements signed in October 2018
(see below).
Since its incorporation in 1999, the Company has
been primarily financed by its “out-licensing” activity (mainly
resulting from the agreements signed with Novo Nordisk A/S,
Bristol-Myers Squibb and AstraZeneca) and issuing new securities.
The Company has also generated cash flow from repayable financing
and grants received from BPI France (ex Oséo). As of December 31,
2018, the remaining amount relating to these advances amounted to
€0.8 million, of which €0.3 million classified as “Current
financial liabilities” and €0.5 million as “Non-current financial
liabilities”.
The other key balance sheet items as of December
31, 2018 are as follows:
• Deferred revenue for €150.2 million (of
which €68.1 million classified as non current) and collaboration
liabilities for €31.7 million (of which €10.7 million classified as
non current) relating to the remaining of the initial payment from
AstraZeneca not yet recognized as turnover or paid in the context
of the co-financing of the monalizumab program with
AstraZeneca;
• Intangible assets for a net book value
of €84.5 million, mainly corresponding to the rights and licences
relating to the acquisition of the anti-NKG2A, anti-CD39, anti-C5aR
and Lumoxiti programs;
• Receivables for €108.0 million and
liabilities for €44.0 million from / towards AstraZeneca relating
to the agreements signed in October 2018 (these receivables and
liabilities have been collected and paid in January 2019);
• A €13.0 million liability towards Novo
Nordisk A/S, eligible to an additional consideration relating to
monalizumab following the exercise of the option by AstraZeneca
(this liability has been paid in February 2019);
• Receivables from the French government
in relation to research tax credit for the year 2018 (€13.5
million);
• Shareholders’ equity of €167.2 million
including the net profit for the period (€3.0 million).
Cash-flow
items
Net cash flows generated over the fiscal year
2018 amounted to €52.9 million, to be compared to a net cash flows
used for the fiscal year 2016 amounting to €76.5 million.
The cash flow generated during the period under
review mainly results from the following:
- Net cash used in operating activities of €32.5 million,
- mainly resulting from research and development activities and
personnel expenses (€72.8 million);
- partly offset by the collection of a part of the proceeds
related to the agreements signed with in AstraZeneca on October 23,
2018 (€40.3 million);
- Net cash from investing activities for an amount of €24.3
million, mainly resulting from the disposal of financial
instruments in the context of the cash management policy;
- Net cash from financing activities for an amount of €61.2
million, mainly resulting from the acquisition by AstraZeneca of
9.8% equity stake in the Company (€62.6 million).
Risk
factors
Risk factors affecting the Company are presented
in Paragraph 1.9 of the latest “Document de Référence” submitted to
the French stock-market regulator, the “Autorité des Marchés
Financiers” on April 28, 2018.
Annual financial report for 2018
and “Reference Document”
The Company intends to file its 2018 annual
financial report as well as its “Reference Document” for the year
so that these documents are made public during the second quarter
of 2019.
Accounting treatment of the
AstraZeneca deal
Monalizumab exercise of the option
The Company entered into a global co-development
and commercialization agreement with AstraZeneca for monalizumab in
April 2015. The Company received an initial non-refundable payment
amounting to $250 million on June 30, 2015 and $100 million on
January 28, 2019 as the result of the exercise of the option.
Impact on statement of income: The recognition
of the these amounts as revenue in the statement of income is based
on the percentage of completion of the works Innate Pharma is
engaged to perform in the context of the agreement. These items
have no cash impact. From October 2018, amounts are recognized on a
basis of $350 million (reduced by the payments the Company intend
to make to AstraZeneca in the context of the co-financing of the
development works) vs $250 million before.
Impact on statement of financial position: The
amount which is not recognized yet as revenue is deferred in the
statement of financial position and recognized as collaboration
liabilities for the amounts the Company is committed to invest in
the development.
IPH5201 option agreement
The Company has received a non-refundable
payment of $50 million (of which $26 million have been received in
October 2018 and $24 million in January 2019).
Impact on statement of income: This amount is
recognized in the statement of income based on the percentage of
completion of the costs Innate Pharma is engaged to expense in the
context of the collaboration.
Impact on statement of financial position: The
amount which is not recognized yet as revenue is deferred in the
statement of financial position.
Pre-clinical molecules agreement
The initial non-refundable payment of $20
million is recognized as deferred revenue in the statement of
financial position. It has been received in October 2018.
Impact on statement of income: Each $5 million
portion corresponding to each the four molecules will be recognized
in the statement of income when AstraZeneca communicates to the
Company its decision to exercise or not exercise each of the
option.
Impact on statement of financial position: This
amount of $20 million is not recognized yet as revenue and is
deferred in the statement of financial position.
Lumoxiti license agreement
The Company has acquired, from AstraZeneca, the
US and EU rights to commercialize Lumoxiti for a $50 million
payment.
Impact on statement of income: The agreement
includes a transition period during which AstraZeneca is
responsible for all aspects of the commercialization of Lumoxiti in
the US up to mid-2020 at the latest. Innate Pharma will reimburse
AstraZeneca for costs incurred other than in 2019 where there will
be some sharing of costs. Innate Pharma will recognize the net
result from the sales and expenses of Lumoxiti, which is presented
on a single line item in the statement of income. R&D costs are
recognized as operating expenses in the R&D line.
Impact on statement of financial position:
Following the licensing agreement signed with AstraZeneca for the
purchase of the rights of Lumoxiti, the Company recognized an
intangible asset amounting to €30.5 million. This amount
corresponds to the $50 million initial payment (€43.5 million) paid
to AstraZeneca in January 2019, reduced by $15.0 million (€13
million), which corresponds to the maximum amount to be financed by
AZ for commercial and R&D costs for the fiscal year 2019 (cost
sharing mechanism). According to this agreement, AstraZeneca will
invoice Innate Pharma development, production and commercialization
costs incurred during the transition phase. This amount is
amortized from November 1, 2018 to July 27, 2031 (end of the
protection period of the composition of matter patents, not
including any potential patent extension nor other patents).
Equity investment from AstraZeneca
The payment of €62.6 million has been received
in October 2018. This is subsequent to the acquisition, by
AstraZeneca, of a 9.8% equity position in Innate through the
issuance of 6,260,500 new shares to AstraZeneca at €10/share.
Impact on statement of financial position: The
payment of €62.6m has been accounted in Cash and cash
equivalents.
[*] current and non-current
[†] Of which $118m received as of December 31,
2018 and $74m reiceived as of January 31, 2019, subsequent to the
AstraZeneca deal signed, net from the payment for the acquisition
of Lumoxiti
[‡] The elements as of December 31, 2018 are
compared to December 31, 2017 restated numbers, which are not
audited and take into account the impact of IFRS 9 and 15 on 2017
financial statements.
[§] The Company has opted for the cumulative
effect approach following the first application of IFRS 15. In
order to provide the most relevant comparison, it presents in its
notes a 2017 restated column including the impact of the first
application of IFRS 15. In all comments, the Company refers to the
2017 restated figures.
[**] The increase in the weighted average number
of shares mainly results from the issuance of 6,260,500 shares to
the benefit of AstraZeneca as part of the deal signed in October
2018.
[††] Current and non-current
[‡‡] LCT is present in approximatively 10% of
Sézary syndrome patients (Talpur, CLML 2016) and is associated
with poorer prognosis and shorter survival.
[§§] STELLAR = SelecTivE bLocking of compLement
receptor C5AR to boost immune response and improve cancer
outcomes
[***] Innate Pharma used the simplified
retrospective method following the application of IFRS 15 and the
retrospective method following the application of IFRS 9.
Reconciliation between the consolidated financial statements is
available in Chapter 3, Part 3.3, Note 2. A) ‘Basis of
Preparation’, of the Full-year consolidated financial statements,
that will be available in the Reference Document, released in the
second quarter of 2019.
[†††] Innate Pharma used the simplified
retrospective method following the application of IFRS 15 and the
retrospective method following the application of IFRS 9.
Reconciliation between the consolidated financial statements is
available in Chapter 3, Part 3.3, Note 2. A) ‘Basis of
Preparation’, of the Full-year consolidated financial statements,
that will be available in the Reference Document, released in the
second quarter of 2019.
Innate Pharma (EU:IPH)
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