UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20-F(Mark One)☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2024OR☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company reportFor the transition period from _________ to _________Commission File Number 001-39084Innate Pharma SA(Exact name of registrant as specified in its charter and translation of registrant’s name into English)France(Jurisdiction of incorporation or organization)117, Avenue de Luminy13009 Marseille France(Address of principal executive offices)Jonathan DickinsonChairman and Chief Executive OfficerInnate Pharma S.A.117 Avenue de Luminy13009 Marseille FranceTel: +33 4 30 30 30 30(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)Securities registered or to be registered pursuant to Section 12(b) of the Act.Title of each classTrading SymbolName of each exchange on which registeredAmerican Depositary Shares, each representing one ordinaryshare, nominal value €0.05 per shareIPHA*The Nasdaq Global Select MarketOrdinary shares, nominal value €0.05 per shareThe Nasdaq Global Select Market**Not for trading, but only in connection with the registration of the American Depositary Shares.Securities registered or to be registered pursuant to Section 12(g) of the Act. NoneSecurities for which there is a reporting obligation pursuant to Section 15(d) of the Act. NoneIndicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by theannual report.Ordinary shares, nominal value €0.05 per share: 83,830,336 as of December 31, 2024 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth
company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☐ Accelerated filer
☐ Emerging growth company
☒
☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. § 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.☒ Yes ☐ No
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included
in the filing reflect the correction of an error to previously issued financial statements. ☒Yes ☐ No
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Yes x No
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐
International Financial Reporting Standards
as issued by the International Accounting Standards Board ☒
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has
elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐
Yes ☒ No
TABLE OF CONTENTS
INTRODUCTION
PART I
Item 1. Identity of Directors, Senior Management and Advisers.
Item 2. Offer Statistics and Expected Timetable.
Item 3. Key Information.
A. Reserved
B. Capitalization and Indebtedness
C. Reasons for the Offer and Use of Proceeds
D. Risk Factors
Item 4. Information on the Company.
A. History and Development of the Company
B. Business Overview
C. Organizational Structure.
D. Property, Plants and Equipment.
Item 4A. Unresolved Staff Comments.
Item 5. Operating and Financial Review and Prospects.
A. Operating Results
B. Liquidity and Capital Resources
C. Research and Development
D. Trend Information
E. Critical Accounting Estimates.
Item 6. Directors, Senior Management and Employee.
A. Directors and Senior Management.
B. Compensation.
C. Board Practices
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D. Employees
E. Share Ownership.
F. Disclosure of any action to recover erroneously awarded compensation
Item 7. Major Shareholders and Related Party Transactions
A. Major Shareholders
B. Related Party Transactions.
C. Interests of Experts and Counsel.
Item 8. Financial Information
A. Consolidated Statements and Other Financial Information.
B. Significant Changes.
Item 9. The Offer and Listing.
A. Offer and Listing Details.
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B. Plan of Distribution.
C. Markets.
D. Selling Shareholders.
E. Dilution.
F. Expenses of the Issue.
Item 10. Additional Information.
A. Share Capital.
B. Memorandum and Articles of Association.
C. Material Contracts.
D. Exchange Controls.
E. Taxation.
F. Dividends and Paying Agents.
G. Statement by Experts.
H. Documents on Display.
I. Subsidiary Information.
J. Annual Report to Security Holders
Item 11. Quantitative and Qualitative Disclosures About Market Risk.
Item 12. Description of Securities Other than Equity Securities.
A. Debt Securities.
B. Warrants and Rights.
C. Other Securities.
D. American Depositary Shares.
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies.
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.
Item 15. Controls and Procedures.
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Item 16. Reserved.
Item 16A. Audit Committees Financial Expert.
Item 16B. Code of Business Conduct and Ethics.
Item 16C. Principal Accountant Fees and Services.
Item 16D. Exemptions from the Listing Standards for Audit Committees.
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
Item 16F. Change in Registrant’s Certifying Accountant.
Item 16G. Corporate Governance.
Item 16H. Mine Safety Disclosure.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Item 16J. Insider Trading Policies
Item 16K. Cybersecurity
PART III
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Item 17. Financial Statements.
Item 18. Financial Statements.
Item 19. Exhibits.
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INTRODUCTION
Unless otherwise indicated in this annual report (this “Annual Report”), “Innate Pharma,” “Innate,” “the company,” “the Company,” “we,” “us”
and “our” refer to Innate Pharma S.A. and its consolidated subsidiaries.
“Innate Pharma,” the Innate Pharma logo, ANKET and other trademarks or service marks of Innate Pharma S.A. appearing in this Annual
Report are the property of Innate Pharma S.A. or its subsidiaries. Solely for convenience, the trademarks, service marks and trade names referred
to in this Annual Report are listed without the ® and ™ symbols, but such references should not be construed as any indicator that their
respective owners will not assert, to the fullest extent under applicable law, their right thereto. All other trademarks, trade names and service
marks appearing in this Annual Report are the property of their respective owners. The Company does not intend to use or display other
companies’ trademarks and trade names to imply any relationship with, or endorsement or sponsorship of Innate by, any other companies.
®
The audited consolidated financial statements have been prepared in accordance with IFRS Accounting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB). The consolidated financial statements are presented in euros, and unless otherwise specified,
all monetary amounts are in euros. All references in this Annual Report to “$,” “US$,” “U.S.$,” “U.S. dollars,” “dollars” and “USD” mean U.S.
dollars and all references to “€” and “euros” mean euros, unless otherwise noted. Throughout this Annual Report, references to ADSs mean
American Depositary Shares or ordinary shares represented by such ADSs, as the case may be.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements other
than present and historical facts and conditions, including statements regarding our future results of operations and financial position, business
strategy, plans and our objectives for future operations, are forward-looking statements. These are based on the management’s current beliefs,
expectations and assumptions about future events, conditions and results and on information currently available to the management. All
statements other than present and historical facts and conditions contained in this Annual Report, including statements regarding the future
results of operations and financial position, business strategy, plans and the Company's objectives for future operations, are forward-looking
statements. When used in this Annual Report, the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “is/are designed
to,” "is/are likely to," “may,” "aim," "target," “might,” “plan,” “potential,” “predict,” “objective,” “should” or the negative of these and similar
expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
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the prospects of attaining, maintaining and expanding marketing authorization for monalizumab, lacutamab and other product
candidates;
the initiation, timing, progress and results of the Company's preclinical studies and clinical trials and those conducted by third parties,
including the Company's collaborators, AstraZeneca and Sanofi;
the Company's ability to successfully develop and advance its pipeline of product candidates;
the timing or likelihood of regulatory filings and approvals;
the Company's ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;
future agreements with third parties in connection with the late-stage development and commercialization of the Company's product
candidates and any other approved product;
the Company's ability to develop sales and marketing capabilities and transition into a commercial-stage company;
the pricing and reimbursement of the Company's product candidates, if approved;
the effects of increased competition as well as innovations by new and existing competitors in the Company's industry;
the Company's ability to obtain funding for its operations;
the Company's ability to obtain, maintain, protect and enforce its intellectual property rights and proprietary technologies and to
operate its business without infringing, misappropriating or otherwise violating the intellectual property rights and proprietary
technology of third parties;
regulatory developments in the United States, Europe and other countries;
costs of compliance and failure to comply with new and existing governmental regulations including, but not limited to, tax
regulations;
statements regarding future revenue, hiring plans, expenses, capital expenditures, capital requirements and stock performance;
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the impact of the current state of the global financial market and economic conditions as well as recent health and geopolitical events;
and
other risks and uncertainties, including those listed in the section of this Annual Report titled “Risk Factors”.
You should refer to the section of this Annual Report titled “Item 3.D – Risk Factors” for a discussion of important factors that may cause actual
results to differ materially from those expressed or implied by the forward-looking statements. As a result of these factors, Innate cannot assure
you that the forward-looking statements in this Annual Report will prove to be accurate. Furthermore, if the forward-looking statements prove to
be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard
these statements as a representation or warranty by Innate or any other person that the Company will achieve its objectives and plans in any
specified time frame or at all. The forward-looking statements made herein relate only to events or information as of the date on which the
statements are made in this Annual Report. The Company undertakes no obligation to publicly update any forward-looking statements, after the
date on which the statements are made or to reflect the occurrence of unanticipated events, whether, whether as a result of new information,
future events or otherwise, except as required by law.
In addition, statements that “Innate believes” and similar statements reflect its beliefs and opinions on the relevant subject. These statements are
based upon information available to Innate Pharma as of the date of this Annual Report, and while the Company believes such information forms
a reasonable basis for such statements, such information may be limited or incomplete, and the statements should not be read to indicate that the
Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently
uncertain and investors are cautioned not to unduly rely upon these statements.
You should read this Annual Report and the documents that the Company references in this Annual Report and have filed as exhibits to this
Annual Report completely and with the understanding that the Company's actual future results, levels of activity, performance and events and
circumstances may be materially different from what the Company expects. The Company qualifies all of its forward-looking statements by
these cautionary statements.
Unless otherwise indicated, information contained in this Annual Report concerning the industry and the markets in which the Company
operates, including its general expectations and market position, market opportunity and market size estimates, is based on information from
independent industry analysts, third-party sources and management estimates. Management estimates are derived from publicly available
information released by independent industry analysts and third-party sources, as well as data from internal research, and are based on
assumptions made by the Company based on such data and its knowledge of such industry and market, which the Company believes to be
reasonable. In addition, while the Company believes the market opportunity information included in this Annual Report is generally reliable and
is based on reasonable assumptions, such data involve risks and uncertainties and are subject to change based on various factors, including those
discussed under the section of this Annual Report titled “Item 3.D—Risk Factors.”
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SUMMARY RISK FACTORS
Investing in the Company's shares involves numerous risks, including the risks described in "Item 3.D—Risk Factors" of this Annual Report on
Form 20-F. Below are some of the principal risks, any one of which could materially adversely affect the Company's business, financial
condition, results of operations, and prospects:
• Biopharmaceutical development involves a high degree of uncertainty and most of the product candidates are in early stages of
development.
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The scientific evidence to support the feasibility of developing product candidates is both preliminary and limited.
The Company intends to develop several of its product candidates in combination with other therapies, which exposes it to additional
risks.
The Company is heavily dependent on the success of its current clinical-stage product candidates
The Company may not be successful in its efforts to develop additional products that receive regulatory approval and are successfully
commercialized.
The Company may encounter substantial delays in its clinical studies or may be unable to conduct its clinical studies on the timelines the
Company expects.
The Company's product candidates in development may cause undesirable side effects or have other properties that could halt or delay
their clinical development, prevent their regulatory approval, limit their commercialization or result in other negative consequences.
The Company faces substantial competition from companies with significantly greater resources and experience.
The regulatory processes that will govern the approval of the Company’s product candidates are complex and changes in regulatory
requirements could result in delays or discontinuation of development or unexpected costs in obtaining regulatory approval.
• Any of the Company's product candidates, if approved and commercialized, may fail to achieve market acceptance by physicians,
patients, third-party payors or the medical community to a degree that is necessary for commercial success.
• A fast track, breakthrough therapy or other designation by the FDA, or equivalent in other territories, may not actually lead to a faster
development.
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The Company has no manufacturing capabilities and relies on third-party manufacturers for its product candidates.
The Company relies on third parties to supply key materials used in its research and development, to provide services to the Company
and to assist with clinical studies.
The Company depends upon its existing collaboration partners, AstraZeneca, Sanofi and other third parties, and may depend upon future
collaboration partners to commit to the research, development, manufacturing and marketing of its drugs.
The late-stage development and marketing of the Company’s product candidates may partially depend on its ability to establish
collaborations with major biopharmaceutical companies.
The Company has incurred and may in the future incur significant operational losses related to its research and development activities.
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The Company may need to raise additional funding to complete the development and any commercialization of its product candidates,
which may not be available on acceptable terms, or at all, and failure to obtain this necessary capital when needed may force it to delay,
limit or terminate its product development efforts or other operations.
If the Company does not achieve its product development or commercialization objectives in the timeframes it expects, the Company
may not receive product revenue or milestone or royalty payments, and it may not be able to conduct its operations as planned.
The revenues generated from the Company’s collaboration and license agreements have contributed and are expected to contribute a
large portion of its revenue for the foreseeable future.
The Company benefits from tax credits in France that could be reduced or eliminated.
The current state of the world financial market and current economic conditions could have a material adverse impact on the Company's
business, financial condition and results of operations.
The Company's business could be affected by natural disaster, such as wildfire, and this could be exacerbated by climate change.
The Company’s ability to compete may be adversely affected if the Company does not adequately obtain, maintain, protect and enforce
its intellectual property or proprietary rights, or if the scope of intellectual property protection the Company obtains is not sufficiently
broad.
The Company’s patents could be found invalid or unenforceable if challenged, and it may not be able to protect its intellectual property.
The dual listing of the Company’s ordinary shares and the ADSs may adversely affect the liquidity and value of the ADSs.
The Company may be affected by political, social, legal and economic instability, civil unrest, war and other geopolitical tension, such as
the ongoing military conflict between Russia and Ukraine and economic sanctions related thereto.
Item 1. Identity of Directors, Senior Management and Advisers.
Not applicable.
Item 2. Offer Statistics and Expected Timetable.
PART I
Not applicable.
Item 3. Key Information.
A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
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D. Risk Factors
The Company's business faces significant risks. You should carefully consider all of the information set forth in this Annual Report and in the
other filings with the SEC, including the following risk factors which Innate faces and which are faced by its industry. The Company's business,
financial condition or results of operations could be materially adversely affected by any of these risks. This report also contains forward-
looking statements that involve risks and uncertainties. Innate's results could materially differ from those anticipated in these forward-looking
statements, as a result of certain factors, including the risks described below and elsewhere in this Annual Report and its other SEC filings. See
“Special Note Regarding Forward-Looking Statements” above.
Risks Related to the Development of the Product Candidates
Biopharmaceutical development involves a high degree of uncertainty and most of the product candidates are in early stages of development,
which makes it difficult to evaluate the current business and future prospects and may increase the risk of your investment.
Innate Pharma is a global, clinical stage oncology-focused biotech company developing a portfolio of product candidates, some of which Innate
is co-developing, in the early stages of clinical development and preclinical programs.
A key element of Innate's strategy is to mature and expand its portfolio of proprietary and partnered product candidates to address unmet medical
needs in immuno-oncology. Although Innate's research and development efforts to date have resulted in a pipeline of product candidates, all of
its product candidates require additional development, regulatory review and approvals, substantial investment, access to sufficient commercial
manufacturing capacity and significant marketing efforts before they can be commercialized and before Innate can generate any revenue from
product sales or royalties. If the Company or its collaboration partners are unable to successfully develop and market these product candidates,
its business, prospects, financial condition and results of operations may be adversely affected.
Aside from Innate's commercial experience with Lumoxiti that ended in December 2020, its operations to date have been limited to developing
its product candidates and undertaking preclinical studies and clinical studies of its product candidates, including monalizumab and IPH5201,
through its partnership with AstraZeneca; IPH6401/SAR'514 through its partnership with Sanofi; and lacutamab, IPH5301, IPH6501 and
IPH4502, its most advanced product candidates, currently in the clinical stage. The success in development of its current and future product
candidates by the Company or its collaborators will depend on many factors, including:
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obtaining positive results in clinical trials, including by demonstrating efficacy, safety and durability of effect of such product
candidates;
completing preclinical studies and receiving regulatory approvals or clearance for conducting clinical trials for its preclinical
programs;
receiving and maintaining approvals for commercialization of such product candidates from regulatory authorities;
manufacturing or overseeing the manufacturing of its product candidates in acceptable quantities and at an acceptable cost;
negotiating favorable terms in any collaboration, licensing or other arrangements into which the Company may enter, and performing
its obligations pursuant to such arrangements;
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maintaining, protecting, enforcing and expanding its portfolio of intellectual property rights, including patents, trade secrets and
know-how;
avoiding and defending against third-party interference, infringement or other intellectual property claims; and
maintaining and growing an organization of scientists, medical professionals and marketing, distribution and sales personnel and
executives who can develop its product candidates and commercialize any approved products.
In addition, if the Company is unable to reduce its dependence on its current clinical and preclinical product candidates, either by in-licensing or
acquiring new product candidates, developing its other product candidates or discovering new product candidates, the Company may be
similarly adversely affected.
The scientific evidence to support the feasibility of developing product candidates is both preliminary and limited.
Innate Pharma's innovative approach to immuno-oncology aims to activate both the innate and adaptive immune systems against abnormal or
cancerous cells and restore the body’s ability to disrupt their proliferation, potentially leading to durable responses in patients. This approach is
focused on developing checkpoint inhibitors, tumor-targeting antibodies and antibodies that affect the tumor microenvironment, and several of
the product candidates rely on novel mechanisms of action and on innovative formats for which the Company has limited scientific evidence and
preclinical and clinical data.
The Company may not ultimately be able to provide the FDA, European Medicines Agency (EMA) or other regulatory authorities with
substantial clinical evidence to support a claim of efficacy and durability of response to enable the applicable regulators to approve its product
candidates for any indication. This may occur because later clinical studies fail to reproduce favorable data obtained in earlier clinical trials,
because the applicable regulator disagrees with how the Company interprets the data from these clinical trials or because the applicable regulator
does not accept these therapeutic effects as valid endpoints in pivotal clinical trials that are sufficient to grant marketing approval. Additionally,
because product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed
through preclinical studies and earlier clinical studies, its collaborators in earlier stages of clinical trials may eventually choose to discontinue
later stage studies. For example, in 2022, AstraZeneca informed Innate Pharma of the discontinuation of the Interlink-1 Phase 3 clinical study
assessing monalizumab in combination with cetuximab in patients with recurrent or metastatic squamous cell carcinoma of the head and neck, as
this combination did not meet a pre-defined threshold for efficacy.
In addition to the safety and efficacy traits of any product candidate, clinical study failures may result from a multitude of factors, including
flaws in study design, dose selection, placebo effect and patient enrollment criteria. A number of companies in the pharmaceutical industry have
suffered significant setbacks in advanced clinical studies due to lack of efficacy or adverse safety profiles, notwithstanding promising results in
earlier studies, and it is possible that the Company will as well. Based upon negative or inconclusive results, the Company or its collaborators
may decide, or regulators may require, the Company to conduct additional clinical studies or preclinical studies. In addition, data obtained from
studies are susceptible to varying interpretations, and regulators may not interpret the Company's data as favorably as the Company does, which
may delay, limit or prevent regulatory approval.
The Company will also need to demonstrate that its product candidates are safe and well tolerated. The Company does not have significant data
on possible harmful long-term effects of its product candidates and does not expect to have this data in the near future. As a result, its ability to
generate clinical safety
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and efficacy data sufficient to support submission of a marketing application or commercialization of its product candidates is uncertain and is
subject to significant risk.
The Company intends to develop several of its product candidates in combination with other therapies, which exposes the Company to
additional risks.
The Company is currently developing monalizumab, lacutamab, IPH5201 and IPH5301, and may develop other product candidates, in
combination with one or more currently approved cancer therapies. Specifically, AstraZeneca is currently evaluating monalizumab in ongoing
Phase 1, 2 and 3 trials in combination with durvalumab, an anti-PD-L1 immune checkpoint inhibitor. Lacutamab is also currently evaluated in
combination with chemotherapy GEMOX (gemcitabine in combination with oxaliplatin) in patients with PTCL (Peripheral T Cell Lymphoma).
In addition, IPH5201 is also currently under clinical investigation, in a Phase 2 study in combination with durvalumab and chemotherapy.
Finally, IPH5301 is currently under clinical investigation in a Phase 1 study in combination with a chemotherapy, paclitaxel and trastuzumab.
Patients may not be able to tolerate the Company's product candidates in combination with other therapies, and preliminary clinical results
indicate that monalizumab, for example, has no meaningful clinical activity as a monotherapy. Even if any product candidate the Company
develops were to receive marketing approval or be commercialized for use in combination with other existing therapies, the Company would
continue to be subject to the risks that the FDA, EMA or other comparable foreign regulatory authorities could revoke approval of the therapy
used in combination with its product candidate or that safety, efficacy, manufacturing or supply issues could arise with these existing therapies.
Combination therapies are commonly used for the treatment of cancer, and the Company would be subject to similar risks if the Company
develops any of its product candidates for use in combination with other therapies or for indications other than cancer. This could result in its
own products, if approved, being removed from the market or being less successful commercially.
The Company may also evaluate any of its current and future product candidates in combination with one or more other cancer therapies that
have not yet been approved for marketing by the FDA, EMA or comparable foreign regulatory authorities. The Company will not be able to
market and sell monalizumab, lacutamab, IPH5201 or IPH5301 or any other product candidate the Company develops in combination with any
such unapproved cancer therapies that do not ultimately obtain marketing approval.
If the FDA, EMA or other comparable foreign regulatory authorities do not approve, revoke their approval of, or if safety, efficacy,
manufacturing or supply issues arise with, the products or product candidates the Company chooses to evaluate in combination with
monalizumab, lacutamab, IPH5201, IPH5301 or any other product candidate the Company develops, the Company may be unable to obtain
approval of or market monalizumab or any other such product candidate the Company develops.
The Company is heavily dependent on the success of its current clinical-stage product candidates, and it cannot be certain that it or its
collaborators will be able to obtain regulatory approval for, or successfully commercialize, these product candidates.
The Company's business and future success depend on receiving regulatory approval for, and the commercial success of, its proprietary and
partnered product candidates. The Company has agreements with AstraZeneca with respect to the advanced development, clinical study
collaboration and potential future registration and marketing of several of its product candidates, including monalizumab and IPH5201, and with
Sanofi for the research and development of IPH6401/SAR’514, IPH62 and of another program in solid tumors. Its near-term prospects depend
heavily on AstraZeneca’s successful clinical development and commercialization of monalizumab, as well as the successful clinical development
of its other product candidates. The clinical success of these product candidates will depend on a number of factors, including the ability and
willingness of AstraZeneca, Sanofi and the Company's other collaborators to complete ongoing clinical studies respectively for monalizumab
and IPH6401/SAR'514
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or other partnered assets, the ability to complete the clinical trials for which the Company is responsible and the safety, tolerability and efficacy
of its product candidates.
The Company may not be successful in its efforts to develop additional products that receive regulatory approval and are successfully
commercialized.
The development of a product candidate is a long, costly and uncertain process, aimed at demonstrating the therapeutic benefit of a product
candidate that competes with existing products or those being developed. There is no guarantee that the Company or its collaborators will be able
to demonstrate a sufficient degree of clinical efficacy or safety of one or more of its proprietary or licensed product candidates in order to gain
regulatory approval or to become commercially viable. The degree of uncertainty associated with clinical development and the risks associated
with developing new product candidates may make it difficult to evaluate its current business and its future prospects.
The Company intends to continue to develop its product candidates that are currently in clinical trials, including monalizumab, lacutamab,
IPH5201, IPH5301, IPH6401/SAR’514, IPH6501 and IPH4502. Monalizumab is currently being investigated in multiple Phase 1, Phase 2 and
Phase 3 clinical studies under a co-development agreement with AstraZeneca. Lacutamab is currently being investigated in an open-label, multi-
cohort Phase 2 clinical study in CTCL and in a Phase 2 in PTCL. IPH5201 is currently being investigated in an open-label Phase 2 clinical study.
IPH5301 is currently being investigated in a Phase 1 clinical study sponsored by the Institut Paoli-Calmettes. IPH6101/SAR'579 is currently
investigated in a Phase 1/2 clinical study, sponsored by Sanofi. The continued Sanofi-led Phase 1/2 study of IPH6401/SAR’514 for the treatment
of patients with relapsed or refractory multiple myeloma will be terminated early and will now be refocused to pursue development in
autoimmune indications. IPH6501 is currently investigated in a first-in-human, Phase 1/2 study in B-Cell non-Hodgkin lymphoma indication.
IPH4502 is currently investigated in a first-in-human, Phase 1 study in patients with advanced solid tumors known to express Nectin-4.
While the Company believes that it will eventually have the in-house capabilities to complete the development and/or support the development
by a partner of monalizumab, lacutamab, IPH5201, IPH5301, IPH6401/SAR'514, IPH6501 and IPH4502, the Company has not yet completed
the clinical studies for these or other product candidates, and there can be no assurance that these or other product candidates will gain regulatory
approval or become commercially viable.
Delays in the preclinical development of a product candidate could lead to delays in initiating clinical development. A failure in the preclinical
development of a product candidate could lead to abandoning its development. Further delays or failures at the various clinical stages for a given
indication could result in delay or halt the development of the product candidate in such indication or in other indications. Moreover,
disappointing results during the initial Phases of development are often not a sufficient basis for deciding whether or not to continue a project. At
these early stages, sample sizes, the duration of studies and the parameters examined may not be sufficient to enable a definitive conclusion to be
drawn, in which case further investigations are required. Conversely, promising results during the initial phases, and even after advanced clinical
studies have been conducted, do not guarantee that a product candidate or an approved drug will be successfully approved and commercialized.
The risks related to the failure of a product candidate’s development are highly related to the stage of maturity of the product candidate. Given
the relatively early stage of the product candidates in the pipeline, there is a substantial risk that some or all of the product candidates will not
obtain regulatory approval or be commercialized, which would have an adverse impact on the Company's business, prospects, financial
condition and results of operations.
14
The Company may not be successful in its efforts to identify, discover or develop additional product candidates, including those based on its
innovative ANKET technology.
®
The Company is seeking to develop a broad and innovative pipeline of product candidates in addition to monalizumab, lacutamab, IPH5201,
IPH5301, IPH6101/SAR'579, IPH6401/SAR’514, IPH6501 and IPH4502. The Company may not be successful in identifying additional product
candidates for clinical development for a number of reasons. For example, its research methodology may be unsuccessful in identifying potential
product candidates or the potential product candidates the Company identifies may have harmful side effects, lack of efficacy or other
characteristics that make them unmarketable or unlikely to receive regulatory approval.
®
Moreover, some of its innovative pipeline of product candidates are based on its innovative ANKET platform, which is not yet approved. The
ANKET platform consists of two different formats, tri-specific and tetra-specific antibodies. A multi-specific is also being developed in
partnership with Sanofi (IPH62). The Company is developing IPH6501, a tetra-specific proprietary antibody. Even if the Company aims at
maintaining a diversified pipeline, the use of an innovative technology represents additional risks in the product candidate development.
®
Research programs to pursue the development of the product candidates for additional indications and to identify new product candidates and
disease targets require substantial technical, financial and human resources. The Company's research programs may initially show promise in
identifying potential indications or product candidates, yet fail to yield results for clinical development for a number of reasons, including:
•
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the research methodology used may not be successful in identifying potential indications or product candidates;
potential product candidates and/or its ANKET technology may, after further study, be shown to have harmful adverse effects or
other characteristics that indicate they are unlikely to be effective drugs; or
®
it may take greater human and financial resources to identify additional therapeutic opportunities for its product candidates or to
develop suitable potential product candidates through internal research programs than the Company will possess, thereby limiting its
ability to diversify and expand its product portfolio.
Accordingly, there can be no assurance that the Company will ever be able to identify additional indications for its product candidates or to
identify and develop new product candidates through internal research programs. The Company may focus its efforts and resources on potential
product candidates or other potential programs that ultimately prove to be unsuccessful.
The Company may encounter substantial delays in its clinical studies or may be unable to conduct its clinical studies on the timelines the
Company expects.
Clinical testing is expensive, time consuming and subject to uncertainty. The Company cannot guarantee that any clinical trials will be conducted
as planned or completed on schedule, if at all. A failure of one or more clinical studies can occur at any stage of testing, and its future clinical
studies may not be successful. Events that may prevent successful or timely completion of clinical development include:
•
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inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of clinical trials;
delays or failure in reaching a consensus with regulatory agencies on clinical study design;
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delays in reaching agreement on acceptable terms with prospective Contract Research Organisations (CROs) and investigational sites,
the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and investigational sites;
imposition of a temporary or permanent clinical hold by regulatory agencies, including as a result of a new safety finding that
presents unreasonable risk to clinical study participants, a negative finding from an inspection of its clinical trial operations or
investigational sites, developments in trials conducted by competitors for related technology that raise regulators’ concerns about risk
to patients of the technology broadly or if a regulatory body finds that the investigational protocol or plan is clearly deficient to meet
its stated objectives. For example, in October 2023, the lacutamab IND was put on partial hold by the FDA following the death of one
patient from hemophagocytic lymphohistiocytosis (HLH). The FDA then lifted this partial hold based on their review of the fatal case
which Innate, together with a steering committee of independent experts, determined to be related to aggressive disease progression
and lacutamab unrelated;
delays in recruiting suitable patients to participate in its clinical studies;
difficulty collaborating with patient groups and investigators;
failure by the Company, its CROs or other third parties, including its collaborators, to adhere to clinical study requirements;
delays in having patients complete participation in a clinical study or return for post-treatment follow-up;
patients withdrawing from a clinical study;
occurrence of adverse events associated with a product candidate that are viewed to outweigh its potential benefits;
changes in regulatory requirements and guidance that require amending or submitting new clinical trial protocols;
regulatory feedback requiring the Company to amend the protocols of ongoing clinical studies in response to safety considerations, as
the Company has previously been required to;
changes in the standard of care on which a clinical development plan was based, which may require new or additional clinical trials;
the cost of clinical studies of its product candidates being greater than the Company anticipates;
clinical studies of its product candidates producing negative or inconclusive results, which may result in the Company deciding, or
regulators requiring the Company, to conduct additional clinical studies or abandon product development programs;
transfer of manufacturing processes to larger-scale facilities operated by either a contract manufacturing organization (CMO) and
delays or failure by its CMOs or the Company to make any necessary changes to such manufacturing process; and
batch recalls, recalls of manufactured product candidates or delays in manufacturing, testing, releasing, validating, or importing or
exporting sufficient stable quantities of its product candidates for use in clinical studies or the inability to do any of the foregoing.
Any inability to successfully complete preclinical and clinical development could result in additional costs to the Company or impair its ability
to generate revenue. In addition, if the Company makes
16
manufacturing or formulation changes to its product candidates, it may be required to or it may elect to conduct additional studies to bridge its
modified product candidates to earlier versions. Clinical study delays could also shorten any periods during which its products have patent
protection and may allow its competitors to bring products to market before the Company does, which could impair its ability to successfully
commercialize its product candidates and may harm its business and results of operations.
The Company depends on enrollment of patients in its clinical studies for its product candidates.
Successful and timely completion of clinical studies will require that the Company or its subcontractors enroll a sufficient number of suitable
patients. Clinical studies may be subject to delays as a result of patient enrollment taking longer than anticipated or patient withdrawal. Patient
enrollment depends on many factors, including the size and nature of the patient population, which is typically limited for rare or orphan
diseases, making the enrollment more difficult, eligibility criteria for the study, the proximity of patients to clinical sites, the design of the
clinical protocol, the availability of competing clinical studies, the availability of new drugs approved for the indication the clinical study is
investigating and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available
therapies. For example, the Company is developing lacutamab for the treatment of cutaneous T cell lymphoma (CTCL). CTCL is an orphan
disease, which means that the potential patient population is limited. In addition, there are several other product candidates potentially in
development for the indications for which the Company is developing product candidates, and the Company may compete for patients with the
sponsors of trials for those drugs. These factors may make it difficult for the Company to enroll enough patients to complete its clinical studies in
a timely and cost-effective manner. Delays in the completion of any clinical study of any of its product candidates will increase its costs, slow
down its product candidate development and approval process and delay or potentially jeopardize its ability to commence product sales and
generate revenue. In addition, some of the factors that cause, or lead to, a delay in the commencement or completion of clinical studies may also
ultimately lead to the inability to obtain regulatory approval of its product candidates.
The Company's product candidates in development may cause undesirable side effects or have other properties that could halt or delay their
clinical development, prevent their regulatory approval, limit their commercialization or result in other negative consequences.
Use of the Company's product candidates in development could be associated with side effects or adverse events, which can vary in severity and
in frequency. Undesirable side effects or unacceptable toxicities caused by its products or product candidates could cause the Company or
regulatory authorities to interrupt, delay or halt clinical studies. The FDA or European regulatory authorities could delay or deny approval of the
Company's product candidates for any or all targeted indications and negative side effects could result in a more restrictive label for any drug
that is approved. Side effects such as toxicity or other safety issues associated with the use of the Company's product candidates could also
require it or its collaborators to perform additional studies or halt development of product candidates or sale of approved products.
Treatment-related side effects could also affect patient recruitment or the ability of enrolled subjects to complete the trial, or could result in
potential product liability claims. In addition, these side effects may not be appropriately or timely recognized or managed by the treating
medical staff, as toxicities resulting from immunotherapy are not normally encountered in the general patient population and by medical
personnel. Inadequate training in recognizing or managing the potential side effects of its product candidates could result in adverse effects to
patients, including death. Any of these occurrences may have an adverse impact on the Company's business, prospects, financial condition and
results of operations.
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The Company faces substantial competition from companies with significantly greater resources and experience.
The biotechnology and pharmaceutical market, and notably the immuno-oncology field, is characterized by rapidly advancing technologies,
products protected by intellectual property rights and intense competition and is subject to significant and rapid change as researchers learn more
about diseases and develop new technologies and treatments. The Company faces potential competition from many different sources, including
major pharmaceutical companies, specialty pharmaceutical and biotechnology companies, academic institutions and governmental agencies and
public and private research institutions. For example, other companies are developing ADCs targeting Nectin-4, such as Eli Lilly, Astellas
Pharma and Corbus Pharmaceuticals. Any product candidates that the Company or its collaborators successfully develop will compete with
existing therapies and new therapies that may become available in the future. If competing products are marketed before Innate's products, or at
lower prices, or cover a wider therapeutic spectrum, or if they prove to be more effective or better tolerated, the Company's business, prospects,
financial condition and results of operations could be affected.
Many of the Company's competitors who are developing immuno-oncology and anti-cancer therapies have considerably greater resources and
experience in research, drug development, finance, manufacturing, marketing, technology and personnel and access to patients for clinical
studies than the Company does. In particular, large pharmaceutical companies have substantially more experience than the Company does in
conducting clinical studies and obtaining regulatory authorizations. Mergers and acquisitions in the pharmaceutical, biotechnology and
diagnostic industries may result in even more resources being concentrated among a smaller number of the Company's competitors. Smaller or
early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established
companies. These competitors are also likely to compete with the Company to recruit and retain scientific and management personnel, acquire
rights for promising product candidates and other complementary technologies, establish clinical investigational sites and patient registration for
clinical studies and acquire technologies complementary to, or necessary for, its programs, as well as to enter into collaborations with partners
who have access to innovative technologies. If the Company cannot successfully compete with new or existing products, its marketing and sales
will suffer and the Company may never be profitable. Should any of these risks materialize, Innate's business, prospects, financial condition and
results of operations may be adversely affected.
The Company cannot guarantee that its product candidates will:
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obtain regulatory authorizations or become commercially available before those of its competitors;
remain competitive in the face of other products developed by its competitors, which may prove to be safer, more effective, have
fewer or less severe side effects, be more convenient, have a broader label, have more robust intellectual property protection or be
less expensive;
remain competitive in the face of products of competitors that are more efficient in their manufacturing or more effective in their
marketing; and
not become obsolete or unprofitable due to technological progress or other therapies developed by its competitors.
In addition, while any future product candidate that is approved may compete with many existing drugs or other therapies, to the extent it is
solely used in combination with these therapies, the Company's product candidates will not be competitive with such therapies, but any sales of
such products could be limited to sales of the combination therapy. In this case, the Company would be exposed to the same competitive risks as
the product used in combination with its product, such as a product that is marketed before the
18
combination therapy, has lower prices, covers a wider therapeutic spectrum or proves to be more effective or better tolerated. For additional
information regarding competition to its business see “Item 4. Information on the Company—B. Business Overview—Competition.”
Risks Related to Regulatory Approval and Marketing of Innate's Product Candidates and Legal Compliance Matters
Even if the Company completes the necessary preclinical and clinical studies, the marketing approval process is expensive, time-consuming
and uncertain and may prevent the Company from obtaining approvals for the commercialization of some or all of its product candidates. If
the Company is not able to obtain, or if there are delays in obtaining, required regulatory approvals, in particular in the United States or the
European Union, the Company will not be able to commercialize its product candidates, and its ability to generate revenue will be materially
impaired.
The research and development of pharmaceutical products is governed by complex regulatory requirements. The regulatory agencies that oversee
these requirements have the authority to permit the commencement of clinical studies or to temporarily or permanently halt a study. They are
entitled to request additional clinical data before authorizing the commencement or resumption of a study, which could result in delays or
changes to the product development plan. As the Company advances its product candidates, the Company will be required to consult with these
regulatory agencies and comply with all applicable guidelines, rules and regulations. If the Company fails to do so, the Company may be
required to delay or discontinue development of its product candidates. Delay or failure to obtain, or unexpected costs in obtaining, the
regulatory approval necessary to bring a potential product to market could decrease its ability to generate sufficient product revenue to maintain
its business.
The clinical studies of Innate's product candidates, the manufacturing and the marketing of its product candidates are and will be, subject to
regulation by numerous government authorities in the United States, in the European Union and in other countries where the Company intends to
test and, if approved, market any product candidate. Before obtaining regulatory approvals for the commercial sale of any product candidate, the
Company must demonstrate, with substantial evidence gathered in well-controlled clinical trials, and, with respect to approval in the United
States, to the satisfaction of the FDA, with respect to approval in the European Union, to the satisfaction of the EMA or, with respect to approval
in other countries, similar regulatory authorities in those countries, that the product candidate is safe and effective for use in each target
indication.
The Company has never submitted a product candidate for marketing approval in the United States, in the European Union or elsewhere.
In the United States, the Company expects that the requisite regulatory submission to seek marketing authorization for its product candidates will
be a Biologic License Application (BLA) and the competent regulatory authority is the FDA. In the European Union, the requisite approval is a
Marketing Authorization (MA), which for products developed by the means of antibody-based therapeutics, gene or cell therapy products as well
as tissue engineered products, is issued through a centralized procedure involving the EMA (see “Item 4. Information on the Company—B.
Business Overview—Regulation”). Satisfaction of these and other regulatory requirements is costly, time consuming, uncertain and subject to
unanticipated delays. Failure to comply with the applicable requirements at any time during the product development process, approval process
or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could include, for example, the FDA’s refusal
to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, product recalls or withdrawals from the
market, product seizures, total or partial suspension of production or distribution
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injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.
Data from preclinical and clinical studies are likely to give rise to different interpretations, which could delay regulatory authorization, restrict
the scope of any such authorization or force Innate to repeat trials in order to meet the requirements of the various regulators. Regulatory
requirements and processes vary widely among countries, and the Company may be unable to obtain authorization within each relevant country
in a timely manner. Regulatory authorities may prevent Innate from starting clinical studies or continuing clinical development if the data were
not produced according to applicable regulations or if they consider that the balance between the expected benefits of the product and its possible
risks is not sufficient to justify the trial.
Despite the Company's efforts, its product candidates may not:
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offer improvement over existing, comparable products;
be proven safe and effective in clinical trials; or
meet applicable regulatory standards.
This process can take many years and may include post-marketing studies and surveillance, which will require the expenditure of substantial
resources beyond the existing cash on hand. Of the large number of drugs in development globally, only a small percentage successfully
complete the regulatory approval process and not all approved drugs are successfully commercialized. Delay or failure to obtain, or unexpected
costs in obtaining, the regulatory approval necessary for the Company or its partners to bring a potential product candidate to market could have
a material adverse effect on its business, prospects, financial condition and results of operations.
The regulatory processes that will govern the approval of Innate's product candidates are complex and changes in regulatory requirements
could result in delays or discontinuation of development or unexpected costs in obtaining regulatory approval.
The Company's product candidates are based on new approaches and/or technologies that are constantly evolving and have not been extensively
tested on humans. The applicable regulatory requirements vary between jurisdictions and are also complex, potentially difficult to apply and
subject to significant modifications. Modifications to regulations during the course of clinical development and regulatory review may lead to
delays or the refusal of authorization.
In Europe, the United States and other countries, regulations can potentially:
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significantly delay or increase the cost of development, testing, manufacturing and marketing of Innate's products;
limit the indications for which the Company will be authorized to market its products; and
impose new, more stringent requirements, suspend marketing authorizations or request the suspension of clinical trials or the
marketing of its products if unexpected results are obtained during trials performed by other researchers on products similar to its
products.
Marketing authorization in one jurisdiction does not ensure marketing authorization in another, but a failure or delay in obtaining marketing
authorization in one jurisdiction may have a negative effect on the regulatory process in others. Failure to obtain marketing authorization in other
countries or any delay or setback in obtaining such approval would impair the Company's ability to develop additional markets for its product
candidates. This would reduce Innate's target market and limit the full commercial potential of its product or product candidates. Should any of
these risks materialize, this could harm its business.
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Innate Pharma's failure to obtain marketing approval in jurisdictions other than the United States and Europe would prevent Innate's
product candidates from being marketed in these other jurisdictions, and any approval the Company is granted for its product candidates in
the United States and Europe would not assure approval of product candidates in other jurisdictions.
In order to market and sell its other product candidates in jurisdictions other than the United States and Europe, the Company must obtain
separate marketing approvals and comply with numerous and varying regulatory requirements. The approval process varies among countries and
can involve additional testing. The time required to obtain approval may differ from that required to obtain FDA approval or approvals from
regulatory authorities in the European Union. The regulatory approval process outside the United States and Europe generally includes all of the
risks associated with obtaining FDA approval or approvals from regulatory authorities in the European Union. In addition, some countries
outside the United States and Europe require approval of the sales price of a product before it can be marketed. In many countries, separate
procedures must be followed to obtain reimbursement, and a product may not be approved for sale in the country until it is also approved for
reimbursement. The Company may not obtain marketing, pricing or reimbursement approvals outside the United States and Europe on a timely
basis, if at all. Approval by the FDA or regulatory authorities in the European Union does not ensure approval by regulatory authorities in other
countries or jurisdictions, and approval by one regulatory authority outside the United States and Europe does not ensure approval by regulatory
authorities in other countries or jurisdictions or by the FDA or regulatory authorities in the European Union. The Company may not be able to
file for marketing approvals and may not receive necessary approvals to commercialize its products in any market. Marketing approvals in
countries outside the United States and Europe do not ensure pricing approvals in those countries or in any other countries, and marketing
approvals and pricing approvals do not ensure that reimbursement will be obtained.
Side effects that appear following the launch of a drug on the market may result in the product being taken off the market or additional
warnings being added to the label despite having obtained all regulatory approvals.
A drug’s launch in the market may expose a large number of patients to potential risks associated with treatment with a new pharmaceutical
product. Certain side effects, which may not have been identified during clinical trials, can subsequently appear. For these reasons, regulatory
agencies require companies to implement post-approval monitoring. Depending on the occurrence of serious undesirable effects, the agencies
may require that the Company or a collaboration partner take a drug off the market temporarily or permanently, even if it is effective and has
obtained all the necessary marketing authorizations. Such an action would negatively impair the Company's ability to generate revenue from
such product and could more generally negatively affect its ability to develop, obtain regulatory approval for, and commercialize its other
product candidates and its reputation generally, each of which could have a material adverse effect on its business and results of operations. In
addition, if the product candidates the Company develops receive marketing authorization and the Company or others identify undesirable side
effects caused by any product after the approval, a number of potentially significant negative consequences could result, including that
regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contraindication, the Company may be
required to create a medication guide outlining the risks of such side effects for distribution to patients and its reputation may suffer.
Any product candidate for which the Company obtains marketing approval will be subject to strict enforcement of post-marketing
requirements and the Company could be subject to substantial penalties, including withdrawal of its product from the market, if the
Company fails to comply with all
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regulatory requirements or if the Company experiences unanticipated problems with its product and product candidates, when and if any of
them are approved.
Any product candidate for which the Company obtains marketing approval will be subject to continual requirements of and review by the FDA,
EMA and other regulatory authorities, including requirements relating to manufacturing processes, post-approval clinical data, labeling,
advertising and promotional activities for such product. These requirements include, but are not limited to, restrictions governing promotion of
an approved product, submissions of safety and other post-marketing information and reports, registration and listing requirements, current good
manufacturing practice (cGMP), requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of
records and documents and requirements regarding the distribution of samples to physicians and recordkeeping. In addition, even if marketing
approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be
marketed, restrictions for specified age groups, warnings, precautions or contraindications or to the conditions of approval.
The FDA and other federal and state agencies, including the U.S. Department of Justice (DOJ), closely regulate compliance with all
requirements governing prescription products, including requirements pertaining to marketing and promotion of products in accordance with the
provisions of the approved labeling and manufacturing of products in accordance with cGMP requirements. The FDA and DOJ impose stringent
restrictions on manufacturers’ communications regarding off-label use, and if the Company does not market its products for their approved
indications, the Company may be subject to enforcement action for off-label marketing. Prescription products may be promoted only for the
approved indications and in accordance with the provisions of the approved label. However, companies may also share truthful and not
misleading information that is otherwise consistent with the labeling. Violations of such requirements may lead to investigations alleging
violations of the Food, Drug and Cosmetic Act and other statutes, including the False Claims Act and other federal and state health care fraud
and abuse laws, as well as state consumer protection laws. The Company's failure to comply with all regulatory requirements, and later discovery
of previously unknown adverse events or other problems with its products, manufacturers or manufacturing processes, may yield various results,
including:
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litigation involving patients taking its products;
restrictions on such products, manufacturers or manufacturing processes;
restrictions on the labeling or marketing of a product;
restrictions on product distribution or use;
requirements to conduct post-marketing studies or clinical trials;
warning letters or untitled letters;
withdrawal of the products from the market;
refusal to approve pending applications or supplements to approved applications that the Company submits;
recall of products;
fines, restitution or disgorgement of profits or revenues;
suspension or withdrawal of marketing approvals;
damage to relationships with any potential collaborators;
unfavorable press coverage and damage to its reputation;
refusal to permit the import or export of its products;
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product seizure; or
injunctions or the imposition of civil or criminal penalties.
Non-compliance by the Company or any future collaborator with the FDA, EMA or other regulatory requirements regarding safety monitoring or
pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant
financial penalties. Similarly, failure to comply with regulatory requirements regarding the protection of personal information can also lead to
significant penalties and sanctions.
Coverage and reimbursement may be limited or unavailable in certain market segments for the Company's product candidates, if approved,
which could make it difficult for the Company to sell its product candidates profitably.
Successful sales of its product candidates, if approved, will depend, in part, on the availability of adequate coverage and reimbursement from
government authorities and third-party payors, such as private health insurers and health maintenance organizations. Patients who are provided
medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment.
Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid in the United States or Social
Security in France, and commercial payors are critical to new product acceptance.
Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drugs and
treatments they will cover and the amount of reimbursement. Coverage and reimbursement by a third-party payor may depend upon a number of
factors, including the third-party payor’s determination that use of a product is:
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a covered benefit under its health plan;
safe, effective and medically necessary;
appropriate for the specific patient;
cost-effective; and
neither experimental nor investigational.
Policies for coverage and reimbursement for products vary among third-party payors. No uniform policy of coverage and reimbursement for
products exists among third-party payors, and third-party payors are increasingly challenging the price, examining the medical necessity and
reviewing the cost-effectiveness of approved drugs and medical services, in addition to questioning their safety and efficacy. As a result,
obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly
process that could require the Company or its partners to provide to each payor supporting scientific, clinical and cost-effectiveness data for the
use of its products on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained. Coverage decisions
may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives
are already available or subsequently become available. Even if the Company obtains coverage for a given product, the resulting reimbursement
payment rates might not be adequate for it to achieve or sustain profitability or may require co-payments that patients find unacceptably high.
Additionally, third-party payors may not cover, or provide adequate reimbursement for, long-term follow-up evaluations required following the
use of the Company's product candidates or approved products.
Because its product candidates represent new approaches to the treatment of cancer and, accordingly, may have a higher cost than conventional
therapies and may require long-term follow-up evaluations, the risk
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that coverage and reimbursement rates may be inadequate for the Company to achieve profitability may be elevated. There are currently a
limited number of immunotherapy products that are designed to treat cancer on the market and, accordingly, there is less experience or precedent
for the reimbursement of such treatments by governmental entities or third-party payors.
Government restrictions on pricing and reimbursement and other healthcare cost-containment initiatives may negatively affect its ability to
generate revenues for its product candidates for which the Company obtains regulatory approval.
Government authorities and other third-party payors are developing increasingly sophisticated methods of controlling healthcare costs, including
by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that
pharmaceutical and biotechnology companies provide them with predetermined discounts from list prices as a condition of coverage, are using
restrictive formularies and preferred drug lists to leverage greater discounts in competitive classes and are challenging the prices charged for
medical products.
In the United States, the European Union and other foreign jurisdictions, there have been a number of legislative and regulatory changes to the
healthcare system that could affect the Company's or its partners’ ability to sell its products profitably.
On March 23, 2010, President Obama signed into law the Affordable Care Act (ACA), which includes a number of healthcare reform provisions.
The ACA, among other things, imposed a significant annual fee on companies that manufacture or import branded prescription drug products;
addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that
are inhaled, infused, instilled, implanted or injected; increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug
Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations; and established a new
Medicare Part D coverage gap discount program, in which manufacturers were required to agree to offer 50% point-of-sale discounts off
negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s
outpatient drugs to be covered under Medicare Part D. Substantial new provisions affecting compliance also were added. The ACA also revised
the definition of “average manufacturer price” for reporting purposes, which could increase the amount of Medicaid drug rebates to states.
Most judicial, congressional, and executive branch efforts to repeal, modify or delay the implementation of the law have been unsuccessful, and
the law remains in effect.
In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. These changes include
aggregate reductions to Medicare payments to providers of 2% per fiscal year, which will remain in effect through 2030, unless additional
Congressional action is taken by Congress. Additional legislative proposals to reform healthcare and government insurance programs, along with
the trend toward managed healthcare in the United States, could influence the purchase of medicines and reduce demand and prices for Innate's
product candidates, if approved. This could harm Innate's or its partners’ ability to market any drugs and generate revenues. Cost containment
measures that healthcare payors and providers are instituting and the effect of further healthcare reform could significantly reduce potential
revenues from the sale of any of its product candidates approved in the future, and could cause an increase in its compliance, manufacturing, or
other operating expenses.
In addition, in the United States, federal programs impose penalties on drug manufacturers in the form of mandatory additional rebates and/or
discounts if commercial prices increase at a rate greater than the U.S. Bureau of Labor Statistics consumer price index, and these rebates or
discounts, which can be substantial, may affect the Company's ability to raise commercial prices.
24
Further, there has been increasing legislative and enforcement interest in the United States with respect to drug pricing practices. There have
been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring
more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under
Medicare and reform government program reimbursement methodologies for drugs.
For example, in August 2022, the Inflation Reduction Act of 2022 was signed into law. This legislation contains substantial drug pricing reforms,
including the establishment of a drug price negotiation program within the U.S. Department of Health and Human Services that would require
manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance. The IRA also
imposes penalties on drug manufacturers in the form of mandatory additional rebates and/or discounts if commercial prices increase at a rate
greater than the U.S. Bureau of Labor Statistics consumer price index, and these rebates or discounts, which can be substantial, may affect the
Company's ability to raise commercial prices. The Inflation Reduction Act of 2022 also caps Medicare beneficiaries’ annual out-of-pocket drug
expenses. Substantial penalties can be assessed for noncompliance with the IRA drug pricing provisions. Provisions of the IRA are subject to
legal challenges, and the full impact of the IRA on the pharmaceutical industry remains uncertain.
However, recent election results in the U.S. may spark uncertainty for the IRA. Although a full repeal of the IRA may be unlikely due to
budgetary impact, the new U.S. administration could change some of the IRA provisions, including Medicare drug price negotiations.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and
biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing
cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
In some countries, the proposed pricing for a biopharmaceutical product must be approved before it may be lawfully marketed. In addition, in
certain foreign markets, the pricing of biopharmaceutical products is subject to government control and reimbursement may in some cases be
unavailable. The requirements governing drug pricing vary widely from country to country. For example, the European Union provides options
for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to
control the prices of medicinal products for human use. An EU member state may approve a specific price for the medicinal product, it may
refuse to reimburse a product at the price set by the manufacturer or it may instead adopt a system of direct or indirect controls on the
profitability of the company placing the medicinal product on the market. There can be no assurance that any country that has price controls or
reimbursement limitations for biopharmaceutical products will allow favorable reimbursement and pricing arrangements for any of Innate's
products. Historically, biopharmaceutical products launched in the European Union do not follow price structures of the United States and
generally tend to have significantly lower prices.
The Company believes that pricing pressures will continue and may increase, which may make it difficult for it to sell any of its product
candidates that may be approved in the future at a price acceptable to the Company or any of its existing or future collaborators.
Any of the Company's product candidates, if approved and commercialized, may fail to achieve market acceptance by physicians, patients,
third-party payors or the medical community to a degree that is necessary for commercial success.
Even if the medical community accepts a product as safe and efficacious for its indicated use, physicians may choose to restrict the use of the
product if the Company is unable to demonstrate that, based on experience, clinical data, side-effect profiles and other factors, its drug is
preferable to any existing drugs
25
or treatments. The Company cannot predict the degree of market acceptance of any product candidate that will receive marketing authorization,
which will depend on a number of factors, including, but not limited to:
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the demonstration of the clinical efficacy and safety of the drug;
the approved labeling for the drug and any required warnings;
prevalence and severity of adverse side effects;
the advantages and disadvantages of the drug compared to alternative treatments;
ease of the drug’s use;
its ability to educate the medical community about the safety and effectiveness of the drug;
the scope of any approval provided by the FDA or foreign regulatory authorities;
publicity about its product or about competitive products;
the coverage and reimbursement policies of government and commercial third-party payors pertaining to the drug;
the market price of its drugs relative to competing treatments; and
due to the rarity of orphan diseases, it could be difficult finding patients seeking treatment.
Poor market penetration could have an adverse effect on the Company's business, prospects, financial condition and results of operations.
Even if some of its product candidates receive marketing authorization, the terms of such approval, ongoing regulation and potential post-
marketing restrictions or withdrawal from the market may limit how the drug may be marketed and may subject the Company to penalties for
failure to comply with regulatory requirements, which could impair its ability to generate revenues.
Even if any of its product candidates receives a marketing authorization, such approval may carry conditions that limit the market for the drug or
put the drug at a competitive disadvantage relative to alternative therapies. Regulators may limit the marketing of products to particular
indications or patient populations. Regulators may require warning labels, and drugs with warnings are subject to more restrictive marketing
regulations than drugs without such warnings. These restrictions could make it more difficult to market any drug effectively. Marketing
restrictions may reduce the revenue that the Company is able to obtain.
Any of its product candidates for which the Company obtains marketing authorization, and the manufacturing processes, post-approval studies
and measures, labeling, advertising and promotional activities for such products, among other things, will be subject to continual requirements of
and review by the FDA, the EMA and other regulatory authorities. These requirements include submissions of safety and other post-marketing
information and reports, registration and listing requirements, requirements relating to manufacturing, quality control, quality assurance and
corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping. Even
if marketing authorization of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the
product may be marketed or to the conditions of approval, including the FDA requirement to implement a risk evaluation and mitigation strategy
to ensure that the benefits of a drug or biological product outweigh its risks.
The FDA, EMA and other national authorities may also impose requirements for costly post-marketing studies or clinical trials and surveillance
to monitor the safety or efficacy of a product, such as long-term observational studies on natural exposure. The FDA and other agencies,
including the U.S. Department of
26
Justice, closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are manufactured, marketed and
distributed only for the approved indications and in accordance with the provisions of the approved labeling. Later discovery of previously
unknown problems with Innate's product candidates or with manufacturing processes, including adverse events of unanticipated severity or
frequency, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information;
imposition of post-market studies or clinical studies to assess new safety risks, or the imposition of distribution or other restrictions including
suspension of production and/or distribution and withdrawal of regulatory approvals. Failure to comply with these requirements may lead to
financial penalties, compliance expenditures, total or partial suspension of production and/or distribution, product seizure or detention, refusal to
permit the import or export of products, suspension of the applicable regulator’s review of a company’s submissions, enforcement actions,
product recalls, injunctions and even criminal prosecution, any of which could materially and adversely affect the Company's business, financial
condition and results of operations.
The Company's future growth depends, in part, on its ability to penetrate multiple markets, in which the Company would be subject to
additional regulatory burdens and other political, social and geographical risks and uncertainties.
Innate's future profitability will depend, in part, on its ability to commercialize its product candidates, if approved, in markets in Europe, the
United States and other countries where the Company maintains commercialization rights. If the Company commercializes its product
candidates, if approved, in multiple markets, the Company would be subject to additional risks and uncertainties, including:
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foreign currency exchange rate fluctuations and currency controls;
economic weakness, including inflation, or political instability in particular economies and markets;
potentially adverse and/or unexpected tax consequences, including penalties due to the failure of tax planning or due to the challenge
by tax authorities on the basis of transfer pricing and liabilities imposed from inconsistent enforcement;
the burden of complying with complex and changing regulatory, tax, accounting and legal requirements, many of which vary between
countries;
different medical practices and customs in multiple countries affecting acceptance of drugs in the marketplace;
differing payor reimbursement regimes, governmental payors or patient self-pay systems and price controls;
tariffs or other trade protection measures, trade barriers, import or export licensing requirements or other restrictive actions;
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
workforce uncertainty in countries where labor unrest is common;
reduced or loss of protection of intellectual property rights in some foreign countries, and related prevalence of generic alternatives to
therapeutics; and
becoming subject to the different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance
with a wide variety of foreign laws, treaties and regulations.
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Political, social and geopolitical conditions in the markets in which our products are developed have been and could continue to be difficult to
predict, resulting in adverse effects on our business. The ongoing armed conflict between Russia and Ukraine, and the escalation of violence and
potential further conflicts in the Middle East, as well as the global geopolitical situation, may affect regional stability and economic growth
throughout the world. As a result of the 2024 presidential and legislative elections in the United States, changes to applicable laws and
regulations that have been announced, proposed, and/or adopted, or could be made or expanded in the future, may result in new or expanded
trade restrictions by the United States and/or other countries, including, but not limited to, tariffs or import taxes being applied to imported
goods, including potentially pharmaceuticals, and services which could affect Innate’s operations and exports into the United States. Other
countries may implement trade restrictions and/or retaliatory measures as well.
These and other risks associated with international operations may adversely affect Innate's ability to attain or maintain profitable operations.
Future sales of the Company's product candidates, if they are approved, will be dependent on purchasing decisions of and reimbursement from
government health administration authorities, distributors and other organizations. As a result of adverse conditions affecting the global economy
and credit and financial markets, including disruptions due to political instability or otherwise, these organizations may defer purchases, may be
unable to satisfy their purchasing or reimbursement obligations, or may affect milestone payments or royalties for monalizumab or any of
Innate's product candidates that are approved for commercialization in the future. Should any of these risks materialize, this could have a
material adverse effect on Innate's business, prospects, financial condition and results of operations.
Even if its product candidates obtain regulatory approval, they will be subject to continuous regulatory review.
If marketing authorization is obtained for any of its product candidates, the candidate will remain subject to continuous review, and therefore
authorization could be subsequently withdrawn or restricted. The Company will be subject to ongoing obligations and oversight by regulatory
authorities, including adverse event reporting requirements, marketing restrictions and, potentially, other post-marketing obligations, all of which
may result in significant expense and limit its ability to commercialize such products.
If there are changes in the application of legislation or regulatory policies, or if problems are discovered with a product or its manufacture of a
product, or if the Company or one of its distributors, licensees or co-marketers fails to comply with regulatory requirements, the regulators could
take various actions. These include imposing fines on the Company, imposing restrictions on the product or its manufacture and requiring Innate
to recall or remove the product from the market. The regulators could also suspend or withdraw their marketing authorizations, requiring Innate
to conduct additional clinical studies, change its product labeling or submit additional applications for marketing authorization. If any of these
events occurs, its ability to sell such product may be impaired, and the Company may incur substantial additional expense to comply with
regulatory requirements, which could materially adversely affect its business, financial condition and results of operations.
Even if one of its product candidates has orphan drug designation, the Company may not be able to obtain any benefit from such
designation. Furthermore, if a product is granted orphan drug exclusivity in the same indication for which the Company is developing
lacutamab or its other product candidates that is granted orphan drug designation, the Company may not be able to have its product
candidate approved by the applicable regulatory authority for a significant period of time.
Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations
as orphan drugs. Under the Orphan Drug Act, the FDA may designate a product candidate as an orphan drug if it is a drug intended to treat a rare
disease or condition
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which is generally defined as a disease that affects a patient population of fewer than 200,000 people in the United States. In the European
Union, the European Commission may designate a product candidate as an orphan medicinal product if it is a medicine for the diagnosis,
prevention or treatment of life-threatening or very serious conditions that affects not more than five in 10,000 persons in the European Union, or
it is unlikely that marketing of the medicine would generate sufficient returns to justify the investment needed for its development. Generally, if a
product candidate with an orphan drug designation receives the first marketing approval for the indication for which it has such designation, the
product is entitled to a period of marketing exclusivity, which, subject to certain exceptions, precludes the FDA from approving the marketing
application of another drug for the same indication for that time period or precludes the EMA, and other national drug regulators in the European
Union, from accepting the marketing application for another medicinal product for the same indication. The applicable period is seven years in
the United States and ten years in the European Union. In the European Union, the proposed wide-ranging revision of the general pharmaceutical
legislation may pose downside risks to innovation and competitiveness in Europe, primarily due to the modification of regulatory exclusivities
and a stricter incentives framework for orphan medicinal products. Such regulatory proposals could adversely affect the exclusivity period for
our products.
Lacutamab has been granted orphan drug designation for cutaneous T cell lymphoma (CTCL) in Europe and in the United States, and the
Company may pursue orphan drug designation for another product candidate that the Company may develop in the future in the United States
and/or Europe. However, there is no assurance the Company will be able to receive orphan drug designation for other product candidates that the
Company may develop in the United States and/or Europe or for any other product candidate in any jurisdiction. Even if the Company is
successful in obtaining orphan drug designation, orphan drug status may not ensure that the Company has market exclusivity in a particular
market. Even if the Company obtains orphan drug exclusivity for any of its product candidates, that exclusivity may not effectively protect the
product from competition because exclusivity can be suspended under certain circumstances. In the United States, even after an orphan drug is
approved, the FDA can subsequently approve another drug for the same condition if the FDA concludes that the later drug is clinically superior
in that it is shown to be safer, more effective or makes a major contribution to patient care. In the European Union, orphan exclusivity will not
prevent a marketing authorization being granted for a similar medicinal product in the same indication if the new product is safer, more effective
or otherwise clinically superior to the first product or if the marketing authorization holder of the first product is unable to supply sufficient
quantities of the product. In addition, if another product is granted marketing approval and orphan drug exclusivity in the same indication for
which the Company is developing a product candidate with orphan drug designation, the Company may not be able to have its product candidate
approved by the applicable regulatory authority for a significant period of time.
A fast track, breakthrough therapy or other designation by the FDA, or equivalent in other territories, may not actually lead to a faster
development.
The Company may seek fast track, breakthrough therapy or similar designation for its product candidates. If a product is intended for the
treatment of a serious or life-threatening condition and the product demonstrates the potential to address unmet medical need for this condition,
the sponsor may apply for FDA fast track designation. The Company has received fast track designation in the U.S. and PRIME designation in
the EU for lacutamab for the treatment of adult patients with relapsed or refractory Sézary Syndrome (SS) who have received at least two prior
systemic therapies. In February 2025, the Company also received a Breakthrough Therapy Designation from the FDA for lacutamab for the
treatment of adult patients with relapsed or refractory Sézary Syndrome after at least two prior systemic therapies including mogamulizumab.
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A breakthrough therapy is a drug candidate that is intended, alone or in combination with one or more other drugs, to treat a serious or life-
threatening disease or condition, and that, as indicated by preliminary clinical evidence, may demonstrate substantial improvement over existing
therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Drugs
designated as breakthrough therapies by the FDA are eligible for accelerated approval and increased interaction and communication with the
FDA designed to expedite the development and review process.
Additionally, the Company may in the future seek equivalent designations in other territories for some of its product candidates that reach the
regulatory review process.
These designations do not ensure that the Company will experience a faster development process, review or approval compared to conventional
FDA procedures. In addition, the FDA may withdraw a designation if it believes that the designation is no longer supported by data from its
clinical development program. A designation alone does not guarantee qualification for the FDA’s priority review procedures.
Priority review designation by the FDA, or the equivalent in other territories, may not lead to a faster regulatory review or approval process
and, in any event, does not assure FDA approval of Innate's product candidates.
If the FDA determines that a product candidate offers major advances in treatment or provides a treatment where no adequate therapy exists, the
FDA may designate the product candidate for priority review. A priority review designation means that the goal for the FDA to review an
application is six months, rather than the standard review period of 10 months. The Company may request priority review for its product
candidates. The FDA has broad discretion with respect to whether or not to grant priority review status to a product candidate, so even if the
Company believes a particular product candidate is eligible for such designation or status, the FDA may decide not to grant it. Moreover, a
priority review designation does not necessarily mean a faster regulatory review process or necessarily confer any advantage with respect to
approval compared to conventional FDA procedures. Receiving priority review from the FDA does not guarantee approval within the six-month
review cycle or thereafter.
The Company is subject to healthcare laws and regulations that may require substantial compliance efforts and could expose Innate to
criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings, among other
penalties.
Healthcare providers and third-party payors play a primary role in the recommendation and prescription of biologic products that are granted
marketing approval. Arrangements with providers, consultants, third-party payors and customers are subject to broadly applicable federal and
state laws and regulations that may constrain the business and/or financial arrangements, including those pertaining to fraud and abuse, anti-
kickback, false claims, transparency, and patient data privacy.
Ensuring that Innate's business arrangements with third parties comply with applicable healthcare laws and regulations will continue to require
Innate to incur additional costs. It is possible that governmental authorities will conclude that Innate's business practices do not comply with
current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If Innate
Pharma's operations were found to be in violation of any of these laws or any other governmental regulations that may apply to us, the Company
may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, possible exclusion from
government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if the Company
becomes subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual
damages, reputational harm, diminished profits and future earnings, and curtailment of its operations, any of which could substantially disrupt its
operations. If the physicians or other providers or entities with whom the
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Company expects to do business are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative
sanctions, including exclusions from government funded healthcare programs. Should any of these risks materialize, this could have a material
adverse effect on its business, prospects, reputation, financial condition and results of operations.
European data collection is governed by restrictive regulations governing the collection, use, processing and cross-border transfer of
personal information.
The Company may collect, process, use or transfer personal information from individuals located in the European Union in connection with its
business, including in connection with conducting clinical studies in the European Union. The collection and use of personal health data in the
European Union are governed by the provisions of the General Data Protection Regulation ((EU) 2016/679) (GDPR). This legislation imposes
requirements relating to having legal bases for processing personal information relating to identifiable individuals and transferring such
information outside of the European Economic Area (EEA), including to the United States, providing details to those individuals regarding the
processing of their personal information, keeping personal information secure, having data processing agreements with third parties who process
personal information, responding to individuals’ requests to exercise their rights in respect of their personal information, reporting security
breaches involving personal data to the competent national data protection authority and affected individuals, appointing data protection officers,
conducting data protection impact assessments and record-keeping. The GDPR applies across the European Economic Area (EEA) and, by virtue
of the GDPR as it forms part of United Kingdom law, in a broadly uniform manner through section 3 of the European Union (Withdrawal) Act
2018, or the UK GDPR, in the United Kingdom. However, the GDPR provides that EEA member states can make their own further laws and
regulations to introduce specific requirements related to the processing of "special categories of personal data," including personal data related to
health, biometric data used for unique identification purposes and genetic information; as well as personal data related to criminal offenses or
convictions – in the United Kingdom, the United Kingdom Data Protection Act 2018 complements the UK GDPR in this regard. This fact may
lead to greater divergence on the law that applies to the processing of such data types across the EEA and/or United Kingdom, compliance with
which, as and where applicable, may increase the Company's costs and could increase its overall compliance risk. Such country-specific
regulations could also limit its ability to collect, use and share data in the context of the Company's EEA and/or United Kingdom establishments
(regardless of where any processing in question occurs), and/or could cause its compliance costs to increase, ultimately having an adverse impact
on Innate's business and harming its business and financial condition. Failure to comply with the requirements of the GDPR and related national
data protection laws of the member states of the European Union may result in substantial fines, other administrative penalties and civil claims
being brought against us, which could have a material adverse effect on Innate's business, prospects, financial condition and results of
operations. Moreover, in some European countries, including France, there are additional obligations applicable to the processing of personal
data for the purpose of research in the field of healthcare and the hosting of personal health data must be carried out by specifically certified
hosting service providers. Non-compliance with such additional rules as well as the absence or suspension of the appropriate certification of such
hosting service provider may adversely affect Innate Pharma's business, or even lead to penalties related to breach of security of personal data.
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Risks Related to Innate's Reliance on Third Parties
The Company has no manufacturing capabilities and relies on third-party manufacturers for its product candidates.
Innate Pharma's product candidates that are tested during its preclinical and clinical studies are manufactured by third parties. The Company has
no production capabilities and relies on third parties to manufacture its products.
This strategy means that the Company does not directly control certain key aspects of its product development, such as:
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the quality of the product manufactured;
the delivery times for drugs for a given clinical trial;
the clinical and commercial quantities that can be supplied; and
compliance with applicable laws and regulations.
Its reliance on third-party manufacturers creates risks that may not exist if the Company had its own manufacturing capabilities. These risks
include:
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failure of third-party manufacturers to comply with regulatory and quality control standards;
production of insufficient quantities;
damage during transport and/or storage of its product candidates;
breach of agreements by third-party manufacturers; and
termination or non-renewal of the agreements for reasons beyond its control.
Should its third-party manufacturers breach their obligations or should the Company fail to renew its contracts with them, the Company cannot
guarantee that it will be able to find new suppliers within a timeframe and under conditions that would not be detrimental. The Company could
also be faced with delays or interruptions in its supplies, which could result in a delay in the clinical trials and, ultimately, a delay in the
commercialization of the product candidates that the Company is developing. For example, manufacturing issues, leading to out-of-specification
product, can occur during a manufacturing campaign at the Contract Manufacturing Organization (CMO) in charge of the production of its
product candidates.
Reproducing a batch of product is a lengthy and costly process and sometimes can lead to drug shortage that can in turn lead to a delay in the
development of the candidate, or even an early stop of a clinical trial. This happened in the early clinical development of lacutamab and led to
the decision to limit the number of patients in order to ensure drug supply for treated patients in the Phase 1 clinical study.
For example, in November 2019, Impletio Wirkstoffabfüllung GmbH (formerly known as Rentschler Fill Solutions GmbH), the subcontractor in
charge of the fill-and-finish manufacturing operations of lacutamab, unilaterally decided to withdraw the certificates of conformance of all
clinical batches produced at their facilities, including the lacutamab batch used for the TELLOMAK Phase 2 clinical study assessing lacutamab
in multiple indications. Impletio Wirkstoffabfüllung GmbH decided to withdraw the certificates of conformance even though the compliance of
its manufacturing site with Good Manufacturing Practices had been confirmed by two on-site inspections performed by the Austrian Health
Agency before and after the Company began to work with them.
The transfer of the manufacturing process to another contract manufacturing organization took a few months and came with additional costs but
allowed Innate to have a conform batch in the middle of 2020
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and to resume the enrollment and treatment of patients in the clinical trials after getting Regulatory Agencies' approval. During this period of
time, the TELLOMAK trial was on partial or full hold in the United States, Spain, Germany and Italy.
Should any of these risks materialize, this could have a material adverse effect on Innate's business, prospects, financial condition and results of
operations.
The Company is reliant upon third parties to manufacture and supply components of certain substances necessary to manufacture its
product candidates.
The Company is reliant on several third-party CMOs for the manufacture and supply of components and substances for all of the product
candidates the Company is developing. In addition, certain component materials are currently available from a single supplier, or a small number
of suppliers. The Company cannot be sure that these suppliers will remain in business, or that they will not be purchased by one of its
competitors or another company that is not interested in continuing to manufacture these materials for the Company. The Company cannot assure
that, if required, the Company will be able to identify alternate sources with the desired scale and capability and establish relationships with such
sources. A loss of any CMO or component supplier and delay in establishing a replacement could delay Innate's clinical development and
regulatory approval process.
Its production costs may be higher than the Company currently estimates.
Innate's product candidates are manufactured according to manufacturing best practices applicable to drugs for clinical trials and to
specifications approved by the applicable regulatory authorities. If any of its products were found to be non-compliant, the Company would be
required to manufacture the product again, which would entail additional costs and may prevent delivery of the product to patients on time.
Other risks inherent in the production process may have the same effect, such as:
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contamination of the controlled atmosphere area;
unusable premises and equipment;
new regulatory requirements requiring a partial and/or extended stop to the production unit to meet the requirements;
unavailable qualified personnel;
power failure of extended duration; and
logistical error.
Should any of these risks materialize, this could have a material adverse effect its business, prospects, financial condition and results of
operations.
The Company relies on third parties to supply key materials used in its research and development, to provide services to Innate and to assist
with clinical studies.
The Company makes considerable use of third-party suppliers for the key materials used in its business. The failure of third-party suppliers to
comply with regulatory standards could result in the imposition of sanctions on the Company. These sanctions could include fines, injunctions,
civil penalties, refusal by regulatory organizations to grant approval to conduct clinical trials or marketing authorization for its products, delays,
suspension or withdrawal of approvals, license revocation, seizure or recalls of its products, operating restrictions and legal proceedings.
Furthermore, the presence of non-conformities, as detected in regulatory toxicology studies, could result in delays in the development of one or
more of its product candidates and would require further tests to be financed. Although the Company is involved in establishing the protocols for
the production of these materials, the Company does not control all the
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stages of production and cannot guarantee that the third parties will fulfil their contractual and regulatory obligations. In particular, a partner’s
failure to comply with protocols or regulatory constraints, or repeated delays by a partner, could compromise the development of its products or
limit its liability. Such events could also inflate the product development costs incurred by us.
The Company also uses third parties to provide certain services, such as scientific, medical or strategic consultancy services. These service
providers are generally selected for their specific expertise, as is the case with the academic partners with whom the Company collaborates. To
build and maintain such a network under acceptable terms, the Company faces intense competition. Such external collaborators may terminate,
at any time, their involvement. The Company can exert only limited control over their activities. The Company may not be able to obtain the
intellectual property rights to the product candidates or technologies developed under collaboration, research and license agreements under
acceptable terms or at all. Moreover, its scientific collaborators may assert intellectual property rights or other rights beyond the terms of their
engagement.
Finally, the Company uses third-party investigators to assist with conducting clinical trials. All clinical trials are subject to strict regulations and
quality standards. Should any of these risks materialize, this could have a material adverse effect on its business, prospects, financial condition
and results of operations.
The Company and its collaborators rely on third parties to conduct some of its preclinical clinical studies and perform other clinical
development tasks. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or comply with
regulatory requirements, it may not be possible to obtain regulatory approval for, or commercialize, its product candidates, and its business
could be substantially harmed.
The Company has relied upon and plans to continue to rely upon third parties to conduct clinical studies of its product candidates or product
candidates that the Company has licensed to partners. For example, under its license and collaboration agreements with AstraZeneca,
AstraZeneca is responsible for a number of clinical studies relating to monalizumab, which are subject to such agreements. In addition, the
Company and its collaborators are responsible for and are supporting several clinical studies that are sponsored by academic or research
institutions, known as investigator-sponsored trials, as is the case for the clinical study assessing IPH5301, which is sponsored by Institut Paoli-
Calmettes and for the clinical study assessing lacutamab in PTCL, sponsored by the Lymphoma Study Association (LYSA). By definition, the
financing, design and conduct of an investigator-sponsored trial are the sole responsibility of the sponsor, and the Company or its collaborators,
as applicable, have limited control over these aspects of these clinical trials, or the timing and reporting of the data from these trials. The
Company and its collaborators also depend on independent clinical investigators and CROs to conduct clinical studies. CROs may also assist in
the collection and analysis of data. There are a limited number of CROs that have the expertise to run clinical studies of its product candidates.
Identifying, qualifying and managing performance of third-party service providers can be difficult and time consuming and can cause delays in
its development programs. These investigators and CROs are not Innate's employees, and the Company is not able to control, other than by
contract, the amount of resources, including the amount of time, that they devote to Innate's product candidates and clinical studies. If the
investigators sponsoring studies of its product candidates, independent investigators participating in clinical studies that Innate or its
collaborators are sponsoring or CROs fail to devote sufficient resources to its clinical studies and development of its product candidates or
product candidates the Company has licensed to others, or if their performance is substandard, it may delay or compromise the prospects for
approval and commercialization of any product candidates that the Company or its collaborators develop. In addition, the use of third-party
service providers requires Innate to disclose its proprietary information to these parties, which could increase the risk that this information will
be misappropriated, and the Company may
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not be able to obtain adequate remedies for such disclosure or misappropriation. Further, the FDA, EMA and other regulatory authorities require
that the Company complies with standards, commonly referred to as Good Clinical Practice (GCP), and other local legal requirements, including
data privacy regulations, for conducting, recording and reporting clinical trials to assure that data and reported results are credible and accurate
and that the rights, integrity and confidentiality of clinical trial subjects are protected. If clinical investigators or CROs fail to meet their
obligations to Innate or comply with GCP procedures or other applicable legal requirements, the data generated in these trials may be deemed
unreliable, and the FDA, EMA or comparable foreign regulatory authorities may require Innate to perform additional studies before approving
Innate's marketing applications. The Company cannot assure that upon inspection by a given regulatory authority, such regulatory authority will
determine that all of its clinical trials comply with GCP regulations.
In addition, Innate's clinical studies must be conducted with product produced under current Good Manufacturing Practice (cGMP) regulations.
The Company's failure to comply with these regulations may require the Company to repeat clinical trials, which would delay the regulatory
approval process. If clinical investigators or CROs do not successfully carry out their contractual duties or obligations or meet expected
deadlines, if they need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to Innate's
protocol or regulatory requirements, or for other reasons, its clinical trials or those of its collaborators may be extended, delayed or terminated,
and the Company or its collaborators may not be able to obtain regulatory approval for or successfully commercialize its product candidates.
Therefore, its results of operations and the commercial prospects for its product candidates would be harmed, its costs could increase and its
ability to generate revenue could be delayed.
Manufacturing facilities and clinical investigational sites are subject to significant government regulations and approvals, and if Innate's or
its partners’ third-party manufacturers fail to comply with these regulations or maintain these approvals, its business could be materially
harmed.
Innate's third-party manufacturers are subject to ongoing regulation and periodic inspection by national authorities, including the EMA, FDA and
other regulatory bodies to ensure compliance with cGMP, when producing batches of its product candidates for clinical trials. CROs and other
third-party research organizations must also comply with Good Laboratory Practices (GLP) when carrying out regulatory toxicology studies.
Any failure to follow and document the Company's or third parties' adherence to such GMP and GLP regulations or other regulatory
requirements may lead to significant delays in the availability of products for commercial sale or clinical trials, may result in the termination of
or a hold on a clinical trial, or may delay or prevent filing or approval of marketing applications for its products.
Failure to comply with applicable regulations could also result in national authorities, the EMA, FDA or other applicable regulatory authorities
taking various actions, including:
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levying fines and other civil penalties;
imposing consent decrees or injunctions;
requiring Innate to suspend or put on hold one or more of its clinical trials;
suspending or withdrawing regulatory approvals;
delaying or refusing to approve pending applications or supplements to approved applications;
requiring Innate to suspend manufacturing activities or product sales, imports or exports;
requiring Innate to communicate with physicians and other customers about concerns related to actual or potential safety, efficacy and
other issues involving its products;
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mandating product recalls or seizing products;
imposing operating restrictions; and
seeking criminal prosecutions.
Any of the foregoing actions could be detrimental to Innate's reputation, business, financial condition or operating results. Furthermore, its key
suppliers may not continue to be in compliance with all applicable regulatory requirements, which could result in its failure to produce its
products on a timely basis and in the required quantities, if at all. In addition, before any additional products would be considered for marketing
authorization in Europe, the United States or elsewhere, its suppliers will have to pass an inspection by the applicable regulatory agencies. The
Company is dependent on its suppliers’ cooperation and ability to pass such inspections, and the inspections and any necessary remediation may
be costly. Failure to pass such inspections by Innate or any of its suppliers would affect its ability to commercialize its product candidates in
Europe, the United States or elsewhere. Should any of these risks materialize, this could have a material adverse effect on the Company's
business, prospects, financial condition and results of operations.
The Company depends upon its existing collaboration partners, AstraZeneca, Sanofi and other third parties, and may depend upon future
collaboration partners to commit to the research, development, manufacturing and marketing of its drugs.
The Company has significant collaborations with AstraZeneca for the development of monalizumab and IPH5201. The Company also
collaborates with Sanofi for the development of IPH6401/SAR’514 and IPH62, and the Company may enter into additional collaborations for
other of its product candidates or technologies in development. The Company cannot control the timing or quantity of resources that its existing
or future collaborators will dedicate to research, preclinical and clinical development, manufacturing or marketing of its products, or whether
collaborators may terminate licenses, agreements or other arrangements, such as Takeda's termination of its license or Sanofi’s termination with
respect to IPH6101/SAR'579. Innate's collaborators may not perform their obligations according to its expectations or standards of quality.
Innate's collaborators could terminate its existing agreements for a number of reasons, including that they may have other, higher priority
products in development or because its partnered programs may no longer be a priority for them. If any of the Company's collaboration
agreements were to be terminated and potentially due to any such terminations, the Company could encounter significant delays in developing its
product candidates, lose the opportunity to earn any revenues Innate expected to generate under such agreements, incur unforeseen costs and
suffer damage to the reputation of its product, product candidates and as a company generally.
In order to optimize the launch and market penetration of certain of its future product candidates, the Company may enter into distribution and
marketing agreements with pharmaceutical industry leaders. For these product candidates, the Company would not market its products alone
once they have obtained marketing authorization. The risks inherent in entry into these contracts are as follows:
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the negotiation and execution of these agreements is a long process that may not result in an agreement being signed or that can delay
the development or commercialization of the product candidate concerned;
these agreements are subject to cancellation or non-renewal by its collaborators or may not be fully complied with by its
collaborators;
in the case of a license granted by Innate, the Company loses control of the development of the product candidate licensed; in such
cases the Company would have only limited control over the means and resources allocated by its partner for the commercialization
of its product; and
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collaborators may not properly obtain, maintain, enforce or defend Innate's intellectual property or proprietary rights or may use its
proprietary information in such a way as to invite litigation that could jeopardize or invalidate its proprietary information or expose
the Company to potential litigation.
Should any of these risks materialize, or should the Company fails to find suitable collaborators, this could have a material adverse effect on its
business, prospects, financial condition and results of operations.
The late-stage development and marketing of its product candidates may partially depend on its ability to establish collaborations with major
biopharmaceutical companies.
In order to develop and market some of its product candidates, the Company relies on collaboration, research and license agreements with
pharmaceutical companies to assist Innate in the development of product candidates and the financing of their development. For its most
advanced clinical product candidate, monalizumab, the Company entered into an agreement with AstraZeneca, in part because of their late-stage
development and marketing capabilities. As the Company identifies new product candidates, Innate will determine the appropriate strategy for
development and marketing, which may result in the need to establish collaborations with major biopharmaceutical companies. Innate may also
enter into agreements with institutions and universities to participate in its other research programs and to share intellectual property rights.
The Company may fail to find collaboration partners and to sign new agreements for its other product candidates and programs. The competition
for partners is intense, and the negotiation process is time-consuming and complex. Any new collaboration may be on terms that are not optimal
for us, and the Company may not be able to maintain any new collaboration if, for example, development or approval of a product candidate is
delayed, sales of an approved product candidate do not meet expectations or the collaborator terminates the collaboration. Any such
collaboration, or other strategic transaction, may require Innate to incur non-recurring or other charges, increase Innate's near- and long-term
expenditures and pose significant integration or implementation challenges or disrupt its management or business. These transactions would
entail numerous operational and financial risks, including exposure to unknown liabilities; disruption of Innate's business and diversion of its
management’s time and attention in order to manage a collaboration or develop acquired products, product candidates or technologies;
incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs; higher than expected
collaboration, acquisition or integration costs; write-downs of assets or goodwill or impairment charges; increased amortization expenses;
difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business; and impairment of
relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership and the
inability to retain key employees of any acquired business. Accordingly, although there can be no assurance that the Company will undertake or
successfully complete any transactions of the nature described above, any transactions that the Company does complete may be subject to the
foregoing or other risks and have a material and adverse effect on its business, financial condition, results of operations and prospects.
Conversely, any failure to enter any additional collaboration or other strategic transaction that would be beneficial to Innate could delay the
development and potential commercialization of its product candidates and have a negative impact on the competitiveness of any product
candidate that reaches market.
The Company does not and will not have access to all information regarding its product candidates that are subject to collaboration and
license agreements. Consequently, its ability to inform its
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shareholders about the status of product candidates that are subject to these agreements, and its ability to make business and operational
decisions, may be limited.
Innate does not and will not have access to all information regarding its product candidates that are subject to its license and collaboration
agreements with AstraZeneca, Sanofi and other third parties, including potentially material information about clinical trial design, execution and
timing, safety and efficacy, clinical trial results, regulatory affairs, manufacturing, marketing and other areas known by its collaborators. In
addition, the Company has confidentiality obligations under its collaboration and license agreements. Therefore, its ability to keep its
shareholders informed about the status of product candidates subject to such agreements will be limited by the degree to which its collaborators
keep Innate informed and allow Innate to disclose information to the public or provide such information to the public themselves. If its
collaborators do not inform Innate about its product candidates subject to agreements with them, the Company may make operational and
investment decisions that the Company would not have made had the Company been fully informed, which may have an adverse impact on its
business, prospects, financial condition and results of operations.
Risks Related to Innate Pharma's Financial Position and Capital Needs
The Company has incurred and may in the future incur significant operational losses related to its research and development activities.
The Company has incurred net losses in each year since its inception except for the years ended December 31, 2016 and 2018. Innate's net
income (loss) was €(49.5) million and €(7.6) million for the years ended December 31, 2024 and 2023, respectively. Substantially all of its net
losses resulted from costs incurred in connection with its development programs and from selling, general and administrative expenses
associated with its ongoing operations. The Company expects to incur significant expenses and operating losses for the foreseeable future.
The net loss for the year ended December 31, 2024 leads to negative equity of €(26.4) million for a share capital of €4.2 million, meaning that
the Company's equity is less than half of its share capital. In accordance with the provisions of Article L. 225-248 of the French Commercial
Code, a resolution will be submitted to the annual general meeting of the shareholders of the Company (the “General Meeting”) on May 22,
2025, to decide whether the Company should be dissolved early pursuant to French corporate law and subject to additional delay periods.
The likelihood and amount of its future operational losses will depend on several factors, including the pace and amount of its future
expenditures in connection with its product candidates and development programs and its ability to obtain funding through milestone or royalty
payments under its license and collaboration agreements, equity or debt financings, strategic collaborations and government grants and tax
credits. The Company expects that its main source of income for the near- and medium-term will be:
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payments received under its license and collaboration agreements with third parties, including AstraZeneca and Sanofi; and
government grants and research tax credits.
The interruption of one or more of those sources of income could have a material adverse effect on Innate's business, prospects, financial
condition and results of operations.
The Company's ability to be profitable in the future will depend on its ability to generate revenue from sales relating to its product candidates, if
approved, and its ability to obtain regulatory approval for marketing its product candidates. If its product candidates receive regulatory approval,
its future revenues will depend upon the size of any markets in which its product candidates have received approval, and
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market acceptance, reimbursement from third-party payors and market share. Any of these factors could have a material adverse effect on
Innate's business, prospects, financial condition and results of operations.
The Company may need to raise additional funding to complete the development and any commercialization of its product candidates, which
may not be available on acceptable terms, or at all, and failure to obtain this necessary capital when needed may force it to delay, limit or
terminate its product development efforts or other operations.
Innate is currently advancing its product candidates through preclinical and clinical development, and anticipates relying on partners as the
Company advances them. Innate currently retains the full development and marketing rights to lacutamab, IPH5301, IPH6501 and IPH4502, and
may retain rights to additional proprietary product candidates in the future. The development of immunotherapy product candidates is expensive,
and Innate expects its research and development expenses to increase as the Company advances its product candidates through clinical studies
and regulatory approvals. If clinical studies are successful and if Innate obtains regulatory approval for product candidates that the Company
develops, Innate expects to incur commercialization expenses before these product candidates are marketed and sold.
The Company anticipates that its expenses will increase substantially if and as it:
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continues its research, preclinical and clinical development of its product candidates if its current collaboration partners cease their
collaborations with us;
expands the scope of its current clinical studies for its product candidates;
initiates additional preclinical, clinical or other studies for its product candidates;
further develops manufacturing processes for its product candidates;
changes or adds additional manufacturers or suppliers;
seeks regulatory and marketing authorizations for its product candidates that successfully complete clinical studies;
establishes a sales, marketing and distribution infrastructure to commercialize any product for which the Company may obtain
marketing authorization;
seeks to identify and validate additional product candidates that may result in additional preclinical, clinical or other product studies;
acquires or in-license agreements or other product candidates and technologies;
makes milestone or other payments under any in-license agreements;
maintains, protects, defends and expands its intellectual property portfolio;
attracts and retains new and existing skilled personnel;
creates additional infrastructure to support its operations as a public company in the United States; and
experiences any delays or encounters issues with any of the above.
As of December 31, 2024, the Company had cash, cash equivalents, short-term investments and non-current financial assets of €91.1 million.
The Company believes its cash, cash equivalents, short-term investments and non-current financial assets, together with its cash flow from
operations, will be sufficient to fund its operations until mid 2026. However, in order to complete the development process, obtain regulatory
approval and, if approved, commercialize its product candidates that the Company is
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developing in-house, including lacutamab, IPH5301, IPH6501 and IPH4502; develop its proprietary technology; and develop a pipeline of
additional product candidates, the Company will require additional funding. Innate's existing resources may not be sufficient to cover any
additional financing needs, in which case new funding would be required. See “—the Company has incurred and may in the future incur
significant operational losses related to its research and development activities.” The conditions and arrangements for such new financing would
depend, among other factors, on economic and market conditions that are beyond its control, including the current volatility in the capital
markets.
Any additional fundraising efforts may divert Innate's management from their day-to-day activities, which may adversely affect the Company's
ability to develop and commercialize its product candidates. In addition, the Company cannot guarantee that future financing will be available in
sufficient amounts or on terms acceptable to us, if at all. Under French law, Innate's share capital may be increased only with shareholders’
approval at an extraordinary general shareholders’ meeting on the basis of a report from the Executive Board. In addition, the French
Commercial Code imposes certain limitations on Innate's ability to price certain offerings of its share capital without preferential subscription
rights (droit préférentiel de souscription), which limitation may prevent Innate from successfully completing any such offering.
Moreover, the terms of any financing may adversely affect the holdings or the rights of Innate's shareholders, and the issuance of additional
securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of its ordinary shares or the ADSs to
decline. The sale of additional equity or convertible securities would dilute its shareholders. The Company may seek funds through arrangements
with collaborative partners or otherwise at an earlier stage of product development than otherwise would be desirable, and the Company may be
required to relinquish rights to some of its technologies or product candidates or otherwise agree to terms unfavorable to Innate Pharma, any of
which may have a material adverse effect on its business, prospects, financial condition and results of operations.
If the Company needs and is unable to obtain funding on a timely basis, the Company may be required to significantly curtail, delay or
discontinue one or more of its research or development programs or the commercialization of any product or product candidate, or the Company
may be unable to expand its operations or otherwise capitalize on its business opportunities as desired, which could impair its growth prospects.
Should any of these risks materialize, this could have a material adverse effect on Innate's business, prospects, financial condition and results of
operations.
The terms of Innate's loans agreements with Société Générale, BNP Paribas and certain other loan obligations place restrictions on its
operating and financial flexibility.
In July 2017, the Company entered into a loan and security agreement with Société Générale (the “Loan Agreement”) in order to finance the
construction of its future headquarters. The Loan Agreement is secured by collateral in the form of financial instruments valued at €15.2 million
held at Société Générale. As of December 31, 2024, Innate had drawn down €15.2 million under the Loan Agreement. The Loan Agreement
subjects Innate to a covenant to maintain a minimum balance of its total cash, cash equivalents and current and non-current financial assets as of
each fiscal year end at least equal to the amount of outstanding principal under the Loan Agreement. Compliance with this covenant may limit its
flexibility in operating its business and its ability to take actions that might be advantageous to Innate and its shareholders. For example, if the
Company fails to meet its minimum cash covenant and Innate is unable to raise additional funds or obtain a waiver or other amendment to the
Loan Agreement, Innate may be required to delay, limit, reduce or terminate certain of its clinical development efforts.
Additionally, Innate may be required to repay the entire amount of outstanding indebtedness under the Loan Agreement in cash if the Company
fails to stay in compliance with its covenant or suffer some other event of default under the Loan Agreement. Under the Loan Agreement, an
event of default will occur if,
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among other things, Innate fails to make payments under the Loan Agreement or Innate breaches its covenant under the Loan Agreement. The
Company may not have enough available cash or be able to raise additional funds through equity or debt financings to repay such indebtedness
at the time any such event of default occurs. In that case, Innate may be required to delay, limit, reduce or terminate its clinical development
efforts or grant rights to others to develop and market product candidates that the Company would otherwise prefer to develop and market itself.
Société Générale could also exercise its rights as collateral agent to take possession and dispose of the collateral securing the loan for its benefit.
Innate's business, financial condition and results of operations could be substantially harmed as a result of any of these events.
On January 5, 2022, the Company announced that it had obtained €28.7 million in non-dilutive financing in the form of two State Guaranteed
Loans from Société Générale (€20.0 million) and BNP Paribas (€8.7 million). The Company received the funds related to these two loans on
December 27 and 30, 2021, respectively. Both loans have an initial maturity of one year with an option to extend to five years. They are 90%
guaranteed by the French government as part of the package of measures put in place by the French government to support companies during the
COVID-19 pandemic. The effective interest rate applied to these contracts is 0.5%, which is the contractual rate for repayment within one year.
On August 2022, the Company requested the extension repayment of the non-dilutive financing of €28.7 million obtained in December 2021 in
the form of two State Guaranteed Loans (“PGE”), respectively, for 20.0 and 8.7 million euros for an additional period of five years starting in
2022 and including a one-year grace period. Consequently, the Company has obtained agreements from Société Générale and BNP Paribas. The
effective interest rates applied to these contracts during the additional period are 1.56% and 0.95% for Société Générale and BNP Paribas loans,
respectively, excluding insurance and guarantee fees, with an amortization exemption for the entire year 2023. During this grace period, the
Company was only liable for the payment of interest and the guarantee fees, with amortization of the two loans starting in 2024 over a period of
four years.
If Innate does not achieve its product development or commercialization objectives in the timeframes Innate expects, the Company may not
receive product revenue or milestone or royalty payments, and Innate Pharma may not be able to conduct its operations as planned.
Innate has received and expects to continue to receive payments from its collaborators when the Company satisfies certain pre-specified
milestones in its licensing or collaboration agreements. Innate currently depends to a large degree on these milestone payments from its existing
collaborators in order to fund its operations, and Innate may enter into new collaboration agreements that also provide for milestone payments.
For example, the Company has granted options to license or acquire intellectual property rights in certain of its programs to its collaborators
which, if exercised, will result in up-front option exercise fees and, assuming Innate meets all specified development, clinical, regulatory and
sales milestones, could result in substantial milestone payments. These milestone payments are generally dependent on the accomplishment of
various scientific, clinical, regulatory, sales and other product development objectives, and the successful or timely achievement of many of
these milestones is outside of its control, in part because some of these activities are being or will be conducted by its collaborators. If Innate or
its collaborators fail to achieve the applicable milestones, Innate Pharma may not receive such milestone payments. A failure to receive any such
milestone payment may cause Innate to:
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delay, reduce or terminate certain research and development programs;
reduce headcount;
raise funds through additional equity or convertible debt financings that could be dilutive to its shareholders and holders of its ADSs;
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obtain funds through collaboration agreements that may require Innate to assign rights to technologies or products that Innate would
have otherwise retained;
sign new collaboration or license agreements that may be less favorable than those the Company would have obtained under different
circumstances; and
consider strategic transactions or engaging in a joint venture with a third party.
In addition, although Innate may be eligible to receive an aggregate of approximately $2.8 billion in future contingent payments from existing
collaboration agreements and any license agreements that become effective upon the exercise by its collaborators of options to license future
product candidates, there is no guarantee that the Company will receive any contingent payments or that its collaborators will exercise any
options to license or acquire additional intellectual property rights in any of its programs. If its collaborators decide not to exercise such options
with respect to a program, the Company will not receive the up-front option exercise fee and will not be eligible to receive any of the related
commercial, development, royalty or other milestone payments. Even if its collaborators exercise such options with respect to a particular
program, Innate may never achieve the related milestones for any number of reasons. The failure to receive milestone or royalty payments and
the occurrence of any of the events above may have a material adverse impact on Innate's business, prospects, financial condition and results of
operations.
The revenues generated from its collaboration and license agreements have contributed and are expected to contribute a large portion of its
revenue for the foreseeable future.
The Company has entered into collaboration and license agreements with pharmaceutical companies, including AstraZeneca and Sanofi. The
upfront payments and milestones received from its partners were €19.0 million, €31.6 million and €56.9 million for the years ended December
31, 2024, 2023 and 2022, respectively.
Innate also enhances its research efforts by establishing collaborations with academic or non-profit research institutions and other
biopharmaceutical companies. The participation in these collaborations may generate revenue and funding in the form of operating grants or the
reimbursement of research and development expenses.
Innate may not be able to renew or maintain its license agreements or collaborative research contracts or may be unable to sign new agreements
with new collaborators on reasonable terms or at all. The early termination of a contract, the non-renewal of a contract or Innate's inability to
find new collaborators would adversely affect its business. Should any of these risks materialize, this could have an adverse effect on Innate's
business, prospects, financial condition and results of operations.
The Company benefits from tax credits in France that could be reduced or eliminated.
As a French biopharmaceutical company, Innate benefits from certain tax advantages, including the French research tax credit (Crédit Impôt
Recherche) (the "Research Tax Credit"), which is a French tax credit aiming at stimulating research and development. The Research Tax Credit
is calculated based on Innate's claimed amount of eligible research and development expenditures in France and represented €7.5 million,
€9.7 million and €7.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Research Tax Credit is a source of
financing to Innate that could be reduced or eliminated by the French tax authorities or by changes in French tax law or regulations. See “Item
10E.—Taxation – Material French Tax Considerations” and “Note 1.2.— Government financing for research expenditures” of this Annual
Report.
The Research Tax Credit can be offset against French corporate income tax due by the company with respect to the year during which the
eligible research and development expenditures have been made. The
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portion of tax credit in excess which is not being offset, if any, represents a receivable against the French Treasury which can in principle be
offset against the French corporate income tax due by the company with respect to the three following years. The remaining portion of tax credit
not being offset upon expiry of such a period may then be refunded to the company.
As soon as the Company qualifies as small- and medium-size business, the French Treasury refunds immediately (meaning that, in practice,
Innate can receive the refund during the year following the year in which the eligible research and development expenditures are made) the
Research Tax Credit claims. If the Company does not qualify for this status, the Research Tax Credit claims will be reimbursed within the expiry
of a period of three years. The history of the Company's status and of the incomes related to the Research Tax Credit is detailed in the Notes to
financial statements, section 2), paragraph q) of the present document.
The French tax authorities, with the assistance of the Higher Education and Research Ministry, may audit each research and development
program in respect of which a Research Tax Credit benefit has been claimed and assess whether such program qualifies in their view for the
Research Tax Credit benefit. The French tax authorities may challenge Innate's eligibility for, or its calculation of, certain tax reductions or
deductions in respect of its research and development activities (and therefore the amount of Research Tax Credit claimed), or the accelerated
reimbursement allowed for small- and medium-size businesses and the Company's credits may be reduced, which would have a negative impact
on its revenue and future cash flows.
Furthermore, the French Parliament may decide to eliminate, or to reduce the scope or the rate of, the Research Tax Credit benefit, either of
which it could decide to do at any time. If Innate fails to receive future Research Tax Credit amounts or if its calculations are challenged, even if
Innate Pharma complies with the current requirements in terms of documentation and eligibility of its expenditure, its business, prospects,
financial condition and results of operations could be adversely affected.
The Company may be unable to carry forward existing tax losses.
Innate has accumulated tax loss carry forwards of €536.8 million as of December 31, 2024. Applicable French law provides that, for fiscal years
ending after December 31, 2012, the use of these tax losses is limited to €1.0 million, plus 50% of the portion of net earnings exceeding this
amount. The unused balance of the tax losses in application of such rule can be carried forward to future fiscal years, under the same conditions
and without time restriction. There can be no assurance that future changes to applicable tax law and regulation will not eliminate or alter these
or other provisions in a manner unfavorable to us, which could have an adverse effect on Innate's business, prospects, financial condition, cash
flows or results of operations.
Innate's business may be exposed to foreign exchange risks.
The Company incurs some of its expenses, and derives certain of its revenues, in currencies other than the euro. In particular, as Innate expands
its operations and conducts clinical studies in the United States, Innate will incur expenses in U.S. dollars. As a result, Innate is exposed to
foreign currency exchange risk as its results of operations and cash flows are subject to fluctuations in foreign currency exchange rates.
The Company currently does not engage in hedging transactions to protect against uncertainty in future exchange rates between particular
foreign currencies and the euro. Therefore, an unfavorable change in the value of the euro against the U.S. dollar could have a negative impact
on its revenue and earnings growth. Innate cannot predict the impact of foreign currency fluctuations, and foreign currency fluctuations in the
future may adversely affect its financial condition, results of operations and cash flows. The ADSs being offered in the U.S. offering are quoted
in U.S. dollars on the Nasdaq, while Innate's ordinary shares trade in euro on Euronext Paris. Innate's financial statements are prepared in euro.
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Therefore, fluctuations in the exchange rate between the euro and the U.S. dollar will also affect, among other matters, the value of Innate's
ordinary shares and ADSs.
Under Innate's license and collaboration agreements with AstraZeneca, the payments the Company receives are in U.S. dollars. The level of
completion of the operations covered by this collaboration agreement is based on the costs converted at the historical exchange rate. The effects
of reevaluation therefore have no impact on the technical progress used for revenue recognition. Consequently, there may be a difference
between the level of completion that would take into account the last known rate and the level of completion as calculated. This difference could
result in a future exchange gain or loss.
Moreover, in the future, Innate could generate part of its sales in the United States and part in Europe and could therefore be subject to an
unfavorable euro/dollar exchange rate. Therefore, for example, an increase in the value of the euro against the U.S. dollar could be expected to
have a negative impact on its revenue and earnings growth as U.S. dollar revenue and earnings, if any, would be translated into euro at a reduced
value. The Company could also sign contracts denominated in other currencies, which would increase its exposure to currency risk. In
accordance with Innate's business decisions, its exposure to this type of risk could change depending on:
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the currencies in which Innate receives its revenues;
the currencies chosen when agreements are signed, such as licensing agreements, or co-marketing or co-development agreements;
the location of clinical trials on product candidates; and
its policy for insurance cover.
At present, Innate has not put any specific hedging arrangements in place to address these risks. Should any of these risks materialize, this could
have a material adverse effect on its business, prospects, financial condition and results of operations.
Changes to U.S. and non-U.S. tax laws could materially adversely affect Innate Pharma.
The Company is unable to predict what tax law may be proposed or enacted in the future or what effect such changes would have on its business,
but such changes, to the extent they are brought into tax legislation, regulations, policies or practices, could affect its effective tax rates in the
future in countries where it has operations and could have an adverse effect on its overall tax rate in the future, along with increasing the
complexity, burden and cost of tax compliance. The Company urges its shareholders and holders of its ADSs to consult with their legal and tax
advisors with respect to the potential tax consequences of investing in or holding Innate's ordinary shares or ADSs.
Tax authorities may disagree with Innate's positions and conclusions regarding certain tax positions, resulting in unanticipated costs, taxes
or non-realization of expected benefits.
A tax authority may disagree with tax positions that the Company has taken, which could result in increased tax liabilities. For example, the
French tax authorities, the U.S. Internal Revenue Service or another tax authority could challenge Innate's allocation of income by tax
jurisdiction and the amounts paid between its affiliated companies pursuant to its intercompany arrangements and transfer pricing policies,
including amounts paid with respect to its intellectual property development. Similarly, a tax authority could assert that the Company is subject
to tax in a jurisdiction where Innate believes it has not established a taxable connection, often referred to as a “permanent establishment” under
international tax treaties, and such an assertion, if successful, could increase the Company's expected tax liability in one or more jurisdictions. A
tax authority may take the position that material income tax liabilities, interest and penalties are payable by us, in which case, the Company
expects that it might contest such assessment.
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Contesting such an assessment may be lengthy and costly, and if Innate was unsuccessful in disputing the assessment, the result could increase
its anticipated effective tax rate.
In 2022 and 2023, the Company was subject to tax inspections by the French tax authorities, in particular one tax inspection from the French tax
authorities relating to fiscal years 2018 to 2021 that resulted in an adjustment of €1.4 million.
Risks Related to Innate Pharma's Organization and Operations
In the past there have been material weaknesses in the Company's internal control over financial reporting and if Innate Pharma is unable
to maintain effective internal controls over financial reporting, the accuracy and timeliness of its financial reporting may be adversely
affected, which could hurt its business and/or lessen investor confidence.
The Company must maintain effective internal control processes over financial reporting in order to accurately report its results of operations and
financial condition on a timely basis. A company’s internal control over financial reporting is a process designed by, or under the supervision of,
a company’s principal executive and principal financial officers, or persons performing similar functions, and effected by a company’s Executive
Board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements in accordance with generally accepted accounting principles.
As a public company listed in the United States, the Sarbanes-Oxley Act requires, among other things, that the Company assess the effectiveness
of its internal control over financial reporting as of the end of each fiscal year. As the Company lost its "emerging growth company" (EGC)
status as of December 31, 2024, Innate's independent registered public auditor is now required to attest to and report on the effectiveness of its
internal controls over financial reporting.
In this context, in order to comply with Section 404(b) of the Sarbanes-Oxley Act within the prescribed timeframe, and over the last five years,
the Company has reinforced its internal control processes and has implemented a standard and more robust Information System including an
Enterprise Resource Planning (ERP) tool supporting the production and the management of its financial information. Some material weaknesses
were identified as of December 31, 2020 and 2022.
Under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency or combination of
deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement in Innate's annual
or interim financial statements will not be prevented or detected and corrected on a timely basis. These deficiencies concerned, respectively,
process and controls relating to the processing of manual entries and significant and unusual transactions, and controls aimed at preventing or
detecting material errors in the classification and presentation of the consolidated financial statements, as well as in the corresponding
disclosures and the recording of all subcontracting expenses over the correct period. The Company took steps to address these material
weaknesses and implemented remediation plans. For a discussion about these remediation measures, see "Item 15. Controls and Procedures" of
this Annual Report.
The Company's management carried out an evaluation of the effectiveness of its internal control at the end of the year ended December 31, 2024.
Management concluded that, as of December 31, 2024, the Company's internal control over financial reporting was effective to provide
reasonable assurance regarding the reliability of its financial reporting and the preparation of its financial statements for external purposes. See
"Item 15. Controls and Procedures" of this Annual Report.
45
The Company cannot give any assurance that it will be able to maintain the appropriate level of control to prevent future material weaknesses.
See “Risk Factors—The Company incurs significant costs as a result of being a public company.”
Innate's internal computerized systems, or those of its third-party contractors or consultants, may fail or suffer security breaches and be
subject to malicious intent or cyberattack, which could result in a material disruption of its product development programs and in its
operations in general.
The Company has implemented a security policy that is intended to secure its data against impermissible access and to preserve the integrity and
confidentiality of the data. To monitor these aspects, the Company set up a dedicated governance structure. See "Item 16K.—Cybersecurity."
Despite the implementation of such processes and measures, Innate's internal computer systems and those of its third-party contractors and
consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war, telecommunication and
electrical failures and other sources. Moreover, part of the Company's information system is “cloud”-based and thus is not fully under its control.
In addition, Innate's research and development facility and headquarters in Luminy, France, is located in an area that may be more susceptible to
wildfires. If Innate's facility or computer systems are damaged by fire despite the fire prevention and data archiving measures it has put in place,
it could suffer financial losses and delays in its operations.
If such an event were to occur and cause interruptions in Innate's operations, it could result in a material disruption of its programs and more
generally of its operations. For example, the loss of clinical study data for Innate's product candidates could result in delays in its regulatory
approval efforts and significantly increase its costs to recover or reproduce the lost data. To the extent that any disruption or security breach
results in a loss of or damage to Innate's data or applications or other data or applications relating to its technology or product candidates or
inappropriate disclosure of confidential or proprietary information, it could incur liabilities, including penalties under data privacy laws such as
the GDPR and other regulations, and the further development of its product candidates could be delayed. Even if the Company has not
experienced any cyber breach to date, should any of these risks materialize, this could have a material adverse effect on Innate's business,
prospects, financial condition and results of operations.
The Company has subscribed to insurance covering "cyber" and fraud. This insurance may be insufficient with regard to the level of financial,
legal, operational and reputational impacts that could arise from a disruption or a break of the Company information systems.
The Company may encounter difficulties in managing the Company development and support changes in its strategy, which could disrupt its
operations.
The opportunities taken, the decisions made, the successes and failures of Innate's research and development programs and its operations in
general can have significant impacts on its workforce and the scope of its operations.
Potential rapid changes such as a strong growth in the Company's headcount or significant organizational changes aiming at supporting strategic
evolutions, may lead to a deterioration in working conditions and the leave of employees, which could lead to a loss of knowledge and expertise,
a decrease in the performance of Innate's operations and therefore a reduced level of achievement of its objectives.
For example, in December 2020, the decision of returning Lumoxiti commercial rights to AstraZeneca was followed by an immediate reduction
of Innate's commercial operations and headcounts in the United States. Although the Company gained some experience in the late stage
development and marketing and commercialization of pharmaceutical products, such experience was short and may not have resulted in a
46
sufficient acquisition of skills to anticipate and tackle the marketing and commercialization of Innate's other drug candidates.
In addition, in order to support the development of the Company and changes in strategy, the Company must continue to implement and improve
its management and operational and financial systems, adapt its facilities and recruit and train qualified personnel. Due to Innate's limited
financial resources, it may not be able to effectively manage the development of Innate's business, which could result in weaknesses in its
infrastructure, operational errors, loss of business opportunities, loss of employees and reduced productivity of remaining employees. The
Company may also experience difficulties in recruiting, training and retaining additional qualified personnel, particularly in key positions. Added
to this is the fact that the Company is located in Marseille and is competing with other locations that potential recruits may find more attractive.
If the Company were to acquire assets or companies, the success of such an acquisition would depend on its capacity to carry out such
acquisitions and to integrate such assets or companies into its existing operations. The implementation of such a strategy could impose
significant constraints, including:
•
•
•
human resources: recruiting, integrating, training, managing, motivating and retaining a growing number of employees;
financial and management system resources: identification and management of appropriate financing and management of its financial
reporting systems; and
infrastructure: expansion or transfer of its laboratories or the development of its information technology system.
If the Company is unable to manage such changes or has difficulty integrating any acquisitions, it could have a material adverse effect on its
business, prospects, financial condition and results of operations.
The Company relies on certain independent organizations, partners, advisors and consultants to provide certain services and needs to hire
new employees and expand its use of service providers.
As of December 31, 2024, the Company had 181 employees. As Innate's development plans and strategies develop, Innate may need additional
managerial, operational, marketing, financial and other personnel.
The Company currently relies, and for the foreseeable future will continue to rely, in part on certain independent organizations, partners, advisors
and consultants to provide certain services. There can be no assurance that the services of these independent organizations, partners, advisors and
consultants will continue to be available to Innate on a timely basis when needed, or that Innate can find qualified replacements. In addition, if
Innate Pharma is unable to effectively manage its outsourced activities or if the quality or accuracy of the services provided by consultants is
compromised for any reason, its clinical trials may be extended, delayed or terminated, and it may not be able to obtain regulatory approval of its
product candidates or otherwise advance its business. There can be no assurance that Innate will be able to manage its existing consultants or
find other competent outside contractors and consultants on economically reasonable terms, if at all.
If the Company is not able to effectively expand its organization by hiring new employees and expanding its groups of consultants and
contractors, it may not be able to successfully implement the tasks necessary to further develop and commercialize its product candidates and,
accordingly, may not achieve its research, development and commercialization goals.
47
The Company depends on qualified management personnel, and its business could be harmed if Innate loses key personnel and cannot
attract new personnel.
Innate's ability to retain key persons in its organization and to recruit qualified personnel is crucial for its success. In particular, its success
depends heavily on its ability to retain key people in its organization, including key scientific and medical personnel.
Should the Company be unable to retain the individuals who form its team of key managers and key scientific advisors, it could have a material
adverse effect on its business and development and could consequently affect its business, prospects, financial condition and results of
operations.
Innate will need to recruit qualified scientific and medical personnel to carry out its clinical studies and expand into new areas that require
specialized skills, such as regulatory matters, marketing and manufacturing. Innate competes with other companies, research organizations and
academic institutions in recruiting and retaining highly qualified scientific, technical and management personnel. Competition for such personnel
is very intense in the biopharmaceutical field, and there can be no assurance that the Company will be successful in attracting or retaining such
personnel, and the failure to do so could harm its operations and its growth prospects. Should any of these risks materialize, this could have a
material adverse effect on Innate's business, prospects, financial condition and results of operations.
Innate's Research and Development facility and Headquarters in Luminy, France, are exposed to forest fires.
The Company's Research and Development facility and Headquarters in Luminy, France, are exposed to forest fires. Luminy is an area on the
outskirts of Marseille, composed in part of undeveloped hills covered with shrubs and pine trees. It is also located next to a natural park entirely
covered by the same type of Mediterranean vegetation. Summers are hot and dry, and this type of vegetation is prone to forest fires.
In order to prevent the risk of fire, fire prevention measures are implemented, such as pruning shrubs in the surrounding green areas and
implementing a maintenance plan for fire-fighting equipment. In addition, computer data backup and archiving measures are implemented,
allowing the regularly backed-up data to be stored on the premises of a specialized service provider. In addition, rare biological material used by
the Company has been identified, duplicated and stored at other sites, at the premises of specialized service providers.
However, these measures do not guarantee that a forest fire would not damage the Company's premises in Luminy, which would result in
financial losses, development delays of various durations or even the suspension of the Company's activities.
The Company may use hazardous chemicals and biological materials in its business, and any claims relating to improper handling, storage
or disposal of these materials could be time-consuming and costly.
Innate's research and development processes involve the controlled use of hazardous materials, including chemicals, biological and radioactive
materials. The Company cannot eliminate the risk of accidental contamination or discharge and any resultant injury from these materials. Innate
also handles genetically recombined material, genetically modified species and pathological biological samples. Consequently, in France and in
the jurisdictions where the Company conducts clinical trials, it is subject to environment and safety laws and regulations governing the use,
storage, handling, discharge and disposal of hazardous materials, including chemical and biological products and radioactive materials. The
Company imposes preventive and protective measures for the protection of its workforce and waste control management in accordance with
applicable laws, including part four of the French Labor Code, relating to occupational health and safety.
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In France, the Company is required to comply with a number of national, regional and local legislative or regulatory provisions regarding
radiation and hazardous materials, including specific regulations regarding the use, handling and storage of radioactive materials and the
potential exposure of employees to hazardous materials and radiation. Innate must also comply with French regulations concerning the use and
handling of genetically modified organisms (GMOs) in confined spaces.
If Innate fails to comply with applicable regulations, it could be subject to fines and may have to suspend all or part of its operations.
Compliance with environmental, health and safety regulations involves additional costs, and Innate Pharma may have to incur significant costs to
comply with future laws and regulations in relevant jurisdictions. Compliance with environmental laws and regulations could require Innate to
purchase equipment, modify facilities and undertake considerable expenses. The Company could be liable for any inadvertent contamination,
injury or damage, which could negatively affect its business, although the Company has subscribed to an insurance policy covering certain risks
inherent to its business.
Product liability and other lawsuits could divert Innate's resources, result in substantial liabilities, reduce the commercial potential of its
product candidates and damage its reputation.
Given that the Company develops therapeutic products intended to be tested on humans and used to treat humans, the risk that Innate may be
sued on product liability claims is inherent in its business. Side effects of, or manufacturing defects in, products that the Company develops
could result in the deterioration of a patient’s condition, injury or even death. For example, its liability could be sought by patients participating
in the clinical trials in the context of the development of the therapeutic products tested and unexpected side effects resulting from the
administration of these products. Once a product is approved for sale and commercialized, the likelihood of product liability lawsuits increases.
Criminal or civil proceedings might be filed against Innate by patients, regulatory authorities, biopharmaceutical companies and any other third
party using or marketing Innate's products. These actions could include claims resulting from acts by Innate's partners, licensees and
subcontractors, over which the Company has little or no control. These lawsuits may divert Innate's management from pursuing its business
strategy and may be costly to defend. In addition, if the Company is held liable in any of these lawsuits, it may incur substantial liabilities, may
be forced to limit or forgo further commercialization of the affected products and may suffer damage to its reputation.
Although the clinical study process is designed to identify and assess potential side effects, it is always possible that a drug, even after regulatory
approval, may exhibit unforeseen side effects. If any of Innate's product candidates were to cause adverse side effects during clinical studies or
after approval of the product candidate, the Company may be exposed to substantial liabilities. Physicians and patients may not comply with any
warnings that identify known potential adverse effects and patients who should not use Innate's product candidates.
The Company has obtained liability insurance coverage for each of its clinical studies in compliance with local legislation and rules. In the
United States, Innate's aggregate insurance coverage for its ongoing clinical studies is limited to €10.0 million per year and in the aggregate.
Innate's insurance coverage may not be sufficient to cover any expenses or losses the Company may suffer. Moreover, insurance coverage is
becoming increasingly expensive, and, in the future, Innate Pharma may not be able to maintain insurance coverage at a reasonable cost or in
sufficient amounts to protect itself against losses due to liability. On occasion, large judgments have been awarded in class action lawsuits based
on drugs that had unanticipated side effects. The cost of any product liability litigation or other proceedings, even if resolved in Innate's favor,
could be substantial. A successful product liability claim, or series of claims, brought against Innate could cause Innate's share price to decline
and, if judgments exceed its insurance coverage, could decrease its cash and adversely affect its business.
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To date, the Company is covered by a product liability insurance with a coverage amount of €10 million per year in the aggregate. If Innate is the
subject of a successful product liability claim that exceeds the limits of any insurance coverage Innate Pharma obtains, the Company would incur
substantial charges that would adversely affect its earnings and require the commitment of capital resources that might otherwise be available for
the development and commercial launch of its product programs. Should any of these risks materialize, this could have a material adverse effect
on Innate's business, prospects, financial condition and results of operations.
Innate Pharma's employees may engage in misconduct or other improper activities, including violating applicable regulatory standards and
requirements, engaging in insider trading or violating the terms of their confidentiality agreements, which could significantly harm Innate's
business.
The Company is exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failure to
comply with legal requirements or the requirements of national authorities, the EMA, FDA and other government regulators; failure to provide
accurate information to applicable government authorities; failure to comply with fraud and abuse and other healthcare laws and regulations in
the United States, Europe and elsewhere; and failure to report financial information or data accurately or disclose unauthorized activities to us. In
particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to
prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations restrict or prohibit a wide range of
pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee
misconduct could also involve the improper use of, including trading on, information obtained in the course of clinical studies, which could
result in regulatory sanctions and serious harm to Innate's reputation. Innate has a Code of Ethics that applies to all employees and consultants,
and other policies and charters, but it is not always possible to identify and deter employee misconduct, and the precautions it takes to detect and
prevent this activity may be ineffective in controlling unknown or unmanaged risks or losses or in protecting Innate from governmental
investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
In order to protect its proprietary technology and processes, the Company relies in part on confidentiality agreements with its partners,
employees, consultants, outside scientific collaborators and sponsored researchers, and other advisors. These agreements may not effectively
prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential
information. Costly and time-consuming litigation could be necessary to enforce and determine the scope of Innate's proprietary rights, and
failure to obtain or maintain trade secret protection could adversely affect its competitive business position. Should any of these risks
materialize, this could have a material adverse effect on Innate's business, prospects, financial condition and results of operations.
The Company may acquire businesses or products in the future, and Innate may not realize the benefits of such acquisitions.
Although Innate's current strategy involves continuing to grow its business internally, the Company may grow externally through selective
acquisitions of complementary products and technologies, or of companies with such assets. If such acquisitions were to become necessary or
attractive in the future, the Company may not be able to identify appropriate targets or make acquisitions under satisfactory conditions, in
particular, satisfactory price conditions. In addition, Innate may be unable to obtain the financing for these acquisitions under favorable
conditions and could be led to finance these acquisitions using cash that could be allocated to other purposes in the context of existing
operations. Innate may encounter numerous difficulties in developing, manufacturing and marketing any new products resulting from an
acquisition that delays or prevents Innate from realizing their expected benefits or enhancing its
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business. The Company cannot assure you that, following any such acquisition, the Company will achieve the expected synergies to justify the
transaction, which could have a material adverse effect on Innate's business, financial conditions, earnings and prospects.
Climate change or legal, regulatory or market measures to address climate change may negatively affect Innate's business and results of
operations.
Climate change presents risks to Innate's operations, including the potential for additional regulatory requirements and associated costs, and the
potential for more frequent and severe weather events and water availability challenges that may impact Innate's facilities and those of Innate's
suppliers. Natural disasters and extreme weather conditions, such as a hurricane, tornado, earthquake, wildfire or flooding, may pose physical
risks to Innate's facilities and disrupt the operation of Innate's supply chain.
Concern over climate change may also result in new or additional legal or regulatory requirements designed to reduce greenhouse gas emissions
and/or mitigate the effects of climate change on the environment. If such laws or regulations are more stringent than current legal or regulatory
obligations, the Company may experience disruption in or an increase in the costs associated with sourcing, manufacturing and distribution of
Innate's products, which may adversely affect Innate's business, results of operations or financial condition.
The current state of the world financial market and current economic conditions could have a material adverse impact on the Company's
business, financial conditions, results of operations and cash flows.
The global economy is facing a number of actual and potential challenges, including the military conflict between Ukraine and Russia, the
conflict in Israel and the Middle East region generally, and the banking crises or failures, such as the recent failures of Silicon Valley Bank and
other U.S. regional banks and the instability of certain European banks. If the conditions in the global economy remain uncertain or continue to
be volatile, or if they deteriorate, including as a result of the ongoing military conflict between Russia and Ukraine, the conflict in Israel, banking
crises or other geopolitical events, the Company's business, financial condition and results of operation may be materially adversely affected.
In addition, increases in inflation raise the Company's costs for labor, materials and services and other costs required to grow and operate its
business, and failure to secure these on reasonable terms may adversely impact its financial condition. Increases in inflation, along with the
uncertainties surrounding potential future pandemics, ongoing geopolitical developments, banking crises and global supply chain disruptions,
could potentially disrupt Innate's business and supply chain, and make it more difficult for Innate to obtain additional funds given the lack of
liquidity in capital markets that these events could cause. Such risks and disruptions may also negatively impact Innate's supply chain,
manufacturing arrangements, preclinical studies and clinical trials, which could have a materially adverse impact on its results of operations,
financial condition and prospects. The extent and duration of the current economic conditions and resulting market disruptions are impossible to
predict but could be substantial. Any such disruptions may also magnify the impact of other risks described in this Annual Report on Form 20-F.
See “Risk Factors—The Company's future growth depends, in part, on its ability to penetrate multiple markets, in which the Company would be
subject to additional regulatory burdens and other political, social and geopolitical risks and uncertainties.”
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Risks Related to Intellectual Property Rights
Its ability to compete may be adversely affected if the Company does not adequately obtain, maintain, protect and enforce Innate's
intellectual property or proprietary rights, or if the scope of intellectual property protection the Company obtains is not sufficiently broad.
Innate's success depends, in large part, on its ability to obtain and maintain patent and other intellectual property protection in the United States
and other countries with respect to Innate's product candidates. However, the Company may not be able to obtain, maintain or enforce Innate's
patents and other intellectual property rights, which could affect its ability to compete effectively. For example, the Company cannot guarantee:
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•
•
•
•
that the Company will file all necessary or desirable patent applications or that the Company will obtain the patents that the Company
has applied for and that are under review;
that the Company will be able to develop new patentable product candidates or technologies or obtain patents to protect such new
product candidates or technologies;
that the Company or its licensing or collaboration partners were the first to make the product candidates or technologies covered by
the issued patents or pending patent applications that the Company licenses or owns;
that the Company will be able to obtain sufficient rights to all necessary or desirable patents or other intellectual property rights,
whether at all or on reasonable terms;
that the scope of any issued patents that the Company owns or licenses will be broad enough to protect its product candidates or
effectively prevent others from commercializing competitive technologies and product candidates; and
that there is no risk of its owned and licensed patents being challenged, invalidated or circumvented by a third party.
The patent prosecution process is expensive, time-consuming and complex, and Innate may not be able to file, prosecute, maintain, enforce or
license all necessary or desirable patent applications at a reasonable cost or in a timely manner. For example, the Company does not intend to
systematically file, maintain, prosecute and defend patents on its product candidates in all countries. Consequently, Innate may not be able to
prevent third parties from exploiting products that are the same as or similar to its products and product candidates in countries in which it does
not obtain patent protection, or from selling or importing such products in and into the countries in which it does have patent protection. It is also
possible that the Company will fail to identify patentable aspects of its research and development output in time to obtain patent protection.
Although the Company enters into confidentiality agreements with parties who have access to confidential or patentable aspects of its research
and development output, such as its employees, consultants, CROs, outside scientific collaborators, sponsored researchers and other advisors,
any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing its ability to
seek patent protection. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents
protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, Innate's intellectual property
may not provide Innate with sufficient rights to exclude others from commercializing product candidates similar or identical to Innate's products.
In addition, in some circumstances, the Company may not have the right to control the preparation, filing, prosecution, maintenance,
enforcement and defense of patents and patent applications covering technology that the Company licenses to or from third parties. For example,
pursuant to its license agreement with AstraZeneca for monalizumab, AstraZeneca retains
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control of such activities for certain patents that the Company licenses to it under the agreement and patents that arise under the collaboration.
Innate cannot be certain that these patents and patent applications will be prepared, filed, prosecuted, maintained, enforced and defended in a
manner consistent with the best interest of its business. If any third party that controls Innate's patents and patent applications fails to maintain
Innate's patents or such third party loses rights to Innate's patents or patent applications, Innate's rights to those patents and underlying
technology may be reduced or eliminated and the Company's right to develop and commercialize its product candidates that are subject to such
rights could be adversely affected.
Moreover, some of Innate's patents and patent applications are, and may in the future be, co-owned with third parties. If the Company is unable
to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to
license their rights to other third parties, including its competitors, and its competitors could market competing products and technology. Innate
may also need the cooperation of any such co-owners of its patents in order to enforce such patents against third parties, and such cooperation
may not be provided to us.
The coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after
issuance. The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability. Even if patent applications the
Company licenses or owns currently or in the future issue as patents, they may not issue in a form that will provide Innate with any meaningful
protection, prevent competitors or other third parties from circumventing its patents by developing similar or alternative technologies or products
in a non-infringing manner, or otherwise provide Innate with any competitive advantage. Challenges from competitors or other third parties
could reduce the scope of Innate's patents or render them invalid or unenforceable, which could limit its ability to stop others from using or
commercializing similar or identical technology and product candidates, or limit the duration of the patent protection for Innate's product
candidates. The legal proceedings that the Company may then have to enter into in order to enforce and defend its intellectual property could be
very costly and could distract its management and other personnel from their normal responsibilities, notably in the case of lawsuits in the United
States. The probability of disputes arising over Innate's intellectual property will increase progressively as patents are granted and as the value
and appeal of the inventions protected by these patents are confirmed. The occurrence of any of these events concerning any of Innate's patents
or intellectual property rights could have a material adverse effect on its business, prospects, financial condition and results of operations. These
risks are even higher for the Company, because of its limited financial and human resources.
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions,
and has been the subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability and commercial value of
Innate's patent rights are highly uncertain. The Company's pending and future patent applications may not result in patents being issued which
protect its technology or product candidates or which effectively prevent others from commercializing competitive technologies and product
candidates. Furthermore, its owned and in-licensed patents may be subject to a reservation of rights by one or more third parties. For example,
the research resulting in certain of its owned and licensed patent rights and technology was funded in part by the U.S. government. As a result,
the government may have certain rights, or march-in rights, to such patent rights and technology. When new technologies are developed with
government funding, the government generally obtains certain rights in any resulting patents, including a non-exclusive license authorizing the
government to use the invention for non-commercial purposes. These rights may permit the government to disclose Innate's confidential
information to third parties and to exercise march-in rights to use or allow third parties to use its licensed technology. The government can
exercise its march-in rights if it determines that action is necessary because the Company failed to achieve practical
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application of the government-funded technology, because action is necessary to alleviate health or safety needs, to meet requirements of federal
regulations or to give preference to U.S. industry. In addition, Innate's rights in such inventions may be subject to certain requirements to
manufacture products embodying such inventions in the United States. Any exercise by the government of such rights could harm Innate
Pharma's competitive position, business, financial condition, results of operations and prospects.
Third parties may allege that the Company or its partners infringe, misappropriate or otherwise violate such third parties’ intellectual
property rights, which could prevent or delay its development efforts, stop Innate from commercializing its product candidates, or increase
the costs of commercializing its product candidates.
The Company's commercial success depends on its ability and the ability of its partners to develop, manufacture, market and sell its product
candidates, and use its proprietary technologies, without infringing, misappropriating or otherwise violating any intellectual property or
proprietary rights of third parties. The field of biopharmaceuticals involves significant patent and other intellectual property litigation, which can
be highly uncertain and involve complex legal and factual questions. The interpretation and breadth of claims allowed in some patents covering
biopharmaceutical compositions also may be uncertain and difficult to determine.
Innate may not be aware of all third-party intellectual property rights potentially relating to its product candidates. In general, in the United
States patent applications are not published until 18 months after filing or, in some cases, not at all. Therefore, the Company cannot be sure that
it was the first to make the inventions claimed in any owned or licensed patents or pending patent applications, or that it was the first to file for
patent protection for such inventions. If the Company was not the first to invent such inventions or first to file any patent or patent application
for such inventions, it may be unable to make use of such inventions in connection with its products. Innate may need to obtain licenses from
third parties (which may not be available under commercially reasonable terms, or at all), delay the launch of product candidates or cease the
production and sale of certain product candidates or develop alternative technologies that are the subject of such patents or patent applications,
any of which could have a material adverse effect on its business, prospects, financial condition and results of operations.
Third parties may allege that Innate or its partners infringe, misappropriate or otherwise violate any such third party’s patents or other intellectual
property rights and assert infringement claims against us, regardless of their merit. A court of competent jurisdiction could hold that these third-
party patents are valid, enforceable and infringed, which could materially and adversely affect Innate's ability to commercialize any product
candidates it may develop and any other product candidates or technologies covered by the asserted third-party patents. In order to successfully
challenge the validity of any such U.S. patent in federal court, Innate would need to overcome a presumption of validity. As this burden is a high
one requiring Innate to present clear and convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurance that a court
of competent jurisdiction would invalidate the claims of any such U.S. patent. If the Company is found to infringe a third party’s intellectual
property rights, and the Company is unsuccessful in demonstrating that such rights are invalid or unenforceable, the Company could be required
to:
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bear the potentially significant costs of proceedings brought against us;
pay damages, which may include treble damages and attorney’s fees if the Company is found to have willfully infringed a third
party’s patent rights;
cease developing, manufacturing and commercializing the infringing technology or product candidates; and
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acquire a license to such third-party intellectual property rights, which may not be available on commercially reasonable terms, or at
all, and may be non-exclusive, thereby giving the Company's competitors and other third parties access to the same technologies
licensed to us.
Even if resolved in Innate's favor, litigation or other intellectual property proceedings may cause Innate to incur significant expenses and could
distract its management and other personnel from their normal responsibilities. For example, Orega Biotech claims joint ownership of certain
patents relating to IPH5201, which the Company disputed. As a result of a decision rendered by the arbitral tribunal in December 2021, the
Company will be required to pay a low-teen percentage to Orega Biotech on a going forward basis of sub-licensing revenues received by the
Company pursuant to its agreement with AstraZeneca regarding IPH5201, and the Company may be obligated to pay Orega Biotech additional
amounts upon the achievement of development and regulatory milestones under such agreement. See Note 6 to the consolidated financial
statements included under "Item 18. Financial Statements" of this Annual Report. In addition, there could be public announcements of the results
of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it
could have a material adverse effect on the price of Innate's ordinary shares or ADSs. The Company may not have sufficient financial or other
resources to adequately conduct such litigation or proceedings. Some of Innate's competitors may be able to sustain the costs of such litigation or
proceedings more effectively than Innate can because of their greater financial resources and more mature and developed intellectual property
portfolios. Should one or more of the foregoing risks materialize, this could have a material adverse effect on Innate's reputation, business,
prospects, financial condition and results of operations.
Its patents could be found invalid or unenforceable if challenged, and the Company may not be able to protect its intellectual property.
Innate's and its licensors’ patents and patent applications, if issued, may be challenged, invalidated or circumvented by third parties. U.S. patents
and patent applications may also be subject to interference proceedings, re-examination proceedings, derivation proceedings, post-grant review
or inter partes review in the United States Patent and Trademark Office (USPTO), challenging Innate's or its licensors’ patent rights. Foreign
patents may be subject also to opposition or comparable proceedings in the corresponding foreign patent office. For example, a third party filed
an opposition in the European Patent Office (EPO) challenging one of the Company's European patents with claims directed to use of anti-
NKG2A antibodies for treating cancer in an individual having progressive disease following treatment with an antibody that neutralizes the
inhibitory activity of PD-1. The EPO issued a decision maintaining the Company's patent as granted, however the third party has appealed such
decision. Third-party oppositions have also been filed challenging two of the Company's in-licensed European patents directed to CD39
technology. One of these oppositions has not yet resulted in a first-instance decision in the EPO, while the other opposition resulted in the
revocation of the patents directed to CD39 technology, which revocation was appealed by Innate's licensor(s). All of the aforementioned
oppositions are currently pending.
In addition, the Company may allege that third parties infringe Innate's or its licensors’ patents, and the defendant could counterclaim that such
patents are invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are
commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of
novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with
prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome
following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, Innate cannot be
certain that there is no invalidating prior art of which the Company or its licensing partners and the patent examiner were unaware during
prosecution.
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Any such patent litigation or proceeding could result in the loss of Innate or its licensors’ patents, denial of Innate's or its licensors’ patent
applications or loss or reduction in the scope of one or more of the claims of such patents or patent applications. Accordingly, Innate's or its
licensors’ rights under any issued patents may not provide Innate with sufficient protection against competitive product candidates or processes;
Innate could become unable to manufacture or commercialize its product candidates without infringing third-party patent rights; and the duration
of the patent protection of its product candidates could be limited. Furthermore, because of the substantial amount of discovery required in
connection with intellectual property litigation, there is a risk that some of Innate's confidential information could be compromised by disclosure
during this type of litigation. Even if the Company is successful, such litigation or proceedings may be costly and may distract its management
and other personnel from their normal responsibilities. Any of the foregoing could have a material adverse effect on Innate's business, prospects,
financial condition and results of operations.
Obtaining and maintaining the Company's patent protection depends on compliance with various procedural, document submission, fee
payment and other requirements imposed by government patent agencies, and its patent protection could be reduced or eliminated for non-
compliance with these requirements.
Periodic maintenance fees, renewal fees, annuity fees and various other government fees on patents and/or applications will be due to be paid to
the USPTO, and various government patent agencies outside of the United States over the lifetime of Innate's owned and licensed patents and/or
patent applications and any patent rights the Company may own in the future. In certain circumstances, Innate Pharma may rely on its licensing
partners to pay these fees. The USPTO and various foreign patent agencies require compliance with several procedural, documentary, fee
payment and other similar provisions during the patent application process. In many cases, an inadvertent lapse can be cured by payment of a
late fee or by other means in accordance with the applicable rules. There are situations, however, in which non-compliance can result in
abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such
an event, potential competitors might be able to enter the market with similar or identical products or technology, which could have a material
adverse effect on Innate's business, prospects, financial condition and results of operations.
Developments in patent law could have a negative impact on the Company's business.
Changes in either the patent laws or interpretation of the patent laws could increase the uncertainties and costs surrounding the prosecution of
patent applications and the enforcement or defense of issued patents. For example, from time to time, the U.S. Congress, the USPTO or similar
foreign authorities may change the standards of patentability, and any such changes could have a negative impact on Innate's business. Therefore,
we cannot be certain that we will obtain adequate patent protection for new products in important markets or that such protections, once granted,
will last as long as originally anticipated. In addition, in an infringement suit against a third party, we may not prevail, and the decision rendered
may not conclude that our patent or other proprietary rights are valid, enforceable, or infringed. Even in cases where we ultimately prevail in an
infringement claim, legal remedies available for harm caused to us by infringing products may be inadequate to make us whole. If we lose patent
protection because of an adverse court decision or a settlement, we face the risk that government and private third-party payers and purchasers of
pharmaceutical products may claim damages alleging they have over-reimbursed or overpaid for a drug.
Trademarks
In addition, changes to or different interpretations of patent laws in the United States and other countries may permit others to use Innate's or its
partners’ discoveries or to develop and commercialize Innate's technology and product candidates without providing any compensation to Innate,
or may limit the
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number of patents or claims it can obtain. The patent positions of companies in the biotechnology and pharmaceutical market are particularly
uncertain. Recent U.S. Supreme Court rulings have narrowed the scope of U.S. patent protection available in certain circumstances and
weakened the rights of patent owners in certain situations. This combination of events has created uncertainty with respect to the validity and
enforceability of patents, once obtained. Depending on future actions by the U.S. Congress, the federal courts, and the USPTO, as well as similar
bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse
effect on Innate's existing patent portfolio and its ability to protect and enforce its intellectual property in the future, which could have a material
adverse effect on its business, prospects, financial condition and results of operations.
If the Company does not obtain protection under the Hatch-Waxman Amendments and similar non-U.S. legislation for extending the term of
patents covering each of its product candidates, its business may be materially harmed.
Depending upon the timing, duration and conditions of FDA marketing authorization of Innate's product candidates, one or more of its U.S.
patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the
Hatch-Waxman Amendments, and similar legislation in the European Union. The Hatch-Waxman Amendments permit a patent term extension of
up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the
FDA regulatory review process. However, the Company may not receive an extension if the Company fails to apply within applicable deadlines,
fails to apply prior to expiration of relevant patents, fails to exercise due diligence during the testing Phase or regulatory review process or
otherwise fails to satisfy applicable requirements, and the Company may not prevail in any actions that it may bring under the Hatch-Waxman
amendments against generic manufacturers or others. Moreover, the length of the extension could be less than what the Company requests. If the
Company is unable to obtain patent term extension or the term of any such extension is less than its requests, the period during which the
Company can enforce its patent rights for that product will be shortened, and its competitors may obtain approval to market competing products
sooner. As a result, Innate's revenue from an applicable product could be reduced, which could have a material adverse effect on its business,
prospects, financial condition and results of operations.
The Company will not seek to protect its intellectual property rights in all jurisdictions throughout the world, and Innate may not be able to
adequately enforce its intellectual property rights in all jurisdictions where Innate Pharma seeks intellectual property protection.
Filing, maintaining, prosecuting and defending patents on Innate's product candidates in all countries and jurisdictions throughout the world
would be prohibitively expensive, and its intellectual property rights in some countries outside the United States could be less extensive than
those in the United States. Consequently, the Company may not be able to prevent third parties from using its product candidates or technologies
in all countries outside the United States, or from selling or importing products made using its product candidates or technologies in and into the
United States or other jurisdictions. Competitors may use Innate's technologies in jurisdictions where Innate Pharma does not pursue and obtain
patent protection to develop their own products and, further, may export otherwise infringing products to territories where the Company has
patent protection, and enforcement is not as strong as that in the United States. These products may compete with Innate's products, and its
patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Even if the Company pursues and
obtains issued patents in particular jurisdictions, its patent claims or other intellectual property rights may not be effective or sufficient to prevent
third parties from so competing.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as the federal and state laws in the
United States. Many companies have encountered significant
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problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries,
particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to
biopharmaceuticals or biotechnologies. This could make it difficult for Innate Pharma to stop the infringement of its patents, if obtained, or the
misappropriation or other violation of its other intellectual property rights. For example, many foreign countries have compulsory licensing laws
under which a patent owner must grant licenses to third parties. In addition, many countries limit the enforceability of patents against third
parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. Patent
protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain
outcomes. Accordingly, the Company may choose not to seek patent protection in certain countries, and the Company will not have the benefit of
patent protection in such countries.
Proceedings to enforce Innate's patent rights in foreign jurisdictions could result in substantial costs and divert its efforts and attention from other
aspects of its business, could put its patents at risk of being invalidated or interpreted narrowly, could put its patent applications at risk of not
issuing and could provoke third parties to assert claims against us. The Company may not prevail in any lawsuits that the Company initiates, and
the damages or other remedies awarded, if any, may not be commercially meaningful. In addition, changes in the law and legal decisions by
courts in the United States and other countries may affect Innate's ability to obtain adequate protection for its technology and the enforcement of
its intellectual property. Accordingly, Innate's efforts to enforce its intellectual property rights around the world may be inadequate to obtain a
significant commercial advantage from the intellectual property that the Company develops or licenses. Should any of these risks materialize,
this could have a material adverse effect on Innate's business, prospects, financial condition and results of operations.
Third parties may assert ownership or commercial rights to products, product candidates or technologies that Innate develops.
Third parties have made, and may in the future make, claims challenging the inventorship or ownership of Innate's intellectual property, which
may result in the imposition of additional obligations on us, such as development, royalty and milestone payments. Innate has written agreements
with partners or other third parties that provide for the ownership of intellectual property arising from its collaborations and its other work with
such third parties. These agreements provide that the Company must negotiate certain commercial rights with partners and other third parties
with respect to joint inventions or inventions made by its partners or such third parties that arise from the results of the collaboration or other
work with such third parties. In some instances, there may not be adequate written provisions to address clearly the resolution of intellectual
property rights that may arise under Innate's agreements. If the Company cannot successfully negotiate sufficient ownership and commercial
rights to the inventions that result from its use of a third party’s materials where required, or if disputes otherwise arise with respect to the
intellectual property developed with the use of a third party’s samples, the Company may be limited in its ability to capitalize on the market
potential of these inventions. In addition, the Company may face claims by third parties that its agreements with employees, contractors or
consultants obligating them to assign intellectual property to itself are ineffective, or in conflict with prior or competing contractual obligations
of assignment, which could result in ownership disputes regarding intellectual property the Company has developed or will develop and interfere
with its ability to capture the commercial value of such inventions. The Company also may be unsuccessful in executing assignment agreements
with each party who, in fact, conceives or develops intellectual property that the Company regards as its own, or such agreements might not be
self-executing or might be breached.
Litigation may be necessary to resolve an ownership dispute, and if the Company is not successful, Innate may be precluded from using certain
intellectual property, may lose its exclusive rights in such
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intellectual property or may be required to acquire a license to such intellectual property, which may not be available on commercially
reasonable terms or at all. Any of the foregoing could have a material adverse impact on Innate's business.
If the Company fails to comply with its obligations under license or technology agreements with third parties, Innate Pharma could lose
license rights that are critical to its business, and the Company may not be successful in obtaining necessary intellectual property rights.
Innate licenses intellectual property from third parties that is critical to its business through license agreements, including but not limited to
licenses related to the manufacture, composition, use and sale of its product candidates, and in the future Innate may enter into additional
agreements that provide it with licenses to valuable intellectual property or technology. For example, Innate depends on its license agreement
with Novo Nordisk A/S for the development and commercialization of monalizumab. Innate's license agreements impose various obligations on
us, which may include development, royalty and milestone payments. If the Company fails to comply with any of these obligations, its licensors
may have the right to terminate the agreements. If its license agreements with AstraZeneca or Novo Nordisk A/S or any other current or future
licensors terminate, the Company would lose valuable rights and may be required to cease its development, manufacture or commercialization of
its product candidates, including monalizumab. In addition, its business would suffer if its licensors fail to abide by the terms of the agreements,
if its licensors fail to prevent infringement by third parties or if the licensed patents or other rights are found to be invalid or unenforceable.
Should any of these risks materialize, this could have a material adverse effect on Innate's business, prospects, financial condition and results of
operations.
In addition, disputes may arise regarding intellectual property subject to a license agreement, including:
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the scope of rights granted under the license agreement and other interpretation-related issues;
the extent to which its technology and processes infringe on intellectual property of the counterparty that is not subject to the license
agreement;
Innate's diligence obligations under the license agreement and what activities satisfy those diligence obligations;
the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by its
counterparties and us; and
the priority of invention of patented technology.
The agreements under which the Company currently licenses intellectual property from third parties are complex, and certain provisions in such
agreements may be susceptible to multiple interpretations. The resolution of any contract dispute that may arise could narrow what Innate
believes to be the scope of its rights to the relevant intellectual property, or modify in a manner adverse to Innate what the Company believes to
be Innate's or its counterpart’s financial or other obligations under the relevant agreement, any of which could have a material adverse effect on
its business, financial condition, results of operations and prospects. If disputes over intellectual property that Innate Pharma has licensed prevent
or impair its ability to maintain its current license agreement on acceptable terms, the Company may be unable to unsuccessfully develop and
commercialize the affected product candidates.
Additionally, the growth of Innate's business may depend, in part, on its ability to acquire, in-license or use proprietary rights held by third
parties. The Company may be unable to acquire or in-license intellectual property rights from third parties that Innate identifies as necessary for
its product candidates on reasonable terms or at all. The licensing or acquisition of third-party intellectual property rights is a competitive area,
and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that the Company may
consider attractive. These established
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companies may have a competitive advantage over Innate due to their size, capital resources and greater clinical development and
commercialization capabilities. In addition, companies that perceive Innate to be a competitor may be unwilling to assign or license rights to us.
Innate also may be unable to license or acquire third-party intellectual property rights on terms that would allow Innate to make an appropriate
return on its investment.
As part of its business, the Company collaborates with non-profit and academic institutions to accelerate its preclinical research or development
under agreements with these institutions. Typically, these institutions provide Innate with an option to negotiate a license to any of the
institution’s or its employees’ rights in technology resulting from the collaboration. Regardless of such option, Innate may be unable to negotiate
a license within the specified timeframe or under terms that are acceptable to us. If the Company is unable to do so, the institution may offer the
intellectual property rights to other parties, potentially blocking its ability to pursue its applicable development or commercialization program. If
Innate Pharma is unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual
property rights Innate has, Innate may have to abandon the development and commercialization of the relevant program, and its business,
financial conditions, results of operations and prospects could be adversely affected.
Third parties may assert that Innate's employees, consultants or independent contractors have wrongfully used or disclosed confidential
information or misappropriated trade secrets of their current or former employers.
The Company employs individuals who are currently, or were previously, employed at universities or other biotechnology or pharmaceutical
companies, including its competitors or potential competitors. Although Innate tries to ensure that its employees, consultants and independent
contractors do not use the proprietary information or know-how of others in their work for Innate, and no such claims against it are currently
pending, Innate may be subject to claims that Innate or its employees, consultants or independent contractors have used or disclosed intellectual
property, including trade secrets or other proprietary information, of any such individual’s current or former employer or other third parties.
Litigation may be necessary to defend against these claims. If Innate fails in defending any such claims, in addition to paying monetary damages,
Innate may lose valuable intellectual property rights or personnel. Even if Innate is successful in defending against such claims, litigation could
result in substantial costs and be a distraction to its management and other employees. Should any of these risks materialize, this could have a
material adverse effect on Innate's business, prospects, financial condition and results of operations.
If the Company is unable to protect the confidentiality of its trade secrets, its business and competitive position could be materially harmed.
In addition to patent protection, because the Company operates in the highly technical field of biopharmaceutical drug development, it relies in
part on trade secret protection in order to protect its proprietary technology and processes. However, trade secrets are difficult to protect. The
Company seeks to protect its trade secrets, in part, by entering into confidentiality agreements with its employees, consultants, CROs, outside
scientific collaborators, sponsored researchers and other advisors. These agreements generally require that the other party keep confidential and
not disclose to third parties all confidential information developed by such party or made known to such party by Innate during the course of
such party’s relationship with us. However, Innate cannot guarantee that it has entered into such agreements with each party that may have or
have had access to its trade secrets and confidential information, and these agreements may be breached, and Innate may not have adequate
remedies for any breach.
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In addition to contractual measures, the Company tries to protect the confidential nature of its proprietary information using physical and
technological security measures. Such measures may not, for example, in the case of misappropriation of a trade secret by an employee or third
party with authorized access, provide adequate protection for Innate's proprietary information. Innate's security measures may not prevent an
employee or consultant from misappropriating its trade secrets and providing them to a competitor, and recourse it takes against such misconduct
may not provide an adequate remedy to protect its interests fully. Enforcing a claim that a party illegally disclosed or misappropriated a trade
secret can be difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, courts outside the United States may be
less willing to protect trade secrets. Moreover, trade secrets may be independently developed by others in a manner that could prevent legal
recourse by Innate. If any of Innate's confidential or proprietary information, such as its trade secrets, were to be disclosed to or misappropriated
by a third party, or if any such information was independently developed by a third party, its competitive position could be materially harmed.
Innate's trade and technical secrets include:
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certain unpatented technical expertise that the Company believes provides itself with an advantage in conducting research and
development work in its field;
certain scientific knowledge generated by the work the Company carries out;
certain information relating to the product candidates the Company is currently developing; and
certain information relating to the agreements signed between the Company and third parties.
The unauthorized disclosure or misappropriation of certain of these secrets could allow third parties to offer products or services to compete with
its or generally have a material adverse effect on Innate's business.
The structures put in place to protect Innate's trade and technical secrets do not constitute a guarantee that one or more of its trade and technical
secrets will not be disclosed or misappropriated. The agreements or other arrangements to protect the Company's trade secrets may fail to
provide the protection sought, or may be breached, or its trade secrets may be disclosed to, or developed independently by, its competitors.
Should any of these risks materialize, this could have a material adverse effect on Innate's business, prospects, financial condition and results of
operations.
Unauthorized use of Innate's trademarks may generate confusion and result in costs and delays to the detriment of its marketing efforts.
Innate's trademarks are a key component of its identity and its products. Although the key components of its trademarks have been registered,
notably in France and the United States, other companies in the pharmaceutical sector might use or attempt to use similar trademarks or
components of the Company's trademarks and thereby create confusion in the minds of third parties. Innate's registered trademarks may be
challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. In addition, there could be potential
trademark infringement claims brought by owners of other trademarks that incorporate variations of Innate's registered or unregistered
trademarks.
In the event the Company develops trademarks for products that conflict with intellectual property rights of third parties, Innate would then have
to redesign or rename its products in order to avoid encroaching on the intellectual property rights of third parties. This could prove to be
impossible or costly in terms of time and financial resources and could be detrimental to Innate's marketing efforts. Should any of these risks
materialize, this could have a material adverse effect on Innate's business, prospects, financial condition and results of operations.
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Intellectual property rights do not necessarily address all potential threats.
The degree of future protection afforded by the Company's intellectual property rights is uncertain because intellectual property rights have
limitations and may not adequately protect its business or permit it to maintain its competitive advantage. For example:
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others may be able to make products that are the same as or similar to its product candidates or utilize similar technology but that are
not covered by the claims of the patents that the Company licenses or may own in the future;
the Company, or its license partners or current or future collaborators, might not have been the first to make the inventions covered by
the issued patent or pending patent application that the Company licenses or may own in the future;
the Company, or its license partners or current or future collaborators, might not have been the first to file patent applications
covering certain of its or their inventions;
others may independently develop similar or alternative technologies or duplicate any of the Company's technologies without
infringing its owned or licensed intellectual property rights;
it is possible that the Company's owned or licensed pending patent applications will not lead to issued patents;
issued patents that the Company holds rights to may be held invalid or unenforceable, including as a result of legal challenges by its
competitors;
its competitors might conduct research and development activities in countries where the Company does not have patent rights and
then use the information learned from such activities to develop competitive products for sale in its major commercial markets;
the Company may not develop additional proprietary technologies that are patentable;
the patents of others may harm the Company's business; and
the Company may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may
subsequently file a patent covering such intellectual property.
Should any of these events occur, they could have a material adverse effect on Innate's business, financial condition, results of operations and
prospects.
Risks Related to Ownership of the Company's Ordinary Shares and the ADSs
The trading price of Innate's equity securities may be volatile, and purchasers of its ordinary shares or ADSs could incur substantial losses.
It is likely that the price of the Company's ordinary shares and ADSs will be significantly affected by events such as announcements regarding
scientific and clinical results concerning product candidates currently being developed by us, its collaboration partners or its main competitors,
changes in market conditions related to its sector of activity, announcements of new contracts, technological innovations and collaborations by
Innate or its main competitors, developments concerning intellectual property rights, as well as the development, regulatory approval and
commercialization of new products by Innate or its main competitors and changes in its financial results.
Equity markets are subject to considerable price fluctuations, and often these movements do not reflect the operational and financial performance
of the listed companies concerned. In particular, biotechnology
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companies’ share prices have been highly volatile and may continue to be highly volatile in the future. As the Company operates in a single
industry, Innate is especially vulnerable to these factors to the extent that they affect its industry. Fluctuations in the stock market as well as the
macro-economic environment could significantly affect the price of its ordinary shares. As a result of this volatility, investors may not be able to
sell their ordinary shares or ADSs at or above the price originally paid for the security. The market price for Innate Pharma's ordinary shares and
ADSs may be influenced by many factors, including:
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actual or anticipated fluctuations in its financial condition and operating results;
actual or anticipated changes in its growth rate relative to its competitors;
competition from existing products or new products that may emerge;
announcements by Innate or its competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital
commitments;
adverse results of delays in Innate's or any of its competitors’ preclinical studies or clinical trials;
adverse regulatory decisions, including failure to receive regulatory approval for any of its product candidates;
the termination of a strategic alliance or the inability to establish additional strategic alliances;
failure to meet or exceed financial estimates and projections of the investment community or that the Company provides to the
public;
issuance of new or updated research or reports by securities analysts;
fluctuations in the valuation of companies perceived by investors to be comparable to us;
ordinary share and ADS price and volume fluctuations attributable to inconsistent trading volume levels of its ordinary shares and
ADSs;
price and volume fluctuations in trading of its ordinary shares on Euronext Paris;
additions or departures of key management or scientific personnel;
disputes or other developments related to proprietary rights, including patents, litigation matters and its ability to obtain patent and
other intellectual property protection for its technologies;
changes to coverage policies or reimbursement levels by commercial third-party payors and government payors and any
announcements relating to coverage policies or reimbursement levels;
announcement or expectation of additional debt or equity financing efforts;
sales of its ordinary shares or ADSs by Innate, its insiders or its other shareholders; and
general economic and market conditions.
These and other market and industry factors may cause the market price and demand for Innate's ordinary shares and ADSs to fluctuate
substantially, regardless of its actual operating performance, which may limit or prevent investors from readily selling their ordinary shares or
ADSs and may otherwise negatively affect the liquidity of the trading market for the ordinary shares and ADSs.
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If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about Innate's business, the price of
the ordinary shares or ADSs and their trading volume could decline.
The trading market for the ADSs and ordinary shares depends in part on the research and reports that securities or industry analysts publish about
Innate or its business. As a public company in France since 2006, the Company's equity securities are currently subject to coverage by a number
of analysts. If fewer securities or industry analysts cover its company, the trading price for the ADSs and ordinary shares would be negatively
impacted. If one or more of the analysts who covers Innate downgrades Innate's equity securities or publishes incorrect or unfavorable research
about Innate's business, the price of the ordinary shares and ADSs would likely decline. If one or more of these analysts ceases coverage of the
Company or fails to publish reports on Innate regularly, or downgrades Innate's securities, demand for the ordinary shares and ADSs could
decrease, which could cause the price of the ordinary shares and ADSs or their trading volume to decline.
The Company does not currently intend to pay dividends on its securities and, consequently, your ability to achieve a return on your
investment will depend on appreciation in the price of the ordinary shares and ADSs. In addition, French law may limit the amount of
dividends the Company is able to distribute.
Innate has never declared or paid any cash dividends on its ordinary shares and does not currently intend to do so for the foreseeable future. The
Company currently intends to invest its future earnings, if any, to fund its growth. Therefore, the holders of Innate's ordinary shares and ADSs
are not likely to receive any dividends for the foreseeable future, and the success of an investment in its ordinary shares and ADSs depends upon
any future appreciation in value. Consequently, investors may need to sell all or part of their holdings of the ordinary shares or ADSs after price
appreciation, which may never occur, as the only way to realize any future gains on their investment. There is no guarantee that the ordinary
shares or ADSs will appreciate in value or even maintain the price at which Innate's shareholders have purchased them.
Further, under French law, the determination of whether the Company has been sufficiently profitable to pay dividends is made on the basis of its
statutory financial statements prepared and presented in accordance with accounting standards applicable in France. Moreover, pursuant to
French law, the Company must allocate 5% of its unconsolidated net profit for each year to its legal reserve fund before dividends, should the
Company propose to declare any, may be paid for that year, until the amount in the legal reserve is equal to 10% of the aggregate nominal value
of its issued and outstanding share capital. In addition, payment of dividends may subject Innate to additional taxes under French law. Therefore,
Innate may be more restricted in its ability to declare dividends than companies that are not incorporated in France.
In addition, exchange rate fluctuations may affect the amount of euros that the Company is able to distribute, and the amount in U.S. dollars that
its shareholders receive upon the payment of cash dividends or other distributions the Company declares and pays in euro, if any. These factors
could harm the value of the ADSs, and, in turn, the U.S. dollar proceeds that holders receive from the sale of the ADSs.
Future sales, or the possibility of future sales, of a substantial number of Innate's ADSs or ordinary shares could adversely affect the market
price of its ADSs and ordinary shares.
Future sales of a substantial number of Innate's ADSs or ordinary shares, or the perception that such sales will occur, could cause a decline in the
market price of its ADSs and/or ordinary shares. Sales in the United States of Innate ADSs and ordinary shares held by its directors, officers and
affiliated shareholders or ADS holders are subject to restrictions. If these shareholders or ADS holders sell substantial amounts of ordinary shares
or ADSs in the public market, or the market perceives that such sales may occur, the
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market price of Innate's ADSs or ordinary shares and its ability to raise capital through an issue of equity securities in the future could be
adversely affected.
The dual listing of Innate's ordinary shares and the ADSs may adversely affect the liquidity and value of the ADSs.
Innate's ADSs are listed on the Nasdaq, and its ordinary shares are admitted to trading on Euronext Paris. Trading of the ADSs or ordinary shares
in these markets take place in different currencies (U.S. dollars on the Nasdaq and euro on Euronext Paris), and at different times (resulting from
different time zones, different trading days and different public holidays in the United States and France). The trading prices of the Company's
ordinary shares on these two markets may differ due to these and other factors. Any decrease in the price of Innate's ordinary shares on Euronext
Paris could cause a decrease in the trading price of the ADSs on Nasdaq. Investors could seek to sell or buy Innate's ordinary shares to take
advantage of any price differences between the markets through a practice referred to as arbitrage. Any arbitrage activity could create unexpected
volatility in both its share prices on one exchange, and the ordinary shares available for trading on the other exchange. In addition, holders of
ADSs are not immediately able to surrender their ADSs and withdraw the underlying ordinary shares for trading on the other market without
effecting necessary procedures with the depositary. This could result in time delays and additional cost for holders of ADSs. The Company
cannot predict the effect of this dual listing on the value of its ordinary shares and the ADSs. However, the dual listing of its ordinary shares and
the ADSs may reduce the liquidity of these securities in one or both markets and may adversely affect the development of an active trading
market for the ADSs in the United States.
The rights of shareholders in companies subject to French corporate law differ in material respects from the rights of shareholders of
corporations incorporated in the United States.
The Company is a French company with limited liability. Its corporate affairs are governed by its bylaws and by the laws governing companies
incorporated in France. The rights of shareholders and the responsibilities of members of Innate's Executive Board and of its Supervisory Board
are in many ways different from the rights and obligations of shareholders in companies governed by the laws of U.S. jurisdictions. For example,
in the performance of its duties, Innate's Executive Board is required by French law to consider the interests of Innate, its shareholders, its
employees and other stakeholders, rather than solely Innate's shareholders and/or creditors. It is possible that some of these parties have interests
that are different from, or in addition to, your interests as a shareholder or holder of ADSs. See “Item 16G.—Corporate Governance.”
U.S. investors may have difficulty enforcing civil liabilities against the Company and members of the Executive Board and the Supervisory
Board.
Most of the members of Innate's Executive Board and Supervisory Board and the experts named therein are non-residents of the United States,
and all or a substantial portion of its assets and the assets of such persons are located outside the United States. As a result, it may not be possible
to serve process on such persons or Innate in the United States or to enforce judgments obtained in U.S. courts against them or Innate based on
civil liability provisions of the securities laws of the United States. Additionally, it may be difficult to obtain jurisdiction over us or our non-U.S.
resident members of the Executive Board and Supervisory Board in U.S. courts in actions predicated on the civil liability provisions of the U.S.
federal securities law, or assert U.S. securities law claims in actions originally instituted outside of the United States. Foreign courts may refuse
to hear a U.S. securities law claim because foreign courts may not be the most appropriate forums in which to bring such a claim. Even if a
foreign court agrees to hear a claim, it may determine that the law of the jurisdiction in which the foreign court resides, and not U.S. law, is
applicable to the claim. Further, if U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a
time-consuming and costly process, and certain matters of
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procedure would still be governed by the law of the jurisdiction in which the foreign court resides. In particular, there is some doubt as to
whether French courts would recognize and enforce certain civil liabilities against us or our Supervisory Board or our Executive Board under
U.S. securities laws in original actions or judgments of U.S. courts based upon the civil liability provisions of the U.S. federal securities laws.
In addition, awards of punitive damages in actions brought in the United States or elsewhere may be unenforceable in France. An award for
monetary damages under the U.S. securities laws would be considered punitive if the amount awarded is disproportionate to the harm suffered
and the defendant’s breach. French law provides that a shareholder, or a group of shareholders, may initiate a legal action to seek indemnification
from the directors of a corporation in the corporation’s interest if it fails to bring such legal action itself. If so, any damages awarded by the court
are paid to the corporation, and any legal fees relating to such action may be borne by the relevant shareholder or the group of shareholders. The
enforceability of any judgment in France will depend on the particular facts of the case as well as the laws and treaties in effect at the time. A
final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not
predicated solely upon the U.S. federal securities laws, would only be recognized and enforced in France provided that a French judge considers
that this judgment meets the French legal requirements concerning the recognition and the enforcement of foreign judgments and is capable of
being immediately enforced in the United States. The United States and France do not currently have a treaty providing for recognition and
enforcement of judgments, other than arbitration awards, in civil and commercial matters.
Innate's bylaws and French corporate law contain provisions that may delay or discourage a takeover attempt.
Provisions contained in the Company's bylaws and French corporate law could make it more difficult for a third party to acquire the Company,
even if doing so might be beneficial to its shareholders. In addition, provisions of its bylaws impose various procedural and other requirements,
which could make it more difficult for shareholders to effect certain corporate actions. These provisions include the following:
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under French law, the owner of 90% of the share capital or voting rights of a public company listed on a regulated market in a
Member State of the European Union or in a state party to the EEA Agreement, including from the main French stock exchange, has
the right to force out minority shareholders following a tender offer made to all shareholders;
under French law, a non-resident of France, as well as any French entity controlled by non-residents of France, may have to file a
declaration for statistical purposes with the Bank of France (Banque de France) within 20 working days following the date of certain
direct foreign investments in us, including any purchase of the Company's ADSs. In particular, such filings are required in connection
with investments exceeding €15,000,000 that lead to the acquisition of at least 10% of the Company's share capital or voting rights or
cross such 10% threshold;
under French law, certain investments in a French company relating to certain strategic industries by individuals or entities not
residents in a Member State of the EU are subject to prior authorization of the Ministry of Economy;
a merger (i.e., in a French law context, a share for share exchange following which the Company would be dissolved into the
acquiring entity and its shareholders would become shareholders of the acquiring entity) of the Company into a company
incorporated in the European Union would require the approval of the Company's Executive Board, as well as a two-thirds majority
of the votes held by the shareholders present, represented by proxy or voting by mail at the relevant meeting;
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a merger of the Company into a company incorporated outside of the European Union would require 100% of its shareholders to
approve it;
under French law, a cash merger is treated as a share purchase and would require the consent of each participating shareholder;
Innate's shareholders may in the future grant the Company's Executive Board broad authorizations to increase Innate's share capital or
to issue additional ordinary shares or other securities (for example, warrants) to Innate's shareholders, the public or qualified
investors, including as a possible defense following the launching of a tender offer for Innate's ordinary shares;
its shareholders have preferential subscription rights on a pro rata basis on the issuance by Innate of any additional securities for cash
or a set-off of cash debts, which rights may only be waived by the extraordinary general meeting (by a two-thirds majority vote) of
the Company's shareholders or on an individual basis by each shareholder;
Innate's Supervisory Board appoints the members of the Executive Board and shall fill any vacancy within two months;
Innate's Supervisory Board has the right to appoint members of the Supervisory Board to fill a vacancy created by the resignation or
death of a member of the Supervisory Board for the remaining duration of such member’s term of office, and subject to the approval
by the shareholders of such appointment at the next shareholders’ meeting, which prevents shareholders from having the sole right to
fill vacancies on the Company's Supervisory Board;
its Executive Board can be convened by the chairman of the Executive Board or other members of the Executive Board delegated for
this purpose;
its Supervisory Board can be convened by the chairman or the vice-chairman of the Supervisory Board. A member of the Executive
Board or one-third of the members of the Supervisory Board may send a written request to the chairman to convene the Supervisory
Board. If the chairman does not convene the Supervisory Board 15 days following the receipt of such request, the authors of the
request may themselves convene the Supervisory Board;
its Supervisory Board meetings can only be regularly held if at least half of its members attend either physically or by way of
videoconference or teleconference enabling the members’ identification and ensuring their effective participation in the Supervisory
Board’s decisions;
approval of at least a majority of the votes held by shareholders present, represented by a proxy, or voting by mail at the relevant
ordinary shareholders’ general meeting is required to remove members of the Executive Board and/or members of the Supervisory
Board with or without cause;
the crossing of certain ownership thresholds has to be disclosed and can impose certain obligations;
advance notice is required for nominations to the Supervisory Board or for proposing matters to be acted upon at a shareholders’
meeting, except that a vote to remove and replace a member of the Supervisory Board can be proposed at any shareholders’ meeting
without notice;
transfers of shares shall comply with applicable insider trading rules and regulations, and in particular with the Market Abuse
Regulation 596/2014 of April 16, 2014, as amended; and
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•
pursuant to French law, the Company's bylaws, including the sections relating to the number of members of the Executive and
Supervisory Boards, and election and removal of members of the Executive and Supervisory Boards from office may only be
modified by a resolution adopted by two-thirds of the votes of the Company's shareholders present, represented by a proxy or voting
by mail at the meeting.
Purchasers of ADSs in the U.S. offering are not directly holding the Company's ordinary shares.
A holder of ADSs is not treated as one of Innate Pharma's shareholders and does not have direct shareholder rights. French law governs Innate's
shareholder rights. The depositary, through the custodian or the custodian’s nominee, is the holder of the ordinary shares underlying ADSs held
by purchasers of ADSs in the U.S. offering. Purchasers of ADSs in the U.S. offering have ADS holder rights. The deposit agreement among us,
the depositary and purchasers of ADSs in the U.S. offering, as an ADS holder, and all other persons directly and indirectly holding ADSs, sets
out ADS holder rights, as well as the rights and obligations of Innate and the depositary.
Your right as a holder of ADSs to participate in any future preferential subscription rights offering or to elect to receive dividends in shares
may be limited, which may cause dilution to your holdings.
According to French law, if the Company issues additional securities for cash, current shareholders will have preferential subscription rights for
these securities on a pro rata basis unless they waive those rights at an extraordinary meeting of its shareholders (by a two-thirds majority vote)
or individually by each shareholder. However, Innate's ADS holders in the United States will not be entitled to exercise or sell such rights unless
the Company registers the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration
requirements is available. In addition, the deposit agreement provides that the depositary will not make rights available to you unless the
distribution to ADS holders of both the rights and any related securities are either registered under the Securities Act or exempt from registration
under the Securities Act. Further, if the Company offers holders of its ordinary shares the option to receive dividends in either cash or shares,
under the deposit agreement the depositary may require satisfactory assurances from Innate that extending the offer to holders of ADSs does not
require registration of any securities under the Securities Act before making the option available to holders of ADSs. The Company is under no
obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be
declared effective. Moreover, the Company may not be able to establish an exemption from registration under the Securities Act. Accordingly,
ADS holders may be unable to participate in the Company's rights offerings or to elect to receive dividends in shares and may experience
dilution in their holdings. In addition, if the depositary is unable to sell rights that are not exercised or not distributed or if the sale is not lawful
or reasonably practicable, it will allow the rights to lapse, in which case you will receive no value for these rights.
You may not be able to exercise your right to vote the ordinary shares underlying your ADSs.
Holders of ADSs may exercise voting rights with respect to the ordinary shares represented by the ADSs only in accordance with the provisions
of the deposit agreement. The deposit agreement provides that, upon receipt of notice of any meeting of holders of Innate's ordinary shares, the
depositary will fix a record date for the determination of ADS holders who shall be entitled to give instructions for the exercise of voting rights.
Upon timely receipt of notice from us, if the Company so requests, the depositary shall distribute to the holders as of the record date (i) the
notice of the meeting or solicitation of consent or proxy sent by Innate and (ii) a statement as to the manner in which instructions may be given
by the holders.
You may instruct the depositary of your ADSs to vote the ordinary shares underlying your ADSs. Otherwise, you will not be able to exercise
your right to vote, unless you withdraw the ordinary shares underlying the ADSs you hold. However, you may not know about the meeting far
enough in advance to
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withdraw those ordinary shares. If the Company asks for your instructions, the depositary, upon timely notice from us, will notify you of the
upcoming vote and arrange to deliver its voting materials to you. The Company cannot guarantee you that you will receive the voting materials
in time to ensure that you can instruct the depositary to vote your ordinary shares or to withdraw your ordinary shares so that you can vote them
yourself. If the depositary does not receive timely voting instructions from you, it may give a proxy to a person designated by Innate to vote the
ordinary shares underlying your ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or
for the manner of carrying out voting instructions. This means that you may not be able to exercise your right to vote, and there may be nothing
you can do if the ordinary shares underlying your ADSs are not voted as you requested.
You may be subject to limitations on the transfer of your ADSs and the withdrawal of the underlying ordinary shares.
Your ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it
deems expedient in connection with the performance of its duties. The depositary may refuse to deliver, transfer or register transfers of your
ADSs generally when the Company's books or the books of the depositary are closed, or at any time if the Company or the depositary thinks it is
advisable to do so because of any requirement of law, government or governmental body, or under any provision of the deposit agreement, or for
any other reason subject to your right to cancel your ADSs and withdraw the underlying ordinary shares. Temporary delays in the cancellation of
your ADSs and withdrawal of the underlying ordinary shares may arise because the depositary has closed its transfer books or the Company has
closed its transfer books, the transfer of ordinary shares is blocked to permit voting at a shareholders’ meeting or the Company is paying a
dividend on its ordinary shares. In addition, you may not be able to cancel your ADSs and withdraw the underlying ordinary shares when you
owe money for fees, taxes and similar charges and when it is necessary to prohibit withdrawals in order to comply with any laws or
governmental regulations that apply to ADSs or to the withdrawal of ordinary shares or other deposited securities.
As a foreign private issuer, the Company is exempt from a number of rules under the U.S. securities laws and is permitted to file less
information with the SEC than a U.S. company.
Innate is a foreign private issuer, as defined in the SEC’s rules and regulations and, consequently, it is not subject to all of the disclosure
requirements applicable to public companies organized within the United States. For example, the Company is exempt from certain rules under
the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or
authorizations applicable to a security registered under the Exchange Act, including the U.S. proxy rules under Section 14 of the Exchange Act.
In addition, the Company's Executive Board and Supervisory Board members are exempt from the reporting and “short-swing” profit recovery
provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of Innate's securities. Moreover, while
the Company currently makes annual and semi-annual filings with respect to its listing on Euronext Paris and files financial reports on an annual
and semi-annual basis, it is not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public
companies and is not required to file quarterly reports on Form 10-Q or current reports on Form 8-K under the Exchange Act. In addition,
foreign private issuers are not required to file their annual report on Form 20-F until four months after the end of each fiscal year. Accordingly,
there is and will be less publicly available information concerning the Company than there would be if the Company were not a foreign private
issuer.
As a foreign private issuer, the Company is permitted to adopt certain home country practices in relation to corporate governance matters
that differ significantly from Nasdaq corporate governance
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listing standards, and these practices may afford less protection to shareholders than they would enjoy if Innate complied fully with Nasdaq
corporate governance listing standards.
As a foreign private issuer listed on Nasdaq, the Company is subject to Nasdaq's corporate governance listing standards. However, Nasdaq rules
permit foreign private issuers to follow the corporate governance practices of their home country. Therefore, as a general matter, the Company
refers to the French Middlenext corporate governance code for corporate governance matters, and thus its corporate governance practices may
differ significantly from Nasdaq corporate governance listing standards. For example, while the Nasdaq corporate governance rules would
require a majority of the Supervisory Board to be independent, the Middlenext corporate governance code requires that at least one third of the
members of Supervisory Board be independent and encourages 50% independent directors. Currently, all of the members of Innate’s Supervisory
Board are independent (as defined by the Middlenext code) and meet both the Middlenext and Nasdaq requirements for independence. However,
in the future, the composition of the Board may change such that the Company only meets the Middlenext requirement, but not the Nasdaq
requirements for independence. Currently, the Company intends to follow home country practice to the maximum extent possible. Therefore,
Innate Pharma's shareholders may be afforded less protection than they otherwise would have under corporate governance listing standards
applicable to U.S. domestic issuers. For an overview of Innate's corporate governance practices, see “Item 16G.—Corporate Governance.”
The Company incurs significant costs as a result of being a public company.
As a public company, Innate has incurred and will continue to incur significant legal, accounting and other expenses, including costs associated
with public company reporting requirements. The Company has also incurred and will continue to incur costs associated with corporate
governance requirements, including requirements of the Sarbanes-Oxley Act, as well as rules implemented by the SEC and Nasdaq Capital
Market, which include requirements with respect to corporate governance practices of public companies. The Company ceased to be an
“emerging growth company” on December 31, 2024, and is therefore no longer eligible for reduced disclosure requirements and exemptions
applicable to emerging growth companies. As the Company is no longer an emerging growth company, it will be required to devote significant
additional attention from management toward ensuring compliance with the requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002
and will likely incur significant additional costs, which could include higher legal fees, accounting fees and fees associated with investor
relations activities, among others. The stringent standards set by the Sarbanes-Oxley Act require that the Company's audit committee be advised
and regularly updated on management’s review of internal control over financial reporting. To comply with this obligation, the Company must
maintain an extensive framework of internal control over financial reporting, that needs to be regularly updated and tested. The Company's
independent registered public accounting firm is required to attest to the effectiveness of its internal controls over financial reporting. The
management of the Company may not be able to effectively and timely implement controls and procedures that adequately respond to the
increased regulatory compliance and reporting requirements that are now applicable to the Company as a public company listed in the United
States. If the Company does not succeed in maintaining the appropriate level of internal control, it could result in material misstatements in its
financial statements, result in the loss of investor confidence in the reliability of its financial statements and subject it to regulatory scrutiny and
sanctions, which in turn could harm the market value of its ordinary shares and ADSs.
The Company may lose its foreign private issuer status in the future, which could result in significant additional cost and expense.
While Innate currently qualifies as a foreign private issuer, the determination of foreign private issuer status is made annually on the last business
day of an issuer’s most recently completed second fiscal quarter and, accordingly, the Company's next determination will be made on June 30,
2025. In the future,
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the Company would lose its foreign private issuer status if the Company fails to meet the requirements necessary to maintain its foreign private
issuer status as of the relevant determination date. For example, if more than 50% of its securities are held by U.S. residents and more than 50%
of the members of its Executive Board or Supervisory Board are residents or citizens of the United States, Innate could lose its foreign private
issuer status.
The regulatory and compliance costs to Innate under U.S. securities laws as a U.S. domestic issuer may be significantly more than costs Innate
incurs as a foreign private issuer. If the Company is not a foreign private issuer, Innate will be required to file periodic reports and registration
statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive in certain respects than the forms available to a
foreign private issuer. The Company would be required under current SEC rules to prepare its financial statements in accordance with U.S.
generally accepted accounting principles, or U.S. GAAP, rather than IFRS, and to modify certain of its policies to comply with corporate
governance practices required of U.S. domestic issuers. Such conversion of Innate's financial statements to U.S. GAAP would involve significant
time and cost. In addition, the Company may lose its ability to rely upon exemptions from certain corporate governance requirements on U.S.
stock exchanges that are available to foreign private issuers such as the ones described above and exemptions from procedural requirements
related to the solicitation of proxies.
If the Company is a passive foreign investment company, there could be adverse U.S. federal income tax consequences to U.S. holders.
Based on Innate's analysis of its income, assets, activities and market capitalization for its taxable year ended December 31, 2024, and although
the matter is not free from doubt, the Company believes that it was not a passive foreign investment company (PFIC) for the taxable year ended
December 31, 2024. However, there can be no assurance that Innate will not be a PFIC in the current year or for any future taxable year. Under
the Code, a non-U.S. company will be a PFIC for any taxable year in which (1) 75% or more of its gross income consists of passive income or
(2) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income. For
purposes of these tests, passive income includes dividends, interest, gains from the sale or exchange of investment property and certain rents and
royalties and passive assets generally includes cash and cash equivalents. In addition, for purposes of the above calculations, a non-U.S.
corporation that directly or indirectly owns at least 25% by value of the shares of another corporation is treated as if it held its proportionate
share of the assets and received directly its proportionate share of the income of such other corporation. The status of the Company as a PFIC
depends on the composition of its income (including whether reimbursements of certain refundable research tax credits will constitute gross
income for purposes of the PFIC income test) and the composition and value of its assets. The value of the Company’s assets may be determined
in large part by reference to the market value of the ordinary shares or ADSs, which may fluctuate substantially. The Company’s status as a PFIC
may also depend in part on the amount of the amount of cash on the Company’s balance sheet, the cash proceeds from any fund-raising
activities, and how quickly the Company utilizes such cash in its business.
If Innate is a PFIC for any taxable year during which a U.S. holder (as defined below under “Item 10E.—Taxation – Material U.S. Federal
Income Tax”) holds its ordinary shares or ADSs, the Company will continue to be treated as a PFIC with respect to such U.S. holder in all
succeeding years during which the U.S. holder owns the ordinary shares or ADSs, regardless of whether the Company continues to meet the
PFIC test described above, unless the U.S. holder makes a specified election once Innate ceases to be a PFIC. If the Company is a PFIC for any
taxable year during which a U.S. holder holds its ordinary shares or ADSs, the U.S. holder may be subject to adverse tax consequences
regardless of whether Innate Pharma continues to qualify as a PFIC, including ineligibility for any preferred tax rates on capital gains or on
actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional
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reporting requirements. For further discussion of the PFIC rules and the adverse U.S. income tax consequences in the event the Company is
classified as a PFIC, see the section of this Annual Report titled “Item 10E.—Taxation– Material U.S. Federal Income Tax Considerations.”
If a United States person is treated as owning at least 10% of Innate's ordinary shares, such holder may be subject to adverse U.S. federal
income tax consequences.
If a U.S. holder is treated as owning, directly, indirectly or constructively, at least 10% of the value or voting power of Innate's ordinary shares or
ADSs, such U.S. holder may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in its group, if any.
Innate Pharma group currently includes one U.S. subsidiary and, therefore, under current law its current non-U.S. subsidiary and any future
newly formed or acquired non-U.S. subsidiaries will be treated as controlled foreign corporations, regardless of whether the Company is treated
as a controlled foreign corporation. A United States shareholder of a controlled foreign corporation may be required to annually report and
include in its U.S. taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income” and investments in U.S.
property by controlled foreign corporations, regardless of whether Innate makes any distributions. An individual that is a U.S. shareholder with
respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a
U.S. shareholder that is a U.S. corporation. Failure to comply with controlled foreign corporation reporting obligations may subject a U.S.
shareholder to significant monetary penalties. The Company cannot provide any assurances that it will furnish to any U.S. shareholder
information that may be necessary to comply with the reporting and tax paying obligations applicable under the controlled foreign corporation
rules of the Code. U.S. holders should consult their tax advisors regarding the potential application of these rules to their investment in Innate's
ordinary shares or ADSs.
Item 4. Information on the Company.
A. History and Development of the Company
Innate's legal name and commercial name is Innate Pharma S.A. The Company was incorporated under the laws of France on September 23,
1999, as a société par actions simplifiée and converted into a société anonyme, or S.A., on June 13, 2005. Innate's headquarters are located at
117, Avenue de Luminy, 13009 Marseille, France. In 2008, The Company incorporated its wholly owned U.S. subsidiary, Innate Pharma Inc. In
2019, Innate Pharma's incorporated its wholly owned French subsidiary, Innate Pharma France S.A.S. (registered under number SIREN
844 853 119). Innate Pharma France S.A.S. was dissolved without liquidation on November 30, 2020, under article 1844-5, Section 3 of the
French Civil Code.
The Company is registered at the Marseille Business and Company Registry (Registre du commerce et des sociétés) under the number SIREN
424 365 336 RCS Marseille. Innate's telephone number at its principal executive offices is +33 4 30 30 30 30. Innate Pharma's wholly owned
U.S. subsidiary is located at 2273 Research Boulevard, Suite 350, Rockville, MD 20850, United States.
Innate's website address is www.innate-pharma.com. The reference to its website is an inactive textual reference only, and information contained
in, or that can be accessed through, its website is not part of this Annual Report. The SEC maintains a website (www.sec.gov) that contains
reports, proxy and information statements and other information regarding registrants, such as Innate, that file electronically with the SEC.
Innate's capital expenditures in the years ended December 31, 2022, 2023 and 2024 primarily related to acquisitions and additional
considerations linked to purchased licenses, and acquisitions of laboratory equipment. Clinical research and development costs are not
capitalized until marketing authorizations are obtained.
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B. Business Overview
Innate Pharma S.A. is a global, clinical-stage biotechnology company developing immunotherapies for cancer patients. Its innovative approach
aims to harness the innate immune system through therapeutic antibodies and its ANKET (Antibody-based NK cell Engager Therapeutics)
proprietary platform. Innate’s portfolio includes our lead proprietary program lacutamab, developed for advanced form of cutaneous T cell
lymphomas and peripheral T cell lymphomas indications; monalizumab developed with AstraZeneca for non-small cell lung cancer (NSCLC)
indications, as well as ANKET multi-specific NK cell engagers to address multiple tumor types. The Company has developed, internally and
through its business development strategy, a broad and diversified portfolio including eight clinical product candidates and a robust preclinical
pipeline. Innate has entered into collaborations with leaders in the biopharmaceutical industry, such as AstraZeneca and Sanofi. Innate Pharma
believes its product candidates and clinical development approach are differentiated from current immuno-oncology therapies and have the
potential to significantly improve the clinical outcome for patients with cancer.
®
®
The immune system is the body’s natural defense against invading organisms and pathogens and is comprised of two arms: the innate immune
system and the adaptive immune system. Recent immunotherapy developments have focused on generating a tumor antigen-specific T cell
response and have led to an unprecedented change in the treatment paradigm of many solid tumor cancers. Despite these successes, the breadth
and durability of the clinical benefit achieved has been limited to a subset of patients and tumor types because of limited effect against solid
tumors and toxicity. The Company's innovative approach to immuno-oncology aims to broaden and amplify anti-tumoral immune responses by
leveraging both the adaptive and the innate immune systems.
The innate immune system is comprised of a variety of cells, including Natural Killer (NK) cells, which are involved in anti-cancer
immunosurveillance through a variety of modalities. Activation of the innate immune system also helps trigger the adaptive immune system to
elicit a response directed against specific antigens and can provide durable immune memory. Innate's scientific expertise, strategic collaborations
and discovery engine to seek to harness the potential of the innate immune system.
73
The Company is developing a pipeline of innovative immunotherapies that it believes have the potential to provide significant clinical benefits to
cancer patients. The following table summarizes Innate's current pipeline.
In addition to these assets, the Company has an active development pipeline with programs in the discovery and preclinical stages.
Innate Pharma's collaborations with leaders in the biopharmaceutical industry, such as AstraZeneca and Sanofi, allow Innate to leverage the
expertise and resources of large pharmaceutical companies and research institutions with the goal of accelerating the development, registration
and launch of several of Innate Pharma's assets while providing the Company with financing to expand the development of its proprietary
product candidates. Since 2015, the Company has received an aggregate of $696.1 million (€619.7 million) in upfront and milestone payments
and equity investments from its collaborations. This amount includes a total of €62.6 million received from AstraZeneca following its investment
in the Company's capital in October 2018. Under Innate's existing collaboration and license agreements that become effective upon the exercise
by its collaborators of options to license future product candidates, the Company may be eligible to receive an aggregate of approximately up to
$2.8 billion in future contingent payments. With respect to the programs for which Innate Pharma has an existing collaboration or similar
agreement, future contingent payments are dependent upon Innate's achievement of specified development, regulatory and commercial related
milestones. With respect to the programs for which Innate Pharma's collaborators have been granted an option, future contingent payments are
dependent upon Innate's collaborators exercising such options, which would result in up-front option exercise fees, and upon its achievement of
specific development and sales milestones in those particular programs. The aggregate $2.8billion in future contingent payments assumes that its
collaborators exercise all of the options the Company has granted to them and that Innate achieves all related development, clinical, regulatory
and sales milestones.
The Company's Strategy
Innate's goal is to harness the immune system for the treatment of oncological conditions with serious unmet medical need. By leveraging its
extensive experience in immuno-oncology research and
74
development, the Company strives to continue to discover and develop a broad and diversified portfolio of first- and best-in-class
immunotherapies across various therapeutic modalities.
In January 2025, Innate announced its updated strategy for company growth, anchored on early clinical development of proprietary assets with
single-agent potential.
The key elements of its strategy include:
• Drive innovation with first-in-class ANKET® Platform: A new era in NK cell therapeutics is at the heart of Innate Pharma’s strategy,
based around its validated, proprietary Antibody-based NK Cell Engager Therapeutics (ANKET®) platform. This cutting-edge
technology with anticipated applications in hematologic malignancies, solid tumors, and autoimmune diseases leverages the advantages
of harnessing NK cell effector functions and can create proliferation of NK cells. By advancing its clinical pipeline, Innate aims to
exploit therapeutic possibilities in oncology and autoimmune diseases. IPH6501, Innate’s proprietary ANKET® is currently being
investigated in a Phase 1/2 study in patients with CD20-expressing non-Hodgkin’s Lymphoma.
• Accelerate development of differentiated Antibody-Drug Conjugates (ADCs): Innate Pharma is advancing its ADC programs to
develop differentiated and highly targeted treatments that combine the specificity of monoclonal antibodies with the potency of cytotoxic
drugs (compounds that induce cancer cell death by interfering with essential cellular functions). IPH4502, Innate’s lead ADC is a novel
and differentiated ADC composed of an antibody targeting Nectin-4 and conjugated to exatecan, a potent topoisomerase I inhibitor,
inducing cell death. IPH4502 is being investigated in a Phase 1 trial in patients with advanced solid tumors.
• Advance current late-stage assets through partnerships: Partnerships will continue to play a critical role in the Company’s strategy,
to aim to have a broader impact with Innate’s established antibody assets, including lacutamab and monalizumab. Innate is actively
seeking a partner to progress lacutamab for patients with advanced forms of T cell lymphomas. Monalizumab, currently in a Phase 3 trial
PACIFIC-9 led by AstraZeneca in non-small cell lung cancer, will see readouts by end of 2026. By entrusting these promising therapies
to strategic partners, Innate seeks to ensure their ongoing development and potential commercialization, with the goal of maximizing
their therapeutic potential and reach.
Activating Innate Immunity: Harnessing the Power of Immunotherapy to Treat Cancer
The Innate Immune System: Gatekeeper of the Adaptive Immune System
The immune system is the body’s defense against invading organisms and pathogens and is comprised of two arms: the innate immune system
and adaptive immune system.
The innate immune system represents the first barrier of immune defense because it reacts almost immediately against threats and serves as a
catalyst to mobilize other components of the immune system. The innate immune system functions to identify, attack and kill pathogens or
cancer cells, produce cytokines and activate the complement cascade and the adaptive immune system through antigen presentation. These
functions involve a variety of cells, including NK cells, dendritic cells, monocytes, macrophages and neutrophils. These cells then launch
adaptive immune responses while also mounting their own effector responses. Throughout the body, cells of the innate immune system play a
critical role in the immunosurveillance and detection of the formation of cancer cells.
Once activated, the adaptive immune system responds with large numbers of effector cells directed against specific antigens and can provide
durable immune memory. An adaptive immune response is highly specific to particular antigens expressed by pathogens or cancer cells, but it
requires time to
75
develop in a process known as priming. Key components of the adaptive immune system include antibodies, which are produced by B cells, bind
to antigens and mark them for destruction by other immune cells, and T cells, which recognize antigens on diseased cells and then attack and
eliminate them. The adaptive immune response is targeted and potent and has the potential to provide a long-lasting immune memory.
Harnessing Innate Immunity in Cancer: NK Cells as a Key Player in the Anti-Tumor Immune Response
NK cells are part of the innate immune system and represent a significant fraction of the total number of cytotoxic cells in the body. They are
active in many hematological malignancies (cancers that originate in blood-forming tissues, such as leukemia and lymphoma) and solid tumors
(cancers that develop in solid tissues like the skin and organs) and play a key role in the initiation of the T cell response.
Checkpoints expressed on NK cells include inhibitory cell surface receptors, such as NKG2A (Natural Killer Group 2A, an inhibitory receptor
that suppresses immune cell function upon binding to HLA-E), and activating NK cell receptors, such as NKp46. NKp46 is the most specific NK
cell marker identified to date across organs and species. Other receptors, such as NKG2A, are more prevalent in certain subsets of NK cells,
including NK cells infiltrating the tumor, and are also present on tumor infiltrating CD8 T cells.
+
NK cells are involved in the anti-cancer immunosurveillance through a variety of direct and indirect effects. The figure below provides an
illustration of anti-cancer functions of NK cells.
1
2
3
NK cells are able to directly and selectively kill cells
undergoing stress caused by a cancerous transformation
or pathogen infection, a process called natural
cytotoxicity.
NK cells can also kill target cells when they are coated
by antibodies in a process called antibody-dependent
cellular cytotoxicity (ADCC).
NK cells are also potent producers of cytokines, which
are soluble molecules that recruit and activate an
adaptive immune response by T cells through dendritic
or other antigen-presenting cells, which in turn may
enable the generation of immune memory against
tumor cells.
By providing the initial catalyst for the multilayered immune response, the activation of the innate immune system through the targeting of NK
cells could potentially result in an optimal anti-tumoral T cell response.
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Innate Pharma's response to cancer: harnessing the innate immunity against cancer
The Company has developed a pipeline around two main innovative strategies in modern immuno-oncology:
•
The first of these strategies is to directly target cancer cells through an antibody targeting a tumor antigen and causing its destruction.
◦
◦
◦
Innate's most advanced proprietary program, lacutamab, is a potentially first-in-class tumor-targeting antibody targeting
KIR3DL2, seeking to induce the killing of cells expressing the tumor antigen. The Company is developing lacutamab for the
treatment of various forms of T cell lymphoma (TCL), such as CTCL, including its aggressive subtype, Sézary syndrome, and
PTCL.
The Company has also developed a proprietary technological platform, named ANKET (for Antibody-based NK cell Engager
Therapeutics), which develops multi-specific antibody formats that leverage an activating receptor, NKp46. Its multi-specific
antibodies co-engage NKp46, with or without CD16, a tumor antigen and depending on the need, a variant of the interleukin-2
(IL-2v) molecule. This approach has the potential to more effectively mobilize NK cells than anti-tumor cytotoxic antibodies
because, in the tumor's microenvironment (TME) of many solid tumors, CD16, the receptor mediating the killing of tumor cells
by IgG1 antibodies can be downregulated on NK cells whereas NKp46 expression is frequently expressed on tumor-infiltrating
NK cells.
®
The Company is using its antibody engineering capabilities to generate classic antibody formats as well as new products by
exploring antibody drug conjugate (ADC) formats.
• Another strategy, known as immuno-oncology, consists of unleashing the immune system against cancer. Innate Pharma has developed
two approaches:
◦
◦
Checkpoint inhibitors: the development of antibodies that target immune checkpoints has been one of the greatest advances in
cancer treatment over the past 10 years. Notably, the current approved checkpoint inhibitors target the CTLA-4 and PD-1/PD-L1
pathways on T cells. These treatments have shown an ability to activate T cells, shrink tumors and improve patient survival in a
broad range of tumors. The Company is developing broad spectrum checkpoint inhibitors targeting inhibitory checkpoints
expressed on several cell types in order to potentially increase the breadth and quality of anti-tumor response. Innate's most
advanced checkpoint inhibitor product candidate, monalizumab, is potentially a first-in-class, dual checkpoint inhibitor designed
to activate both tumor-infiltrating NK cells and CD8 T cells, likely resulting in increased effector functions and greater killing
of the tumor by the immune system. The Company has partnered with AstraZeneca to develop this product, which is currently
being tested in a Phase 3 clinical trial in unresectable, Stage III non-small cell lung cancer (NSCLC) and a Phase 2 clinical trial
in resectable, early-stage NSCLC.
+
Tumor’s microenvironment (TME): the TME can inhibit both innate and adaptive immune responses either by producing or
degrading key metabolites or by recruiting suppressive cells, or both. For example, adenosine is one of the components of the
TME that most broadly affects immune response. It is produced by the sequential degradation of extracellular adenosine
triphosphate (ATP) by the following two enzymes: first CD39, which degrades the ATP into adenosine monophosphate (AMP),
and then second, CD73, which impairs the AMP into adenosine. For this reason, this pathway has attracted significant
development efforts that have been focused primarily on the downstream part
77
of the adenosine degradation cascade, CD73 and the adenosine receptors. The Company is developing IPH5301, a potentially
best-in-class anti-CD73 antibody, and has also focused on the upstream part of the cascade through IPH5201, an anti-CD39
antibody, in order to block the production of immunosuppressive adenosine and increase the pool of immuno-stimulatory
extracellular ATP. The Company believes this approach is also potentially mechanistically synergistic with many therapies such
as checkpoint inhibitor, tumor-targeting product, etc., as shown by the results of the COAST randomized Phase 2 study, where
AstraZeneca's anti-CD73 oleclumab in combination with durvalumab improved progression-free survival (PFS) and objective
response rate (ORR) compared to durvalumab alone in patients with unresectable, Stage III non-small cell lung cancer
(NSCLC). Similarly, results from NeoCoast randomized Phase 2 study showed that one cycle of neoadjuvant oleclumab in
combination with durvalumab improved major pathological response (MPR) and pathological complete response (pCR) rates
versus durvalumab alone, in stage I-IIIA resectable NSCLC patients.
Innate Pharma's Product Pipeline
Lacutamab (IPH4102), a Tumor Targeting Anti-KIR3DL2 Antibody
a. Mechanism & Rationale
The Company is developing its wholly owned product candidate lacutamab for the treatment of certain subtypes of T cell lymphoma (TCLs),
including cutaneous T cell lymphoma (CTCL) and peripheral T cell lymphoma (PTCL). Lacutamab is designed to bind to the KIR3DL2 receptor
and to kill cancer cells by antibody dependant cellular phagocytosis (ADCP) and antibody dependant cell cytotoxicity (ADCC), as illustrated in
the following figure.
KIR3DL2 is a receptor of the killer immunoglobulin like receptor (KIR) family. In its preclinical studies, the Company has observed that
KIR3DL2 is not expressed on healthy tissues, except on a subset of NK cells (36%) and T cells (12% of CD8 and 4% of CD4 ) (IPH internal
data). In addition, KIR3DL2 is expressed in T cell lymphoma: 65% of CTCL patients express KIR3DL2 with approximately 50% of patients
with MF, the most common type of CTCL expressing KIR3DL2 (Battistella, 2017). This
+
+
78
frequency increases for the most aggressive CTCL subtypes, including 90% of Sézary syndrome (Roelens, 2019). Lastly, approximately 50% of
patients with PTCL also express KIR3DL2 (Cheminant, ICML Meeting, 2019).
b.
Indication
i.
Cutaneous T Cell Lymphoma
CTCL is a heterogeneous group of non-Hodgkin’s lymphomas that are characterized by the abnormal accumulation of malignant T cells,
primarily in the skin. CTCL accounts for approximately 4% of all non-Hodgkin’s lymphomas and has a median age at diagnosis of 55 to 60
years (Dobos, 2020; Fuji, 2020). There are approximately 2,200-4,000 new CTCL cases diagnosed per year in Europe and the United States
combined (SEER Cancer Statistics Review 1975-2017; Dobos, 2020; Zhang, 2019; Gilson, 2019). The most common type of CTCL is mycosis
fungoides, or MF, accounting for approximately half of all CTCLs (Dobos, 2020, Bradford, 2009). Sézary syndrome, characterized by the
presence of lymphoma cells in the blood, is a CTCL subtype with a particularly poor prognosis. The following table outlines the most common
CTCL types, their frequency as a percentage of all cases of CTCL (Dobos, 2020), and the prognosis (WHO-EORTC classification 2018 :
Willemze, 2019).
CTCL Type
Frequency among CTCL
(%) Worldwide
5-year disease-specific survival (%)
+
Mycosis fungoides
Primary cutaneous CD30 lympho-proliferative disorders
Primary cutaneous CD4 small/medium T-cell lymphoproliferative disorder
Mycosis fungoides variants
Sézary syndrome
+
62
16
2
6
3
88
95-99
100
75-100
36
Patients with advanced CTCL have a poor prognosis with few therapeutic options and no standard of care. Treatment generally includes skin-
directed therapies, such as topical corticosteroids, and systemic treatments, such as steroid drugs and interferon, for patients with more advanced
disease or for whom skin-directed therapies failed. There are several approved agents for the treatment of CTCL:
• Bexarotene, approved by FDA in 1999, for use in patients with advanced stage of MF who are refractory to at least one prior systemic
therapy;
• Vorinostat, approved by FDA in 2006 for for the treatment of patients with persistent or recurrent cutaneous T-cell lymphoma (CTCL)
whose malignant cells express the CD25 component of the interleukin (IL)-2 receptor (CD25+). However, ONTAK was voluntarily
withdrawn from the U.S. market in 2014. In 2024, "LYMPHIR," also known as "E7777" or "I/ONTAK," a purified and more bioactive
formulation of the previously FDA-approved ONTAK®, was approved for the treatment of adult patients with relapsed or refractory
cutaneous T-cell lymphoma (CTCL) in stages I-III, after at least one prior systemic therapy.
• Denileukin diftitox (DD) approved by the FDA in 2008 for patients with resistant and recurrent CTCL;
79
• Romidepsin, approved by FDA in 2009 for patients with CTCL who have received at least one prior systemic therapy;
• Brentuximab vedotin (marketed as Adcetris), was approved by the FDA in 2017 for the treatment of patients with primary cutaneous
anaplastic large cell lymphoma, or pcALCL, or CD30-expressing MF who have received prior systemic therapy. In Europe, brentuximab
vedotin is indicated for the treatment of adult patients with R/R CD30 CTCL who require systemic therapy; and
+
• Mogamulizumab (marketed as Poteligeo), was approved in 2018 by the FDA and the EMA for the treatment of adult patients with R/R
MF or Sézary syndrome after at least one prior systemic therapy.
In general, treatment guidelines distinguish CTCL by clinical appearance and localization, histological subtype, extent and type of
extracutaneous disease, aggressiveness and response to previous treatment. Most patients are not suitable for stem cell transplantation due to
their age and/or comorbid conditions. Although brentuximab vedotin and mogamulizumab represent recent progress in the treatment of CTCL,
they are still associated with the safety and efficacy limitations observed in their respective clinical trials. Further, even with these options, the
vast majority of these treated patients eventually relapse and the overall survival rate remains poor, which translates to unmet needs that
lacutamab aims to address.
In January 2019, the Food and Drug Administration (FDA) granted lacutamab Fast Track Designation for the treatment of adults with
relapsed/refractory (r/r) Sézary syndrome who have received at least two prior systemic therapies. In November 2020, Innate Pharma received
Priority Medicines (PRIME) designation from the EMA for lacutamab, for the treatment of patients with relapsed or refractory Sézary syndrome
(SS) who have received at least two prior systemic therapies. Lacutamab has also been granted orphan drug designation by the FDA and orphan
designation by the EMA for the treatment of CTCL. The U.S. Fast-Track and EU PRIME designations support the potential for lacutamab to
benefit Sézary Syndrome patients in need of new treatment options. Results from the study in Sézary syndrome and mycosis fungoides were
presented at the American Society of Hematology (ASH) 2023 Annual Meeting and the American Society of Clinical Oncology (ASCO) 2024
Annual Meeting respectively. Quality of life data and translational analysis from the TELLOMAK trial in patients with relapsed/refractory
cutaneous T-cell lymphoma were presented at the ASH Annual Meeting 2024. During the third quarter of 2024, the FDA provided encouraging
initial feedback on the Company’s proposed regulatory pathway, which could potentially include Accelerated Approval for Sézary syndrome, and
the Company continues to align with the FDA around the confirmatory Phase 3 trial.
Separately, in February 2025 the FDA granted Breakthrough Therapy Designation (BTD) to lacutamab, for the treatment of adult patients with
relapsed or refractory (r/r) Sézary syndrome (SS) after at least two prior systemic therapies including mogamulizumab. Breakthrough Therapy
designation is a process designed to expedite the development and review of drugs that are intended to treat a serious condition and preliminary
clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on a clinically significant endpoint(s).
ii.
Peripheral T Cell Lymphoma
PTCL is a diverse group of aggressive non-Hodgkin’s lymphomas that develop from mature T cells and NK cells. PTCL arises in the lymphoid
tissues outside of the bone marrow, such as in the lymph nodes,
80
spleen, gastrointestinal tract and skin (Hsi, 2017). The various PTCL types, their frequency as a percentage of all TCL cases (Hsi, 2017), and
prognosis (Vose, 2018) are shown in the following table.
PTCL Type
PTCL not otherwise specified
Angioimmunoblas c
Anaplas c large cell lymphoma, or ALCL, ALK posi ve
Anaplas c large cell lymphoma, ALK nega ve
Frequency (%) U.S
5-year overall survival (%)
32
16
6
11
32
32
70
49
Irrespective of the specific regimen used (single agent chemotherapy or combination chemotherapy including Gemcitabine and Oxaliplatin,
usually referred to as GemOx), patients with R/R PTCL typically experience a poor outcome, with a median progression-free survival and
overall survival of 3.1 months and 5.5 months, respectively (Mak, 2013).
Multi-agent chemotherapy is the recommended first line treatment for the majority of patients with PTCL. Brentuximab vedotin is approved in
combination with first line chemotherapy for patients with CD30-positive PTCL. For patients who are eligible, subsequent stem cell
transplantation is a potentially curative option but it is limited to a minority of patients. Despite these treatments, a high proportion of patients
need second line therapy. Belinostat (marketed as Beleodaq), pralatrexate (marketed as Folotyn) and romidepsin (marketed as Istodax) have each
been approved by the FDA in this setting, but efficacy is generally limited. In the respective non-randomized clinical registration trials, the
response rates to belinostat, pralatrexate and romidepsin were each less than 30%, and the median duration of response was approximately 10
months for belinostat and pralatrexate (O'Connor, 2015 ; O'Connor, 2011; Coiffier, 2012). None of these treatments have been approved by the
EMA.
Despite these approvals, current treatment guidelines (NCCN 2021) recommend participation in a clinical trial as a preferred option for patients
with relapsed PTCL after first line treatment. If clinical trials are not available, a chemotherapy combination of gemcitabine and oxaliplatin
(GemOx) is listed as one of the preferred treatment combinations (European Society for Medical Oncology (ESMO) Lymphoma Guidelines).
Several studies have been published on the role of GemOx in patients with relapsed lymphoma and it is one of the most widely used regimens
for this patient population in the United States, Europe and Asia (Mounier, 2013; Yamaguchi, 2012).
81
c. Clinical Trials
Below is a summary of the clinical trials of lacutamab.
i.
Phase 1 Clinical Trial - CTCL
In November 2015, the lacutamab Phase 1 dose-escalating and cohort expansion clinical trial was initiated to evaluate lacutamab for the
treatment of advanced CTCL. Data from this trial were presented at the 2018 meeting of the American Society of Hematology ("ASH"), and
reported in Lancet Oncology in 2019 by Bagot et al. The Company reported clinical activity in the subgroup of 35 Sézary syndrome patients,
including an observed overall response rate of 42.9%, median duration of response of 13.8 months, median progression-free survival of 11.7
months and approximately 90% of patients experienced an improved quality of life. The overall response rate appeared to be higher (53.6%) in
the 28 patients with no histologic evidence of large cell transformation. Clinical activity was associated with a substantial improvement in
quality of life as assessed by the Skindex29 and Pruritus Visual Analog Scale scores. In a post hoc analysis of seven patients with Sézary
syndrome who were previously treated with mogamulizumab, three (43%) achieved a global overall response and three others had stable disease
as best response. The remaining patient had a progressive disease. The median duration of response in these patients was 13.8 months and
median progression-free survival was 16.8 months. Lacutamab was generally well tolerated.
ii.
Phase 2 Clinical Trial (TELLOMAK) - CTCL
1.
Study overview
In May 2019, the Company initiated a global, open-label, multi-cohort Phase 2 clinical trial, known as TELLOMAK. This clinical trial is being
conducted at approximately 50 sites within the United States and Europe (France, Italy, Spain, Germany, Belgium, Poland and Austria). The trial
aims to evaluate the efficacy and safety of lacutamab in patients with advanced T cell Lymphoma. 160 patients have been recruited,
approximately 60 patients with Sézary syndrome who have received at least two prior treatments (Cohort 1), and approximately 100 patients
with MF who have received at least two prior systemic therapies (Cohorts 2, 3 and all-comers). Cohorts 2 and 3 recruited KIR3DL2 expressing
and non-expressing patients respectively based on an IHC assay for use on frozen tissue. The cohorts were designed using Simon 2-stage
approach which pre-defined an efficacy threshold in Stage 1 before continuing to stage 2. While Cohort 2 continues to Stage 2, the pre-specified
threshold for Cohort 3 was not met, and was therefore closed in March 2022.
In March 2022, the Company announced the opening of a new mycosis fungoides (MF) all-comers cohort in the TELLOMAK study. The all-
comers cohort was planned to recruit both KIR3DL2 expressors and
82
non-expressors to explore the correlation between the level of KIR3DL2 expression and treatment outcomes utilizing a formalin-fixed paraffin
embedded (FFPE) assay as a companion diagnostic.
The following graphic depicts the latest trial design :
The primary endpoint of the trial is objective response rate, measured using the 2011 Olsen criteria for CTCL. Key secondary measures include
incidence of treatment-emergent AEs, the effect of skin disease on quality of life as measured by the Skindex29 questionnaire, pruritus as
measured by the Visual Analog Scale, progression-free survival and overall survival. The results of the dedicated Sézary syndrome cohort may
support a future Biologics License Application (BLA) submission to the FDA.
The study started in 2019 and completed enrollment in June 2023 (n=170 patients).
The TELLOMAK study experienced some supply issues within 2019/2020 which led to a clinical hold, now resolved and summarized below:
• November 2019, Impletio Wirkstoffabfüllung GmbH (formerly known as Rentschler Fill Solutions GmbH), the subcontractor in charge of the
fill-and-finish manufacturing operations of lacutamab unilaterally decided to withdraw the certificates of conformance of all clinical batches
produced at their facilities, including lacutamab. The company also filed for bankruptcy.
• Discussions were held with US and European national regulatory authorities regarding GMP deficiencies resulting in a suspension of
enrollment of new patients into TELLOMAK from December 2019.
• In January 2020, the TELLOMAK trial in Sézary syndrome and MF in France and in the United Kingdom, was reactivated following
authorization by the respective national authorities. In June 2020, the FDA lifted the partial clinical hold placed on the TELLOMAK Phase 2
clinical trial, based on a quality assessment of a new GMP-certified batch successfully manufactured for the lacutamab clinical development
program, including the TELLOMAK trial. Regulatory agencies in Spain, Germany and Italy also lifted, in the third quarter of 2020, their partial
clinical holds on the TELLOMAK trial, enabling Innate to resume recruitment of the trial in these countries.
Importantly, there were no safety issues related to the trial medication. This is consistent with the review conducted by the Independent Data
Monitoring Committee (IDMC), which concluded there were no safety issues related to lacutamab, and the product appeared to be well-tolerated
among current patients enrolled in the trial. Lacutamab fill and finish manufacturing operations were transferred to alternative CMOs
In October 2023, the FDA placed a partial clinical hold on the lacutamab IND leading to a pause in new patient enrollment to the Company’s
lacutamab trials IPH4102-201 (Phase 2 TELLOMAK) and 102 (Phase 1b PTCL). The partial clinical hold followed one fatal case of
hemophagocytic lymphohistiocytosis, a rare hematologic disorder. In January 2024, Innate announced that the U.S. Food and Drug
Administration (FDA) has lifted the partial clinical hold. The FDA decision to lift the partial clinical hold is based on the FDA review of the fatal
case which Innate, together with a steering committee of independent experts, determined to be related to aggressive disease progression and
lacutamab unrelated.
83
Based on the results of a planned futility interim analysis, however, and in consultation with FDA, the Phase 1b study will not enroll additional
patients. Despite objective responses observed, the Company-sponsored Phase 1b clinical trial evaluating lacutamab as monotherapy in patients
with KIR3DL2-expressing refractory/relapsing PTCL will not be reopened to recruitment as the prespecified threshold for meaningful clinical
activity was not reached.
2.
Clinical results in Sézary Syndrome (SS) (Cohort 1)
•
Final results from the Phase 2 TELLOMAK study in Sézary Syndrome were presented at the ASH Meeting in December 2023.
◦ As of May 1, 2023, the study’s data cutoff, patients in the Sézary Syndrome cohort (cohort 1, n=56) received a median of five
prior systemic therapies, including mogamulizumab, and had a median follow-up of 14.4 months.
◦
The data demonstrated that lacutamab showed robust clinical activity and an overall favorable safety profile. The global
confirmed objective response rate (ORR), was 37.5% (21 out of 56), including two complete responses and 19 partial responses.
ORR in the skin was 46.4% (26 out of 56), including five complete responses and 21 partial responses and ORR in the blood
was 48.2% (27 out of 56) with 15 CR and 12 PR. Median progression-free survival was 8.0 months (95% confidence interval
4.7-21.2). In patients who achieved a global response, the median duration of response is 12.3 months (95% confidence interval
5.1-NE).
•
In February 2025, Innate announced that the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy Designation
(BTD) to lacutamab, an anti-KIR3DL2 cytotoxicity-inducing antibody, for the treatment of adult patients with relapsed or refractory (r/r)
Sézary syndrome (SS) after at least 2 prior systemic therapies including mogamulizumab.
◦
The BTD is granted based on Phase 1 study results as well as results from the Phase 2 TELLOMAK study, where lacutamab
demonstrated encouraging efficacy and a favorable safety profile in heavily pretreated, post-mogamulizumab patients with
advanced Sézary syndrome.
◦ A BTD by the FDA is intended to accelerate the development and regulatory review in the U.S. of drugs that are intended to
treat a serious condition and that have shown encouraging early clinical results, which may demonstrate substantial
improvement on a clinically significant endpoint over available medicines.
◦
Innate continues to align with the regulatory agencies around the confirmatory Phase 3 trial in CTCL and is actively seeking a
partner.
84
Efficacy results in Sézary Syndrome patients (n=56)
3.
Interim clinical results in mycosis fungoides (MF)
•
•
•
•
In February 2021, the Company announced that lacutamab demonstrated a positive early signal in Cohort 2 testing lacutamab in
KIR3DL2 expressing MF patients in the TELLOMAK trial. This cohort reached the pre-determined number of responses needed to
advance to stage 2, allowing the Company to recruit additional patients.
The preliminary data from cohorts 2 and 3 were presented at the ICML and EORTC congresses in July and October 2021 respectively.
In September 2022, MF Cohorts 2 and 3 Stage 1 interim data were presented at the EORTC congress. As of the March 4, 2022 data
cutoff:
◦
◦
Patients in the KIR3DL2 ≥1% subgroup (cohort 2) received a median of four prior systemic therapies, and had a median follow-
up of 12.2 months. Objective response rate (ORR) was 28.6% (95% CI 13.8-50.0) including two complete responses and four
partial responses. Median PFS was 12.0 months (4.6-15.4) and Median Duration of Response was 10.2 months (4.6-NA).
Patients in the KIR3DL2 <1% subgroup (cohort 3) received a median of 4.5 prior systemic therapies and had a median follow-
up of 13.8 months. ORR was 11.1% (3.1-32.8) with a median PFS of 8.5 months (4.1-NA)
◦ Within the advanced and heavily pre-treated population enrolled in TELLOMAK, Lacutamab continues to demonstrates clinical
activity with a favorable safety profile.
◦
Lacutamab showed low immunogenicity and reached target concentration in both the KIR3DL2 expressing and non-expressing
patients.
In 2023, MF Cohorts 2 and 3 interim efficacy results according to updated guidelines were presented at the International Conference on
Malignant Lymphoma and EORTC Cutaneous Lymphoma Tumour Group Annual Meeting congresses in June and October 2023,
respectively.
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◦ As of the March 4, 2022 data cutoff, patients in the KIR3DL2-expressing MF cohort (cohort 2, n=21) received a median of 4
prior systemic therapies, and had a median follow-up of 12.2 months. In the KIR3DL2 non-expressing cohort (cohort 3, n=18),
patients received a median of 4.5 prior systemic therapies and had a median follow-up of 13.8 months.
◦
Lymph Node assessment is an important component of staging and response assessment in CTCL (cutaneous T cell
lymphomas). In a recent update to the Olsen 2011 guidelines, it was clarified that the pathological assessment of lymph nodes be
limited to those that satisfy nodal lymphoma i.e. N3 designation (Olsen 2021). Based on these criteria, results showed that
lacutamab produced an increased global objective response rate (ORR) of 42.9% (95% confidence interval [CI], 24.5-63.5) in
patients with KIR3DL2 ≥ 1% MF (cohort 2, n=21), including 2 complete responses and 7 partial responses. Clinical Benefit
Rate remained unchanged at 85.7% [95% CI tbc]. In Cohort 3, comprising 18 patients with KIR3DL2 < 1% MF, findings remain
unchanged.
•
In 2024, favorable results from the Phase 2 TELLOMAK study with lacutamab in mycosis fungoides (MF) were presented at the ASCO
2024
◦ As of October 13, 2023, data cutoff, MF patients (n=107) received a median of 4 prior systemic therapies and had a median
follow-up of 11.8 months.
◦
The data demonstrated that treatment with lacutamab resulted in meaningful antitumor activity, regardless of the KIR3DL2
baseline expression, and an overall favorable safety profile. The global objective response rate (ORR) was 16.8% (Olsen 2011)
and 22.4% (Olsen 2022), including 2 complete responses (CR) and 16 partial responses (PR). In patients expressing a baseline
KIR3DL2 ≥ 1%, the ORR was 20.8% (Olsen 2011) and 29.2% (Olsen 2022). Median progression-free survival was 10.2 months
(95% CI 6.5, 16.8) for all MF patients and 12.0 months (95% CI 5.6, 20.0) in the KIR3DL2 ≥ 1% group. Time to response was
1.0 month (95% CI 1, 5).
iii.
Clinical Trials in PTCL
• Despite objective responses observed, the Company-sponsored Phase 1b clinical trial evaluating lacutamab as monotherapy in patients
with KIR3DL2-expressing refractory/relapsing PTCL will not be reopened to recruitment as the prespecified threshold for meaningful
clinical activity was not reached.
• At the ASH Annual Congress 2023, Innate presented a poster with preclinical data demonstrating a synergistic effect between lacutamab
and chemotherapy in preclinical models of PTCL, supporting the rationale for combination strategy in this clinical indication.
•
The Phase 2 KILT (anti-KIR in T Cell Lymphoma) trial, an investigator-sponsored, randomized trial led by the Lymphoma Study
Association (LYSA) to evaluate lacutamab in combination with chemotherapy GEMOX (gemcitabine in combination with oxaliplatin)
versus GEMOX alone in patients with KIR3DL2-expressing relapsed/refractory PTCL is ongoing.
Monalizumab, a Dual Checkpoint Inhibitor Targeting T Cells and NK Cells
a. Mechanism & Rationale
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+
Monalizumab (IPH2201) is a potentially first-in-class immune checkpoint inhibitor targeting NKG2A receptors expressed on tumor infiltrating
cytotoxic CD8 T cells and NK cells. NKG2A is an inhibitory receptor for HLA-E (Human Leukocyte Antigen-E). HLA-E is a non-classical
MHC class I molecule that plays a in immune regulation. In cancer, HLA-E is frequently overexpressed allowing tumor cells to evade immune
attack by engaging NKG2A and suppressing the activity of cytotoxic immune cells. Monalizumab may reestablish a broad anti-tumor response
mediated by NK and T cells, and may enhance the cytotoxic potential of other therapeutic antibodies (André et al., Cell 2018).
b. Rationale for combinations with monalizumab
The Company is primarily focused on investigating monalizumab in combination with durvalumab, which is an antibody directed against PD-L1
(Programmed Death-Ligand 1). PD-L1 is an immune checkpoint protein expressed on the surface of many cancer cells that binds to PD-1 on T
cells, suppressing their activity and preventing an effective immune response. By inhibiting PD-L1, durvalumab restores T cell function,
enhancing the immune system’s ability to recognize and attack tumor cells. Both PD-L1 and HLA-E are frequently overexpressed on cancer cells
and contribute to immune evasion by binding to their respective inhibitory receptors, PD-1 and NKG2A. Innate Pharma's preclinical data support
its hypothesis that a monalizumab and durvalumab combination therapy may result in a greater anti-tumor immune response than durvalumab
alone by blocking both the PD-1/PD-L1 and the NKG2A/HLA-E inhibitory pathways.
The following illustration depicts the way in which monalizumab, in combination with durvalumab, is designed to result in greater anti-tumor
activity.
The rationale for this combination is further supported by the favorable tolerability profile of monalizumab that the Company observed in
preclinical studies and earlier clinical trials, suggesting that monalizumab is generally not expected to negatively impact the safety profile of
combination partner drugs.
c. Clinical Development Plan and results
i.
Overview
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Monalizumab has been evaluated in clinical trials in head and neck, lung and other cancer indications. Innate was responsible for the conduct of
the IPH2201-203 study in head and neck squamous cell carcinoma (study completed), while AstraZeneca is conducting all other trials (except for
the External Sponsored studies). External Sponsored studies are currently ongoing in bladder cancer and small cell lung cancer. Below is a
summary of ongoing clinical trials in NSCLC that AstraZeneca is conducting to evaluate monalizumab:
Lung cancer is the leading cause of cancer death, accounting for about one-third of all cancer deaths. In 2020, an estimated 2.2 million
people were diagnosed with lung cancer worldwide. Eighty to eighty-five percent are classified as NSCLC. Stage III NSCLC represents
approximately one quarter of NSCLC incidence. In 2018, the FDA approved durvalumab for patients with unresectable stage III NSCLC whose
disease has not progressed following concurrent platinum-based chemotherapy and radiation therapy. However, there is still a need for new
treatment options to further increase the potential for cure in this setting. AstraZeneca conducted COAST, a randomized Phase 2 trial
investigating durvalumab alone or in combination with either oleclumab (anti-CD73 monoclonal antibody) or monalizumab (anti-NKG2A
monoclonal antibody) in patients with locally advanced, unresectable Stage III NSCLC who had not progressed after chemoradiotherapy (CRT).
Following on the signal observed in this Phase 2 study, AstraZeneca has started a randomized Phase 3 study PACIFIC-9 of monalizumab or
oleclumab plus durvalumab in unresectable, Stage III NSCLC setting for patients who have not progressed after concurrent chemoradiation
therapy.
Separately, AstraZeneca evaluated the effectiveness and safety of neoadjuvant durvalumab alone or in combination with monalizumab or
oleclumab in subjects with resectable, early-stage (Stage I [>2 cm] to IIIA) non-small cell lung cancer (NeoCOAST) and in 2022 initiated the
Phase 2 trial, NeoCOAST-2, with neoadjuvant and adjuvant treatment, that includes an arm with durvalumab in combination with chemotherapy
and monalizumab.
In head and neck cancer, Innate and AstraZeneca evaluated monalizumab in combination with cetuximab in R/M SCCHN IO naïve or
IO-pretreated in a Phase 1b/2 study (IPH2201-203). Based on the results and the unmet need in the IO-pretreated population, AstraZeneca and
Innate elected to advance this program to a Phase 3 study (INTERLINK-1). Dosing of the first patient in this trial triggered a $50 million
milestone payment from AstraZeneca to Innate in October 2020. In 2022, Innate announced that a planned futility interim analysis of the
INTERLINK-1 Phase 3 study sponsored by AstraZeneca did not meet a pre-defined threshold for efficacy. Based on this result and the
recommendation of an Independent
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Data Monitoring Committee, AstraZeneca informed Innate that the study would be discontinued. There were no new safety findings.
ii.Lung Cancer: Phase 2 COAST Study
In September 2021, AstraZeneca presented a late-breaker abstract on the randomized COAST Phase 2 trial in patients with unresectable, Stage
III non-small cell lung cancer (NSCLC) at the European Society for Medical Oncology (ESMO) Congress. The presentation highlighted
progression-free survival (PFS) and overall response rate (ORR) results for durvalumab in combination with monalizumab, Innate’s lead
partnered asset, and oleclumab, AstraZeneca’s anti-CD73 monoclonal antibody. After a median follow-up of 11.5 months, the results of an
interim analysis showed a 10-month PFS rate of 72.7% for durvalumab plus monalizumab, versus 39.2% with durvalumab alone in unresectable,
Stage III NSCLC patients following chemoradiation therapy. The results also showed an increase in the primary endpoint of confirmed ORR for
durvalumab plus monalizumab over durvalumab alone (36% vs. 18%). Data are published in the Journal of Clinical Oncology in 2022 (figure
below).
At ASCO 2024, AstraZeneca presented an update on the trial results. After a median follow-up of 30.1 months, the findings showed a 12-month
progression-free survival rate of 73.2% for durvalumab plus monalizumab, compared to 37.6% for durvalumab alone. The results also
demonstrated an increase in the primary endpoint, confirmed overall response rate, for durvalumab plus monalizumab versus durvalumab alone
(40.3% vs. 23.9%).
iii.
Lung Cancer: Phase 2 NeoCOAST Study
In March 2022, the Phase 2 NeoCOAST multi-drug platform study assessing the safety and efficacy of neoadjuvant durvalumab in combination
with chemotherapy and oleclumab, monalizumab or danvatirsen and adjuvant treatment in participants with resectable, early-stage non-small cell
lung cancer was accepted for an oral presentation on April 11, 2022 at the Annual Meeting 2022 of the American Association for Cancer
Research (AACR).” The study demonstrated that a single cycle of neoadjuvant durvalumab combined with oleclumab, monalizumab, or
danvatirsen produced numerically improved MPR rates (19, 30 and 31.2%, respectively) compared with durvalumab alone (11.1%). No
differences in pCR rates were observed between treatment arms.
iv.
Lung Cancer: Phase 3 PACIFIC-9
In June 2023, AstraZeneca presented at the ASCO conference a trial-in-progress poster on the PACIFIC-9 study: "Phase 3 study of durvalumab
combined with oleclumab or monalizumab in patients with unresectable stage III NSCLC (PACIFIC-9)."
PACIFIC-9 started in February 2022 and continues to enroll patients.
In 2024, the Independent Data Monitoring Committee recommended the continuation of the Phase 3 PACIFIC-9 trial based on a pre-planned
analysis.
v.
Lung Cancer: Phase 2 NeoCOAST-2
In June 2023, AstraZeneca presented at the ASCO conference a trial-in-progress poster on the NeoCOAST-2: study: "NeoCOAST-2: A Phase 2
study of neoadjuvant durvalumab plus novel immunotherapies (IO) and chemotherapy (CT) or MEDI5752 (volrustomig) plus CT, followed by
surgery
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and adjuvant durvalumab plus novel IO or volrustomig alone in patients with resectable non-small-cell lung cancer (NSCLC)."
NeoCOAST-2 started in April 2022 and continues to enroll patients.
AstraZeneca presented interim results from the randomized NeoCOAST-2 (NCT05061550) Phase 2 platform study during the 2024 World
Conference on Lung Cancer on September 8, 2024.
The preliminary data of three arms were presented at WCLC, namely:
• Arm 1: oleclumab in combination with durvalumab and platinum doublet chemotherapy in the neoadjuvant setting and durvalumab plus
oleclumab in the adjuvant setting;
• Arm 2: monalizumab in combination with durvalumab and platinum doublet chemotherapy in the neoadjuvant setting and durvalumab
plus monalizumab in the adjuvant setting and;
• Arm 4: datopotamab deruxtecan in combination with durvalumab and single agent platinum chemotherapy in the neoadjuvant setting,
and durvalumab alone in the adjuvant setting.
In this preliminary analysis on the first 60 of 72 patients randomized to Arm 2, monalizumab added to durvalumab plus platinum-based
chemotherapy doublet induced a pathological complete response rate of 26.7% [95% CI; 16.1–39.7] and a major pathological response rate of
53.3% [95% CI; 40.0–66.3] which are numerically higher than the durvalumab plus platinum doublet approved regimen. Treatment in Arm 2
showed manageable safety profile and no impact on surgical rate.
d.
Partnership with AstraZeneca
Further to a first co‑development and commercialization agreement with AstraZeneca to accelerate and broaden the development of
monalizumab, AstraZeneca obtained full oncology rights to monalizumab in October 2018. The financial terms of the agreement include
potential cash payments of up to $1.275 billion to Innate Pharma. With the addition of the $50 million payment triggered by dosing the first
patient in the Phase 3 PACIFIC-9 clinical trial, Innate Pharma has received $450 million to date. AstraZeneca will book all sales and will pay
Innate low double-digit to mid-teen percentage royalties on net sales worldwide except in Europe where Innate Pharma will receive if it chooses
to co-promote the licensed products in certain European countries a 50% share of the profits and losses in these territories. Should Innate Pharma
elect not to co-promote, its share of profits in Europe will be reduced by a specified amount of percentage points not to exceed the mid-single
digits. Innate will co-fund 30% of the costs of the Phase 3 development program of monalizumab with a pre-agreed limitation on Innate’s
financial commitment.
®
ANKET Platform
a. General Overview
Multi-specific monoclonal antibodies, or multi-specifics, are antibody-derived formats that can simultaneously bind to two or more different
types of molecules. A number of studies of bispecific antibodies are currently underway, such as those assessing the safety and efficacy of
bispecific T cell engagers (BiTEs), which engage T cells via the antigen receptor on one side of the bispecific T cell engager, and a tumor antigen
on the other side of the BiTE. These molecules have demonstrated the ability to reduce or slow the growth of tumors in cancer patients, but they
also carry a significant toxicity risk. This toxicity risk occurs by engaging all T cells, irrespective of their specificity and development status,
potentially leading to an over production of cytokines by these T cells, referred to as a cytokine
90
storm. In parallel, bispecific killer cell engagers (BiKEs) that engage CD16 receptors found on NK cells, and tri-specific killer cell engagers
(TriKEs) that engage CD16 receptors and contain IL-15, a cytokine that promotes NK cell activation and survival, have also been developed to
target antigens expressed on solid tumors. BiKEs and TriKEs can be effective both in vitro and in vivo in preclinical models. These multi-
specific molecules that engage NK cells could reduce the risks associated with toxicity, as NK cell counts represent only approximately 10% of
T cell counts, thereby potentially limiting the likelihood of inducing a cytokine storm. However, it remains unclear whether these multifunctional
CD16 engager antibodies can activate NK cells in solid tumors since solid tumors often express low levels of CD16.
®
ANKET (Antibody-based NK cell Engager Therapeutics) is Innate’s proprietary platform for developing next-generation, multi-specific NK
cell engagers to treat certain types of cancer.
This versatile, fit-for-purpose technology is creating an entirely new class of molecules to induce synthetic immunity against cancer. It leverages
the advantages of harnessing NK cell effector functions against cancer cells and also provides proliferation and activation signals targeted to NK
cells.
Innate's latest innovation in the ANKET platform, the tetra-specific ANKET molecule, is the first NK cell engager technology to engage
activating receptors (NKp46 and CD16), a tumor antigen and an interleukin (IL)-2 receptor (via an IL-2 variant, IL-2v) via a single molecule.
This innovation is built on its existing tri-specific NK cell engager technology, which has demonstrated potent NK cell activation, cytotoxicity
and efficient control of tumor growth in preclinical models.
®
®
Because NKp46 is expressed on all NK cells and conserved on tumor infiltrating NK cells, and NK cells are not expected to produce a cytokine
storm, ANKET molecules may overcome the limitations of both ADCC-inducing antibodies and T cell engagers.
®
®
ANKET Pipeline
Sanofi's partnership
IPH6101/SAR'579, a CD123-targeting NK Cell Engager
a. Mechanism
®
IPH6101/SAR443579 is the first trifunctional anti-CD123 NK cell engager NKp46/CD16 using Innate’s proprietary multi-specific antibody
format ANKET . It has shown anti-tumor activity in preclinical models, including supporting pharmacokinetic/pharmacodynamic (PK/PD) and
safety data in non-human primate studies, leading to its selection as a drug candidate for development. IPH6101 was part of a non-exclusive
intellectual property license granted to Sanofi under the 2016 research collaboration and license agreement, pursuant to which the companies
collaborated on the development of innovative multi-specific antibody formats engaging NK cells through the activating receptors NKp46 and
CD16 to kill tumor cells. Several NK cell therapies have been shown to induce antitumor responses, without the complications frequently
associated with T cell therapies, such as cytokine release syndrome (CRS) or neurotoxicity.
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b.
Indication and Rationale
Acute myeloid leukemia (AML) is the most common acute leukemia in adults, mostly affecting elderly patients, with a median age at diagnosis
of 65-70 years. AML is a heterogeneous cancer characterized by the clonal expansion of myeloid precursors in the bone marrow and peripheral
blood. Despite significant progress in the care of AML patients in the past decade, there is still a clear unmet medical need in AML, as up to 50%
of patients relapse after initial chemotherapy, and the prognosis for older patients remains poor.
Cytotoxic antibodies targeting CD123 displayed limited antileukemic activity in several clinical trials, even when tested in the form of Fc-
engineered antibodies designed specifically to increase antibody-dependent cell cytotoxicity (ADCC). By contrast, T cell engager molecules and
CAR-T cell therapies have some clinical efficacy, but are also highly toxic, confirming the need for alternative targeted approaches for the
treatment of AML. NK cell-based therapies may provide new treatment perspectives and a safer alternative for targeting tumor cells in this
context.
c. Preclinical Development
In its preclinical studies, Innate and Sanofi investigated whether NKp46-based NKCE technology could provide more effective antitumor
activity than regular IgG antibodies for AML treatment by generating a NKCE molecule targeting CD123. Innate and Sanofi evaluated the ex
vivo antitumor activity of this molecule, comparing it with a regular IgG1 antibody derived from clone 7G3 (CD123-IgG1 ) with an engineered
Fc domain for enhanced ADCC.
+
The anti-CD123 antibody-mediated killing of primary blasts from AML patients (AML#1 to AML#4) was evaluated ex vivo with NK cells from
healthy donors as effectors. The anti-CD123 antibody (CD123-IgG1 ) mediated the killing of blasts from half the patient samples (AML#1 and
AML#2) but was barely active against blasts from the other half of the primary samples (AML#3 and AML#4). The patient samples could
therefore be separated into two distinct groups: CD123-IgG1 responders and CD123-IgG1 non-responders.
+-
+-
+
Innate and Sanofi observed that trifunctional CD123-ANKET displayed killing activity against all primary malignant AML cells, promoting
significant antitumor activity in CD123-IgG1 non-responders samples from AML patients against which the regular anti-CD123 cytotoxic
antibody was completely inactive.
+-
®
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The minimal level of pro-inflammatory cytokine release following the treatment of human peripheral blood mononuclear cells (PBMCs) with
NKCE in vitro (data not shown) was further confirmed in vivo, in dedicated pharmacokinetic (PK), pharmacodynamic (PD) and toxicology
studies performed in non-human primates (NHPs).
Innate and Sanofi evaluated the PK/PD of CD123-NKCE administered by a single one-hour i.v. infusion of a high (3 mg/kg) or low (3 µg/kg)
doses in male cynomolgus monkeys (two animals each for the 3 mg/kg and 3 µg/kg doses). Treatment with CD123-NKCE promoted a sustained
and complete depletion of CD123 cells in the blood of all monkeys, for more than 10 days, at both the 3 mg/kg and 3 µg/kg doses, with only
very small amounts (< 50 pg/mL) of the pro-inflammatory cytokines IL-6 and IL-10 released without any associated clinical signs.
+
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d. Ongoing Clinical Trial
•
Phase 1/2 clinical trial monotherapy
IPH6101/SAR443579 is currently being evaluated in a Phase 1/2 clinical trial (NCT05086315) in patients with relapsed or refractory acute
myeloid leukemia (R/R AML), B-cell acute lymphoblastic leukemia (B-ALL) or high risk-myelodysplastic syndrome (HR-MDS).
The purpose of the dose escalation and dose expansion study, which is sponsored by Sanofi, is to evaluate the safety, pharmacokinetics,
pharmacodynamics and initial clinical activity of IPH6101/SAR443579, Innate’s lead ANKET asset, in various CD123-expressing
hematological malignancies.
®
Innate Pharma announced that the first patient was dosed on December 16, 2021.
▪
▪
▪
In June 2023, safety and preliminary efficacy were presented during an oral presentation at the ASCO Meeting. Preliminary data showed
SAR443579 / IPH6101 was well tolerated and induced three complete responses in the eight patients at 1 mg/kg as the highest dose. In
addition, Innate Pharma shared Sanofi’s news that the FDA has granted Fast Track Designation for SAR’579 / IPH6101 for the treatment
of hematological malignancies.
In October 2023, a preliminary Pharmacokinetics (PK) and Pharmacodynamic (PD) Analysis of the CD123 NK Cell Engager
SAR’579/IPH6101 in patients with relapsed or refractory AML, B-ALL or HR-MDS was presented at the ESMO congress.
In December 2023, updated efficacy and safety results were shared in a poster presentation at the ASH Annual Meeting. Abstract details
included:
• As of July 5, 2023, 43 patients (42 R/R AML and one HR-MDS) across eight dose levels at 10 – 6000 μg/kg/dose were included.
Patients had received a median of 2.0 (1.0 – 10.0) prior lines of treatment with 13 patients (30.2%) reporting prior
hematopoiectic stem cell transplantation and 36 patients (83.7%) with prior exposure to venetoclax.
•
In dose levels with a highest dose of 1000 μg/kg QW, 5 out of 15 (33.3%) AML patients achieved a complete remission, or CR,
(4 CRs and 1 CR with incomplete hematological recovery) as of the cut-off date.
• Data from preliminary pharmacokinetics / pharmacodynamic and in vitro mechanistic analyses studying dose-response relations
were also presented.
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•
SAR443579 was well tolerated up to doses of 6000 μg/kg QW with observed clinical benefit in patients with R/R AML. The
results are consistent with the predicted favorable safety profile.
Updated efficacy and safety results were presented at the European Hematology Association 2024
•
Fifty-nine patients (58 R/R AML and 1 HR-MDS) across 11 dose levels (0.01 – 6mg/kg) were treated. Patients had received a median of
2 (1 – 10) prior lines of treatment. A maximum response rate was observed at a final target dose of 1 mg/kg every week with 5 AML
patients achieving a CR (4 CR/1 CRi)1. The median treatment duration was 7.9 weeks, with durable CR (>10 months) observed in 3
patients with 2 remaining on maintenance therapy as of the data cutoff. SAR’579 was well tolerated up to doses of 6 mg/kg every week.
These data will form the basis for selection of recommended doses for development in the Phase 2 portion of the trial.
In April 2024, Sanofi advanced SAR’579 / IPH6101 to the Phase 2 preliminary dose expansion of the trial evaluating NK Cell Engager
SAR443579/ IPH6101 in various blood cancers. Under the terms of the 2016 research collaboration with Sanofi, the progression to the
dose expansion part of the trial has triggered a milestone payment from Sanofi to Innate of €4 million. This amount was received by the
Company on May 17, 2024.
Phase 1/2 clinical trial in combination
•
In July 2024, Sanofi initiated a new Phase 1 / Phase 2, randomized, open label, multi-cohort, multi-center study (NCT06508489)
assessing the safety, tolerability and preliminary efficacy of SAR’579 / IPH6101 administered in combination with azacitidine and
venetoclax in patients with CD123 expressing hematological malignancies in newly diagnosed AML.
On April 23, 2025, the Company announced that, as part of the restructuring of the January 2016 Research Collaboration and License Agreement
(the “2016 Agreement”) and in alignment with both company's current strategic priorities, Sanofi and Innate agreed to terminate the 2016
Agreement as it relates to SAR’579/IPH6101 (CD123 ANKET), effective as of June 30, 2025. Innate will regain the rights on July 1, 2025. The
Parties will discuss a transition plan with regard to ongoing studies
IPH6401/SAR’514, a BCMA-targeting NK Cell Engager
a.
Mechanism
BCMA (B-Cell Maturation Antigen) is a protein expressed on the surface of mature B cells and plasma cells. It is essential for B cell survival
and function. In multiple myeloma and other B-cell malignancies, BCMA is overexpressed on malignant plasma cells.
IPH6401/SAR’514 is a trifunctional anti-BCMA NKp46xCD16 NK cell engager, using Sanofi’s proprietary CROSSODILE® multi-functional
platform, which comprises the Cross-Over-Dual-Variable-Domain (CODV) format. It induces a dual targeting of the NK activating receptors,
NKp46 and CD16, for an optimized NK cell activation, based on Innate’s ANKET (Antibody-based NK cell Engager Therapeutics) proprietary
platform.
®
b.
Clinical trial
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A Sanofi-sponsored Phase 1/2 clinical trial (NCT05839626) is evaluating SAR’514 / IPH6401 in relapsed/refractory Multiple Myeloma
(RRMM) and Relapsed/Refractory Light-chain Amyloidosis (RRLCA). The purpose of the dose escalation and dose expansion study is to
evaluate the safety, pharmacokinetics and preliminary efficacy of SAR’514 in monotherapy in patients with RRMM and RRLCA. The clinical
trial is part of the Sanofi 2016 research collaboration and licensing agreement.
As a reminder, the Company announced that, in 2023, the first patient was dosed in a Sanofi-sponsored Phase 1/2 clinical trial evaluating
IPH6401/SAR'514 in RRMM. As provided by the licensing agreement signed in 2016, Sanofi made a milestone payment of €2.0 million, fully
recognized in revenue as of June 30, 2023. This amount was received by the Company on July 21, 2023.
The Company announced on March 27, 2025, that the clinical study will be terminated early as SAR’514/IPH6401 will now be pursued in
autoimmune indications.
IPH62, a B7-H3-targeting NK Cell Engager
IPH62 is a multi-specific NK cell-engaging antibody targeting B7-H3, using Innate's proprietary multi-specific antibody format, the ANKET
platform.
®
IPH62 provides dual targeting of NK cell activating receptors, NKp46 and CD16, based on Innate's proprietary ANKET (Antibody-based NK
cell Engager Therapeutics) platform for optimised NK cell activation.
®
Proprietary ANKET
®
IPH6501, a CD20-targeting tetra-specific NK Cell Engager
a. Mechanism
The IPH6501 program is developing a CD20-targeting tetra-specific Antibody-based NK cell Engager Therapeutics (ANKET ). CD20 is an
antigen expressed by a number of B cell malignancies, and its targeting by therapeutic antibodies has shown efficacy to treat the patients
although a number of the tumors develop resistance and relapse. Compared to a classical IgG1-based antibody which engages Fc receptors and a
tumor antigen, IPH6501 co-engages on one hand NKp46 and Fc receptors, as well as CD122 subunit of the IL-2 receptor (but not CD25
subunit), and on the other hand CD20 as a targeted
®
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antigen on malignant B cells, leading to potent NK cell activation, cytotoxicity and control of tumor growth.
IPH6501 was designed to induce NK cell mediated-cytotoxicity and cytokine secretion by co-engaging CD16a and NKp46. Only the binding of
IPH6501 to CD20, bridging the NK cells to the target cells, was able to trigger the cytotoxic activity of NK cells. IPH6501 is thus a promising
biologic designed to harness the anti-tumor functions of NK cells in CD20 B cell malignancies.
+
Moreover, the IL-2R binding element incorporated in IPH6501 is an IL-2 variant (IL-2v) designed with point mutations that abolish binding to
the IL-2R-α chain (CD25), with the goal of limiting toxicity and interaction with Tregs. IL-2v incorporated into IPH6501 is directed towards NK
cells through the binding with high affinity to NKp46 and CD16a, providing its ability to interact with IL-2R preferentially on NK cells and to
promote their activation and proliferation at pM doses.
b.
Indication and Rationale
IPH6501 is being developed in patients with relapsed or refractory (R/R) CD20 B-cell non-Hodgkin's lymphomas (NHL).
+
NHL is the most prevalent hematological malignancy, accounting for 4% of all new cancer cases and 3% of cancer-related deaths in the United
States (Howlader 2020a, Howlader 2020b). For 2021, estimates for the United States include 81,560 new cases and 20,720 deaths from NHL
(American Cancer Society 2021a, American Cancer Society 2021b). In 2020, Europe had 122,979 new cases of NHL reported, and 49,684
deaths were attributable to NHL (World Health Organization (WHO) 2020). The emergence of relapsed refractory (r/r) disease among B-cell
malignancies with curtailed sustained responses to treatment and unattained long-term survivals has created a significant unmet need (National
Comprehensive Cancer Network (NCCN) 2021a).
CD20 is expressed by >90% of B-cell non-Hodgkin's lymphomas (NHL). Several generations of CD20-targeting monoclonal antibodies
including rituximab, ofatumumab, and obinutuzumab have been widely used for B-cell malignancy therapies. Despite the recent approvals of
novel CD20-targeting agents, new alternatives and strategies are still required for patients, which are relapsing or refractory after several lines of
treatment. High circulating NK cell numbers have been associated with better clinical responses
97
to anti-CD20-targeting monoclonal antibodies, supporting the role of NK cells in efficacy of these treatments.
c. Preclinical Development
IPH6501 preclinical activity was explored both in vitro and in vivo. In vitro studies established that IPH6501´s main modes of action were NK
cell proliferation and antibody-dependent cell cytotoxicity (ADCC) against CD20-expressing cells.
•
In vitro
Non-saturating doses of IPH6501 on NK cells and on CD20 cells were sufficient to promote maximal killing activity. Furthermore, IPH6501
promoted NK cell cytotoxicity against tumor cells expressing very low levels of CD20. IPH6501 also demonstrated superiority to control tumor
cell growth in vitro, as compared to the CD20-targeting clinical benchmark antibodies rituximab and the Fc-optimized obinutuzumab.
+
+
IPH6501 alone without NK cells did not induce direct killing of CD20 cells. Culturing human purified NK cells with CD20 B-lymphoma cell
lines and IPH6501 induced the specific lysis of tumoral CD20 cells. Alternatively, culturing human PBMCs with IPH6501 induced the specific
depletion of normal CD20 B lymphocytes without affecting other lymphocyte population numbers, as well as cytokine production in line with
NK cell activation. Incubation of human PBMC with IPH6501 induced a preferential NK cell proliferation that occurred at lower doses as
+
compared to the proliferating effect of IPH6501 on other CD8 or CD4 T lymphocytes (expressing the IL-2R).
+
+
+
+
•
In vivo
In vivo treatment with a mouse surrogate of IPH6501 induced peripheral NK cell proliferation and activation, and demonstrated potent antitumor
efficacy in a xenograft mouse model using the aggressive human B-lymphoma CD20 RAJI cell line engrafted subcutaneously. Surrogate
moIPH6501 also showed
+
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a dose dependent and significant control of tumor growth in a model of CD20-expressing B16F10 cells injected intravenously (IV) in
immunocompetent mice, as shown in figure below.
Updated preclinical data were presented at the European Hematology Association (EHA) congress in June 2023, including experiments on non-
human primates and samples from R/R B-NHL patients. In preclinical settings, IPH6501 was shown to induce NK cell proliferation and to
trigger high NK cell cytoxicity against CD20+ target cells in in vitro assays, in ex vivo assays with relapse/refractory (R/R) B-NHL patient
samples who received at least one prior treatment, as well as in in vivo studies in non-human primates. A surrogate of IPH6501 mediated a
potent anti-tumor activity in vivo in CD20+ tumor models in mice. In addition, in ex vivo assays with R/R B-NHL patient samples, IPH6501
was shown to be more efficient than a T cell engager targeting CD20.
• Non-human primates
In non-human primates, a well-tolerated dose of IPH6501 resulted in NK cell expansion, with minimal increase in systemic cytokine levels, and
to the depletion of CD20+ B cells in circulation and lymphoid tissues.
• Analysis from samples from R/R B-NHL patients
Flow cytometric analysis of samples from R/R B-NHL patients revealed that NK cell numbers in blood were within normal range values, and
NKp46 expression was maintained in blood and tumor-involved lymph nodes. Of note, in contrast to NKp46, cell surface expression of CD16
was down-regulated on NK cells in B-NHL patient’s lymph nodes, suggesting a potential therapeutic advantage of targeting NKp46 with
IPH6501 in B-NHL compared with classical monoclonal antibodies. IPH6501 stimulated NK cell
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proliferation and CD20+ cell depletion ex vivo in PBMC samples from R/R B-NHL patients, which compared favourably with acontrol
CD3xCD20 T cell engager.
In 2024, new preclinical data supporting the development of IPH6501 were presented at the SITC, EHA, and EHA conferences with the
following key messages:
•
•
•
•
IPH6501 expand and mobilize peripheral NK cells for tumor killing: IPH6501 mouse surrogate potently induces NK cells activation,
proliferation and recruitment from the periphery to the tumor microenvironment in mouse models
IPH6501 advantage over antibody-based CD20- T cell engagers:
◦ Higher efficacy in depleting autologous CD20 B cells in PBMC from HD and from R/R B-NHL patients (leukemic phase
disease)
◦ Reduced induction of pro-inflammatory cytokines compared to a CD20-TCE in PBMCs from HD.
IPH6501 advantage over antibody-based CD20-targeting therapies: NK cells from B-NHL patients lymph nodes express low levels of
CD16 while NKp46 is maintained
IPH6501 has applications across subtypes of B-NHL, and potential in post CAR-T setting:
◦
◦
◦
IPH6501 targets (NKp46, CD16, IL-2Rβ) are expressed on blood NK cells
IPH6501 shows potent in vitro antitumor activity on patient PBMCs
Post-lymphodepletion NK recovery (Piperoglou et al., 2021, J. Leuk. Biol) supports IPH6501 potential in post CAR-T patients.
IPH6501 is a first-in-class CD20-targeting tetra-specific NK cell engager designed to promote NK cell proliferation and specific cytotoxicity
against CD20 cells. IPH6501 is thus a promising biologic designed to harness the anti-tumor functions of NK cells in CD20 B cell
malignancies.
+
+
d. Clinical Trial
first-in-human,
multicenter, open-label Phase 1/2 study will evaluate the safety profile, tolerability of IPH6501, and determine the recommended Phase 2 dose
(RP2D) for patients with B-Cell non-Hodgkin lymphoma. The Company received a Study May Proceed Letter from FDA in July 2023.
international,
An
On March 6, 2024, the Company announced that the first patient was dosed in its Phase 1/2 multicenter trial (NCT06088654), investigating the
safety and tolerability of IPH6501 in patients with Relapsed and/or Refractory CD20-expressing B-cell non-Hodgkin’s lymphoma. The study is
ongoing and planned to
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enroll up to 184 patients. Clinical sites are open in the US, Australia and France and the first safety and preliminary activity data are expected in
late 2025.
A poster on the design of the ongoing trial was presented at ASCO 2024.
In December 2024, the Company has entered into an agreement to clinically study the potential of IPH6501, Innate's anti-CD20 ANKET® in
follicular lymphoma (FL) with the Institute for Follicular Lymphoma (IFLI) under which Innate’s ongoing Phase 1/2, open-label, multicenter
trial investigating the safety, tolerability, and preliminary antineoplastic activity of IPH6501 in patients with relapsed and/or refractory CD20-
expressing Non-Hodgkin Lymphoma will include patients with relapsed / refractory (R/R) FL.
To support the Phase 1/2 trial and inclusion of FL patients, IFLI initially invested $3 million into new shares of Innate, issued through a capital
increase reserved to IFLI at a price of €1.56 per share and representing 2.26% of the share capital of Innate at the time of issuance. IFLI may also
invest up to an additional $4.9 million into new shares of Innate, depending on the completion of certain milestones, at a price to be determined
at the time of such investments.
Antibody Drug Conjugates
a. Overview
To further our R&D program, the Company continues to develop different approaches for the treatment of cancer utilizing its antibody
engineering capabilities to deliver novel assets, with its innovative ANKET platform and continuing to explore Antibody Drug Conjugates
(ADC) formats. The Company has a robust pipeline of additional preclinical product candidates. Its additional disclosed preclinical pipeline
includes:
®
–
–
IPH45 is a novel and differentiated topoisomerase I inhibitor ADC conjugated to exatecan targeting Nectin-4
IPH43, an anti-MICA/B ADC.
b. Proprietary : IPH4502
1. Rationale
Nectin-4 is overexpressed in multiple solid tumors with high medical need, but is expressed at low levels in some epithelia, including the skin,
bladder, breast duct, and placenta. Enfortumab vedotin (EV), a Nectin-4-targeting antibody-drug conjugate (ADC) with a monomethyl auristatin
E (MMAE) payload, has been approved for the treatment of urothelial carcinoma (UC), which exhibits highest Nectin-4 expression. To treat
cancers with lower levels of Nectin-4 and improve the balance between efficacy and safety, we developed IPH4502. IPH4502 delivers a cancer-
killing drug, exatecan, with a drug-to-antibody ratio (DAR) of 8.
2. Preclinical data
The preclinical data on IPH4502, a next-generation ADC targeting Nectin-4 and conjugated to exatecan, were presented at the 2024 AACR and
SITC conferences.
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–
–
–
Strong bystander effect in vivo and high internalization efficiency in vitro compared to other Nectin-4-targeting ADCs. These
characteristics contribute to enhanced anti-tumor activity compared to EV across a broad range of Nectin-4 expression levels, from low
to high, in PDX models.
Superior efficacy to EV in bladder cancer models with low Nectin-4 expression.
Potential beyond bladder cancer in tumors with low and heterogeneous Nectin-4 expression: Leveraging its bystander activity, IPH4502
is active in tumor models with low and heterogeneous Nectin-4 expression beyond UC.
– Activity in models with primary or acquired resistance to EV: IPH4502 demonstrates efficacy in an in vivo model with primary
resistance to MMAE due to MDR1 transporter expression and shows anti-tumor activity in a PDX model of UC with acquired resistance
to EV.
–
Strong combination potential with PD-1-targeting agents: In syngeneic mouse models, the combination of IPH4502 with an anti-PD-1
antibody induces synergistic anti-tumor activity in both EV-sensitive and EV-resistant models.
– Hydrophilic and stable linker enables high ADC exposure and minimal free exatecan release in cynomolgus monkey plasma.
The activity of IPH45 in various indications and its enhanced anti-tumor activity in combination with anti-PD-1 therapies in preclinical models
support its development beyond UC.
3. Clinical development
The Phase 1, open-label, multi-center study, includes a Part 1 Dose Escalation and a Part 2 Dose Optimization, and will assess the safety,
tolerability, and preliminary efficacy of IPH4502 as a single agent in advanced solid tumors known to express Nectin-4, including but not limited
to urothelial carcinoma, non-small cell lung, breast, ovarian, gastric, esophageal, and colorectal cancers.
The U.S Food and Drug Administration (FDA) cleared its investigational new drug (IND) application to initiate a Phase 1 clinical study of
IPH4502 in September 2024 and the first patient was dosed in its Phase 1 study (NCT06781983) in January 2025.
The study is recruiting and plans to enroll approximately 105 patients.
c. Former Partner
Innate announced in April 2023 that it granted Takeda exclusive worldwide rights to research and develop ADC using a panel of selected Innate
antibodies against an undisclosed target, with a primary focus in Celiac disease.
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Takeda would have been responsible for the future development, manufacture and commercialization of any potential products developed using
the licensed antibodies.
Under the terms of the license agreement, Innate has received an upfront payment of $5 million and would have been eligible to receive up to
$410 million in future development, regulatory and commercial milestones if all milestones are achieved during the term of the agreement, plus
royalties on potential net sales of any commercial product resulting from the license. Takeda made a strategic decision to terminate the license
agreement executed in March 2023 for use of selected Innate antibodies in antibody drug-conjugates. Innate has regained full rights to these
antibodies during the last quarter of 2024. The Company does not intend at this stage to continue the development of these antibodies.
IPH5201, an Anti-CD39 Antibody Targeting the Immunosuppressive Adenosine Pathway
a Mechanism & Rationale
CD39 is an extracellular enzyme that is expressed in the tumor microenvironment, on both tumor infiltrating cells and stromal cells in several
cancer types. CD39 inhibits the immune system by degrading adenosine triphosphate (ATP) into adenosine monophosphate (AMP), that is then
further degraded into adenosine by CD73. By promoting the accumulation of immune-stimulating ATP, and preventing the production of
immune-suppressive adenosine, the blockade of CD39 may stimulate anti-tumor activity.
IPH5201 is a blocking antibody targeting the CD39 immunosuppressive pathway.
Targeting the adenosine pathway has recently been reported to improve Durvalumab (anti-PD-L1) efficacy in early-stage Non-Small Cell Lung
Cancer (NSCLC) patients, through the use of Oleclumab, an anti-CD73 monoclonal antibody. Indeed, in the COAST randomized Phase 2 study,
oleclumab in combination with durvalumab improved progression-free survival (PFS) and objective response rate (ORR) compared to
durvalumab alone in patients with unresectable, Stage III non-small cell lung cancer (NSCLC) (Herbst, JCO, 2022). Also, in the NeoCoast
randomized Phase 2 study, one cycle of neoadjuvant oleclumab in combination with durvalumab improved major pathological response (MPR)
and pathological complete response (pCR) rates versus durvalumab alone, in stage I-IIIA resectable NSCLC patients (Cascone, AACR 2022).
This supports the evaluation of the combined blockade of CD39 and PD-L1, with IPH5201 and durvalumab, respectively, that can hypothetically
increase activity when compared to durvalumab monotherapy by altering the balance of ATP and adenosine in the tumor microenvironment.
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i.
Clinical development
1. Overview and indications
IPH5201 has been evaluated in a Phase 1 clinical in advanced solid tumors, in monotherapy and in combination with durvalumab; and is being
investigated in a Phase 2 clinical trial, MATISSE, in combination with durvalumab and chemotherapy in non-small cell lung cancer (NSCLC).
Lung cancer is the second most common cancer in both men and women, with an estimated 234,030 new cases of lung cancer in the United
States in 2018, and remains the main cause of cancer-related deaths worldwide. Resectable, early‑stage NSCLC is considered a potentially
curable disease, and the standard of care is surgery alone or surgery with adjuvant or neoadjuvant platinum‑based doublet chemotherapy (NCCN
2022). However, patients had five‑year survival rates ranging from approximately 70% for Stage IA1 NSCLC to 20% for Stage IIIA NSCLC
(Chansky, 2017).
Recently, the role of PD-1/PD‑L1 inhibition has been evaluated for the treatment of resectable, early‑stage NSCLC in adjuvant and neoadjuvant
setting and led to improved outcomes and recent approval (Nivolumab/Checkmate 816 and Pembrolizumab/KEYNOTE-671). Recent interim
data from the Phase III AEGEAN study (NCT03800134) showed that perioperative durvalumab (anti-PD-L1) plus neoadjuvant CT significantly
improved both pathological complete response (pCR) rate (17.2% in the durvalumab-based regimen arm vs 4.3% in the CT arm) and Event-Free
Survival (EFS) (median not reached in the durvalumab-based regimen arm vs 25.9 months in the CT arm) in patients with resectable, Stage IIA–
IIIB[N2] NSCLC.
1. Phase I in advanced solid tumors
A Phase 1 clinical trial (NCT04261075), sponsored by AstraZeneca, with first patient treated in March 2020, evaluated IPH5201, an
anti-CD39 blocking monoclonal antibody, in adult patients with advanced solid tumors. The purpose of the study was to evaluate IPH5201 as
monotherapy and in combination with durvalumab (anti-PD-L1) and with or without oleclumab (anti-CD73 monoclonal antibody). This
multicenter, open-label, dose-escalation Phase 1 study evaluated the safety, tolerability, antitumor activity, pharmacokinetics (PK),
pharmacodynamics (PD) and immunogenicity of IPH5201 alone, or in combination with AstraZeneca’s anti-PD-L1 therapy, durvalumab, with or
without its anti-CD73 monoclonal antibody, oleclumab.
IPH5201 was well tolerated when used alone or in combination with durvalumab up to a dose of 3000 mg Q3W. The safety profile was
manageable, with the most common treatment-related adverse events being infusion-related reactions and fatigue; no new safety signals were
identified beyond those observed with durvalumab monotherapy. No maximum tolerated dose (MTD) was identified. PK of IPH5201 was non-
linear at ≤300 mg and linear at ≥1000 mg. The PD profile, including inhibition of
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CD39 activity in the tumors of patients treated with IPH5201, was consistent with the proposed mechanism of action for IPH5201.
As clinical activity results, 22/57 patients (38.6%) had stable disease as their best overall response; there were no partial or complete responses.
In IPH5201 monotherapy subgroup, 17/38 patients (44.7%) had stable disease as their best overall response
1. Phase II MATISSE study in NSCLC
MATISSE is a Phase 2 multicenter single-arm study (NCT05742607), sponsored by Innate Pharma, evaluating neoadjuvant and adjuvant
treatment with IPH5201, an anti-CD39 blocking monoclonal antibody, in combination with durvalumab (anti-PD-L1) and chemotherapy, in
treatment-naïve patients with resectable early stage non-small cell lung cancer (NSCLC). The primary objectives of the study are to assess
antitumor activity of neoadjuvant treatment based on pathological complete response (pCR) and safety. Innate is responsible for conducting the
study and shares study costs with AstraZeneca. AstraZeneca supplies clinical trial drugs.
The first patient was dosed in June 2023. In October 2023, Innate Pharma presented at the ESMO conference a trial-in-progress poster on the
MATISSE study: "A Phase II multicenter, open label, non-randomized study of neoadjuvant and adjuvant treatment with IPH5201 and
durvalumab in patients with resectable, early-stage (II to IIIA) non-small cell lung cancer (MATISSE)."
a
Partnership
On October 22, 2018, Innate Pharma and AstraZeneca entered into the 2018 AZ Option Agreement for further co-development and co-
commercialization of IPH5201. Following the dosing of the first patient on March 9, 2020, in the IPH5201 Phase 1 clinical trial, AstraZeneca
made a $5 million milestone
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payment to Innate under the collaboration and option agreement relating to IPH5201. Innate made a €2.7 million milestone payment to Orega
Biotech SAS after the dosing of the first patient in the Phase 1 pursuant to Innate’s exclusive licensing agreement from Orega Biotech SAS (see
“Item 10C.—Material Contracts”) and an arbitral decision rendered in December 2021 relating to milestone payments received by the Company
under the 2018 AZ Option Agreement. For more information, see Note 6 to the consolidated financial statements included under "Item 18.
Financial Statements" of this Annual Report.
In June 2022, the 2018 IPH5201 Option Agreement was amended. Innate received a $5 million milestone payment from AstraZeneca upon
signature of the amendment and is responsible for conducting a Phase 2 multicenter, open label, non-randomized study of neoadjuvant and
adjuvant treatment with IPH5201, durvalumab, and chemotherapy in patients with resectable, early-stage non-small cell lung cancer (NSCLC).
The "MATISSE" Study has started and is recruiting patients. AstraZeneca and Innate will share study costs and AstraZeneca will supply clinical
trial drugs. Innate made a €0.6 million milestone payment to Orega Biotech SAS pursuant to Innate’s exclusive licensing agreement.
IPH5301, an Anti-CD73 Antibody Targeting the Immunosuppressive Adenosine Pathway
a Mechanism & Rationale
Targeting the pathway that metabolizes adenosine triphosphate (ATP) to adenosine in the tumor microenvironment is an emerging therapeutic
strategy to promote antitumor immunity (Di Virgilio et al., 2018, Leone et al., 2018, Vijayan, 2017). Within the tumor microenvironment,
extracellular ATP is released by dying cells and has an immune-stimulatory activity, promoting activation of antigen presenting cells, and a
subsequent immune response (de Andrade Mello et al., 2017; Ghiringhelli et al., 2009). The extracellular enzyme CD39 hydrolyses ATP into
adenosine diphosphate (ADP) and adenosine monophosphate (AMP) in the extracellular space, and CD73 ectonucleotidase (NT5E, ecto-5’-
nucleotidase) further metabolizes AMP to adenosine (Allard, 2016). Adenosine exerts immunosuppressive effects on both the myeloid and
lymphoid compartments (de Andrade Mello et al., 2017). In T cells, adenosine inhibits effector T cell activation, induces T cell anergy and
expands T regulatory cells (Ehrentraut et al., 2012; Romio et al., 2011; Zarek et al., 2008). Finally, adenosine inhibits NK cell-mediated tumor
cell lysis (Beavis et al., 2013).
The benefit of targeting CD73 in oncology has been further demonstrated by results of the COAST randomized Phase 2 study, where anti-CD73
oleclumab in combination with durvalumab improved progression-free survival (PFS) and objective response rate (ORR) compared to
durvalumab alone in patients with unresectable, Stage III non-small cell lung cancer (NSCLC) (Herbst, JCO, 2022), as well as in results from
NeoCoast randomized Phase 2 study showing that one cycle of neoadjuvant oleclumab in combination with durvalumab improved MPR (Major
Pathological Response) and pCR (pathological Complete Response) rates versus durvalumab alone, in stage I-IIIA resectable NSCLC patients
(Cascone, AACR 2022).
The Company is developing IPH5301 (anti-CD73) as a potential anticancer therapy for patients with advanced or metastatic disease in selected
solid tumors. IPH5301 is a monoclonal antibody that selectively binds to and inhibits the activity of both membrane-bound and soluble human
CD73 (NT5E, ecto-5’-nucleotidase).
IPH5301 inhibits CD73-mediated hydrolysis of adenosine monophosphate (AMP) to adenosine. CD73 has been shown to be expressed by tumor
cells as well as stromal cells, endothelial cells and B and T lymphocytes within the tumor microenvironment, and it has been shown to play a
significant role in promoting immunosuppression through the pathway degrading AMP into adenosine. Therefore, inhibition of CD73‑mediated
hydrolysis of AMP by IPH5301 has the potential to reduce the formation of
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immunosuppressive adenosine, thereby leading to increased antitumor immunity across multiple tumor types, as shown in the figure below.
a
Indication
In the tumor microenvironment, CD73 is expressed by tumor cells as well as stromal cells, endothelial cells and B and T lymphocytes (Allard et
al., 2017). Inhibition of CD73 enzymatic activity by IPH5301 has the potential to reduce the formation of immunosuppressive adenosine, thereby
leading to increased antitumor immunity across multiple tumor types.
a
Preclinical Development
The Company published preclinical data further supporting the rationale of developing IPH5301. IPH5301 blocked the enzymatic activity of
both CD73 expressed at the cell surface and the soluble form of CD73. IPH5301 was able to efficiently restore T cell proliferation inhibited by
AMP in vitro. In addition, IPH5301 has been observed to have a differentiated and superior activity compared to benchmark antibodies that are
currently in clinical development (Perrot, 2019).
Thus, IPH5301 could potentially exhibit a favorable efficacy profile in patients with advanced or metastatic disease in selected solid tumors,
including serving as a candidate for combination treatments with chemotherapy or immune therapeutic agents.
As further evidence for the negative role of CD73 in anti-tumor response, Loi et al., 2013, examined gene expression data from 6,000 breast
cancer patients and found that high CD73 expression was associated with poor prognosis in triple-negative breast cancer (TNBC), as was the
association between high CD73 gene expression and pre-surgery treatment with the standard of care chemotherapy anthracycline. In mice
inoculated with the syngeneic 4T1.2 breast tumor cell line, a combination of an anti-CD73 antibody and doxorubicin (an anthracycline) led to a
greater reduction in tumor volume and increase in mouse survival than either treatment alone.
In HER2-positive breast tumors, high CD73 expression was shown to promote resistance to trastuzumab. In addition, targeting CD73 was shown
to enhance efficacy of treatment with anti-HER2 therapy (Turcotte, 2017). On the other hand, several chemotherapeutic agents including
taxanes, anthracyclines and platinum salts were shown to increase the release of ATP (Martins and Tesniere, 2009); (Martins and Wang, 2014).
All together, these preclinical results indicate that CD73 blockade with IPH5301 has also the potential to enhance antitumor activity observed
with not only PD1 immunotherapy, but also with chemotherapy and trastuzumab.
i. Ongoing Clinical Trial
In December 2021, an investigator-sponsored Phase 1 trial of IPH5301 was initiated by the Institut Paoli-Calmettes. CHANCES-IPC 2021-008
(NCT05143970) is a First In Human, Phase 1, multicenter, European study evaluating an anti-CD73, IPH5301, in advanced and/or metastatic
cancer. The trial will be conducted in two parts. The Part I-Dose escalation aims to identify the maximum tolerated dose (MTD) of IPH5301
agent in monotherapy and recommended Phase 2 dose (RP2D) for future trials, followed by a safety expansion study part cohort. In the Part II-
Expansion cohort, a total of 12 HER2+
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cancer patients, respectively six breast cancer patients and six gastric cancer patients, are planned to be enrolled into the next expansion cohort to
select a recommended dose of IPH5301 to be administered in combination with chemotherapy and trastuzumab for evaluation in future trials
with selected advanced solid tumors. In March 2022, The Institut Paoli Calmettes announced that the first patient had been dosed. In December
2022, a "Trial in Progress" poster was presented by the Institut Paoli Calmettes at ESMO-IO 2022 congress (Goncalvez, ESMO-IO 2022, Poster
199, abstract 290). This trial is ongoing.
At the ESMO Conference in September 2024, preliminary results were presented, indicating that IPH5301 was was safe and well-tolerated with
preliminary signals of monotherapy antitumor activity.
Next Steps for Clinical Trials
Competition
The biotechnology and pharmaceutical industry, and notably the cancer field, is characterized by rapidly advancing technologies, products
protected by intellectual property rights and intense competition and is subject to significant and rapid changes as researchers learn more about
diseases and develop new technologies and treatments. While the Company believes that its technology, knowledge, experience, collaborations
and scientific resources provide Innate with competitive advantages, the Company faces potential competition from many different sources,
including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, governmental agencies and
public and private research institutions. Any approved product that Innate Pharma commercializes will compete with existing therapies and new
therapies that may become available in the future.
A large number of companies are developing or marketing treatments for cancer, including many major pharmaceutical and biotechnology
companies. Many of their competitors have significantly greater experience, personnel and resources as they relate to research, drug
development, manufacturing and marketing. In particular, large pharmaceutical laboratories have substantially more experience than the
Company does in conducting clinical trials and obtaining regulatory authorizations. Mergers and acquisitions in the pharmaceutical,
biotechnology and diagnostic industries may result in even more resources being concentrated among a smaller number of its competitors.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and
established companies. These competitors are also likely to compete with Innate to recruit
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and retain top qualified scientific and management personnel, acquire rights for promising product candidates and technologies, establish clinical
trial sites and patient registration for clinical trials, acquire technologies complementary to, or necessary for, its programs and enter into
collaborations with potential partners who have access to innovative technologies.
Innate's commercial opportunity could be reduced or eliminated if its competitors develop and commercialize products that are more effective,
have a better safety profile, are more convenient, have a broader label, have more robust intellectual property protection or are less expensive
than any products that the Company may develop. Its competitors also may obtain regulatory approval for their products more rapidly than the
Company may obtain approval for its products, which could result in its competitors establishing a strong market position before the Company is
able to enter the market. In addition, its competitors could be more efficient in manufacturing or more effective in marketing their own products
than the Company or its partners may be in the future.
With respect to its lead product candidate, lacutamab, a monoclonal antibody product candidate targeting KIR3DL2, the Company is aware of
several pharmaceutical companies marketing and developing products for the treatment of patients with CTCL, including MF and Sézary
syndrome, and PTCL. The latest drugs approved by the FDA for CTCL are: In 2024, LYMPHIR, also known as E7777 or I/ONTAK, a purified
and more bioactive formulation of the previously FDA-approved ONTAK®, was approved for the treatment of adult patients with relapsed or
refractory cutaneous T-cell lymphoma (CTCL) at stages I-III, after at least one prior systemic therapy. Adcetris (brentuximab vedotin), marketed
by Seattle Genetics and approved in combination with chemotherapy for treatment of patients with primary cutaneous anaplastic large cell
lymphoma (pcALCL) or CD30-expressing MF who have received prior systemic therapy, and Poteligeo (mogamulizumab), marketed by Kyowa
Kirin and approved for the treatment of adult patients with R/R MF or Sézary syndrome after at least one prior systemic therapy. Zolinza
(vorinostat) is the only drug approved by the FDA for CTCL patients after two prior failures. In the second line setting of PTCL, Beleodaq
(belinostat), Folotyn (pralatrexate) and Istodax (romidepsin) have all been approved by the FDA; however, none of these treatments have been
approved by the EMA.
With respect to monalizumab, a novel dual-targeting checkpoint inhibitor, other anti-NKG2A have started to be assessed in clinical trials, and
several pharmaceutical companies are marketing and developing treatments for either NSCLC. Currently two ongoing clinical trials are
assessing other anti-NKG2A molecules. A Phase 1/2 study is assessing S095029 (Servier) monotherapy or in combination with an anti-PD-1 in
patients with solid tumors with dose expansion cohorts that add an anti-HER2 or anti-EGFR to the doublet. A Phase 1 study is evaluating
BRY805 (BioRay Pharmaceutical Co.) as monotherapy in patients with solid tumours. A Phase 1/2 trial evaluating BMS-986315 (Bristol-Myers
Squibb) as a monotherapy or in combination with nivolumab or cetuximab in patients with solid tumors has been completed. Exelis and Invenra
are collaborating to develop a bispecific targeting PD-L1 and NKG2A which is in the preclinical setting.
There are also several pharmaceutical and biotechnology companies that are focused on the tumor microenvironment, including the complement
and the adenosine pathways. AstraZeneca has an anti-CD73, Oleclumab, in Phase 3 in the PACIFIC-9 trial, in which Monalizumab is also being
evaluated. I-Mab (Ulidlimab) and Arcus Biosciences (Quemliclustat) also have CD73 inhibitors in clinical development. Several other
companies are developing CD39 inhibitors, including Trishula Therapeutics (TTX-030), Arcus Biosciences (AB598), and Elpiscience (ES002).
NK cells have been increasingly researched and the Company is aware of several companies activating and /or harnessing NK cells to target and
kill cancer cells through different approaches such as cell therapies (for example, Fate Therapeutics, Inc. and NKarta, Inc., Century Therapeutics)
and multi-specifics (for example, Affimed N.V. and Dragonfly Therapeutics, Inc.).
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The development of antibody-drug conjugates (ADCs) in oncology is highly competitive, with numerous companies investing in this therapeutic
approach to improve the efficacy and selectivity of cancer treatments. Nectin-4 (N4) is garnering increasing interest due to its high expression in
several solid tumors, including urothelial carcinoma. To date, only one Nectin-4-targeting ADC has been commercialized (Enfortumab Vedotin,
PADCEV®). Several Nectin-4-targeting ADCs conjugated with MMAE are in advanced stages of development, such as candidates from Bicycle
and Mabwell. Additionally, new ADCs using topoisomerase inhibitors as cytotoxic payloads are being developed, with early-stage programs in
the U.S. and Europe, and more advanced phases in China (Hengrui). In this competitive landscape, IPH4502 offers differentiated perspectives in
terms of therapeutic index and potential benefit for patients with low Nectin-4 expression. Its strategic development aims to address the
limitations of existing ADCs and optimize the treatment of Nectin-4-expressing cancers.
Intellectual Property
Commercial success of the Company depends in part on obtaining and maintaining patent, trade secret and other intellectual property and
proprietary protection of its technology, current and future products and product candidates and methods used to develop and manufacture them.
The Company cannot be sure that patents will be granted with respect to any of its pending patent applications or to any patent applications filed
by Innate in the future, nor can the Company be sure that any of its existing patents or any patents that may be granted to Innate in the future will
be sufficient to protect its technology or will not be challenged, invalidated or circumvented. Its success also depends on its ability to operate its
business without infringing, misappropriating or otherwise violating any patents and other intellectual property or proprietary rights of third
parties.
The Company relies, in some circumstances, on trade secrets to protect its technology. However, trade secrets can be difficult to protect. The
Company seeks to protect its trade secrets, in part, by confidentiality agreements with its employees, consultants, scientific advisors and
contractors. These agreements may not provide meaningful protection or may be breached, and the Company may not have an adequate remedy
for any such breach. The Company also seeks to preserve the integrity and confidentiality of its data and trade secrets by maintaining physical
security of its premises and physical and electronic security of its information technology systems. Notwithstanding these measures, these
agreements and systems may be breached, and the Company may not have adequate remedies for any such breach. In addition, its trade secrets
may otherwise become known or be independently discovered by competitors or misused by collaborators to whom the Company discloses such
information. Despite measures taken to protect its intellectual property, unauthorized parties may attempt to copy aspects of its products or drug
candidates or obtain or use information that the Company regards as proprietary. As a result, the Company may be unable to meaningfully
protect its trade secrets and proprietary information. To the extent that its employees, consultants, contractors or partners use intellectual property
owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. For more information
regarding the risks related to intellectual property, please see “Risk Factors—Risks Related to Intellectual Property Rights.”
Patents
The Company files patent applications to protect its product candidates, technical processes and the processes used to prepare its product
candidates, the compounds or molecules contained in these product
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candidates and medical treatment methods. The Company also licenses rights to patents owned by third parties, academic partners or other
companies in its field.
Monalizumab/IPH2201
As of December 31, 2024, the principal intellectual property rights related to monalizumab are in-licensed from Novo Nordisk A/S and include
U.S. Patent Nos. 8,206,709 and 8,901,283, European patents EP 2 038 306 B1 and EP 2 426 150 B1 and counterpart patents in certain other
countries. These patents are directed to the composition of matter of monalizumab and have a statutory expiration date in 2027, not including
patent term adjustment or any potential patent term extension. Other patent rights include U.S. Patent No. 11,572,410, European patent 3 193
931 B1 and counterpart patents in certain other countries relating to use of monalizumab in combination with agents that neutralize PD-1 or
PDL1, which patents are solely owned by us and have a statutory expiration date in 2035, not including patent term adjustment or any potential
patent term extension.
Lacutamab/Anti-KIR3DL2
As of December 31, 2024, the principal intellectual property rights related to lacutamab are wholly owned by Innate and include U.S. Patent
Nos. 10,280,222 and 11,066,470, European patent EP 3 116 908 B1 and counterpart patent applications in certain other countries. These patents
and patent applications are directed to the composition of matter of lacutamab, and such patents have, and any patents that issue from such
applications would have, a statutory expiration date in 2035, not including patent term adjustment or any potential patent term extension.
IPH5201/Anti-CD39
As of December 31, 2024, the principal intellectual property rights related to IPH5201 are co-owned by Innate together with Orega Biotech, and
include U.S. patent No. 11,377,503, European patent No. EP 3 807 316 B1, and other patent applications in certain other countries. These patents
and patent applications are directed to the composition of matter of IPH5201, and such have, and any patents that issue from such patent
application would have, a statutory expiration date in 2039, not including patent term adjustment or any potential patent term extension.
IPH5301/Anti-CD73
As of December 31, 2024, the principal intellectual property rights related to IPH5301 are solely owned by us, and include one U.S. non-
provisional patent application, one European patent application, and other patent applications in certain other countries. If a patent directed to
IPH5301 issues from such U.S. patent application, it would have a statutory expiration date in 2040, not including patent term adjustment or any
potential patent term extension.
IPH6501
As of December 31, 2024, the principal intellectual property rights related to IPH6501 are solely owned by us, and include one U.S. non-
provisional patent application, one European patent application, and other patent applications in certain other countries. If a patent directed to
IPH6501 issues from such U.S. patent application, it would have a statutory expiration date in 2042, not including patent term adjustment or any
potential patent term extension.
IPH45
As of December 31, 2024, the principal intellectual property rights related to IPH45 are solely owned by us, and include one U.S. non-
provisional patent application, one European patent application, and other patent applications in certain other countries. If a patent directed to
IPH45 issues from such U.S. patent
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application, it would have a statutory expiration date in 2043, not including patent term adjustment or any potential patent term extension.
The term of individual patents depends upon the legal term of patents in the countries in which they are obtained. In most countries, including
the United States, the patent term is 20 years from the earliest claimed filing date of a non-provisional patent application or its foreign equivalent
in the applicable country. In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which
compensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally
disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expiration date. In the United States, a
patent may also be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or
Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent
term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14
years from the date of product approval, only one patent applicable to each regulatory review period may be extended and only those claims
covering the approved drug, a method for using it, or a method for manufacturing it may be extended.
Trademarks
The Company owns the mark INNATE PHARMA in the United States, Australia and Europe (EU community trademark), and INNATE in
Europe (EU community trademark). The Company also owns registrations for the mark ANKET respectively in the United States and Europe
(EU community trademark), and the marks LONKIRLO and KIRTAMSY in the United States, Europe (EU community trademark) and certain
other countries.
®
Regulation
Research and development work, preclinical tests, clinical studies, facilities, and the manufacture and sale of its products are and will continue to
be subject to the complex legislative and regulatory provisions implemented by the various competent authorities in Europe, the United States
and other countries. The EMA, FDA and the various national regulatory authorities impose considerable constraints on the development,
manufacture and sale of products that the Company develops and clinical trials it conducts. In case of non-compliance with these laws or
regulations, the regulatory authorities may impose fines, seize or withdraw products from the market or even partially or totally suspend their
production. They may also revoke previously granted marketing authorizations and reject applications seeking authorization. These legal and
regulatory constraints are important in considering whether an investigational product can ultimately become an approved, commercialized drug,
as well as for recognizing the time and investments necessary for such development.
Although there are differences from one country to another, the development of therapeutic products for human use is subject to similar
procedures and companies must comply with the same types of regulations in all ICH countries (countries that are part of the International
Council for Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use). In order to obtain marketing
authorization for a product, proof of its efficacy and safety should be provided by the applicant, along with detailed information on its
composition and manufacturing process. This entails significant pharmaceutical and preclinical developments, clinical trials and laboratory tests.
The development of a new drug from basic research to commercial marketing generally comprises five steps: (i) research, (ii) preclinical trials,
(iii) clinical trials in humans, (iv) marketing authorization and (v) marketing.
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Preclinical studies
Preclinical studies include laboratory evaluation of the purity and stability of the manufactured substance or active pharmaceutical ingredient and
the formulated product, as well as in vitro and animal studies to assess the safety and activity of the product candidate for initial testing in
humans and to establish a rationale for therapeutic use. The conduct of preclinical studies is subject to national regulations and requirements,
including Good Laboratory Practices (GLP) regulations. The results of the preclinical tests, together with manufacturing information, analytical
data, any available clinical data or literature and plans for clinical studies, among other things, are submitted to the applicable regulatory agency
in connection with the application to begin human testing. Some long-term preclinical testing, such as animal tests of reproductive adverse
events and carcinogenicity, and long-term toxicity studies, may continue after submission of the application.
Regulation of clinical trials
In humans, clinical trials are usually carried out in three Phases that are generally sequential, but under certain circumstances Phases of trials can
overlap or even be skipped, following a specific review and determination by regulatory agencies. Clinical trials are sometimes necessary or
required by regulatory authorities after marketing authorization to explain certain side-effects, investigate a specific pharmacological effect or
obtain more accurate or additional data. Additional trials are also commonly conducted to explore new indications. Regulatory authorization and
ethics approvals are needed to carry out clinical trials. The regulatory authorities may put on clinical hold, block, suspend or require significant
modifications to the clinical study protocols submitted by companies seeking to test products, including the imposition of clinical holds before or
after a clinical trial has commenced.
Clinical trial authorization in the European Union
In the European Union, clinical trials are governed by the Clinical Trials Regulation (EU) No 536/2014 (CTR), which entered into application on
January 31, 2022, repealing and replacing the former Clinical Trials Directive 2001/20 (CTD) and related national implementing legislation of
EU Member States.
The CTR applies to interventional clinical trials on medicinal products and to clinical trials authorized under the CTD with a three-year transition
period from the CTR that has come into operation. As from January 31, 2023, all new clinical trial applications are registered pursuant to the
CTR. Trials approved under the CTD before January 30, 2023 can continue to be regulated under the CTD until January 30, 2025.
The CTR allows better consistency throughout EU Member States:
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Single submission of the clinical trial application dossier through the EU Clinical Trials Information System (Article 5) including a
common part assessed jointly by all participating EU Member States, and a national part covering the ethical and operational aspects
of the trial assessed by each EU Member State independently.
A clinical trial authorization issued in the form of a single decision.
The CTR applies in the Member States without the requirement for separate implementing legislation by each Member State, but some of the
existing laws of the Member States applicable at a national level will continue to apply.
This regulation is intended to increase transparency of authorized clinical trials in the European Union: the EU Clinical Trials Information
System serves as the source of public information, without prejudice of personal data protection, commercially confidential information
protection, and protection of confidential communication and trial supervision between Member States. Public information includes
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clinical trial authorization information, protocol data, and a summary of the results 12 months after the end of the trial (or six months in case of
pediatric clinical trials).
Clinical trial authorization in the United States
In the United States, an Investigational New Drug (IND) application must be submitted to the FDA and accepted before clinical trials can start
on humans. An IND is an exemption from the Federal Food, Drug, and Cosmetic Act (FDCA) that allows an unapproved product candidate to be
shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer an investigational
product to humans. This application contains early research data as well as the pharmaceutical dossier, preclinical and clinical data (if any) and
includes the clinical protocol. If there are no objections from the FDA, the IND application becomes valid 30 days after it is received by the
FDA. This waiting period is designed to allow the FDA to review the IND to determine whether human research subjects will be exposed to
unreasonable health risks. At any time during or subsequent to this 30-day period, the FDA may request the suspension or clinical hold of clinical
trials, whether such trials are planned or in progress, and may request additional information. This temporary suspension (clinical hold)
continues until the FDA receives the information it has requested.
In addition to the foregoing IND requirements, one or more independent institutional review board (IRB) covering each institution participating
in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct
continuing review and reapprove the study at least annually. The IRB must review and approve, among other things, the study protocol and
informed consent information to be provided to study subjects. An IRB must operate in compliance with FDA regulations and other application
regulations and internal compliance procedures. An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it
represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated
with unexpected serious harm to patients.
The FDA’s primary objectives in reviewing an IND are to assure the safety and rights of patients and to help assure that the quality of the
investigation will be adequate to permit an evaluation of the biological product’s safety, purity and potency. The decision to suspend or terminate
development of an investigational biological product may be made by either a health authority body such as the FDA, an IRB, or by Innate for
various reasons. Additionally, some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a
data safety monitoring board or committee (DSMB). This group provides authorization for whether or not a trial may move forward at
designated check points based on data from the study that is made available to such DSMB for such purpose. Suspension or termination of
development during any Phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable
health risk. Other reasons for suspension or termination may be made by Innate based on evolving business objectives and/or the competitive
climate.
Good clinical practices (GCP)
In most countries, clinical trials also must comply with the current GCP, or cGCP, standards as defined by the International Council for
Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH). Directive 2005/28/EC dated April 8, 2005
adopted the cGCP principles in the context of strengthening the regulatory structure specified by Directive 2001/20/EC. In the US, ICH GCP
standards are adopted by FDA as guidance. The competent authority designated in each Member State to authorize clinical trials must take into
consideration, among other factors, the scientific value of the study, the safety of the drug and the possible responsibility of the clinical site.
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Conducting clinical trials
Clinical trials must be carried out in compliance with complex regulations throughout the various Phases of clinical development, based on the
principle of informed consent by the patient to whom the products will be administered.
Clinical trial Phases
Clinical trials may be conducted in the United States, in Europe or in other parts of the world as long as such trials have been approved by health
authorities and ethics committees or IRBs in each country where the trial is conducted. There are three well-established and internationally
recognized clinical Phases: Phase 1, 2 and 3. This classification is used by the FDA and the EMA, as well as other regulatory agencies. Each of
these clinical Phases is described below.
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•
Phase 1: The product candidate is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption,
metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, such as cancer, especially
when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often
conducted with patients. Sponsors sometimes designate their Phase 1 trials as Phase 1a or Phase 1b. Phase 1b trials are typically
aimed at confirming dosing, pharmacokinetics and safety in larger number of patients. Some Phase 1b studies evaluate biomarkers or
surrogate markers that may be associated with efficacy in patients with specific types of diseases.
Phase 2: This Phase involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to
preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and appropriate
dosage.
Phase 3: Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at
geographically dispersed clinical study sites. These clinical trials, generally comparative, are intended to demonstrate the overall risk-
benefit ratio of the product candidate and provide, if appropriate, an adequate basis for product labeling.
Post-approval trials, sometimes referred to as Phase 4 studies, may be conducted after marketing approval is obtained. These trials are used to
gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the applicable regulator may
mandate the performance of Phase 4 clinical trials as a condition of approval.
In specific situations, certain Phases of development can be merged or even skipped when clear signs of efficacy emerge in the early Phases of
development and the product candidate is designed for patients with major unmet medical needs. However, these deviations from the standard
pattern of development must be discussed and approved by health authorities. Given the high unmet medical need for certain cancer patients,
deviations from the typical Phases of development are frequent in oncology and particularly in the field of immunotherapy.
Disclosure of clinical trial information
Sponsors of applicable clinical trials of FDA-regulated drugs are required to register and disclose certain clinical trial information, which is
publicly available at www.clinicaltrials.gov. Similarly, in Europe, Sponsors are required to register and disclose certain clinical trial information
on a single portal, CTIS (Clinical Trial Information System), replacing Eudra-CT, set up by the European Medicines Agency (EMA). CTIS is a
single entry point centralizing information and databases on clinical trials in the EU. Eudra-CT will be definitively abandoned at the end of the
transition period, i.e., on January 30, 2025. Information related to the product, patient population, Phase of investigation, study sites and
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investigators, and other aspects of the clinical trial is then made public as part of the registration. Sponsors of applicable clinical trials are also
obligated to disclose the results of their clinical trials within a certain timeframe after completion. Disclosure of the results of these trials may be
delayed until the new product or new indication being studied has been approved, subject to time-based limitations. Competitors may use this
publicly available information to gain knowledge regarding the progress of development programs.
Regulations concerning marketing authorizations
In order to be marketed, a drug product must have regulatory authorization (known as approval of a New Drug Application (NDA) or licensure
of a Biologics License Application (BLA) in the United States, a Marketing Authorization Application (MAA) in the European Union and a
Great Britain Marketing Authorisation Application). The competent authorities are the FDA in the United States, the EMA in the European
Union and the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom. Companies apply for a marketing
authorization based on quality, safety and efficacy data. In the European Union, the United States and Japan, the dossier is a standard dossier
referred to as a CTD, or Common Technical Document. Generally, the dossier describes the manufacturing of the drug substance (active
substance), the manufacturing of the final product and the clinical and non-clinical studies common to all jurisdictions while providing a separate
module for region-specific information.
United States review and approval process for biological products
In the United States, the FDA licenses complex biological products under the Public Health Service Act, or PHSA. In order to obtain approval to
market a biological product in the United States, a BLA must be submitted to the FDA with data establishing the safety, purity and potency of the
proposed biological product for its intended indication. The application includes all relevant data available from pertinent preclinical and clinical
trials, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry,
manufacturing, controls and proposed labeling, among other things. Data can come from company-sponsored clinical trials intended to test the
safety and effectiveness of a use of a product, or from a number of alternative sources, including studies initiated by investigators. To support
marketing authorization, the data submitted must be sufficient in quality and quantity to establish the safety, purity and potency of the biological
product to the satisfaction of the FDA.
The BLA is the vehicle through which applicants formally propose that the FDA approve a new biological product for marketing and sale in the
United States for one or more indications. Every new biological product candidate must be the subject of an approved BLA before it may be
commercialized in the United States. Under federal law, the submission of most BLAs is subject to an application user fee and the sponsor of an
approved BLA is also subject to annual program user fees. These fees typically increase annually. Certain exceptions and waivers are available
for some of these fees, such as an exception from the application fee for products with orphan drug designation and a waiver for certain small
businesses, an exception from the establishment fee when the establishment does not engage in manufacturing the product during a particular
fiscal year, and an exception from the product fee for a product that is the same as another product approved under an abbreviated pathway.
Following submission of a BLA, the FDA conducts a preliminary review of the application generally within 60 calendar days of its receipt and
strives to inform the sponsor, via the "Day 74 Letter," by the 74th day after the FDA’s receipt of the submission of whether the application is
sufficiently complete to permit substantive review. The FDA may request additional information rather than accept the application for filing. In
this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the
FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA has agreed to
specified
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performance goals in the BLA review process. Under that agreement, FDA committed to review and act on 90% of applications seeking approval
of original BLA's within 10 months of the filing date and on 90% of original BLA submissions that have been designated for “priority review”
within six months of the filing date. The review process and the Prescription Drug User Fee Act goal date for an original application may be
extended by the FDA for three additional months to consider new information or clarification provided by the applicant to address an outstanding
deficiency identified by the FDA following the original submission.
Before approving an application, the FDA typically will inspect the facility or facilities where the product is or will be manufactured. These pre-
approval inspections may cover all facilities associated with a BLA submission, including component manufacturing, finished product
manufacturing, and control testing laboratories. The FDA will not approve an application unless it determines that the manufacturing processes
and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required
specifications. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with cGCP.
As a condition of approval, the FDA may require an applicant to develop a Risk Evaluation and Mitigation Strategy (REMS). REMS are
required risk management plans that use risk mitigation strategies beyond the professional labeling to ensure that the benefits of the product
outweigh the potential risks. To determine whether a REMS is needed, the FDA will consider the size of the population likely to use the product,
seriousness of the disease/condition to be treated, expected benefit of the product, expected duration of treatment, seriousness of known or
potential adverse events, and whether the product is a new molecular entity.
To support its evaluation, the FDA may request advice from an advisory committee. Preliminary plans on whether to hold an advisory committee
are included in the Day 74 Letter. The FDA requests advice from advisory committees on a variety of matters, including various aspects of
clinical investigations and applications for marketing approval of drug products. Advisory committee members are scientific experts such as
physician-researchers and statisticians, as well as representatives of the public, including patients. The FDA is not bound by the
recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
On the basis of the FDA’s evaluation of the application and accompanying information, including the results of the inspection of the
manufacturing facilities, the FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing
of the product with specific prescribing information for specific indications. A complete response letter generally outlines the deficiencies in the
submission and may require substantial additional testing or information in order for the FDA to reconsider the application. If and when those
deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the BLA, the FDA will issue an approval letter. The FDA has
committed to reviewing and acting on 90% of such resubmissions in two or six months depending on the type of information included. Even
with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for
approval.
If the FDA approves a product, it may limit the approved indications for use for the product, require that contraindications, warnings or
precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess
the product’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other
conditions, including distribution restrictions or other risk management mechanisms, including REMS, which can materially affect the potential
market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing
studies or surveillance programs.
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Registration procedures in the European Union
To access the European markets through community procedures, drug products must be submitted through the Centralized Procedure, the Mutual
Recognition Procedure or the Decentralized Procedure. The process for doing this depends, among other things, on the nature of the medicinal
product. Regulation (EC) No 726/2004 of the European Parliament and of the Council of March 31, 2004 provides for the Centralized
Procedure. The Centralized Procedure results in a single Marketing Authorization (MA), granted by the European Commission that is valid
across the European Economic Area or EEA (i.e., the European Union as well as Iceland, Liechtenstein and Norway). The Centralized Procedure
is compulsory for human drugs that are: (i) derived from biotechnology processes, (ii) contain a new active substance indicated for the treatment
of certain diseases, such as cancer, HIV/AIDS, diabetes, neurodegenerative diseases, autoimmune and other immune dysfunctions and viral
diseases, (iii) officially designated orphan medicines and (iv) advanced-therapy medicines, such as gene therapy, somatic cell therapy or tissue-
engineered medicines.
Under Article 3 of the Regulation (EC) No 726/2004, the Centralized Procedure is optional for any other human medicinal product if: (1) the
medicinal product contains a new active substance ; or (2) the applicant shows that the medicinal product constitutes a significant therapeutic,
scientific or technical innovation or that the granting of authorization in accordance with this Regulation is in the interests of patients health at
the EU level.
Under the Centralized Procedure in the European Union, the European Medicines Agency (EMA), shall ensure that the opinion of the Committee
for Medicinal Products for Human Use (CHMP), is given within 210 days (Article 6.3). This excludes so-called clock stops, during which
additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP (Article 7). At the end of
the review period, the CHMP provides its opinion through a scientific assessment report to the European Commission. The Commission may
then adopt a final decision to grant an MA. Once granted, the MA is valid across all EEA countries for an initial period of five years. Since 2008,
as a consequence of a European directive, a marketing authorization is now renewed only once, five years after the initial registration. The
marketing authorization shall be then valid for an unlimited period, unless the Commission decides, on justified grounds, relating to
pharmacovigilance, to proceed with one additional five-year renewal.
National MAs, issued by the competent authorities of the member states of the EEA, are also available; however these only cover their
respective territory. National MAs may be applied for through the Mutual Recognition Procedure or Decentralized Procedure in order that
multiple competent authorities in different member states of the EEA may each issue a national MA in their territory for the same product on the
back of the same application. National MAs are only available for products not falling within the mandatory scope of the Centralized Procedure.
It is possible for a drug to be withdrawn from the market, upon the request of the health authorities, if a serious problem arises, in particular a
safety-related problem. The marketing authorization is then cancelled. There can be various reasons for the withdrawal of drugs from the market,
with the main reasons being public health, major undesirable side effects and non-compliance with manufacturing rules.
Non-standard regulatory procedures
Aside from the standard procedures of granting a BLA or a European MA, as described above, non-standard regulatory procedures allow a
shorter time-to-market for new medicines.
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The following programs that are in place in the United States are intended to facilitate the development and/or expedite the review and potential
approval of drug products:
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•
•
Accelerated Approval: FDA may grant accelerated approval to a product for a serious or life-threatening disease or condition upon a
determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical
endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on
irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and
the availability or lack of alternative treatments. This procedure is somewhat comparable to the “conditional approval” in the
European Union.
Priority Review: An application for a drug will receive priority review designation if it is for a drug that treats a serious condition and,
if approved, would provide a significant improvement in safety or effectiveness. Priority Review provides for a shorter review clock:
the time it takes FDA to review a filed BLA is reduced to six months rather than 10 months. This procedure is somewhat comparable
to the “accelerated assessment” in the European Union.
The Fast Track Designation: Section 506(b) of the FDCA provides for the designation of a drug as a fast track product “if it is
intended, whether alone or in combination with one or more other drugs, for the treatment of a serious or life-threatening disease or
condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition.” This provision is
intended to facilitate development and expedite review of drugs to treat serious and life-threatening conditions so that an approved
product can reach the market expeditiously. For fast track designated drugs, sponsors may have a higher number of interactions with
the FDA. In addition, the FDA may review sections of the BLA for a fast track designated drug on a rolling basis before the complete
application is submitted. Fast track designation may be rescinded if the qualifying criteria are no longer met. Fast Track designation
does not necessarily lead to a Priority Review or Accelerated Approval.
The Breakthrough Therapy Designation: Section 506(a) of the FDCA provides for designation of a drug as a breakthrough therapy “if
the drug is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition
and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or
more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.” The standard for
breakthrough therapy designation is not the same as the standard for drug approval as the clinical evidence needed to support
breakthrough designation is preliminary. In contrast, as is the case for all drugs, FDA will review the full data submitted to support
approval of drugs designated as breakthrough therapies to determine whether the drugs are safe and effective for their intended use
before they are approved for marketing. The program provides the same advantages of the fast track designation, but also includes
intensive FDA guidance to promote efficient development and FDA organizational commitment. Breakthrough therapy designation
may be rescinded if the qualifying criteria are no longer met.
In the European Union, non-standard registration procedures under the Centralized Procedures are as follows:
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Conditional marketing authorization: valid one year (instead of five). It is granted only if the benefit / risk ratio is positive, if the
product addresses unmet medical needs, and if the benefits to public health outweigh the risks associated with uncertainty because of
an incomplete evaluation of the drug (for instance, because of clinical trials still ongoing at the time of the
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•
•
•
evaluation, or when additional clinical trials are needed). It is renewed annually if an appropriate report is submitted annually by the
sponsor. Once the results of the pending studies are provided, it can become a “regular” marketing authorization.
Approval under exceptional circumstances: a marketing authorization may be granted in exceptional cases, reviewed each year to
reassess the risk-benefit balance when the initial dossier for assessment of the drug cannot contain all required data, for instance when
the condition to be treated is rarely encountered.
Accelerated assessment : the evaluation process is accelerated (150 days instead of 210 days) when a drug is of major interest from
the standpoint of public health or in particular from the viewpoint of therapeutic innovation.
The PRIME (priority medicines) scheme refers to a process for enhanced interactions and early dialogue with EMA to facilitate the
development and speed up examination of drugs which target unmet medical needs or offer a major therapeutic advantage over
existing treatments. Through PRIME, drug developers can expect to be eligible for accelerated assessment at the time of application
for a marketing authorization.
As part of the EU pharmaceuticals strategy, the EU Commission worked on a revision of the EU’s general legislation on medicines for human
use. On April 26, 2023 the EU Commission adopted a Directive proposal and a Regulation proposal, which represent the largest pharmaceutical
reform in over 20 years. The revision will impact the global legal framework for medicinal products in the EU, including legislation relating to
orphan and pediatric drugs and will review the incentives system (data protection and market exclusivity) in place (see also below “—European
Union proposed revision of the general pharmaceutical legislation”).
Orphan drugs
Generally, orphan drugs are drugs used for the prevention or treatment of life-threatening or serious rare conditions.
In the United States, the 1983 Orphan Drug Act was passed to encourage the development of drugs for rare disease or conditions. In the United
States, a rare disease or condition is defined as a disease that affects fewer than 200,000 people in the United States, or affects more than 200,000
but there is no reasonable expectation that the cost of developing and making available a drug for such disease or condition in the United States
will be recovered from U.S. sales of the drug. The FDA has authority to grant orphan drug designation to a drug or biological product to prevent,
diagnose or treat a rare disease or condition, a designation which carries with it the following incentives: the possibility of obtaining research
grants from the American government for clinical trials; tax credits for a portion of research costs; a possible exemption from user fees; and the
potential for a seven-year period of exclusivity if a marketing authorization is granted.
Regarding orphan drug exclusivity, if a product with orphan drug designation receives the first FDA approval for the disease or condition for
which it has such designation or for a select indication or use within the rare disease or condition for which it was designated, the product will
generally receive orphan drug exclusivity. Orphan drug exclusivity means that the FDA may not approve another sponsor’s marketing
application for the same drug for the same use or indication for seven years, except in certain limited circumstances. Orphan drug exclusivity
does not block the approval of a different product for the same rare disease or condition, nor does it block the approval of the same product for
different indications. If a product designated as an orphan drug ultimately receives marketing approval for an indication broader than what was
designated in its orphan drug application, it may not be entitled to exclusivity.
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Orphan exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product that is the same
biologic for the same use or indication is shown to be clinically superior to the approved product on the basis of greater effectiveness than the
approved drug, greater safety in a substantial portion of the target populations, or demonstration of a major contribution to patient care.
Additionally, FDA may approve another application for the same biologic for the same use or condition notwithstanding the applicability of
orphan drug exclusivity, if the company with orphan drug exclusivity is not able to assure a sufficient quantity of the drug.
In the European Union, equivalent legislation has been adopted to promote treatments for rare diseases (Regulation 141/2000/EC of December
16, 1999, as amended by Regulation 847/2000/EC of April 27, 2000). A medicinal product may be designated as orphan if: (a) it is intended for
the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in
the European Union when the application is made, or (b) it is intended for the diagnosis, prevention or treatment of a life-threatening, seriously
debilitating or serious and chronic condition in the European Union and that without incentives it is unlikely that the marketing of the medicinal
product in the European Union would generate sufficient return to justify the necessary investment.
For either of these conditions, the applicant must demonstrate that there exists no satisfactory method of diagnosis, prevention or treatment of the
condition in question that has been authorized in the EU or, if such method exists, the medicinal product will be of significant benefit to those
affected by that condition.
Medicinal products receiving orphan designation in the European Union can receive 10 years of market exclusivity, during which time no similar
medicinal product can be submitted for the same therapeutic indication. An orphan product can also obtain an additional two years of market
exclusivity in the European Union for pediatric studies (in this case for orphan drugs no extension to any supplementary protection certificate
can be granted, see further detail below). Orphan medicinal products are also eligible for financial incentives such as reduction of fees or fee
waivers and scientific assistance for study proposals. (Articles 6 and 9 of the above-mentioned regulation). The application for orphan drug
designation must be submitted before the application for marketing authorization (Article 5). The applicant will receive a fee reduction for the
marketing authorization application if the orphan drug designation has been granted, but not if the designation is still pending at the time the
marketing authorization is submitted. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory
review and approval process.
The 10-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the
criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity (Article 8).
However, marketing authorization may be granted to a similar medicinal product for the same indication at any time if:
•
•
•
the holder of the marketing authorization, or MA, for the original orphan medicinal product has given its consent to the second
applicant;
the holder of the MA for the original orphan medicinal product cannot supply sufficient quantities of the orphan medicinal product; or
the second applicant can establish in the application that its product, although similar to the orphan medicinal product already
authorized, is safer, more effective or otherwise clinically superior.
European Union proposed revision of the general pharmaceutical legislation
The European Union is currently contemplating a major revision of the general pharmaceutical legislation. The revision is still under tripartite
discussions between the European Commission, the
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European Parliament and the European Council of Member States, and adoption is unlikely until 2028. The most concerning draft proposals
relate to modulated regulatory data protection and orphan market exclusivity periods; greater transparency in R&D costs; faster availability of
generics and biosimilars; and more stringent obligations for the supply of medicines.
Separately, harmonization of EU health technology assessment (HTA) is intended to improve patient access inequalities in Europe, with official
implementation in January 2025. To achieve this, a joint EU HTA process is being implemented in phases, starting with oncology medicines and
advanced therapy medicinal products (ATMPs) from 2025, before expanding to orphan drugs in 2028 and other products in 2030.
It will introduce EU-level joint scientific consultations (JSCs) and joint clinical assessments (JCAs) that will serve as the basis for national value
assessments and price negotiations. 25 JCAs are planned to be conducted by the EU HTA Coordination Group (HTACG) in 2025.
While preparations gathered pace in 2024, there are short-term risks and uncertainties related to the new JCA framework, especially as regards
methodologies (i.e. comparators and endpoints), potential delayed assessments, and the disruption caused to national HTA processes in adopting
EU HTA without additional resources.
In addition, the new EU HTA regulation will trigger increased workload and higher evidence requirements at launch, requiring manufacturers to
adapt their operating models. As countries and companies transition to the new processes, EU-wide coordination on HTA is anticipated to gain
momentum, albeit slower than initially expected.
Another priority of the European Commission is to secure the uninterrupted supply of medicines in Europe. In 2024 it launched the Critical
Medicines Alliance, paving the way for a possible Critical Medicines Act in the future. To mitigate drug shortages, the European Commission is
pursuing several actions including reshoring of generics production, compulsory stockpiling, and joint procurement of the most critical
medicines.
Registration procedures outside of the European Union and the United States
In addition to regulation in the United States and the European Union, a variety of foreign regulations govern clinical trials, commercial sales
and distribution of drugs. Pharmaceutical firms who wish to market their medicinal drugs outside the European Union and the United States
must submit marketing authorization application to the national authorities of the concerned countries, such as the Pharmaceutical and Medical
Device Agency (PMDA) in Japan. The approval process varies from jurisdiction to jurisdiction and the time to approval may be longer or shorter
than that required by the FDA or European Commission.
Of note, in the United Kingdom (which comprises Great Britain and Northern Ireland), Great Britain is no longer covered by EU centralized
procedures for MAs (under the Northern Ireland Protocol, EU centralized procedures for MAs continue to be recognized in Northern Ireland).
For a period of two years from January 1, 2021, when determining an application for a Great Britain Marketing Authorization, the MHRA was
allowed to rely on on a decision taken by the European Commission on the approval of a new MA in the centralized procedure (the European
Decision Reliance Procedure). On January 1, 2024, a new international recognition framework procedure (IRP) replaced the European Decision
Reliance Procedure. Under the IRP, the MHRA may take into account the approval of MAs made by the EMA and certain other regulators. The
MHRA also has the power to take into account MAs approved in EU Member States through decentralized or mutual recognition procedures
with a view to more quickly granting an MA in the United Kingdom.
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Post-approval regulations
Post-approval regulation in the United States
Biologics manufactured or distributed pursuant to FDA licensure are subject to pervasive and continuing regulation by the FDA, including,
among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion
and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications or
other labeling claims, are subject to prior FDA review and approval. There are also continuing, annual user fee requirements for any marketed
products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with
clinical data.
In addition, manufacturers and other entities involved in the manufacture and distribution of approved products are required to register their
establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and aforementioned state
agencies for compliance with drug manufacturing regulations, including current good manufacturing practices (cGMP). Changes to the
manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require
investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any
third-party manufacturers that the sponsor may decide to use.
Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or
if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse
events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in
revising the approved labeling to add new safety information; imposing post-market studies or clinical trials to assess new safety risks; or
imposing distribution or other restrictions under a REMS program. Other potential consequences include, among other things:
•
•
•
•
•
restrictions on the marketing or manufacturing of the product, suspension of the approval, or complete withdrawal of the product
from the market or product recalls;
fines, warning letters or holds on post-approval clinical trials;
refusal of the FDA to approve pending applications or supplements to approved BLAs, or suspension or revocation of product license
approvals;
product seizure or detention, or refusal to permit the import or export of products; and
injunctions or the imposition of civil or criminal penalties.
In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act (PDMA) and its
implementing regulations, as well as the Drug Supply Chain Security Act (DSCSA), which respectively regulate the distribution and tracing of
prescription drug samples at the federal level and set floor and ceiling standards for the regulation of wholesale distributors by the states. PDMA,
its implementing regulations and state laws limit the distribution of prescription pharmaceutical product samples, and DSCSA imposes
requirements to ensure accountability during distribution and to identify and remove counterfeit and other illegitimate products from the market,
each among other objectives.
The FDA strictly regulates labels/labeling, advertising and promotion of prescription drugs that are placed on the market. The FDA-required
labeling sets forth the conditions of use under which the licensed biologics has been shown to meet the relevant standard for marketing and
provides directions and information on how to use the product safely and effectively under those conditions. Licensed biologics
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may be promoted only for the approved indications and in accordance with the provisions of the approved label, including information consistent
with the FDA required labeling and not otherwise false or misleading. The FDA and other agencies actively enforce the laws and regulations
prohibiting the promotion of off-label uses. A company that is found to have improperly promoted off-label uses may be subject to significant
liability.
Patent term restoration and extension in the United States
A patent claiming a new biologic product may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a
patent restoration of up to five years for patent term lost during product development and the FDA regulatory review period. A regulatory review
period consists of two periods of time: a testing phase and an approval phase. The restoration period granted on a patent covering a product is
calculated as one-half the testing phase (the time between the exemption to permit the clinical investigations of the drug product becomes
effective and start of the approval phase) plus the approval phase (the time between the submission date of an application and the ultimate
approval date). A maximum of five years can be restored to a patent and patent term extension cannot be used to extend the remaining term of a
patent past a total of 14 years from the product’s approval date. Additionally, only one patent applicable to an approved product is eligible for the
extension, the application for the extension must be submitted prior to the expiration of the patent in question, and only those claims covering the
approved drug, a method for using it, or a method for manufacturing it may be extended. A patent that covers multiple products for which
approval is sought can only be extended in connection with one of the approvals. The USPTO reviews and approves the application for any
patent term extension or restoration in consultation with the FDA. For more information regarding the risks related to patent term restoration and
extension, please see “Risk Factors—Risks Related to Intellectual Property Rights—If the Company does not obtain protection under the Hatch-
Waxman Amendments and similar non-U.S. legislation for extending the term of patents covering Lumoxiti and each of its product candidates,
its business may be materially harmed.”
Healthcare law and regulation in the United States
Healthcare providers and third-party payors play a primary role in the recommendation and prescription of biologic products that are granted
marketing approval. Arrangements with providers, consultants, third-party payors and customers are subject to broadly applicable fraud and
abuse, anti-kickback, false claims laws, transparency laws and patient data privacy laws, and regulations and other healthcare laws and
regulations that may constrain business and/or financial arrangements. Restrictions under applicable federal and state healthcare laws and
regulations, include the following:
•
•
•
the U.S. Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting,
offering, paying, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral
of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or
in part, under a federal healthcare program such as Medicare and Medicaid;
the U.S. civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit
individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims
for payment that are false, fictitious or fraudulent or knowingly making, using or causing to be made or used a false record or
statement to avoid, decrease or conceal an obligation to pay money to the federal government;
the U.S. Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created additional federal criminal laws that
prohibit, among other things, knowingly and willfully
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executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to
healthcare matters;
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their respective implementing
regulations, including the Final Omnibus Rule published in January 2013, which impose obligations on covered entities and their
business associates, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of
individually identifiable health information;
the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Patient Protection and
Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or the ACA, which requires certain manufacturers
of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services (CMS) within
the United States Department of Health and Human Services, information related to payments and other transfers of value made by
that entity to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate
family members; and
analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to healthcare
items or services that are reimbursed by non-governmental third-party payors, including private insurers.
•
•
•
Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the
relevant compliance guidance promulgated by the federal government in addition to requiring manufacturers to report information related to
payments to physicians and other health care providers or marketing expenditures. Certain state laws require the reporting of information relating
to drug and biologic pricing; and some state and local laws require the registration of pharmaceutical sales representatives. State and foreign
laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways
and often are not preempted by HIPAA, thus complicating compliance efforts.
Failure to comply with these laws or any other governmental regulations as applicable, could result in the imposition of significant civil, criminal
and administrative penalties, damages, fines, disgorgement, imprisonment, possible exclusion from government funded healthcare programs,
such as Medicare and Medicaid, additional integrity reporting requirements and oversight, as well as contractual damages, reputational harm,
diminished profits and future earnings, and curtailment of operations.
Healthcare reform in the United States
A primary trend in the United States healthcare industry and elsewhere is cost containment. There have been a number of federal and state
proposals and changes during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and
reimbursement for biologics and other medical products, government control and other changes to the healthcare system in the United States.
On March 23, 2010, President Obama signed into law the ACA, which includes a number of healthcare reform provisions. The ACA, among
other things, imposed a significant annual fee on companies that manufacture or import branded prescription drug products; addressed a new
methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled,
infused, instilled, implanted or injected; increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate
Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations; and established a new Medicare Part
D coverage gap discount program, in which manufacturers were required to agree to offer 50% point-of-sale discounts off
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negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s
outpatient drugs to be covered under Medicare Part D. Substantial new provisions affecting compliance also were added. The ACA also revised
the definition of “average manufacturer price” for reporting purposes, which could increase the amount of Medicaid drug rebates to states.
Most judicial, congressional, and executive branch efforts to repeal, modify or delay the implementation of the law have been unsuccessful, and
the law remains in effect.
In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, in August
2011, the Budget Control Act of 2011, among other things, included aggregate reductions to Medicare payments to providers and suppliers of
2% per fiscal year, starting in 2013, and, due to subsequent legislative amendments to the statute, will remain in effect through 2032, unless
additional Congressional action is taken.
Furthermore, there has been increasing legislative and enforcement interest in the United States with respect to drug pricing practices. There
have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things,
bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs
under Medicare, and reform government program reimbursement methodologies for drugs.
For example, in August 2022, the Inflation Reduction Act of 2022 was signed into law. This legislation contains substantial drug pricing reforms,
including the establishment of a drug price negotiation program within the U.S. Department of Health and Human Services that would require
manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance. The IRA also
imposes penalties on drug manufacturers in the form of mandatory additional rebates and/or discounts if commercial prices increase at a rate
greater than the U.S. Bureau of Labor Statistics consumer price index, and these rebates or discounts, which can be substantial, may affect the
Company's ability to raise commercial prices. The Inflation Reduction Act of 2022 also caps Medicare beneficiaries’ annual out-of-pocket drug
expenses. Provisions of the IRA are subject to legal challenges, and the full impact of the IRA on the pharmaceutical industry remains uncertain.
However, recent election results in the U.S. may spark uncertainty for the IRA. Although a full repeal of the IRA may be unlikely due to
budgetary impact, the new U.S. administration could change some of the IRA provisions, including Medicare drug price negotiations.
Additionally, under the current U.S. administration, the FDA is facing staff reductions, which could impact the FDA’s ability to engage in
regulatory and oversight activities and could result in delays or limitations on Innate’s ability to proceed with clinical development programs and
obtain regulatory approvals. It is difficult to predict how executive actions that may be taken under the current U.S. administration may affect the
FDA’s ability to exercise its regulatory authority, which could negatively impact our business.
At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and
biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing
cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Pharmacovigilance system in the European Union
An MA holder in the EU must establish and maintain a pharmacovigilance system and appoint an individual qualified person for
pharmacovigilance (QPPV), who is responsible for oversight of the
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pharmacovigilance system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety
update reports (PSURs).
All new MA applications must include a risk management plan (RMP) describing the risk management system that the company will put in place
and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific
obligations as a condition of the MA. Such risk-minimization measures or post-authorization obligations may include additional safety
monitoring, more frequent submission of PSURs or the conduct of additional clinical trials or post-authorization safety studies. RMPs and
PSURs are routinely available to third parties requesting access, subject to limited redactions.
Advertising regulation in the European Union
All advertising and promotional activities for the product must be consistent with the approved summary of product characteristics, and therefore
all off-label promotion is prohibited. Direct-to-consumer advertising of prescription medicines is also prohibited in the European Union.
Although general requirements for advertising and promotion of medicinal products are established under European Union directives, the details
are governed by regulations in each European Union Member State and can differ from one country to another.
If the Company fails to comply with applicable foreign regulatory requirements, the Company may be subject to fines, suspension or withdrawal
of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.
Pharmaceutical coverage, pricing and reimbursement
European Union
In the European Union, pricing and reimbursement schemes vary widely from country to country. In some countries, products may be marketed
only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-
effectiveness of a particular product candidate to currently available therapies or so-called health technology assessments, in order to obtain
reimbursement or pricing approval. For example, the European Union provides options for its member states to restrict the range of products for
which their national health insurance systems provide reimbursement for and to control the prices of medicinal products for human use.
European Union member states may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the
profitability of the company placing the product on the market. Other member states allow companies to fix their own prices for products, but
monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. Recently, many countries in the European
Union have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage
healthcare expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the European Union. The
downward pressure on health care costs in general, particularly prescription products, has become intense. As a result, increasingly high barriers
are being erected to the entry of new products. Political, economic and regulatory developments may further complicate pricing negotiations, and
pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various European Union member states,
and parallel trade, i.e., arbitrage between low-priced and high-priced member states, can further reduce prices. There can be no assurance that
any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing
arrangements for any products, if approved in those countries.
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United States
In the United States, patients who have treatments prescribed for their conditions and providers performing the prescribed services generally rely
on third-party payors to reimburse all or part of the associated healthcare costs. Significant uncertainty exists as to the coverage and
reimbursement status of products approved by the FDA. Thus, even if a product candidate is approved, sales of the product will depend, in part,
on the extent to which third-party payors, including government health programs in the United States such as Medicare and Medicaid,
commercial health insurers and managed care organizations, provide coverage, and establish adequate reimbursement levels for, the product. The
process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or
reimbursement rate that the payor will pay for the product once coverage is approved. Third-party payors are increasingly challenging the prices
charged, examining the medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to
manage costs. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which may not include
all of the approved products for a particular indication.
In order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive
pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required
to obtain FDA or other comparable marketing approvals. Nonetheless, product candidates may not be considered medically necessary or cost
effective. A decision by a third-party payor not to cover a product candidate could reduce physician utilization once the product is approved,
which could have a material adverse effect on sales, results of operations and financial condition. Additionally, a payor’s decision to provide
coverage for a product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide
coverage for a product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage
and reimbursement can differ significantly from payor to payor.
The containment of healthcare costs also has become a priority of federal, state and foreign governments and the prices of products have been a
focus in this effort. Governments have shown significant interest in implementing cost-containment programs, including price controls,
restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures,
and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated
from the sale of any approved products. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable
coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive marketing approval,
less favorable coverage policies and reimbursement rates may be implemented in the future.
Anti-corruption, anti-kickback and transparency regulations
Arrangements with healthcare providers, physicians, third-party payors and customers can expose pharmaceutical manufactures to broadly
applicable anti-bribery, fraud and abuse and other healthcare laws and regulations, which may constrain the business or financial arrangements
and relationships through which such companies sell, market and distribute pharmaceutical products.
More specifically, each of the above-mentioned steps of the development of therapeutic products for human use is heavily regulated and
therefore involves significant interaction with public officials which is likely to cause a risk of corruption or bribery. For instance, in many
countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials. Certain payments
to hospitals in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to
enforcement actions. That is why business activity may
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be subject to anti-bribery or anti-corruption laws, regulations or rules of other countries in which the Company operates, including without
limitation the Foreign Corrupt Practices Act, the U.K. Bribery Act or the French Sapin 2 Law.
These statutes generally prohibit offering, promising, giving, or authorizing others to give anything of value, either directly or indirectly, to a
government or a foreign government official or employees of public international organizations in order to influence official action, or otherwise
obtain or retain business. The implementation of these statutes may also impose internal compliance programs, procedures and guidelines to
detect and report any suspicious activities and to mitigate any risks of noncompliance which may occur.
In addition, the Company may be subject to specific healthcare regulations, including, without limitation:
•
•
the French “transparency” provisions, or “French Sunshine Act” (Articles L. 1453-1 and D. 1453-1 and seq. of the French Public
Health Code or PHC), which contains provisions regarding transparency of fees received by some healthcare professionals from
industries, i.e. companies manufacturing or marketing healthcare products (medicinal products, medical devices, etc.) in France.
these companies shall publicly disclose (on a specific public website available at
According
https://transparence.sante.gouv.fr) the advantages and fees paid to healthcare professionals amounting to €10 or above, as well as the
agreements concluded with the latter, along with detailed information about each agreement (the precise subject matter of the
agreement, the date of signature of the agreement, its end date, the total amount paid to the healthcare professional, etc.); and
the provisions,
to
the French “anti-gift” provisions (Articles L.1453-3 to L.1453-12 PHC), setting out a general prohibition of payments and rewards
from industries, i.e. companies manufacturing or marketing health products to healthcare professionals (HCP), healthcare
organizations (HCO), healthcare associations and students with limited exceptions, and strictly defining the conditions under which
such payments or awards are lawful. The regime entails strict formalities depending on the amount paid, when authorized, to the
HCP, HCO, students or associations.
Data protection rules
The Regulation 2016/679, known as the General Data Protection Regulation, or GDPR, that came into force on May 25, 2018, as well as EU
Member State implementing legislations, apply to the collection and processing of personal data, including health-related information, by
companies located in the EU, or in certain circumstances, by companies located outside of the EU and processing personal information of
individuals located in the EU.
These laws impose strict obligations on the ability to process personal data, including health-related information, in particular in relation to their
collection, use, disclosure and transfer.
Also, in certain countries, in particular France, the conduct of clinical trials is subject to compliance with specific provisions of the Act No.78-17
of January 6, 1978 on Information Technology, Data Files and Civil Liberties, as amended. These provisions require, among others, the filing of
compliance undertakings with “standard methodologies” and a specific framework applicable to the retention of personal data when researching
in the health sector (July 2020) adopted by the French Data Protection Authority (the CNIL), or, if not compliant, obtaining a specific
authorization from the CNIL.
The most common standard methodologies are the following:
•
Decision No. 2018-153 of May 3, 2018 concerning the approval of a standard methodology for the processing of personal data
carried out within the context of research in the field of clinical
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trials, which requires the express consent of the person involved (standard methodology MR-001)
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Decision No. 2018-154 of May 3, 2018 concerning the approval of a standard methodology for the processing of personal data in the
context of research in the field of health, which does not require the express consent of the person involved (methodology MR-003).
Deliberation no. 2020-077 of June 18, 2020 adopting a framework relating to the retention periods of personal data processed for the
purposes of research, study or evaluation in the field of health.
In certain specific cases, entities processing health personal data may have to comply with article L1111-8 of the French Public Health Code
which imposes certain certifications for the hosting service providers.
C. Organizational Structure.
On December 31, 2024, Innate Pharma is the sole shareholder of Innate Pharma Inc., a Delaware corporation.
D. Property, Plants and Equipment.
Innate Pharma's corporate offices and laboratories are located in Luminy, Marseille, France and the Company owns the buildings and land.
Item 4A. Unresolved Staff Comments.
Not applicable.
Item 5. Operating and Financial Review and Prospects.
You should read the following discussion of the Company financial condition and results of operations in conjunction with the “Selected
Consolidated Financial Data” and its consolidated financial statements and the related notes thereto included elsewhere in this Annual Report.
In addition to historical information, the following discussion and analysis contains forward-looking statements that reflect the Company plans,
estimates and beliefs. The Company actual results and the timing of events could differ materially from those anticipated in the forward-looking
statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report,
particularly in sections titled “Item 3.D – Risk Factors” and “Special Note Regarding Forward-Looking Statements.” The Company audited
consolidated financial statements as of and for the years ended December 31, 2022, 2023 and 2024 have been prepared in accordance with IFRS
as issued by the IASB, which may differ in material respects from generally accepted accounting principles in other jurisdictions, including the
United States.
Overview
Innate Pharma S.A. is a global, clinical-stage biotechnology company developing immunotherapies for cancer patients. Its innovative approach
aims to harness the innate immune system through three therapeutic approaches: monoclonal antibodies, multispecific NK Cell Engagers via its
ANKET® (Antibody-based NK cell Engager Therapeutics) proprietary platform and Antibody Drug Conjugates (ADC). Innate’s portfolio
includes its lead proprietary program lacutamab, developed in advanced form of cutaneous T cell lymphomas and peripheral T cell lymphomas,
monalizumab developed with AstraZeneca in non-small cell lung cancer, several ANKET® drug candidates to address multiple tumor types as
well as IPH4502 a differentiated ADC in development in solid tumors. Innate Pharma is a trusted partner to biopharmaceutical companies such
as Sanofi and AstraZeneca, as well as leading research institutions, to accelerate innovation, research and development for the benefit of patients.
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Since its inception, the Company has devoted substantially all of its financial resources to research and development efforts, including
conducting preclinical studies and clinical trials of its product candidates, providing general and administrative support for its operations and
protecting its intellectual property.
As of December 31, 2024, the Company had €91.1 million in cash, cash equivalents, short-term investments and non-current financial assets.
Since its inception, the Company has raised a total of €314.3 million through the sale of equity securities, including €33.7 million in the initial
public offering of its ordinary shares on Euronext Paris in 2006 and €66.0 million in the initial public offering of our ordinary shares on Euronext
and ADS on The Nasdaq Global Select Market, or Nasdaq, in 2019. The main capital increases since 1999 are described in Item 5 - B Liquidity
and Capital Resources. As of December 31, 2024, the Company has also received $656.1 million (€579.1 million) in payments from its
collaborators, including AstraZeneca, since 2011, excluding payments received for purchases of its equity securities by its collaborators.
The Company has significant agreements with AstraZeneca and Sanofi pursuant to which it has the right to earn milestone and royalty payments.
The Company has other license agreements, pursuant to which it has acquired intellectual property and under which the Company will be
required to make payments to the counterparty upon the achievement of certain milestone events and commercial sales related to its product
candidates.
The Company has incurred net losses in each year since its inception except for the years ended December 31, 2016 and 2018. The Company net
income (loss) was €(58.1) million, €(7.6) million and €(49.5) million for the years ended December 31, 2022, 2023 and 2024, respectively.
Substantially all of its net losses have resulted from costs incurred in connection with its research and development programs and from selling,
general and administrative expenses associated with its operations. As the Company continues advancing its product candidates through research
and development programs, the Company expects to continue to incur significant expenses and may again incur operating losses in future
periods. The Company anticipates that such expenses will increase substantially if and as the Company:
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continues the research and development of its product candidates;
initiates clinical trials for, or additional preclinical development of, its product candidates;
further develops and refines the manufacturing processes for its product candidates;
changes or adds manufacturers or suppliers of biological materials;
seeks regulatory and marketing authorizations for any of its product candidates that successfully complete development;
seeks to identify and validate additional product candidates;
acquires or licenses other product candidates, technologies or biological materials;
makes milestone, royalty or other payments under any current or future license agreements;
obtains, maintains, protects and enforces its intellectual property portfolio;
secures manufacturing arrangements for commercial production;
seeks to attract and retain new and existing skilled personnel;
creates additional infrastructure to support its operations as a U.S. public company and incurs increased legal, accounting, investor
relations and other expenses; and
experiences delays or encounters issues with any of the above.
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The Company anticipates that it will need to raise additional funding, prior to completing clinical development of any of its product candidates.
Until such time that the Company can generate significant revenues from sales of its product candidates, if approved, the Company expects to
finance its operating activities through a combination of milestone payments received pursuant to its strategic alliances, equity offerings, debt
financings, government or other third-party funding and collaborations, and licensing arrangements. However, the Company may not receive
milestone payments when expected, or at all, and the Company may be unable to raise additional funds or enter into such arrangements when
needed on favorable terms, or at all, which would have a negative impact on its financial condition and could force the Company to delay, limit,
reduce or terminate its development programs or commercialization efforts or grant to others rights to develop or market product candidates that
the Company would otherwise prefer to develop and market itself. Failure to receive additional funding could cause the Company to cease
operations, in part or in full.
Presentation of Financial Information
The Company audited consolidated financial statements included herein as of and for the years ended December 31, 2022, 2023 and 2024 have
been prepared in accordance with IFRS as issued by the IASB.
Due to the listing of its ordinary shares on Euronext Paris and in accordance with the European Union’s regulation No. 1606/2002 of July 19,
2002, the Company also prepares and publishes its consolidated financial statements in accordance with IFRS as adopted by the European Union
(EU).
All the standards published by the IASB that are mandatorily applicable in the years ended December 2022, 2023 and 2024 are endorsed by the
EU and are mandatorily applicable in the EU. Therefore, the Company audited consolidated financial statements for the years ended December
31, 2022, 2023 and 2024 are compliant with both IFRS as issued by the IASB and IFRS as adopted by the EU.
The preparation of financial statements in accordance with IFRS requires the Company to make significant judgments and estimates which are
presented below. See “—Critical Accounting Policies and Significant Judgments and Estimates.”
Principal Collaboration and Licensing Agreements of the Company
The Company results of operations are impacted by the terms and conditions of its principal collaboration and licensing agreements. For a
description of its principal collaboration and licensing agreements, see “Item 10C.—Material Contracts.”
Principal Components of the Company Results of Operations
Revenue and other income
The Company revenue and other income mainly consists of revenues from collaboration and licensing agreements and government financing for
research expenditure in the form of research tax credits, as well as other grants.
Revenue from collaboration and licensing agreements
The Company currently derives substantially all its revenues from payments pursuant to its licensing and collaboration agreements notably with
AstraZeneca relating to monalizumab and IPH5201, Sanofi relating to IPH6401/SAR'514 and IPH62 consisting of (i) upfront payments, (ii)
milestone payments based upon the achievement of pre-determined development, regulatory and commercial events and (iii) research and
development fees related to charges for full time equivalents, or FTEs, at contracted rates and reimbursement of research and development
expenses.
As a consequence of the termination of the Lumoxiti Agreement, the Lumoxiti activity (including sales) is presented in the consolidated income
statement and the notes to the consolidated financial statements as a
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discontinued operation for the 2023, 2022 and 2021 financial years in accordance with IFRS5 "non-current assets held for sale and discontinued
operations."
The Company ability to generate significant product revenue and to become profitable will depend upon its ability to successfully develop,
obtain regulatory approval for and commercialize any product candidates. Because of the numerous risks and uncertainties associated with
product development and regulatory approval, the Company is unable to predict the amount, timing or whether it will be able to obtain product
revenue from any such candidates.
Government financing for research expenditures
The Company's government financing for research expenditures consists of research tax credits (crédit d’impôt recherche) and grants.
The research tax credit is granted to companies by the French tax authorities in order to encourage them to conduct technical and scientific
research. Companies demonstrating that they have expenses that meet the required criteria, including research expenses located in France or,
since January 1, 2005, within the EU or in another state that is a party to the agreement in the European Economic Area that has concluded a tax
treaty with France that contains an administrative assistance clause, receive a tax credit which can be used against the payment of the corporate
tax due for the fiscal year in which the expenses were incurred and during the next three fiscal years, or, as applicable, can be reimbursed for the
excess portion. The expenditures taken into account for the calculation of the research tax credit involve only research expenses.
The main characteristics of the research tax credit are:
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the research tax credit results in a cash inflow to the Company, i.e., it is used to offset the payment of corporate income tax the year
after the date of its record as a tax credit in the income statement, or is paid directly to the Company from the tax authorities for the
portion that remains unused, in principle, three years after the fiscal year for which it is determined;
The Company's corporate income tax liability does not limit the amount of the research tax credit. If the Company does not pay any
corporate income tax, the Company can offset the remaining research tax credit the year following its record in the income statement;
and
the research tax credit is not included in the determination of the corporate income tax.
When the research tax credit is not deductible from taxes payable by the Company, it is generally reimbursed by the French government three
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 lost its SME status at the end of
the 2019 fiscal year but has been eligible again since the end of the 2021 financial year. Since December 31, 2023, the company lost again the
SME status due to two consecutive year with a statutory turnover over €50,000 thousand. For more information, see “Item 5.B—Liquidity and
Capital Resources—Sources and uses of liquidity.”
The Company has concluded that the research tax credit meets the definition of a government grant as defined in IAS 20 Accounting for
government grants and disclosure of government assistance (IAS 20), and that the classification as “Revenue and other income” in its
consolidated statement of income (loss) is appropriate.
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Innate may also be eligible to receive other government grants, which are recognized in its consolidated statement of income (loss) when Innate
complies with the conditions attached to the grants, and the latter are non-repayable grants.
Operating expenses from continuing operations
Since its inception, Innate's operating expenses have consisted primarily of research and development expenses and general and administration
expenses.
Following the transfer back of the U.S. marketing authorization to AstraZeneca linked to the Termination and Transition Agreement (from
October 1, 2021), selling expenses relating to Lumoxiti activities are presented as discontinued operations since December 31, 2021. The 2020
and 2019 comparatives have been restated compared to previous publications, in accordance with the same standard (see "Discontinued
Operations" below).
Research and development expenses
The Company engages in substantial research and development efforts to develop innovative product candidates. Research and development
expenses consist primarily of:
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personnel costs, including salaries, related benefits and share-based compensation, for Innate's employees engaged in scientific
research and development functions;
cost of third-party contractors and academic institutions involved in preclinical studies or clinical trials that the Company may
conduct, or third-party contractors involved in field trials;
purchases of biological raw materials, real estate leasing costs as well as conferences and travel costs; and
certain other expenses, such as expenses for use of laboratories and facilities for Innate's research and development activities as well
as depreciation and amortization.
Innate's research and development efforts are focused on its existing product candidates and preclinical programs, including the advancement of
its lead product candidates, monalizumab, lacutamab. Its direct research and development expenses consist principally of external costs
associated with subcontracting of preclinical and clinical operations to third parties, which Innate tracks on a program-by-program basis. The
Company also uses its employee and infrastructure resources across multiple research and development programs, and does not track these
indirect expenses on a program-by-program basis.
Research and development costs are expensed as incurred. Costs for certain activities are recognized based on an evaluation of the progress to
completion of specific tasks using data such as information provided to Innate Pharma by its vendors and analyzing the progress of its preclinical
studies or other services performed. Significant judgment and estimates are made in determining the accrued expense balances at the end of any
reporting period. Non-refundable advance payments for research and development goods or services to be received in the future from third
parties are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed.
Research and development activities are central to Innate's business. As product candidates in later stages of clinical development generally have
higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage
clinical trials, the Company expects that its research and development costs will increase in the foreseeable future. Such cost increases are
expected to occur as the Company conducts existing clinical trials and initiates future clinical trials, manufactures pre-commercial clinical trial
and preclinical study materials, expands its research and development efforts, seeks regulatory approvals for its product candidates that
successfully complete
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clinical trials, accesses and develops additional technologies and hires additional personnel to support its research and development efforts.
The Company cannot determine with certainty the duration and total costs of its future clinical trials of its product candidates or if, when, or to
what extent it will generate revenues from the commercialization and sale of any of its product candidates, or those of its collaborators, that
might obtain regulatory approval. The Company may never succeed in achieving regulatory approval for any product candidates. The duration,
costs and timing of clinical trials and development of its product candidates will depend on a variety of factors, including:
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the scope, rate of progress and expense of its ongoing clinical trials as well as any additional preclinical studies, clinical trials
conducted by its collaborators and other research and development activities;
clinical trial and preclinical study results;
the terms and timing of regulatory approvals;
the expense of filing, maintaining, prosecuting, defending and enforcing patent claims and other intellectual property rights; and
the ability to market, commercialize and achieve market acceptance for any products that receive regulatory approval.
A change in the outcome of any of these variables with respect to the development of monalizumab, lacutamab or any other product candidate or
preclinical program that the Company is developing or could develop in the future could mean a significant change in the costs and timing
associated with the development of such product candidates or preclinical programs. For example, if the FDA, the EMA or another regulatory
authority were to require Innate to conduct preclinical studies and clinical trials beyond those that it currently anticipates will be required for the
completion of clinical development, or if the Company experiences significant delays in enrollment in any clinical trials, the Company could be
required to spend significant additional financial resources and time on the completion of clinical development. For a discussion of the risks
associated with completing the development projects on schedule, see “Risk Factors—Risks Related to the Development of the Product
Candidates.”
General and administrative expenses
General and administrative expenses consist primarily of personnel costs and share-based compensation for personnel other than research and
development staff. Selling, general and administrative expenses also consist of fees for professional services, mainly related to audit, IT,
accounting, recruitment and legal services, communication and travel costs, real-estate leasing costs, office furniture and equipment costs,
allowance for amortization and depreciation, director’s attendance fees and insurance costs and overhead costs, such as postal and
telecommunications expenses.
Net financial income (loss)
The financial income (loss) primarily consists of realized and unrealized foreign exchange gains and losses primarily related to the purchase of
services as well as deposit accounts denominated in U.S. dollars and gains and losses and interest received in relation to cash and cash
equivalents that have been deposited in cash accounts, short-term fixed deposits and short-term highly liquid investments with original maturities
of three months or less. Thus, the Company's financial assets generated €2.4 million of interest income in the financial year ended December 31,
2024. Innate expects to continue this investment philosophy in the future.
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Net result from discontinued operations
Pursuant to the Termination and Transition Agreement, in the year ended December 31, 2020 results announcement, the Company reported a
contingent liability of up to $12.8 million in its consolidated financial statements, which was related to the splitting of certain manufacturing
costs. As part of the Termination and Transition Agreement, Innate and AstraZeneca agreed to split these manufacturing costs, and Innate paid
$6.2 million (€5.9 million) to AstraZeneca on April 30, 2022.
As a consequence of the termination of the Lumoxiti Agreement, the Lumoxiti activity (including sales) is presented in the consolidated income
statement and the notes to the consolidated financial statements as a discontinued operation for the 2024, 2023 and 2022 financial years in
accordance with IFRS5 "non-current assets held for sale and discontinued operations." Therefore, since December 31, 2020 the income
statement and subsequent years have been prepared with the Lumoxiti activity (including sales) as a discontinued operation in accordance with
the same IFRS standard.The Lumoxiti activity has not had an impact on the consolidated income statement since 2022.
Impairment of intangible assets
The Group assesses at the end of each reporting period whether there is an indication that intangible assets, property and equipment may be
impaired. If any indication exists, the Group estimates the recoverable amount of the related asset.
Whether or not there is any indication of impairment, intangible assets not yet available for use are tested for impairment annually by comparing
their carrying amount with their recoverable amount.
Pursuant to IAS 36—Impairment of Assets, criteria for assessing indication of loss in value may notably include performance levels lower than
forecast, a significant change in market data or the regulatory environment, or obsolescence or physical damage of the asset not included in the
amortization/depreciation schedule. The recognition of an impairment loss alters the amortizable/depreciable amount and potentially, the
amortization/depreciation schedule of the relevant asset.
As of December 31, 2022, impairment of intangible assets consisted of the full depreciation of avdoralimab rights for an amount of €41.0
million, following the Company's decision to stop avdoralimab development in bullous phemphigoid ("BP") indication in inflammation
following a decision taken by a sponsor to stop the Phase 2 clinical trial in said indication during the fourth quarter of 2022.
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A. Operating Results
Comparisons for the years ended December 31, 2023 and 2024
The following table sets forth a summary of the Company's consolidated statements of income (loss) for the periods presented.
Revenue from collaboration and licensing agreements
Government financing for research expenditures
Other income
Revenue and other income
Research and development expenses
General and administrative expenses
Operating expenses
Operating income (loss)
Financial income
Financial expenses
Net financial income (loss)
Net income (loss) before tax
Income tax expense
Net income (loss) from continuing operations
Year ended December 31,
2023
2024
(in thousands)
€ 51,901
9,729
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61,641
(56,022)
(18,288)
(74,310)
(12,669)
6,934
(1,835)
5,099
(7,570)
—
(7,570)
€ 12,622
7,488
11
20,121
(51,980)
(19,716)
(71,696)
(51,575)
6,079
(3,975)
2,104
(49,471)
—
(49,471)
Net income (loss)
€ (7,570)
€ (49,471)
Revenue and other income
Revenue and other income from continuing operations resulted from collaboration and licensing agreements and government financing for
research expenditure. Revenue and other income from continuing operations decreased by €41.5 million, to €20.1 million for the year ended
December 31, 2024, as compared to revenue and other income of €61.6 million for the year ended December 31, 2023.
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Revenue from collaboration and licensing agreements
Government financing for research expenditures
Other income
Revenue and other income
Year ended December 31,
2023
2024
(in thousands)
€ 51,901
9,729
11
€ 61,641
€ 12,622
7,488
11
€ 20,121
Revenue from collaboration and licensing agreements
Revenue from collaboration and licensing agreements from continuing operations decreased by €39.3 million, to €12.6 million for the year
ended December 31, 2024, as compared to revenue from collaboration and licensing agreements of €51.9 million for the year ended December
31, 2023.
Revenue from collaboration and licensing agreements mainly resulted from the partial or entire recognition of the proceeds received pursuant to
the agreements with AstraZeneca signed in April 2015 and October 2018, as well as the agreement signed with Sanofi in 2016 and 2022 and also
with Takeda in 2023. Proceeds are recognized on the basis of the percentage of completion of the works performed by the Company under such
agreements.
Revenue from collaboration and licensing agreements is set forth in the table below.
Proceeds from collaboration and licensing agreements
of which monalizumab agreement - AstraZeneca
of which Sanofi agreement 2016
of which Sanofi agreement 2022 - ANKET IPH62 - Recognition of license initial payment and income related to the
completion of work in line with the joint research program
of which Sanofi agreement 2022 - ANKET IPH67 -Recognition of license initial payment and income related to the
option exercise
of which Takeda agreement 2023
Proceeds from collaboration and licensing agreements
Invoicing of research and development costs (IPH5201)
Others
Revenue from collaboration and licensing agreements
Year ended December 31,
2023
2024
(in thousands)
9,499
2,000
18,873
15,800
4,553
50,725
1,165
11
€ 51,901
€ 4,404
4,000
401
1,700
—
10,505
2,060
56
€ 12,622
Proceeds related to monalizumab.
Revenues related to monalizumab result from the partial recognition of the $250.0 million non-refundable upfront payment and the $100.0
million milestone resulting from the exercise of the option received in June 2015 and October 2018 from AstraZeneca. The additional payment
of $50.0 million (€47.7 million) received from AstraZeneca in December 2020 triggered by the dosing of the first patient in the Phase 3
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trial evaluating monalizumab was treated in full as a collaboration commitment ("collaboration liability" in the consolidated balance sheet) in
view to the commitment linked to the agreement for the Phase 1/2 (co-financing) and Phase 3 studies (amendment signed in September 2020).
For more information, see Note 1.1 to the consolidated financial statements are included as part of this Annual Report. Consequently, this
additional payment has no impact on the transaction price.
In addition to these amounts, AstraZeneca made an additional payment of $50.0 million (€47.7 million) in June 2022, triggered by the treatment
of the first patient in a second Phase 3 trial evaluating monalizumab in April 2022. This additional payment has been treated as a collaboration
commitment ("collaboration liability" in the consolidated balance sheet) for an amount of $36.0 million (€34.3 million) in view to the contractual
commitment linked to the Phase 1/2 studies (co-funding under the initial contract). The remaining $14.0 million was treated as a change in
estimate of the transaction price, recognized in the income statement in line with the progress of the Phase 1/2 studies.
Revenue related to monalizumab decreased by €5.1 million, to €4.4 million for the year ended December 31, 2024, as compared to €9.5 million
for the year ended December 31, 2023. This €5.1 million decrease is primarily explained by the accounting of an exceptional revenue catch-up
during the first half of 2023. Indeed, as of June 30, 2023, the Company had conducted an analysis of the cost basis used to calculate the progress
of Phase 1/2 trials in light of their advancement. This analysis led to a reduction in this cost basis through a reassessment of projected expenses.
Consequently, this adjustment to the cost basis had a positive impact on the percentage of completion and resulted in the recognition of an
additional revenue of €5.9 million for the first half of 2023, which did not recur in 2024. As of December 31, 2024, the amount not recognized as
revenue amounted to €0.2 million, and is presented in full under "Current contract liabilities" given the maturity of the Phase 1/2 trials.
Proceeds related to IPH5201.
Revenue related to IPH5201 for the year ended December 31, 2024 is $0.0 same as year ended December 31, 2023, compared with $5.0 million
(€4.7 million) for the year 2022. This revenue related to the milestone payment received from AstraZeneca following the signature on June 1,
2022 of an amendment to the initial contract signed in October 2018. This amendment sets the terms of the collaboration following
AstraZeneca’s decision to advance IPH5201 to a Phase 2 study. The Company will conduct the study. Both parties will share the external cost
related to the study and incurred by the Company and AstraZeneca will provide products necessary to conduct the clinical trial. For more
information on this amendment, see Note 1.1 to the consolidated financial statements included under "Item 18. Financial Statements" of this
Annual Report.
Invoicing of research and development costs - IPH5201.
Pursuant to the Company's agreements with AstraZeneca, research and development costs related to IPH5201 in connection with preclinical
work are fully borne by AstraZeneca, in accordance with the initial 2018 agreement. These costs were re-invoiced on a quarterly basis.
Following the signature on June 1, 2022 of an amendment to the initial agreement signed in October 2018 specifying the terms of the
collaboration following the decision to advance IPH5201 to a Phase 2 study, the parties are committed to sharing the external costs of the study
incurred by the Company and AstraZeneca will provide products necessary to conduct the clinical trial.
Revenue from invoicing of research and development costs for the year ended December 31, 2024 was €2.1 million compared to €1.2 million for
the year ended December 31, 2023, or a increase of € 0.9 million.
Proceeds related to Sanofi 2016 agreement.
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Revenues under the collaboration and license agreement signed with Sanofi in 2016 amounted to €4.0 million for the year ended December 31,
2024 as compared to €2.0 million for the year ended December 31, 2023. On April 15, 2024, the Company announced the treatment of the first
patient in the dose-expansion phase 2 of the study conducted by Sanofi evaluating the NK Cell Engager IPH6101/SAR443579 in various blood
cancers. According to the terms of the 2016 agreement, this trial progression triggered a milestone payment of €4.0 million, fully recognized as
revenue during the first quarter of 2024, and was received by the Company on May 17, 2024
Proceeds related to Sanofi 2022 agreement
On December 19, 2022, the Company announced that it had entered into a research collaboration and license agreement with Genzyme
Corporation, a wholly-owned subsidiary of Sanofi (“Sanofi”) pursuant to which the Company granted Sanofi an exclusive license on the Innate
Pharma's B7-H3 ANKET program and options on two additional targets. On January 25, 2023, the Company announced the expiration of the
waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 and the effectiveness of the licensing agreement as of
January 24, 2023. Consequently, the Company received an upfront payment of €25.0 million in March 2023, including €18.5 million relating to
the exclusive license, €1.5 million relating to the research work and €5.0 million relating to the two additional targets options.
®
The Company considers that the license to the B7-H3 technology is a right to use the intellectual property granted exclusively to Sanofi as from
the effective date of the agreement. As such, the €18.5 million upfront payment relating to the exclusive license has been fully recognized in
revenue since June 2023.
The Company will provide collaborative research services to Sanofi for an initial estimated three years period as from the effective date of the
collaboration, i.e., January 24, 2023. During this period, Sanofi and Innate will collaborate and work on research activities as defined in the work
program described in the agreement. Consequently, the corresponding upfront payment of €1.5 million will be recognized on a straight-line basis
over the duration of the research services that the Company has agreed to carry out. As a result, a €0.8 million has been recognized in revenue as
of December 31, 2024, and amounts not recognized in revenue are classified as deferred revenue current portion equal to €0.4 million and
deferred revenue non-current portion equal to €0.3 million.
Under the terms of this agreement, the Company has also granted two exclusive options, exercisable no later than three years after the effective
date, for exclusive licenses to Innate's intellectual property for the research, development, manufacture and commercialization of NKCEs
specifically targeting two preclinical molecules. The Company considers that the option to acquire an exclusive license provide a material right
to Sanofi that it would not receive without entering into this agreement. The Company will recognize the related revenues either at the reporting
date or three years after the effective date. Consequently, the €5.0 million initial payment relating to these options was recognized in deferred
revenue—non-current portion as of June 30, 2023.
On December 19, 2023, the Company announced that Sanofi had exercised an option for one of the two preclinical molecules. As a consequence,
the Company recognized related income of €2.5 million as of December 31, 2023.
This option exercise also resulted in a milestone payment of €15.0 million, including €13.3 million in respect of the exclusive license, which was
fully recognized in income as of December 31, 2023, and €1.7 million in respect of research services to be carried out by the Company. Sanofi
and Innate will collaborate and work on the research activities defined in the contractual work program. Consequently, the corresponding initial
payment of €1.7 million will be recognized on a straight-line basis over the duration of the research work that the Company has agreed to carry
out. This work had not yet begun as of December 31, 2023. In this respect, no revenue has been recognized in the income statement, and the
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amount of €1.7 million is presented under current contract liabilities (€0.4 million) and non-current contract liabilities (€1.3 million).
On October 9, 2024, the Company received a termination letter for the license agreement concerning this option. The termination ends the
research work. The revenue of €1.7 million was therefore fully recognized as revenue on December 31, 2024.
Innate has regained full rights to IPH67, a NK Cell Engager program derived from the ANKET® platform currently in development for solid
tumors. Sanofi retains a right to a low single-digit compensation regarding any future revenue that Innate Pharma may receive for licenses of
IPH67, as well as payments based on milestones should the Company develop IPH67 itself, and an ongoing royalty fee in the low-single digits.
Under the terms of the agreement, Sanofi still retains a license option for a third preclinical molecule.
Proceeds related to Takeda agreement
On April 3, 2023, the Company announced that it has entered into an exclusive license agreement with Takeda under which Innate granted
Takeda exclusive worldwide rights to research and develop ADCs using a panel of selected Innate antibodies against an undisclosed target, with
a primary focus in Celiac disease. Takeda would have beeen responsible for the future development, manufacture and commercialization of any
potential products developed using the licensed antibodies. As such, the Company considered that the license granted was a right to use the
relevant intellectual property, which was granted fully and perpetually to Takeda. The agreement did not stipulate that Innate's activities would
significantly affect the intellectual property granted during the life of the agreement. Consequently, the $5.0 million (or €4.6 million) initial
payment, received by the Company in May 2023, was fully recognized in revenue since June 30, 2023. Given Takeda’s strategic decision in July
2024 to terminate the license agreement executed in March 2023 for use of selected Innate antibodies in antibody drug-conjugates, no further
revenue is recognized under this agreement with Takeda. The Company does not intend at this stage to continue the development of these
antibodies.
Government financing for research expenditures
Government funding for research expenditures decreased by €2.2 million, or (23.03)%, to €7.5 million for the year ended December 31, 2024, as
compared to €9.7 million for the year ended December 31, 2023. As a reminder, the 2023 research tax credit included a reduction of €0.1 million
related to a provision following the tax inspection carried out in 2022 by the French tax authorities. The provision estimated in 2022 was
adjusted after the reception of final tax authority decision.
The table below details government funding for research expenditures for the years ended December 31, 2023 and 2024.
Research Tax Credit(1)
Grant and other tax credit (2)
Government financing for research expenditures
Year ended December 31,
2023
2024
€ 9,729
—
€ 9,729
€ 7,463
25
€ 7,488
(1) As of December 31, 2024, the amount is mainly composed of (i) the research tax credit calculated and recognized for the 2024 financial year for an amount of €7.5 million compared to €9.8
million for the 2023 financial year which is subtracted (ii) a provision amounting to €0.1 million following the tax inspection. As a reminder, the tax inspection carried out by the French tax
authorities related to the 2018, 2019 and 2020 tax credit calculation and 2019 and 2020 income tax calculation as the prescription period are different. On February 13,
141
2024, the Company received from the tax authorities the rectification proposal and adjusted the provision to €0.1 million following the final settlement.
(2) The company can be eligible to local or European grants dedicated to R&D program and benefit from tax credit related to employee benefits.
The research tax credit is calculated as 30% of the amount of research and development expenses, net of grants received, eligible for the research
tax credit for the fiscal year. For more information, see “Item 5.B—Liquidity and Capital Resources—Sources and uses of liquidity.”
Operating expenses
The table below presents our operating expenses from continuing operations for the years ended December 31, 2024 and 2023.
Research and development expenses
General and administrative expenses
Impairment of intangible assets
Total operating expenses after impairment
Research and development expenses
Year ended December 31,
2023
2024
(in thousands)
(56,022)
(18,288)
—
€ (74,310)
(51,980)
(19,716)
—
€ (71,696)
Our research and development expenses are broken down as set forth in the table below for the years ended December 31, 2023 and 2024.
142
Lacutamab
Monalizumab
Avdoralimab
IPH5201
IPH5301
IPH6501 (1)
Sub-total programs in clinical development
Sub-total programs in preclinical development
Total direct research and development expenses (2)
Personnel expenses (including share-based payments)
Depreciation and amortization
Other expenses
Personnel and other expenses
Total research and development expenses
Year ended December 31,
2023
2024
(in thousands)
€ (12,248)
(791)
(175)
(2,313)
(296)
(4,214)
(20,037)
(10,142)
(30,179)
(17,121)
(3,891)
(4,831)
(25,843)
€ (8,976)
(63)
(50)
(4,013)
(461)
(2,307)
(15,870)
(12,429)
(28,299)
(17,536)
(1,075)
(5,070)
(23,681)
€ (56,022)
€ (51,980)
1. 2023 expenses from program IPH6501 were reported in 2023 20-F in sub-total programs in preclinical development. Following first patient dosed in June 2024, this program is now in clinical
stage therefore we have reclassed 2023 expenses in the sub-total programs in clinical development
2. Total direct research and development expenses are composed of subcontracting costs and cost of supplies and consumables materials.
Research and development expenses from continuing operations decreased by €4.0 million, or 7.2%, to €52.0 million for the year ended
December 31, 2024, as compared to research and development expenses of €56.0 million for the year ended December 31, 2023. This decrease
over the period is mainly due to (i) a decrease in direct research and development expenses of €1.9 million over the period due mainly to the
decrease in expenses related to more mature clinical development programs, and (ii) indirect expenses which have decreased by €2.2 million
mainly in depreciation and amortization. Research and development expenses represented a total of 72.5% and 75.4% of operating expenses
before impairment for years ended December 31, 2024 and December 31, 2023, respectively.
Direct research and development expenses decreased by €1.9 million, or 6.2%, to €28.3 million for the year ended December 31, 2024, as
compared to direct research and development expenses of €30.2 million for the year ended December 31, 2023. This decrease is mainly due to a
€2.3 million increase in expenses related to preclinical development programs relating notably to the ADC field, partly offset by a €4.2 million
decrease in expenses related to the Company's clinical programs. This decrease in clinical programs expenses mainly results from a €0.7 million
decrease in expenses relating to the monalizumab program and a €3.3 million decrease in expenses relating to the lacutamab program, partly
offset by a €1.7 million increase in expenses related to the growth in IPH5201 phase 2 trials patient recruitment. In addition, In addition,
IPH6501 moved from pre-clinical to Phase 1 clinical development in June 24, with the first patient dosed. Costs decreased by € 1.9 million due
to lower research and development expenses, partially offset by expenses related to the commencement of clinical trial.
As of December 31, 2024, the collaboration liabilities relating to monalizumab and the agreements signed with AstraZeneca in April 2015,
October 2018 and September 2020 amounted to €48.6 million, as compared to collaborations liabilities of €52.7 million as of December 31,
2023. This decrease of €4.1
143
million mainly results from (i) net repayment of €7.8 million during year 2024 to AstraZeneca linked to the Monalizumab cofinancing program,
including phase 3 trial INTERLINK-1 launched in October 2020 and PACIFIC-9 launched in April 2022, and (ii) the increase of the
collaboration commitment ("collaboration liabilities" in the consolidated statements of financial position) for an amount of €3.6 million linked to
the Euro-dollar parity exchange rate variation.
Personnel and other expenses allocated to research and development decreased by €2.2 million, or 8.4%, to €23.7 million for the year ended
December 31, 2024, as compared to an amount of €25.8 million for the year ended December 31, 2023. This decrease is due to (i) decrease of
€2.8 million in depreciation and amortization, mainly composed of the amortization of the monalizumab and IPH5201 intangible assets. (ii) €0.4
million increase in staff costs allocated to research and development, of which €0.2 million in personnel expenses and €0.2 million in share-
based payment expenses, .
As of December 31, 2024, the Company had 139 employees, including Leadership Team members, in research and development functions,
compared to 140 as of December 31, 2023.
General and administrative expenses
General and administrative expenses from continuing operations increased by €1.4 million, or 7.8%, to €19.7 million for the year ended
December 31, 2024, as compared to €18.3 million for the year ended December 31, 2023. General and administrative expenses represented a
total of 27.5% and 24.6% of our total operating expenses before impairment for the years ended December 31, 2024 and 2023, respectively.
The table below presents our general and administrative expenses by nature for the years ended December 31, 2023 and 2024:
Personnel expenses (including share based payments)
Non scientific advisory and consulting
(1)
Other expenses
Total general and administrative
.
Year ended December 31,
2023
2024
(in thousands)
€ (8,842)
(2,906)
(6,540)
€ (18,288)
€ (8,556)
(3,377)
(7,783)
€ (19,716)
(1) Other expenses are related to intellectual property, maintenance costs for laboratory equipment and our headquarters, depreciation and amortization and other general and administrative
expenses.
Personnel expenses, which includes the compensation paid to our employees and consultants, decreased by €0.3 million, or 3.2%, to €8.6 million
for the year ended December 31, 2024, as compared to personnel expenses of €8.8 million for the year ended December 31, 2023. This decrease
mainly results from €0.5 million decrease in share-based payment expenses compensated by an increase in wages of €(0.2) million. As of
December 31, 2024, we had 42 employees, including Leadership Team members, in general and administrative functions, as compared to 39 as
of December 31, 2023.
Non-scientific advisory and consulting expenses mostly consist of auditing, accounting, legal and hiring services. These expenses increased by
€0.5 million, or 16.2%, to €3.4 million for the year ended December 31, 2024, as compared to an amount of €2.9 million for the year ended
December 31, 2023.
144
This increase is mainly due to the use of recruitment agencies to set up the clinical department and to recruit the new Chairman of the Executive
Board.
Other general and administrative expenses relate to intellectual property, depreciation and amortization and other general, administrative
expenses. These expenses increased by €1.2 million or 19.0% to €7.8 million for the year ended December 31, 2024, as compared to an amount
of €6.5 million for the year ended December 31, 2023, is primarily related to the repayment of interest on the 2023 R&D Tax Credit amounting
to €0.8 million, the rise in IT service costs of €0.1 million and the impact of IFRS 16 following the restitution of leased spaces, which generated
a non-recurring credit of €0.2 million in 2023.
Impairment of intangible assets
As a reminder, for the year ended December 31, 2022, impairment of intangible assets results from full impairment of anti-C5aR rights acquired
from Novo/Nordisk A/S (avdoralimab intangible asset) for an amount of €41.0 million. During the fourth quarter of 2022, the Company was
informed by the sponsor of the Phase 2 clinical trial evaluating avdoralimab in inflammation in bullous pemphigoid ("BP") indication of its
decision to stop said trial. Consequently, the Company decided in December 2022 to stop the development of avdoralimab in BP indication in
inflammation, only indication supporting the recoverable amount of the asset as of December 31, 2021 (as well that as of June 30, 2022).
Without any new event since then, the impairment has not been reassessed.
Financial income (loss), net
The net financial result decreased by €3.0 million, to a €2.1 million profit for the year ended December 31, 2024, as compared to a €5.1 million
loss for the year ended December 31, 2023. This change mainly results from the net foreign exchange loss of €1.8 million (net foreign exchange
gain of €0.9 million in 2023), interest income on financial investments (net gain of €2.4 million in 2024 compared to €3.2 millions in 2023) and
the change in the fair value of certain financial instruments (net gain of €2.0 million in 2024 as compared to a net gain of €1.6 million in 2023).
The table below presents the components of our net financial result for the years ended December 31, 2023 and 2024:
Interests and gains on financial assets
Unrealized gains on financials assets
Foreign exchange gains
Financial income
Foreign exchange losses
Interest on financial liabilities
Financial expenses
Net financial income (loss)
Year ended December 31,
2023
2024
(in thousands)
€ 3,177
1,648
2,109
6,934
(1,195)
(640)
(1,835)
€ 5,099
€ 2,437
1,983
1,658
6,079
(3,409)
(566)
(3,975)
€ 2,104
For the years ended December 31, 2023 and 2024, the foreign exchange gains and losses mainly result from the variance of the exchange rate
between the Euro and the U.S. dollar on U.S. dollar-denominated
145
cash and cash equivalents, short-term investments, financial assets and collaboration debt based on U.S. dollar. For instruments for which the
valuation may be subject to certain events, the Company has ensured that no such events have occurred a of December 31, 2024.
146
Comparisons for the years ended December 31, 2022 and 2023
The following table sets forth a summary of our consolidated statements of income (loss) for the periods presented.
Revenue from collaboration and licensing agreements
Government financing for research expenditures
Sales
Revenue and other income
Research and development expenses
General and administrative expenses
Impairment of intangible assets
Operating expenses
Operating income (loss)
Financial income
Financial expenses
Net financial income (loss)
Net income (loss) before tax
Income tax expense
Net income (loss) from continuing operations
Net income (loss) from discontinued operations
Net income (loss)
Revenue and other income
Year ended December 31,
2022
2023
(in thousands)
€ 49,580
8,035
59
57,674
(51,663)
(22,436)
(41,000)
(115,099)
(57,425)
4,775
(5,321)
(546)
(57,972)
—
(57,972)
(131)
€ 51,901
9,729
11
61,641
(56,022)
(18,288)
—
(74,310)
(12,669)
6,934
(1,835)
5,099
(7,570)
—
(7,570)
—
€ (58,103)
€ (7,570)
Revenue and other income from continuing operations resulted from collaboration and licensing agreements and government financing for
research expenditure. Revenue and other income from continuing operations increased by €4.0 million, to €61.6 million for the year ended
December 31, 2023, as compared to revenue and other income of €57.7 million for the year ended December 31, 2022.
147
Revenue from collaboration and licensing agreements
Government financing for research expenditures
Other income
Revenue and other income
Year ended December 31,
2022
2023
(in thousands)
49,580
8,035
59
€ 57,674
51,901
9,729
11
€ 61,641
Revenues from collaboration and licensing agreements
Revenue from collaboration and licensing agreements from continuing operations increased by €2.3 million, to €51.9 million for the year ended
December 31, 2023, as compared to revenue from collaboration and licensing agreements of €49.6 million for the year ended December 31,
2022.
Revenue from collaboration and licensing agreements mainly resulted from the partial or entire recognition of the proceeds received pursuant to
the agreements with AstraZeneca signed in April 2015 and October 2018, as well as the agreement signed with Sanofi in 2016 and 2022 and also
with Takeda in 2023. Proceeds are recognized on the basis of the percentage of completion of the work performed by the Company under such
agreements.
Revenue from collaboration and licensing agreements is set forth in the table below.
Proceeds from collaboration and licensing agreements
of which monalizumab agreement - AstraZeneca
of which IPH5201 agreement - AstraZeneca
of which preclinical molecules agreement - AstraZeneca
of which Sanofi agreement 2016
of which Sanofi agreement 2022 - ANKET IPH62 - Recognition of license initial payment and income related to the
completion of work in line with the joint research program
of which Sanofi agreement 2022 - ANKET IPH67 -Recognition of license initial payment and income related to the
option exercise
of which Takeda agreement 2023
of which other agreements
Proceeds from collaboration and licensing agreements
Invoicing of research and development costs (IPH5201)
Exchange gains (loss) on collaboration agreements
Others
Revenue from collaboration and licensing agreements
Year ended December 31,
2022
2023
(in thousands)
22,376
4,677
17,400
4,000
—
—
—
353
48,806
1,391
(627)
10
49,580
9,499
—
—
2,000
18,873
15,800
4,553
—
50,725
1,165
—
11
€ 51,901
148
Proceeds related to monalizumab.
Revenues related to monalizumab result from the partial recognition of the $250.0 million non-refundable upfront payment and the $100.0
million milestone resulting from the exercise of the option received in June 2015 and October 2018 from AstraZeneca. The additional payment
of $50.0 million (€47.7 million) received from AstraZeneca in December 2020 triggered by the dosing of the first patient in the Phase 3 trial
evaluating monalizumab was treated in full as a collaboration commitment ("collaboration liability" in the consolidated balance sheet) in view to
the commitment linked to the agreement for the Phase 1/2 (co-financing) and Phase 3 studies (amendment signed in September 2020). For more
information, see Note 1.1 to the consolidated financial statements included under "Item 18. Financial Statements" of this Annual Report.
Consequently, this additional payment has no impact on the transaction price.
In addition to these amounts, AstraZeneca made an additional payment of $50.0 million (€47.7 million) in June 2022, triggered by the treatment
of the first patient in a second Phase 3 trial evaluating monalizumab in April 2022. This additional payment has been treated as a collaboration
commitment ("collaboration liability" in the consolidated balance sheet) for an amount of $36.0 million (€34.3 million) in view to the contractual
commitment linked to the Phase 1/2 studies (co-funding under the initial contract). The remaining $14.0 million was treated as a change in
estimate of the transaction price, recognized in the income statement in line with the progress of the Phase 1/2 studies.
Revenue related to monalizumab decreased by €12.9 million, to €9.5 million for the year ended December 31, 2023, as compared to €22.4
million for the year ended December 31, 2022. This €12.9 million decrease mainly resulted from to the increase, in the first half of 2022, in the
transaction price of €13.4 million ($14.0 million) triggered by the launch of the PACIFIC-9 Phase 3 trial on April 28, 2022. As a reminder, this
increase in the transaction price led to the recognition of additional income of €12.6 million in the income related to the monalizumab agreement
for 2022. As of December 31, 2023, the amount not recognized as revenue amounted to €5.2 million, and is presented in full under "Current
contract liabilities" given the maturity of the Phase 1/2 trials.
Proceeds related to IPH5201. Revenue related to IPH5201 for the year ended December 31, 2023 is $0.0 compared with $5.0 million (€4.7
million) for the year 2022. This revenue related to the milestone payment received from AstraZeneca following the signature on June 1, 2022 of
an amendment to the initial contract signed in October 2018. This amendment sets the terms of the collaboration following AstraZeneca’s
decision to advance IPH5201 to a Phase 2 study. The Company will conduct the study. Both parties will share the external cost related to the
study and incurred by the Company and AstraZeneca will provide products necessary to conduct the clinical trial. For more information on this
amendment, see Note 1.1 to the consolidated financial statements included under "Item 18. Financial Statements" of this Annual Report.
Proceeds related to collaboration and option agreement related to four to-be-agreed upon molecules (preclinical molecules).
During the first half of 2022, the Company received from AstraZeneca a notice that it will not exercise its option to license the four preclinical
programs covered in the "Future Programs Option Agreement." This license option was part of the 2018 multi-term agreement between
AstraZeneca and the Company under which the Company had received an upfront payment of $20.0 million (€17.4 million). As the rights related
to these four preclinical programs have been returned to the Company, the entire upfront payment of $20.0 million (€17.4 million) has been
recognized as revenue as of June 30, 2022.
Invoicing of research and development costs - IPH5201.
149
Pursuant to the Company's agreements with AstraZeneca, research and development costs related to IPH5201 in connection with preclinical
work are fully borne by AstraZeneca, in accordance with the initial 2018 agreement. These costs were re-invoiced on a quarterly basis.
Following the signature on June 1, 2022 of an amendment to the initial agreement signed in October 2018 specifying the terms of the
collaboration following the decision to advance IPH5201 to a Phase 2 study, the parties are committed to sharing the external costs of the study
incurred by the Company and AstraZeneca will provide products necessary to conduct the clinical trial.
Revenue from invoicing of research and development costs for the year ended December 31, 2023 was €1.2 million compared to €1.4 million for
the year ended December 31, 2022, or a decrease of € 0.2 million.
Proceeds related to Sanofi 2016 agreement.
Revenues under the collaboration and license agreement signed with Sanofi in 2016 amounted to €2.0 million for the year ended December 31,
2023 as compared to €4.0 million for the year ended December 31, 2022. The Company announced that, in June 2023, the first patient was dosed
in a Sanofi-sponsored Phase 1/2 clinical trial evaluating IPH6401/SAR'514 in relapsed or refractory Multiple Myeloma. As provided by the
licensing agreement signed in 2016, Sanofi made a milestone payment of €2.0 million, fully recognized in revenue since June 2023. This amount
was received by the Company on July 21, 2023. As a reminder, the revenue recognized in 2022 resulted from Sanofi's decision to advance
IPH6401/SAR'514 towards regulatory preclinical studies for a new investigational drug. This decision triggered a milestone payment of €3.0
million fully recognized in revenue. This amount was received by the Company on September 9, 2022.
Proceeds related to Sanofi 2022 agreement
On December 19, 2022, the Company announced that it had entered into a research collaboration and license agreement with Genzyme
Corporation, a wholly-owned subsidiary of Sanofi (“Sanofi”) pursuant to which the Company granted Sanofi an exclusive license on the Innate
Pharma's B7-H3 ANKET program and options on two additional targets. On January 25, 2023, the Company announced the expiration of the
waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 and the effectiveness of the licensing agreement as of
January 24, 2023. Consequently, the Company received an upfront payment of €25.0 million in March 2023, including €18.5 million relating to
the exclusive license, €1.5 million relating to the research work and €5.0 million relating to the two additional targets options.
®
The Company considers that the license to the B7-H3 technology is a right to use the intellectual property granted exclusively to Sanofi as from
the effective date of the agreement. As such, the €18.5 million upfront payment relating to the exclusive license has been fully recognized in
revenue since June 2023.
The Company will provide collaborative research services to Sanofi for an initial estimated three years period as from the effective date of the
collaboration, i.e., January 24, 2023. During this period, Sanofi and Innate will collaborate and work on research activities as defined in the work
program described in the agreement. Consequently, the corresponding upfront payment of €1.5 million will be recognized on a straight-line basis
over the duration of the research services that the Company has agreed to carry out. As a result, a €0.4 million has been recognized in revenue as
of December 31, 2023, and amounts not recognized in revenue are classified as deferred revenue—current portion equal to €0.3 million and
deferred revenue—non-current portion equal to €0.8 million.
Under the terms of this agreement, the Company has also granted two exclusive options, exercisable no later than three years after the effective
date, for exclusive licenses to Innate's intellectual property for the research, development, manufacture and commercialization of NKCEs
specifically targeting two
150
preclinical molecules. The Company considers that the option to acquire an exclusive license provide a material right to Sanofi that it would not
receive without entering into this agreement. The Company will recognize the related revenues either at the reporting date or three years after the
effective date. Consequently, the €5.0 million initial payment relating to these options was recognized in deferred revenue—non-current portion
as of June 30, 2023.
On December 19, 2023, the Company announced that Sanofi had exercised an option for one of the two preclinical molecules. As a consequence,
the Company recognized related income of €2.5 million as of December 31, 2023.
This option exercise also resulted in a milestone payment of €15.0 million, including €13.3 million in respect of the exclusive license, which was
fully recognized in income as of December 31, 2023, and €1.7 million in respect of research services to be carried out by the Company. Sanofi
and Innate will collaborate and work on the research activities defined in the contractual work program. Consequently, the corresponding initial
payment of €1.7 million will be recognized on a straight-line basis over the duration of the research work that the Company has agreed to carry
out. This work had not yet begun as of December 31, 2023. In this respect, no revenue has been recognized in the income statement, and the
amount of €1.7 million is presented under current contract liabilities (€0.4 million) and non-current contract liabilities (€1.3 million).
Under the terms of the agreement, Sanofi still retains a license option for a third preclinical molecule.
Proceeds related to Takeda agreement
On April 3, 2023, the Company announced that it has entered into an exclusive license agreement with Takeda under which Innate granted
Takeda exclusive worldwide rights to research and develop ADCs using a panel of selected Innate antibodies against an undisclosed target, with
a primary focus in Celiac disease. Takeda would be responsible for the future development, manufacture and commercialization of any potential
products developed using the licensed antibodies. As such, prior to the termination of this agreement, the Company considered that the license
granted was a right to use the relevant intellectual property, which was granted fully and perpetually to Takeda. The agreement did not stipulate
that Innate's activities would significantly affect the intellectual property granted during the life of the agreement. Consequently, the $5.0 million
(or €4.6 million) initial payment, received by the Company in May 2023, was fully recognized in revenue since June 30, 2023.
Government financing for research expenditures
Government funding for research expenditures increased by €1.7 million, or 21.08%, to €9.7 million for the year ended December 31, 2023, as
compared to €8.0 million for the year ended December 31, 2022. As a reminder, the 2022 research tax credit included a reduction of €1.3 million
related to a provision following the tax inspection carried out in 2022 by the French tax authorities. This provision was based on estimated
amounts and adjustments not disputed by the Company and has been increased in 2023 for €0.1 million.
The table below details government funding for research expenditures for the years ended December 31, 2022 and 2023.
151
Research Tax Credit(1)
Grant and other tax credit (2)
Government financing for research expenditures
Year ended December 31,
2022
2023
(in thousands)
7,925
110
8,035
9,729
—
9,729
(1) As of December 31, 2023, the amount is mainly composed of (i) the research tax credit calculated and recognized for the 2023 financial year for an amount of €9.8 million compared to €9.2
million for the 2022 financial year which is subtracted (ii) a provision amounting to €0.1 million following the tax inspection compared to €1.3 million last year. As a reminder, the tax
inspection carried out by the French tax authorities related to the 2018, 2019 and 2020 tax credit calculation and 2019 and 2020 income tax calculation as the prescription period are different.
On February 13, 2024, the Company received from the tax authorities the rectification proposal and adjusted the provision to €0.1 million following the final settlement.
(2) The company can be eligible to local or European grants dedicated to R&D program.
The research tax credit is calculated as 30% of the amount of research and development expenses, net of grants received, eligible for the research
tax credit for the fiscal year.
Operating expenses
The table below presents our operating expenses from continuing operations for the years ended December 31, 2023 and 2022.
Research and development expenses
General and administrative expenses
Impairment of intangible assets
Total operating expenses after impairment
Research and development expenses
Year ended December 31,
2022
2023
(in thousands)
(51,663)
(22,436)
(41,000)
€ (115,099)
(56,022)
(18,288)
—
€ (74,310)
Our research and development expenses from continuing operations are broken down as set forth in the table below for the years ended
December 31, 2022 and 2023.
152
Lacutamab
Monalizumab
Avdoralimab
IPH5201
IPH5301
Sub-total programs in clinical development
Sub-total programs in preclinical development
Total direct research and development expenses
Personnel expenses (including share-based payments)
Depreciation and amortization
Other expenses
Personnel and other expenses
Total research and development expenses
Year ended December 31,
2022
2023
(in thousands)
(12,473)
(1,224)
(385)
(1,648)
(625)
(16,355)
(11,129)
(27,484)
(16,373)
(2,928)
(4,877)
(24,178)
(51,663)
(12,248)
(791)
(175)
(2,313)
(296)
(15,823)
(14,356)
(30,179)
(17,121)
(3,891)
(4,831)
(25,843)
(56,022)
Research and development expenses from continuing operations increased by €4.4 million, or 8.4%, to €56.0 million for the year ended
December 31, 2023, as compared to research and development expenses of €51.7 million for the year ended December 31, 2022. This increase
over the period is mainly due to an increase in direct research and development expenses of €2.7 million over the period. Research and
development expenses represented a total of 75.4% and 69.7% of operating expenses before impairment for years ended December 31, 2023 and
December 31, 2022, respectively. Indirect expenses increased by €1.7 million mainly in personnel expenses and amortization and depreciation.
Direct research and development expenses increased by €2.7 million, or 9.8%, to €30.2 million for the year ended December 31, 2023, as
compared to direct research and development expenses of €27.5 million for the year ended December 31, 2022. This increase is mainly due to a
€3.2 million increase in expenses related to preclinical development programs relating notably to the ADC field, partly offset by a €0.5 million
decrease in expenses related to the Company's clinical programs. This decrease in clinical programs expenses mainly results from a €0.4 million
decrease in expenses relating to the monalizumab program, a €0.2 million decrease in expenses relating to the avdoralimab program and a €0.2
million decrease in expenses relating to the lacutamab program, partly offset by a €0.7 million increase in expenses related to the growth in
IPH5201 phase 2 trials patient recruitment.
Also, as of December 31, 2023, the collaboration liabilities relating to monalizumab and the agreements signed with AstraZeneca in April 2015,
October 2018 and September 2020 amounted to €52.7 million, as compared to collaborations liabilities of €63.2 million as of December 31,
2022. This decrease of €10.5 million mainly results from (i) net repayment of €8.4 million during year 2023 to AstraZeneca linked to the
Monalizumab cofinancing program, including phase 3 trial INTERLINK-1 launched in October 2020 and PACIFIC-9 launched in April 2022,
and (ii) the decrease of the collaboration commitment ("collaboration liabilities" in the consolidated statements of financial position) for an
amount of €2.0 million linked to the Euro-dollar parity exchange rate variation.
153
Personnel and other expenses allocated to research and development increased by €1.7 million, or 6.9%, to €25.8 million for the year ended
December 31, 2023, as compared to an amount of €24.2 million for the year ended December 31, 2022. This increase is due to the (i) €0.7
million increase in staff costs allocated to research and development, of which €0.5 million in personnel expenses and €0.2 million in share-
based payment expenses, (ii) increase of €1.0 million in depreciation and amortization. The line item is mainly composed of the amortization of
the monalizumab, IPH5201 intangible assets.
As of December 31, 2023, the Company had 140 employees, including Leadership Team members, in research and development functions,
compared to 155 as of December 31, 2022.
General and administrative expenses
General and administrative expenses from continuing operations decreased by €4.1 million, or 18.5%, to €18.3 million for the year ended
December 31, 2023, as compared to €22.4 million for the year ended December 31, 2022. General and administrative expenses represented a
total of 24.6% and 30.3% of our total operating expenses before impairment for the years ended December 31, 2023 and 2022, respectively.
The table below presents our general and administrative expenses by nature for the years ended December 31, 2022 and 2023:
Personnel expenses (including share based payments)
Non scientific advisory and consulting
(1)
Other expenses
Total general and administrative
Year ended December 31,
2022
2023
(in thousands)
(10,229)
(4,244)
(7,963)
€ (22,436)
(8,842)
(2,906)
(6,540)
€ (18,288)
(1) Other expenses are related to intellectual property, maintenance costs for laboratory equipment and our headquarters, depreciation and amortization and other general and administrative
expenses.
Personnel expenses, which includes the compensation paid to our employees and consultants, decreased by €1.4 million, or 13.6%, to €8.8
million for the year ended December 31, 2023, as compared to personnel expenses of €10.2 million for the year ended December 31, 2022. This
decrease mainly results from a decrease in wages of €1.2 million as well as a decrease of €0.2 million in share-based payment expenses mainly
explained by the decrease of employees. As of December 31, 2023, we had 39 employees, including Leadership Team members, in general and
administrative functions, as compared to 55 as of December 31, 2022.
Non-scientific advisory and consulting expenses mostly consist of auditing, accounting, legal and hiring services. These expenses decreased by
€1.3 million, or 31.5%, to €2.9 million for the year ended December 31, 2023, as compared to an amount of €4.2 million for the year ended
December 31, 2022. This decrease mainly results from operating efficiency measures, which led to a reduction in the number of new hires, and
use of external communication and consulting services.
154
Other general and administrative expenses relate to intellectual property, depreciation and amortization and other general, administrative
expenses. These expenses decreased by €1.4 million or 17.9% to €6.5 million for the year ended December 31, 2023, as compared to an amount
of €8.0 million for the year ended December 31, 2022.
This decrease related notably to savings (reduction in office space) and a reclassification of R&D laboratory support costs (maintenance,
supplies, depreciation of R&D equipment) for 1.0 million euros in R&D.
Impairment of intangible assets
As a reminder, for the year ended December 31, 2022, impairment of intangible assets results from full impairment of anti-C5aR rights acquired
from Novo/Nordisk A/S (avdoralimab intangible asset) for an amount of €41.0 million. During the fourth quarter of 2022, the Company was
informed by the sponsor of the Phase 2 clinical trial evaluating avdoralimab in inflammation in bullous pemphigoid ("BP") indication of its
decision to stop said trial. Consequently, the Company decided in December 2022 to stop the development of avdoralimab in BP indication in
inflammation, only indication supporting the recoverable amount of the asset as of December 31, 2021 (as well that as of June 30, 2022).
Without any new event during year ended December 31, 2023, the impairment has not been reassessed.
Financial income (loss), net
The net financial result increased by €5.6 million, to a €5.1 million profit for the year ended December 31, 2023, as compared to a €0.5 million
loss for the year ended December 31, 2022. This change mainly results from interest income on financial investments (net gain of €2.5 million in
2023), the change in the fair value of certain financial instruments (net gain of €1.6 million in 2023 as compared to a net loss of €1.6 million in
2022) and a net foreign exchange gain of €0.9 million in 2023 as compared to a net foreign exchange gain of €0.8 million in 2022.
The table below presents the components of our net financial result for the years ended December 31, 2022 and 2023:
Interests and gains on financial assets
Unrealized gains on financials assets
Foreign exchange gains
Financial income
Foreign exchange losses
Unrealized losses on financial assets
Interest on financial liabilities
Financial expenses
Net financial income (loss)
Year ended December 31,
2022
2023
(in thousands)
€ 546
418
3,810
4,775
(2,983)
(2,050)
(288)
(5,321)
€ (546)
€ 3,177
1,648
2,109
6,934
(1,195)
—
(640)
(1,835)
€ 5,099
For the years ended December 31, 2022 and 2023, the foreign exchange gains and losses mainly result from the variance of the exchange rate
between the Euro and the U.S. dollar on U.S. dollar-denominated cash and cash equivalents, short-term investments and financial assets. For
instruments for which the
155
valuation may be subject to certain events, the Company has ensured that no such events have occurred a of December 31, 2023.
Net result from discontinued operations
Subsequently to the Termination and Transition Agreement, operations related to Lumoxiti are presented as a discontinued operation as of
October 1, 2021.
As a consequence, the Lumoxiti activity (including sales) is presented in the consolidated income statement and the notes to the consolidated
financial statements as a discontinued operation for the 2021 financial year in accordance with IFRS5 "non-current assets held for sale and
discontinued operations."
Thus, the net result from discontinued operations relating to Lumoxiti represents a net loss of €0.1 million as compared to a net loss nil for the
years ended December 31, 2022 and 2023, respectively, presented as follows :
Revenue and other income
Revenue from collaboration and licensing agreements
Sales
Total revenue and other income
Research and development expenses
(1)
Selling, general and administrative expenses
(2)
Total operating expenses
Net income (loss) from distribution agreements
Impairment of intangible assets
Operating income (loss)
Financial income
Financial expenses
Net financial income (loss)
Net income (loss) before tax
Income tax expense
Net income (loss) from discontinued operations
Year ended December 31,
2022
2023
(in thousands)
194
22
216
—
(346)
(346)
—
—
(131)
—
—
—
(131)
—
(131)
€ —
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(1) Research and development expenses. Research and development expenses relating to Lumoxiti discontinued operations are nil for the years ended December 31, 2022 and 2023, respectively.
(2) Selling, general and administrative expenses. Selling, general and administrative expenses relating to Lumoxiti discontinued operations amounted to €0.3 million and are nil for the years
ended December 31, 2022 and 2023, respectively. For the year ended December 31, 2022, these expenses mainly consisted of remaining transition costs.
156
Critical Accounting Policies and Significant Judgments and Estimates
The Company's consolidated financial statements are prepared in accordance with IFRS. Some of the accounting methods and policies used in
preparing the financial statements under IFRS are based on complex and subjective assessments by our management or on estimates based on
past experience and assumptions deemed realistic and reasonable based on the facts and circumstances. The actual value of the Company's
assets, liabilities and shareholders’ equity, as well as its income and expenses, could differ from the value derived from these estimates if
conditions changed and these changes had an impact on the assumptions adopted. See Note 2 to the Company's consolidated financial statements
included under "Item 18. Financial Statements" of this Annual Report.
The Company believes that the most significant management judgments and assumptions in the preparation of its consolidated financial
statements are described below.
Accounting for collaboration and licensing arrangements
To date, the Company's revenue has been generated primarily from payments received in relation to research, collaboration and licensing
agreements signed with pharmaceutical companies. These contracts generally provide for components such as upfront payments, milestone
payments upon reaching certain predetermined development objectives, research and development funding, as well as payment of royalties on
future sales of products.
Non-refundable upfront payments are deferred and recognized as revenue over the period Innate is engaged to deliver services to the third party.
Revenue is recognized based on completion of the underlying work.
Milestone payments represent amounts received from Innate's collaborators, the receipt of which is dependent upon the achievement of certain
scientific, regulatory, or commercial milestones. The Company recognizes milestone payments when the triggering event has occurred, there are
no further contingencies or services to be provided with respect to that event, and the counterparty has no right to a refund of the payment. The
triggering event may be scientific results achieved by the Company or another party to the arrangement, regulatory approvals, or the marketing
of products developed under the arrangement. As of December 31, 2024, given the significant progress of the work to be performed (99.92%)
and the level of budget consumption, the impact of accounting estimates is no longer a determining factor in the calculation of revenue related to
the monalizumab agreement.
Estimate of the recoverable amount of the acquired and under progress licenses
Impairment tests are performed on a yearly basis for the intangible assets which are not amortized (such as intangible assets in progress). The
Company is testing amortizable intangible assets for impairment when there is an indicator of impairment. Impairment tests involve comparing
the recoverable amount of the licenses to their net book value. The recoverable amount of an asset is the higher of its fair value less costs to sell
and its value in use. If the carrying amount of any asset is above its recoverable amount, the Company recognizes an impairment loss to reduce
the carrying amount to the recoverable amount. The main assumptions used for the impairment test include (a) the amount of cash flows that are
set on the basis of the development and commercialization plans and budgets approved by management, (b) assumptions related to the
achievement of the clinical trials and the launch of the commercialization, (c) the discount rate, (d) assumptions on risk related to the
development and (e) for the commercialization, selling price and volume of sales, and are provided in Note 6 to the Company's consolidated
financial statements included under "Item 18. Financial Statements" of this Annual Report. Any change in these
157
assumptions could lead to the recognition of an impairment charge that could have a significant impact on the Company's consolidated financial
statements. In case of failure of the clinical trials in progress, the Company may have to fully depreciate the intangible asset. As of December 31,
2022, given the Company's decision in December 2022 to discontinue the development of avdoralimab in the indication of BP supporting the
recoverable amount of the asset as of December 31, 2021 and June 30, 2022, the rights related to the intangible asset have been fully impaired
for the net carrying amount of the intangible asset, of €41,000 thousand, without using the historical assumptions described above (see Note 6 to
the Company's consolidated financial statements which are included elsewhere in this Annual Report). As a result, the Company considers that
there are no longer any critical estimates in line with intangible assets since 2022. Without any new event to be considered since then, there are
therefore no longer any critical assumptions that could call into question the recoverable amount of the asset.
B. Liquidity and Capital Resources
The liquidity and capital resources discussion that follows contains certain estimates as of the date of this Annual Report of the Company's
estimated future sources and uses of liquidity (including estimated future capital resources and capital expenditures) and future financial and
operating results. These estimates reflect numerous assumptions made by Innate with respect to industry performance, general business,
economic, regulatory, market and financial conditions and other future events, and matters specific to its businesses, all of which are difficult or
impossible to predict and many of which are beyond its control.
Sources and uses of liquidity
As of December 31, 2024, the Company has primarily financed its operations through its receipt of $656.1 million (€579.1 million) in payments
from its collaborators, including AstraZeneca and Sanofi, since 2011, excluding payments received for purchases of Innate's equity securities by
its collaborators.
Innate has also financed its operations since its inception through several rounds of public and private financings. Since its inception, Innate has
raised a total of €314.3 million through the sale of equity securities, including €33.7 million in the initial public offering of Innate's ordinary
shares on Euronext Paris in 2006 and €66.0 million in the initial public offering of the Company's initial public offering of its ordinary shares on
Nasdaq in 2019 and €5.0 million from Novo Nordisk related to NKG2A agreement.
In addition, Innate has received an aggregate of €109.4 million in French research tax credit ("CIR") through December 31, 2024. As a French
biopharmaceutical company, Innate Pharma has benefited from certain tax advantages, including, for example, the CIR. The research tax credit
can be offset against French corporate income tax due and the portion in excess, if any, may be refunded. The research tax credit is calculated
based on Innate's claimed amount of eligible research and development expenditures in France. The research tax credit decreased by €2.3
million, or 23%, to €7.5 million for the year ended December 31, 2024, as compared to a research tax credit of €9.7 million for the year ended
December 31, 2023.
Companies benefiting from the status of Community SMEs can request the early reimbursement of the research tax credit starting from the
following fiscal year. Innate lost its status as a small or medium size business at the end of the year ended December 31, 2019 and, therefore, was
no longer entitled to the immediate reimbursement of the research tax credit for the fiscal year ended 2019 and 2020 but instead will be
reimbursed within the expiry of a three-year period. The 2019 and 2020 tax credit was refunded on February 2024 and July 2024 respectively.
For the 2021 and 2022 financial year, the Company again met the criteria of an SME according to the criteria of the European Union. As a result,
the Company was eligible for the early repayment by the French treasury of the 2021 CIR during the fiscal year 2022. As of
158
December 31, 2024, the Company received reimbursement for its the CIR up to that of the financial year ending December 31, 2022. The
Company has been eligible for the early repayment by the French treasury of the 2022 CIR during the fiscal year 2023. As of the end of the
financial year ending December, 31 2023, the Company again lost SME status. As a consequence, the 2023 and 2024 CIR amounts are expected
to be paid after a three-year period. The CIR due to the Company for the financial year ending December 31, 2023 is refundable by the French
tax administration by December 31, 2027, and was recorded as a long-term receivable for the financial year ending December 31, 2023.
Pursuant to an agreement with Natixis dated December 10, 2024 regarding financing of the CIR and pursuant to a French-law assignment of the
CIR receivable to Natixis, Natixis paid to the Company €8.6 million in December 2024 relating to the CIR credit for financial year ending
December 31, 2023, corresponding to 95% of the CIR refund from the financial year 2023 in December 2024. Natixis will pay to the Company
the remaining five percent of the CIR refund regarding the 2023 financial year at the end of a three-year period, i.e., in 2027, subject to the CIR
refund amount for the financial year ending December 31, 2023 being modified or reclaimed by the French Tax authority. The Company
recognized this amount as "Other non-current assets".
Innate is potentially eligible to earn milestone payments and royalties under its agreements with AstraZeneca in the event that the Company
satisfies certain pre-specified milestones. Innate may enter into new collaboration agreements that also provide milestone payments. These
milestone payments are dependent on the accomplishment of various development, regulatory and commercialization objectives, and the
achievement of many of these milestones is outside of Innate's control. However, Innate's ability to earn these payments and their timing will, in
part, be dependent upon the outcome of its research activities, which is uncertain at this time.
On July 3, 2017, Innate Pharma borrowed from the bank Société Générale in order to finance the construction of its future headquarters. This
loan, amounting to a maximum of €15.2 million, can be drawn down during the period of the construction in order to pay supplier payments as
they become due, but in any event no later than August 30, 2019. Given the development of its portfolio, and in particular the refocusing of its
activities on research and development, the Company has for the time being suspended the project to build its new head office on the land
acquired in Luminy. In the meantime, the loan will be used to finance several structuring projects (improvement of the information system,
development of a commercial platform, development of additional premises rented, etc.). Repayment of any amounts drawn down are payable
over a 12-year term beginning on August 30, 2019 and ending on August 30, 2031. As security for the loan, Innate pledged collateral in the form
of financial instruments held at Société Générale amounting to €15.2 million. The security interest on the pledged financial instruments will be
released in accordance with the following schedule: €4.2 million in July 2024, €5.0 million in August 2027 and €6.0 million in August 2031. The
Company had drawn down €15.2 million under the loan as of December 31, 2019. The loan bears a fixed interest rate of 2.01%. Under the loan,
Innate is subject to a covenant that its total cash, cash equivalents and current and non-current financial assets as of each fiscal year end will be at
least equal to the amount of outstanding principal under the loan. As of December 31, 2024, the remaining capital of this loan amounted to €8.9
million as compared to €10.2 million as of December 31, 2023. As expected, the financial investment amounting to €4.2 million was released on
July 2024.
On January 5, 2022, the Company announced that it had obtained non-dilutive financing of €28.7 million in the form of two State-Guaranteed
Loans (Prêts Garantis “PGE”) from Société Générale (€20.0 million) and BNP Paribas (€8.7 million). The funds related to these two PGEs were
collected by the Company on December 27 and 30, 2021, respectively. These two loans have an initial maturity of one year, with an option to
extend up to five years from August 2022. They are 90% guaranteed by the French State as part of a system put in place to support companies in
the face of the COVID-19 health crisis. In
159
August 2022, the Company requested the extension of these two loans repayment for an additional period of five years starting in 2022 and
including a one-year grace period (2023). Consequently, the Company has obtained agreements from Société Générale and BNP Paribas. The
effective interest rates applied to these contracts during the additional period are 1.56% and 0.95% for Société Générale and BNP Paribas loans,
respectively, excluding insurance and guarantee fees, with an amortization exemption for the entire year 2023. During this grace period, the
Company was only liable for the payment of interest and the guarantee fees, with amortization of the two loans starting in 2024 over a period of
four years. The state guarantee fees amount to €877 thousand and €379 thousand for Société Générale and BNP Paribas loans respectively. As of
December 31, 2024, the remaining capital of these loans amounted to €21.7 million.
On April 24, 2025, the Company announced that, given the satisfactory market conditions, Sanofi subscribed to 8,345,387 new ordinary shares
of Innate, at a price of €1.7974 per share, representing a total capital increase of €14,999,998.59 (€417,269.35 in nominal amount and
€14,582,729.24 of issue premium). The newly issued shares were admitted to trading on the regulated market of Euronext in Paris on the same
day. See Note 21 to the consolidated financial statements included under "Item 18. Financial Statements" of this Annual Report.
Lastly, during the years ended December 31, 2016 and 2017, Innate also used lease-financing and bank loans to finance the acquisition of
laboratory equipment and to set up new laboratories. The debt related to these loans amounts to €42,000 at December 31, 2024.
The following table summarizes the Company's contractual obligations (principal amount only) as of December 31, 2024:
(in thousands of euro)
State guaranteed loan Société Générale
State guaranteed loan BNP Paribas
Lease liabilities – Building "Le Virage"
Lease liabilities – Premises Innate Inc
Lease liabilities – Laboratory equipment
Lease liabilities – Vehicles
Lease liabilities - Printers
Loans – Equipment
Loan – Building
Total
Current
2025
4,969
2,167
131
102
—
29
9
42
1,260
8,709
2026
5,038
2,185
—
62
—
23
—
—
2027
5,117
2,206
—
—
—
15
—
—
Non-current
2028
2029
>2029
Total
—
—
—
—
—
4
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
15,125
6,558
131
164
—
72
9
42
1,285
8,594
1,311
8,650
1,225
1,229
1,363
1,363
2,451
2,451
8,894
30,996
The table below summarizes Innate's contractual obligations (principal amount and interest) as of December 31, 2024:
160
(in thousands of euro)
2025
2026
2027
2028
2029
>2029
Total
State guaranteed loan Société Générale
State guaranteed loan BNP Paribas
Lease liabilities – Building "Le Virage"
Lease liabilities – Premises Innate Inc
Lease liabilities – Vehicles
Lease liabilities - Printers
Loans – Equipment
Loan – Building
Total
Liquidity position
5,167
2,222
133
104
32
9
43
1,427
9,137
5,167
2,221
5,167
2,220
—
62
24
—
—
—
—
16
—
—
—
—
—
—
4
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
15,502
6,662
133
166
76
9
43
1,427
8,901
1,427
8,829
1,308
1,312
1,427
1,427
2,496
2,496
9,510
32,102
Cash, cash equivalents and short-term investments decreased by €11.7 million, or 13%, to €80.8 million as of December 31, 2024, as compared
to cash, cash equivalents and short-term investments of €92.5 million as of December 31, 2023. Net cash as of December 31, 2024 amounted to
€72.1 million (€83.5 million as of December 31, 2023). Net cash is equal to cash, cash equivalents and short-term investments less current
financial liabilities. Net cash is a non-IFRS financial indicator that is reviewed by the Company’s management and that the Company believes
provides useful information to investors with respect to measuring cash resources that are available for strategic investment. Net cash is not
defined by IFRS and is not a substitute for “cash and cash equivalents” as reported under IFRS. The term net cash may be interpreted differently
by other companies and under different circumstances. Cash and cash equivalents are mainly composed of current bank accounts, interest-
bearing accounts, fixed-term accounts and money market funds as per AMF definition. Short-term investments primarily consist of shares of
mutual funds and all investments with a maturity less than one year. Their purpose is to finance Innate's activities, including Innate's research and
development costs.
As a reminder, Innate has received a total of €309.3 million in cash from capital increases, before deducting the costs associated with capital
increases, and after excluding proceeds from share compensation instruments, between 1999 and December 31, 2019. The table below
summarizes the main capital increases between 1999 and December 31, 2024 :
161
Date
April 2000
March 2001
July 2002
March 2004
July 2004
March 2006
November 2006
December 2009
November 2013
June 2014
October 2018
October 2019
December 2024
Total
Cash flows
Comparisons for the year ended December 31, 2023 and 2024
The following table sets forth cash flow data for the years ended December 31, 2023 and 2024:
Cash flows from / (used in) operating activities
Cash flows from / (used in) investing activities
Cash flows from / (used in) financing activities
Effect of the exchange rate changes
Net increase / (decrease) in cash and cash equivalents
Cash flows from / (used in) operating activities
Gross Proceeds
€ 1.2 million
3.3 million
20.0 million
5.0 million
10.0 million
10.0 million
33.7 million
24.3 million
20.3 million
50.0 million
62.6 million
66.0 million
2.9 million
€ 309.3 million
Year ended December 31,
2023
2024
(in thousands)
€ (32,559)
20,630
(1,966)
274
€ (13,619)
€ (6,896)
9,200
(6,008)
(505)
€ (4,209)
The Company's net cash flow used in operating activities decreased by €25.7 million to €6.9 million for the year ended December 31, 2024 as
compared to net cash flows used in operating activities of €32.6 million for the year ended December 31, 2023.
This variation is mainly due to (i) the receipt of €29.5 million related to 2019 and 2020 tax credit refunds, (ii) the receipt of €8.6 million pursuant
to a financing agreement with Natixis including the assignment of the Company's receive with respect to future CIR payments (corresponding to
the CIR for the financial year ending December 31, 2023 that will be paid in 2027), (iii) the receipt of €15.0 millions in January
162
2024 following Sanofi's decision to exercise one of its two license option for an NK Cell Engager program in solid tumors, derived from the
Company's ANKET® (Antibody-based NK Cell Engager Therapeutics) platform, pursuant to the terms of the research collaboration and license
agreement signed in December 2022, (iv) the collection in May 2024 of €4.8 million (including value-added tax) the treatment of the first patient
in the Phase 2 dose expansion part of the Sanofi-sponsored clinical trial evaluating NK Cell Engager SAR443579/ IPH6101 in various blood
cancer.
As a reminder, in 2023, the net cash flow used in operating activities included (i) the receipt of €25.0 million from Sanofi in March 2023
following the entry into force of the research collaboration and licensing agreement signed in December 2022 under which the Company granted
Genzyme Corporation, a wholly-owned subsidiary of Sanofi ("Sanofi") an exclusive licence to Innate Pharma's B7H3 ANKET program and
options on two additional targets, (ii) the receipt in May 2023 of a payment of €4.6 million ($5.0 million) received from Takeda following the
conclusion of an exclusive licensing agreement under which Innate granted Takeda exclusive worldwide rights for the research and development
of ADCs, (iii) the receipt in July 2023 of €2.0 million following the treatment of the first patient in the Phase 1/2 clinical trial sponsored by
Sanofi evaluating IPH6401/SAR'514 in patients with relapsed or refractory multiple myeloma. Lastly, during 2023, the Company benefited from
the early repayment of the CIR claim relating to the 2022 financial year, amounting to €9.2 million, paid to the Company by the French Treasury
in July 2023.
®
Excluding these specific effects, net cash flows used by operating activities for the year ended December 31, 2024 decreased by €9.4 million.
This decrease is mainly explained by (i) the decrease in the operating expenses.
Cash flows from / (used in) investing activities
The Company's net cash flows from investing activities for the year ended December 31, 2024 amounted to €9.2 million and mainly included a
€4.2 million of current financial instrument with a July 2024 fixed term and various non current financial assets sales for a total of €5.0 million
to cope with Company dollars cash needs. These cash in were partially offset by acquisitions of property, plant and equipment and intangible
assets for a net amount €0.4 million. As a reminder, net cash flow used in investing activities for the year ended December 31, 2023 amounted to
€20.6 million and were mainly composed of a disposal of a non-current financial instrument which generated a net cash collection of €22.8
million partially offset by acquisitions of property, plant and equipment and intangible assets for a net amount €2.2 million.
Cash flows from / (used in) financing activities
The Company's net cash flows used in financing activities for the year ended December 31, 2024 increased by €4.0 million to €6.0 million for
the year ended December 31, 2024 as compared to net cash flows from financing activities of €2.0 million for the year ended December 31,
2023.
Loan repayments amounted to €8.9 million for the year ended December 31, 2024 as compared to €2.4 million for the year ended December 31,
2023. The start of PGE loans repayment in 2024 result in an increase in repayment amounting to €7.0 million.
Receipts from capital transactions amount to €2.9 million in 2024, compared with €0.4 million in 2023. The change is mainly explained by the
amount received from a new equity partner for €2.9 million.
163
Comparisons for the year ended December 31, 2022 and 2023
The following table sets forth cash flow data for the years ended December 31, 2022 and 2023:
Cash flows from / (used in) operating activities
Cash flows from / (used in) investing activities
Cash flows from / (used in) financing activities
Effect of the exchange rate changes
Net increase / (decrease) in cash and cash equivalents
Cash flows from / (used in) operating activities
Year ended December 31,
2022
2023
(in thousands)
€ (19,155)
1,877
(1,828)
(428)
€ (19,532)
€ (32,559)
20,630
(1,966)
274
€ (13,619)
®
The Company's net cash flow used in operating activities decreased by €13.4 million to €32.6 million for the year ended December 31, 2023 as
compared to net cash flows used in operating activities of €19.2 million for the year ended December 31, 2022. This variation is mainly due to
(i) the receipt of €25.0 million from Sanofi in March 2023 following the entry into force of the research collaboration and licensing agreement
signed in December 2022 under which the Company granted Genzyme Corporation, a wholly-owned subsidiary of Sanofi ("Sanofi") an
exclusive licence to Innate Pharma's B7H3 ANKET program and options on two additional targets, (ii) the receipt in May 2023 of a payment of
€4.6 million ($5.0 million) received from Takeda following the conclusion of an exclusive licensing agreement under which Innate granted
Takeda exclusive worldwide rights for the research and development of ADCs, (iii) the receipt in July 2023 of €2.0 million following the
treatment of the first patient in the Phase 1/2 clinical trial sponsored by Sanofi evaluating IPH6401/SAR'514 in patients with relapsed or
refractory multiple myeloma. Lastly, during 2023, the Company benefited from the early repayment of the research tax credit claim relating to
the 2022 financial year, amounting to €9.2 million, paid to the Company by the French Treasury in July 2023. As a reminder, cash flows used in
operating activities for the year ended December 31, 2022, included successive (i) the collection of €47.7 million ($50.0 million) and €4.9
million ($5.0 million) in June 2022 and August 2022,respectively, under the monalizumab agreement and the amendment to the IPH5201
collaboration and option agreement, (ii) the collection of €3.0 million received from Sanofi under the 2016 agreement and following Sanofi's
decision to advance IPH6401/SAR'514 into regulatory preclinical studies for an investigational new drug, and (iii) in 2022, the Company
collected the early repayment of the research tax credit receivable relating to the 2021 financial year for an amount of €10.3 million, paid to the
Company by the French Treasury in November 2022. These collections were partially offset by the €5.9 million payment to AstraZeneca on
April 20, 2022 pursuant to the Termination and Transition Agreement and cash outflows related to the Company's operating activities. Not
considering these specific effects, net cash flows used by operating activities for the year ended December 31, 2023 decreased by €5.5 million.
This decrease is mainly explained by the decrease in the Company's research and development activities, notably related to preclinical trials, and
also by higher cash outflows related to the re-invoicing of costs to AstraZeneca for the Phase 3 trials evaluating monalizumab, INTERLINK-1
and PACIFIC-9, in accordance with the Company's co-financing commitments and the reduction in staff costs related to the reduction of staff in
the Company.
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Net cash flow consumed by operating activities in connection with the Lumoxiti discontinued operation are nil for the year ended December 31,
2023 as compared to € 5.1 million for the year 2022. In 2022, the cash consumption related to the payment to AstraZeneca of €5.9 million in
April 2022 under the Termination and Transition Agreement.
Cash flows from / (used in) investing activities
The Company's net cash flows from investing activities for the year ended December 31, 2023 amounted to €20.6 million and are mainly
composed of a disposal of a non-current financial instrument which generated a net cash collection of €22.8 million partially offset by
acquisitions of property, plant and equipment and intangible assets for a net amount €2.2 million. As a reminder, net cash flow used in investing
activities for the year ended December 31, 2022 amounted to €1.9 million and were mainly comprised of acquisitions of tangibles assets and
disposal of a current financial instrument liquidation for €3.0 million.
Net cash flows consumed by investing activities in connection with the Lumoxiti discontinued operation were nil for the year ended December
31, 2023 and 2022, respectively.
Cash flows from / (used in) financing activities
The Company's net cash flows used in financing activities for the year ended December 31, 2023 increased by €0.1 million to €2.0 million for
the year ended December 31, 2023 as compared to net cash flows from financing activities of €1.8 million for the year ended December 31,
2022.
Loan repayments amounted to €2.4 million for the year ended December 31, 2023 as compared to €2.0 million for the year ended December 31,
2022.
In addition, net cash flows from financing activities related to Lumoxiti discontinued operations are nil for the year ended December 31, 2022
and 2021, respectively.
Funding requirements
Innate Pharma believes that its existing cash, cash equivalents, short-term investments and non-current financial assets, will enable it to fund its
operations for at least the next 12 months. Innate has based this estimate on assumptions that may prove to be wrong, and the Company could
use its capital resources sooner than it currently expects.
Until Innate can generate a sufficient amount of revenue from the sale of approved products, if ever, it expects to finance its operating activities
through its existing liquidity and expected milestone payments from collaborators.
Innate's present and future funding requirements will depend on many factors, including, among other things:
•
•
•
•
•
the size, progress, timing and completion of its clinical trials and preclinical studies for any current or future product candidates,
including its lead product candidates, monalizumab and lacutamab;
the number of potential new product candidates Innate identifies and decides to develop;
costs associated with its payment obligations to third parties in connection with its development and potential commercialization of
certain of its product candidates;
costs associated with expanding its organization;
the costs involved in filing patent applications and maintaining and enforcing patents or defending against claims of infringement
raised by third parties;
165
•
•
the time and costs involved in obtaining regulatory approval for its product candidates and any delays the Company may encounter as
a result of evolving regulatory requirements or adverse results with respect to any of these product candidates;
the amount of revenues, if any, Innate Pharma may derive either directly, or in the form of milestone or royalty payments from any
future potential partnership agreements, from monalizumab, IPH5201, IPH6101/SAR443579, IPH6401/SAR'514, B7H3 or other
target or relating to its other product candidates.
For more information as to the risks associated with Innate's future funding needs, see “Risk Factors—The Company may need to raise
additional funding to complete the development and any commercialization of its product candidates, which may not be available on acceptable
terms, or at all, and failure to obtain this necessary capital when needed may force the Company to delay, limit or terminate its product
development efforts or other operations.”
Capital expenditures
Innate Pharma's operations mainly require investment in intangible assets. Innate acquired the rights of avdoralimab from Novo Nordisk A/S in
2017. The Company paid an upfront fee of €40.0 million, of which €37.2 million was contributed in new ordinary shares and €2.8 million in
cash. As part of this agreement, an additional amount of € 1.0 million was paid in October 2020 to Novo Nordisk A / S following the launch of
the first avdoralimab Phase 2 trial.
In January 2019, Innate Pharma paid to AstraZeneca an initial payment for the license related to Lumoxiti ($50.0 million, or €43.8 million, using
the foreign exchange rate of 1.1422 at the date of payment), and in February 2019, Innate paid to Novo Nordisk A/S additional consideration
relating to monalizumab ($15.0 million, or €13.1 million, using the exchange rate of 1.1394 at the date of payment). In June 2019, Innate paid
€7.0 million to Orega Biotech in relation to the anti-CD39 program as consideration and will be required to pay a low-teen percentage to Orega
Biotech on a going forward basis of sub-licensing revenues received pursuant to the 2018 AZ Option Agreement, up to an additional amount of
up to €47 million. See Note 6 to the consolidated financial statements included as part of this Annual Report.
Innate's operations generally require little investment in tangible assets because the Company outsources most of the manufacturing and research
activities to third parties. Innate Pharma leases some of its computer equipment under operating lease agreements. Innate accounts for its
payments for these items as operating expenses in the consolidated statement of income.
The Company's capital expenditures in the years ended December 31, 2022, 2023 and 2024 primarily related to laboratory equipment. Clinical
research and development costs are not capitalized until marketing authorizations are obtained.
Innate's corporate office in Luminy, Marseille, France is leased under a finance lease agreement signed in 2008 with Sogebail, a subsidiary of
Société Générale, for an aggregate amount of €6.6 million. The lease-financing agreement has a 12-year term. Innate has a purchase option for
all of the buildings and land for the lump sum of €1 at the end of the term of the contract on June 9, 2020, which it has exercised. The Company
now owns its corporate office in Luminy, Marseille.
Since July 2017, Innate also rents office space in Marseille, France under a commercial lease.
On January 10, 2020, the Company signed an amendment to the lease for the “Le Virage” building in order to expand its premises. This
amendment also extended the duration of the contractual commitment until 2025.
On March 13, 2023, the Company signed an amendment to the lease for "Le Virage Building" in order to reduce the rental area of its premises
located in the "Le Virage" building. This amendment has the effect
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of reducing the amount of the commitment relating to rent by €685 thousand. The Company remains committed under this contract until June 30,
2025.
C. Research and Development
For a discussion of our research and development activities, see “Item 4.B—Business Overview” and “Item 5.A—Operating Results.”
D. Trend Information
For a discussion of trends, see “Item 4.B—Business Overview,” “Item 5.A—Operating Results” and “Item 5.B—Liquidity and Capital
Resources.” Other than as disclosed in these sections, we are not aware of any trends, uncertainties, demands, commitments or events since
December 31, 2023 that are reasonably likely to have a material effect on our operating revenues, profitability, liquidity or capital resources, or
that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
E. Critical Accounting Estimates.
The Company applies IFRS as issued by the IASB in its primary financial statements (see Note 2 to the Company’s consolidated financial
statements included under "Item 18. Financial Statements" of this Annual Report).
Item 6. Directors, Senior Management and Employees.
A. Directors and Senior Management.
Directors and Officers
On December 15, 2023, the Supervisory Board appointed Irina Staatz-Granzer as Chairwoman and Pascale Boissel as Vice Chairwoman.
On January 3, 2024, the Supervisory Board appointed Sonia Quaratino and Arvind Sood as members of the Executive Board and Hervé Brailly
as Chairman of the Executive Board.
On May 23, 2024, the annual shareholders meeting renewed the appointment of Pascale Boissel and Sally Bennett as members of the
Supervisory Board for two years.
On October 11, 2024, the Supervisory Board appointed Jonathan Dickinson as CEO and Chairman of the Executive Board with effect on
November 1, 2024.
In February 2025, Mr. Arvind Sood resigned from his position as member of the Executive Board and left the Company. Mr. Sood is challenging
his departure conditions.
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The following table sets forth information concerning the members of the Supervisory Board, the Executive Board and the Leadership Team
(formerly named “Executive Committee”) as of December 31, 2024.
Name
Executive Board Members
Jonathan Dickinson, MBA, BSc
Yannis Morel, Ph.D.
Sonia Quaratino, M.D., Ph.D.
Arvind Sood*
Supervisory Board Members
Irina Staatz-Granzer, Ph.D.
Pascale Boissel
Jean-Yves Blay, Ph.D.
Gilles Brisson
Véronique Chabernaud, M.D.
Olivier Martinez
Sally Bennett
Members of the Leadership Team
Odile Belzunce
Eric Vivier, D.V.M., Ph.D.
Nicolas Beltraminelli, Ph.D.
Odile Laurent, Ph.D., MBA
Frédéric Lombard, MBA
Claire de Saint Blanquat
Henry Wheeler, MSc
Age
57
51
62
66
64
58
64
73
63
54
53
44
60
55
63
50
52
42
Position
Chairman of the Executive Board, member of the Leadership Team
Member of the Executive Board, Executive Vice President, Chief Operating Officer and member of
the Leadership Team
Member of the Executive Board, Executive Vice President, Chief Medical Officer and member of the
Leadership Team
Member of the Executive Board, Executive Vice President, President of US Operations and member
of the Leadership Team
Chairwoman of the Supervisory Board
Vice Chairwoman of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Leadership Team, VP Compliance, IT and Portfolio Management
Permanent Guest to the Leadership Team, SVP, Chief Scientific Officer
Member of the Leadership Team, VP Chief Development Officer
Member of the Leadership Team, VP Human Resources
Member of the Leadership Team, Chief Financial Officer
Member of the Leadership Team, VP Legal and Corporate Affairs
Member of the Leadership Team, VP Investor Relations and Communications
* Arvind Sood resigned from his position on the Executive Board in February 2025.
Executive Board
Jonathan Dickinson, MBA, BSc, has served as Chairman of the Executive Board since November 1, 2024. Prior to joining Innate Pharma,
Jonathan Dickinson most recently served as Executive Vice President and General Manager, Europe at Incyte, a role he held since 2016. He
gained significant leadership experience through several senior positions at ARIAD Pharmaceuticals, a US oncology focused biotechnology
company and Bristol-Myers Squibb. This followed a distinguished 13-year tenure at Hoffmann-La Roche, where he was instrumental in driving
the success of several of the company’s flagship oncology therapies.
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Jonathan Dickinson began his career at Novartis, holding roles of increasing responsibility within the oncology and endocrinology divisions. He
holds a Bachelor of Science degree in Genetics and a Master of Business Administration from the University of Nottingham.
Yannis Morel, Ph.D., has served as a member of the Executive Board since June 25, 2015. He is Executive Vice-President and Chief Operating
Officer. He joined Innate in December 2001. Between 2001 and 2007, he was in R&D positions, initially as a scientist in the immunology team,
before becoming team manager, and finally becoming responsible for research programs. He is in charge of business development for the
company since 2007, adding product portfolio strategy since 2017 and research and early development since 2024. Yannis Morel holds a Ph.D.
in oncology (from Aix-Marseille University) and is an alumnus of Ecole Normale Supérieure de Paris Saclay (previously Cachan), with a BS in
physical and molecular chemistry.
Sonia Quaratino, M.D., Ph.D., joined Innate Pharma in November 2023 as Executive Vice President and Chief Medical Officer (CMO) and as a
member of Innate's Leadership Team. Sonia Quaratino has over 25 years of experience in basic research, clinical development and translational
medicine. Before joining Innate, Sonia Quaratino was CMO at Georgiamune INC (USA), and prior to that, CMO at Kymab (UK), a clinical-
stage biopharmaceutical company focused on immune-mediated diseases and immuno-oncology, until its acquisition by Sanofi in 2021.
Previously, Sonia Quaratino was Global Program Lead in Oncology at Novartis (Switzerland) and Senior Medical Director Oncology and
Advisor in Immunology at Merck Serono (Germany). She was Professor of Immunology at the University of Southampton in the UK and her
research has been published in high-impact scientific journals.
Supervisory Board
Irina Staatz-Granzer, Ph.D., Chairwoman of the Supervisory Board since January 1, 2024 and member of the Supervisory Board since June 23,
2009. Irina Staatz-Granzer has held business development positions at Hermal (subsidiary of Merck KGaA), Boots Healthcare International,
Knoll (BASF Pharma, later Abbott) and as Chief Executive Officer of Scil Technology Gmbh, Chief Executive Officer of U3 Pharma AG and
Chief Executive Officer of Blink Biomedical SAS. Irina Staatz-Granzer also serves as Chairman of PLCD (German Pharma Licensing Club).
She founded and is currently Chief Executive Officer of Staatz Business Development & Strategy. She is also member of the Supervisory Board
of Aelis Farma SAS. Irina Staatz-Granzer received a degree in pharmacy from Philipps-Universität Marburg (Germany) and a Ph.D. from the
University of Tübingen (Germany).
Jean-Yves Blay, Ph.D., has served has a member of the Supervisory Board of the Company since December 13, 2017. He has held the post of
General Director of the Centre Léon Bérard in Lyon, France, since 2014 and renewed in 2019. He became President of Unicancer in 2019. He is
President of the French Sarcoma Group and Director of the European Reference Network for Rare Adult Cancers (EURACAN). Between 2009
and 2012 he held the position of President of the European Organization for Research and Treatment of Cancer (EORTC). Jean-Yves Blay
currently holds various other university and hospital positions. He is a member of the European Union Committee of Experts of Rare Disease,
the European Commission’s Scientific Panel for Health (SPH) and served as a Faculty Coordinator for Sarcoma for the European Society of
Medical Oncology (ESMO) between 2012 and 2016. Jean-Yves Blay trained as a medical oncologist with a Ph.D. from the University Claude
Bernard in Lyon (France); his research activities have been focused on the role of immune effector cells and cytokines in cancer. Jean-Yves Blay
is a member of various scientific societies and academic expert groups, has been awarded several honors and is the author of more than 200
publications over the last three years.
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Gilles Brisson, member of the Supervisory Board, has served on the Supervisory Board of the Company since June 26, 2007 and was the
Chairman until December 30, 2016. Gilles Brisson has worked in management positions at Rhône-Poulenc and then at Aventis Pharma (Sanofi),
where he served as Chairman of the Executive Board, Chairman of the Supervisory Board and Europe Manager. He received a degree from
Hautes Etudes Commerciales de Paris (France).
Véronique Chabernaud, M.D., has served as a member of the Supervisory Board since April 27, 2015. She is an oncologist, a graduate of ESSEC
Business School (France) and has worked for 20 years in the pharmaceutical industry. In particular, she was the Director of the French
Oncological Operational Unit at Sanofi Aventis, a Vice President of Marketing and Sales at Aventis Intercontinental and Europe, and Director of
Oncology Global Medical Affairs at Rhône Poulenc Rorer. She also works as a consultant for companies in the field of innovative technologies
with a high impact on public health, on a national and international level. Such companies include Genomic Health, BioSystems International,
MaunaKea Technologies, Ariana Pharma, Qynapse, Omicure. In 2007, Véronique Chabernaud founded "Créer la Vitalité", which helps
companies and organizations in the development of health innovations and prevention. Véronique Chabernaud graduated in 2017 from the
Institut Français des Administrateurs and Sciences Po Paris with a Certificate in Corporate Directorship and has been involved in this program
since 2017. Véronique Chabernaud also founded the association “Enfance et Vitalité” which offers health workshops to children. She is also co-
author of the book "Capital Humain versus Humain Capital." From July 2019 to July 2021, Véronique Chabernaud has been member of the
Board of Directors and Chairman of the Compensation and nomination committee of Groupe Bastide le confort médical (BLC).
Pascale Boissel, has served as a member of the Supervisory Board since May 19, 2020 and now serves as Vice Chairwoman of the Supervisory
Board since January 1, 2024. She is, with more than 30 years of financial experience, an expert in finance, audit, transactions, internal control,
growth management and restructuring operations. Her experience has been represented in a variety of industries, including: food and beverage
(Danone), building materials (Lafarge Holcim), education and, for more than 10 years now, healthcare and biotechnology. Before, she was Chief
Financial Officer of ENYO Pharma. Pascale Boissel was the Deputy-Chief Executive Officer and Administrative and Financial Director of the
BIOASTER Institute (IRT) in the field of infectious diseases and microbiology. In 2009, Pascale Boissel joined Ipsogen a listed company
developing and marketing molecular diagnostic products as Chief Financial Officer. Pascale Boissel began her career in audit and corporate
finance at PricewaterhouseCoopers Paris.
Olivier Martinez, has been permanent representative of Bpifrance Participations S.A. ("Bpifrance") since June 30, 2021; Bpifrance has been a
member of the Supervisory Board since June 23, 2017. He is Senior Investment Director of the Investments Biotech Department of the Direction
of Innovation of Bpifrance. Prior to that, Olivier Martinez was Investment Director at CDC Entreprises (2010-2013) and Partner at Bioam
Gestion (2000-2010). Olivier Martinez is an alumnus of the Ecole Normale Supérieure and holds a Ph.D. in cell biology from the University of
Paris XI and an MBA from the Collège des Ingénieurs (France).
Sally Bennett, MBChB., has served as a member of the Supervisory Board since May 20, 2022. She has a significant experience and expertise in
financial analysis and capital markets in the healthcare and biotechnology sectors. Sally Bennett has a career spanning medicine, equity & capital
markets and investment management. She spent 15 years in senior roles as both a public and private investor at HealthCor, a U.S. based global
healthcare and life science investment manager and most recently co-led the firm's move into private investing. She is now acting as a Senior
Advisor to Catalio Capital in conjunction with its acquisition of HealthCor Management. Prior to HealthCor, she spent 10 years as a senior
analyst at ING Financial Markets and then at Piper Jaffray. Sally Bennett serves as an Independent Non-Executive Director at BerGenBio, a
publicly traded European biopharmaceutical company, where she Chairs the Audit Committee and is also an Advisory Board member of the P4
Precision Medicine
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Accelerator Programme in the UK. She also serves on the Board of a private UK Company, Mosaic Therapeutics, where she represents the
Sanger Institute. She was also a member of the Board of Governors of UCLH, an NHS Foundation Trust hospital, where she served on the
Research and Innovation Committee. She is a member of the Institute of Directors (IoD) and has been awarded the CertIoD qualification. Sally
Bennett received a BSc in Anatomical Sciences and a Medical Degree, awarded with honors, both from the University of Manchester. She is a
British citizen.
Leadership Team Members
Odile Belzunce, member of the Leadership Team, Vice President, Compliance and Operations, was appointed as a member of the Executive
Committee of the Company on January 31, 2019. Odile Belzunce joined Innate Pharma in February 2005. She was Quality Manager for 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. Odile Belzunce currently holds the position of VP, Compliance and
Operations.
Nicola Beltraminelli, Ph.D., member of the Leadership Team, Vice President, Chief Development Officer, joined Innate Pharma as Vice
President and Chief Development Officer in January 2022. Nicola Beltraminelli brings more than 20 years of biotech experience to the role, and
specifically in the development of biologic products from early discovery to GMP manufacture. Most recently, Nicola Beltraminelli served as
Chief Technical Officer at Lysogene, where he led the CMC activities for two late-stage assets. Prior to Lysogene, he held senior level positions
at HiFiBiO Therapeutics and BliNK Biomedical SAS. At HiFiBiO, Nicola Beltraminelli led the R&D activities of the company’s French site, as
well as its global CMC efforts, bringing three projects to the clinic. Nicola Beltraminelli holds a Ph.D. in Molecular Biology from the University
of Lausanne, Switzerland.
Eric Vivier, D.V.M., Ph.D., permanent guest to the Leadership Team, Senior Vice President, Chief Scientific Officer, joined Innate in that role in
2018. Eric Vivier is a Doctor of Veterinary Medicine (DVM) from the Ecole Nationale Vétérinaire de Maisons-Alfort and holds a Ph.D. in
Immunology from the Paris University (Paris XI). After completing his post-doctoral fellowship at Harvard Medical School (Dana-Faber Cancer
Institute), Eric Vivier joined the Center of Immunology at Marseille-Luminy (CIML) in 1993, becoming its director in 2008 and serving in that
role until 2017. A pioneer in the field of innate immunity, he is one of the four immunologists whose research led to the creation of Innate
Pharma. He has been four times laureate of the prestigious European Research Council (ERC) grants. During his career, Eric Vivier has been a
visiting professor at The Scripps Research Institute, The Rockefeller University, and The Walter and Elisa Hall Institute. He is a member of the
French National Academy of Medicine, of the Institut Universitaire de France and of the Royal Academy of Medicine of Belgium. He is on the
board of numerous committees and has been awarded several prizes and honors, including the European Federation of Immunological Society
award and the Grand Prix Charles Oberling in Oncology. He is also Chevalier de la Légion d’Honneur and Officier de l'Ordre National du
Mérite.
Odile Laurent, member of the Leadership Team, Vice President, Human Resources Director, joined Innate in that role in September 2017. Odile
Laurent has been appointed Vice President, Human Resources Director in January 2020. Before joining Innate Pharma, Odile Laurent was Group
Human Resources Director at Marie Brizard Wine&Spirits Group from 2015 to 2017. Previously, Odile Laurent was Director of Human
Resources for the "Power Transformers" business unit at Areva T&D, and was subsequently appointed Head of Global Sales at Alstom Grid.
Odile Laurent has spent most of her career at Sanofi-Aventis where from 2005 she was successively in charge of the Multi-site and European
Human Resources Department of the "Matures Products and OTC" business unit, and later of the Supply-Chain business unit worldwide. Odile
Laurent holds a Ph.D. in Physical Sciences from the Institut National
171
Polytechnique of Toulouse and a Master of Business Administration in Human Resources from the Institut d’Administration des Entreprises of
Toulouse (France).
Frédéric Lombard, member of the Leadership Team, Chief Financial Officer, joined Innate Pharma in April 2021. Frédéric Lombard joined
Innate with more than 20 years of financial experience in the pharmaceutical industry, holding senior finance roles at Ipsen, AstraZeneca and
Novartis. Throughout his career, Frédéric Lombard has developed international financial teams with the aim of strengthening team members’
skill sets and positioning the function as a collaborative business partner. He also specializes in project management, successfully conducting
significant transformation projects in multi-cultural environments. Prior to his financial career in the healthcare sector, Frédéric Lombard worked
in the information technology industry, where he became familiar with the information systems standards in fast-changing environments. He
holds a BA in Economics & Finance from Lyon 2 University and a MBA from EM Lyon Business School.
Claire de Saint-Blanquat, member of the Leadership Team, Vice President, Legal and Corporate Affairs and Secretary of the Supervisory Board,
joined Innate Pharma in October 2020 and was appointed to the Leadership Team in January 2023. Claire de Saint-Blanquat has more than 20
years of experience in diverse legal positions in the pharmaceutical industry. Admitted to the Paris Bar in 1998, she started her career at Clifford
Chance and then held senior positions, notably at Teva, Servier and Biogaran, where she was Legal and Compliance Director since 2016. Claire
de Saint-Blanquat holds a master's degree in private law from the University of Paris II - Panthéon Assas (1995), a DEA in civil and commercial
obligations law from the University of Paris V - Malakoff (1996) and a DESS in biotechnology law from the University of Versailles- Saint
Quentin (2003).
Henry Wheeler, MSc, member of the Leadership Team, Investor Relations and Communications, joined Innate Pharma as Vice President,
Investor Relations in June 2021 and was appointed to the Leadership Team in January 2023. Henry Wheeler has over 15 years’ experience across
the pharmaceutical and financial industries. Henry Wheeler joined from AstraZeneca, where he led investor relations for the company’s oncology
portfolio, having previously served within AstraZeneca’s Oncology Business Unit. Prior to this, Henry Wheeler worked in various healthcare
financial roles, including at Third Bridge and Morgan Stanley in London. Henry Wheeler graduated with a MSc in Drug Discovery Skills and a
BSc with honors in Pharmacology, both from King's College, London.
Hervé Brailly, Innate Pharma’s former CEO and co-founder was appointed as interim CEO and Chairman of the Executive Board from January
1, 2024 to October 31, 2024. Jonathan Dickinson was appointed as Chairman of the Executive Board effective November 1, 2024.
On January 4, 2024, Innate Pharma announced that it appointed two new Executive Board members. Arvind Sood, Executive Vice President,
President of U.S. Operations, and Sonia Quaratino, Executive Vice President, Chief Medical Officer have joined Hervé Brailly, interim Chief
Executive Officer and Yannis Morel, Executive Vice President, Chief Operating Officer.
Yannis Morel, current Executive Vice President, Business Development and Product Portfolio Strategy, member of the Executive Board and
member of the Leadership Team broadened his remit to become Executive Vice President, Chief Operating Officer extending his operational
responsibility to the management of research and early development, working with Innate Pharma’s Chief Scientific Officer Prof. Eric Vivier,
and Chief Development Officer, Nicola Beltraminelli.
Sonia Quaratino, current Executive Vice President, Chief Medical Officer and member of the Leadership Team was appointed to the Executive
Board. Sonia Quaratino joined Innate Pharma in October 2023, bringing over 25 years of experience in basic research, clinical development, and
translational medicine, having worked in academia, global large pharmaceuticals, and biotech companies.
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Arvind Sood, Executive Vice President, President of US operations, was a member of the Executive Board and of the Leadership Team, and was
responsible for the execution of the Company’s U.S. strategy, to help expand the Company’s U.S. investor base, and source business
development and corporate development opportunities in the U.S. including liaising with academic institutions and clinical key opinion leaders.
Arvind Sood joined Innate Pharma from Amgen after over four decades of experience within large biopharma companies in areas including
commercial operations, investor relations and financial communications. Arvind Sood left the Company in February 2025 and resigned from his
position as member of the Executive Board. The position of President of U.S. Operations is not contemplated to be filled at this time. The
Company and Mr. Sood are discussing his departure conditions.
Family Relationships
There are no family relationships among any of the members of the Executive Board, the Supervisory Board, and the Leadership Team of the
Company referred to above.
Arrangements with existing Major Shareholders and Customers
There are no arrangements with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected
as member of the Executive Board, the Supervisory Board, or of the Leadership Team of the Company.
Subsequent Developments
The Company plans to ask to the next General Meeting to be held on May 22, 2025 to approve its transformation into a société anonyme with a
Board of Directors ("conseil d'administration"). This transformation is part of a strategic move to simplify and align Innate Pharma's corporate
governance with international standards.
If the General Meeting approves this governance change, it will be asked to appoint as members to the Board of Directors, Irina Staatz-Granzer,
Pascale Boissel, Sally Bennett, Véronique Chabernaud, Bpifrance (represented by Olivier Martinez), Jonathan Dickinson and two new members
of the Board of Directors, Marty J. Duvall and Christian Itin. If the General Meeting approves this change in governance and the proposed
composition of the Board of Directors, the Board of Directors is expected to appoint Irina Staatz-Granzer as its Chairwoman and Jonathan
Dickinson as Chief Executive Officer at its first meeting after the General Meeting.
If shareholders do not approve the governance change, it would be proposed to renew the mandate of the current members of the Supervisory
Board whose terms of office are due to expire – with the exception of Gilles Brisson and Jean-Yves Blay – and to appoint two new members,
Marty J. Duvall and Christian Itin. The composition of the Executive Board would remain unchanged, as Jonathan Dickinson would remain
Chairman and Yannis Morel and Sonia Quaratino would remain members (Arvind Sood resigned from his position on the Executive Board in
February 2025).
Mr. Marty J. Duvall is a biotechnology executive based in the United States, with over 35 years of experience building companies in the
pharmaceutical and biotechnology industry, focused in specialty therapeutics. Mr. Duvall’s main pharma experience includes global oncology
leadership positions at Aventis and Merck. His biotech experience includes leading to strategic transactions at MGI Pharma, Abraxis Bioscience,
and ARIAD, where he worked to build a footprint across the United States, Europe and Asia. His chief executive officer experience includes
public companies (Tocagen and Oncopeptides) as well as private companies (Angiex). With an oncology focus over the last three decades, Mr.
Duvall has helped launch and drive therapeutics for patients with a range of cancers.
173
Dr Christian Itin is a biotechnology company leader with more than 25 years of industry experience. He currently serves as CEO of Autolus
Therapeutics. Previously, Mr. Itin was President and Chief Executive Officer of Micromet Inc., a formerly Nasdaq-listed biopharmaceutical
company acquired in March 2012 by Amgen, Inc. Micromet developed the first T-cell engaging antibody Blincyto®. From 2016 to 2019, Mr.
Itin was on the board of Kuros Biosciences serving as chairman from 2016 to 2018. Prior to Kuros he served as executive chairman of Cytos
Biotechnology Ltd from 2012 to 2016 until its merger with Kuros Biosurgery, forming Kuros Biosciences. Kuros developed and is
commercializing MagnetOS™, a synthetic bone graft replacing bone allo-or xenografts. Mr. Itin also served as non-executive director on the
board of Kymab, Ltd, a privately held UK company from 2012 until its acquisition by Sanofi in 2021. He has a diploma in biology and holds a
Ph.D. in cell biology summa cum laude from the University of Basel, Switzerland and performed post-doctoral research at the Biocenter of Basel
University and at Stanford University School of Medicine, California.
B. Compensation.
Compensation of Members of the Executive and Supervisory Boards
Following the entry into force of the Sapin 2 Law (French law no. 2016-1691 of December 9, 2016), the Ordonnance no. 2019-1234 dated
November 27, 2019 and the Decree no. 2019-1235 dated November 27, 2019, the payment of any variable or exceptional compensation
attributed for a financial year to the Chairman of the Supervisory Board, the Chairman of the Executive Board and members of the Leadership
Team, is subject to approval at the next ordinary general meeting (ex-post vote). The payments of the below variable compensations, for the year
ended December 31, 2024, will be submitted for approval to the ordinary and extraordinary shareholder meeting to be held on May 22, 2025. In
addition to the ex-post vote described above, French law also requires that the compensation policy for the members of the Executive and
Supervisory Board for the year ending December 31, 2025 is subject to the approval at the ordinary general meeting relating to the year ending
December 31, 2024.
Compensation of Members of the Supervisory Board
Attendance Fees
The Company pays attendance fees to the members of the Supervisory Board, except for the permanent representative of Bpifrance and the
Chairwoman of the Supervisory Board. At its general meeting of shareholders held on May 23, 2024, shareholders set the total attendance fees to
be distributed among the members of the Supervisory Board at €300,000. The attendance fees consist of a fixed portion and a
174
variable portion based on attendance at meetings of the Supervisory Board and its committees. The following table shows the breakdown of the
attendance fees for the year ended December 31, 2024:
Member Role
Attendance Fee
Fixed Portion (annual fee)
Supervisory Board Member
Chair of the Audit Committee and Compensation and Nomination
Committee
Variable Portion (attendance fee at each meeting of the Supervisory Board, the
Audit Committee, the Compensation and Nomination Committee and the
Transaction Committee)
Supervisory Board Member
(1)
Member of the Audit Committee or Compensation and Nomination
Committee
Variable Portion (attendance fee at each meeting of an additional Supervisory
Board, an Audit Committee, a Compensation and Nomination Committee and a
Transaction Committee)
Supervisory Board Member
Transaction Committee or CSR Member
€30,000
€10,000
€3,000
€1,500
(1) reduction of 50% of variable portion received in the event of remote participation in the Supervisory Board meeting held to approve the annual and half-yearly financial statements, the annual
strategic Supervisory Board meeting, the Supervisory Board meeting held to approve the budget, and the Supervisory Board meeting following the Annual General Meeting.
The following table sets forth information regarding the attendance fees earned by members of the Supervisory Board during the year ended
December 31, 2024:
Member
Attendance Fees
Irina Staatz-Granzer
Gilles Brisson
Véronique Chabernaud
Jean-Yves Blay
Pascale Boissel
Sally Bennett
€100,000
€29,000
€53,000
€34,000
€64,000
€52,000
The Supervisory Board of March 26, 2025 decided to put to the vote of the shareholders at the General Meeting to be held on May 22, 2025, a
total attendance fees envelope to be distributed among the members of the Supervisory Board amounting to €500,000 for the year ending
December 31, 2025 . The following table shows the breakdown of Innate's attendance fees for the year ending December 31, 2025:
175
Member Role
Attendance Fee
Fixed Portion (annual fee)
Supervisory Board Member
Chair of the Audit Committee and Compensation and Nomination
Committee
Variable Portion (attendance fee at each meeting of the Supervisory Board, the
Audit Committee, the Compensation and Nomination Committee and the
Transaction Committee)
Supervisory Board Member
(1)
Member of the Audit Committee or Compensation and Nomination
Committee
Variable Portion (attendance fee at each meeting of an additional Supervisory
Board, an Audit Committee, a Compensation and Nomination Committee and a
Transaction Committee)
Supervisory Board Member
Transaction Committee or CSR Member
€30,000
€10,000
€3,000
€1,500
(1) reduction of 50% of variable portion received in the event of remote participation in the Supervisory Board meeting held to approve the annual and half-yearly financial statements, the annual
strategic Supervisory Board meeting, the Supervisory Board meeting held to approve the budget, and the Supervisory Board meeting following the Annual General Meeting.
Chairman Compensation
Irina Staatz-Granzer, the Chairwoman of the Supervisory Board, receives a specific compensation pursuant to article L.225-84 of the French
Commercial Code for her duties as Chairwoman of the Supervisory Board. For the year ended December 31, 2024, Innate paid Irina Staatz-
Granzer a specific compensation of €100,000 for the performance of her duties as Chairwoman of the Supervisory Board.
Compensation of Members of the Executive Board
Breakdown of the Executive Board Members' Compensation
During the year ended on December 31, 2024, the Executive Board consisted of Hervé Brailly, Jonathan Dickinson, Yannis Morel, Sonia
Quaratino and Arvind Sood. Hervé Brailly served as interim CEO and Chairman of the Executive Board from January 1, 2024 to October 31,
2024. He was replaced by Jonathan Dickinson as CEO and Chairman of the Executive Board effective November 1, 2024. Arvind Sood resigned
from his mandate of member of the Executive Board on February 3, 2025.
The compensation of members of the Executive Board is decided by the Supervisory Board upon recommendation by the Compensation and
Nomination Committee. The compensation of Hervé Brailly and Jonathan Dickinson as Chairman of the Executive Board, is paid under their
social mandate (mandat social), whereas the compensation of Yannis Morel, Sonia Quaratino and Arvind Sood is paid under their employment
contract.
The compensation of members of the Executive Board includes the following components:
•
•
Fixed Compensation. The members of the Executive Board receive a fixed compensation pursuant to their employment agreements or, in
the case of the Chairman, his social mandate (mandat social).
Annual Variable Compensation. The members of the Executive Board are eligible to receive annual variable compensation upon the
recommendation of the Compensation and Nomination Committee based on the achievement of pre-specified objectives. For the year
ended on December 31, 2024,
176
such objectives were based on the achievement of the Company's main strategic pillars and operational targets defined according to Innate
Pharma's activities in order to (i) take into account the outperformance inherent to a fast-growing biotech company and (ii) motivate the
executives to exceed their objectives.
The strategic pillars are the following: (i) partnering Lacutamab, (ii) completing IPH6501 dose level 3, (iii) IND filing by 3Q2024 for
IPH4502, complemented by two other pillars: (iv) finance and (v) corporate.
Each pillar was subdivided into:
(i) core objectives; and
(ii) outperformance targets.
The weights of each pillar are as follows:
If 100% of the core objectives are achieved, 100% of the corresponding bonus is paid. If not 100% of the core objectives is achieved, the
percentage of the bonus paid is proportional to the percentage of achievement of the core objectives. In case of outperformance for the year
2024, it may be decided to increase the amount of the bonus beyond 100% up to a limit of 150% based on other predefined criteria.
The outperformance targets may only be reached if 100% of the core objectives are reached.
•
•
Performance Free Shares. The members of the Executive Board are able to receive, upon authorization of the Supervisory Board and upon
recommendation of the Compensation and Nomination Committee, equity compensation in the form of performance free shares.
Other Benefits. The members of the Executive Board may also receive other benefits consisting of a supplementary pension plan, in-kind
benefits and, for the Chairman of the Executive Board, an unemployment insurance.
Executive Compensation Clawback Policy
Pursuant to the rules adopted by the SEC pursuant to Section 10D-1 of the Exchange Act, requiring national securities exchanges and national
securities associations, such as the NYSE, to amend their relevant listing standards no later than November 28, 2023 to require companies with
listed securities to put in place a policy whereby listed companies will recover erroneously-awarded variable compensation from the Chief
Executive Officer and certain other “executive officers” as defined in Rule 10D-1(d) under the Exchange Act. On June 9, 2023, the SEC
approved the Nasdaq’s proposed rule amending its listing standards for recovery of erroneously awarded compensation by listed issuers, which
has taken effect on October 2, 2023.
On October 13, 2023, the Supervisory Board approved the adoption of a clawback policy, applicable from October 2, 2023, requiring the
recovery in full or in part of the components of the Chief Executive Officer's compensation that are wholly or partially contingent on the
attainment of financial performance criteria based on financial information that has been determined to be erroneous and has required
restatement of the financial statements for accounting purposes.
177
2024 Compensation of Hervé Brailly
The following table sets forth the compensation earned by Hervé Brailly during the year ended on December 31, 2024:
Amount of Compensation
Description
Type of Compensation
Fixed Compensation
Annual Variable
Compensation—Cash
€391,667
€274,950
Performance Free Shares 2024
€301,500
Benefits in Kind
Total Compensation
€6,928
€975,045
178
Gross fixed compensation pursuant to Hervé Brailly's social
mandate (mandat social).
This amount represents Hervé Brailly’s annual variable
compensation, based on his achievement of 100% of the annual
objectives.
This amount was calculated in accordance with the IFRS 2
valuation of the grant to Hervé Brailly's of 150,000 performance
free shares 2024.
Primarily represents amounts paid for use of a company car and
additional retirement benefits (known as “article 83”), among other
benefits.
2024 Compensation of Jonathan Dickinson
The following table sets forth the compensation earned by Jonathan Dickinson during the year ended on December 31, 2024:
Type of Compensation
Fixed Compensation
Annual Variable
Compensation—Cash
Free Shares 2024
Benefits in Kind
Total Compensation
Amount of Compensation
Description
€91,666
0
€324,000
€19,583
€435,249
Gross fixed compensation pursuant to Jonathan Dickinson's social
mandate (mandat social).
N/A for 2024.
This amount was calculated in accordance with the IFRS 2
valuation of the grant to Jonathan Dickinson of 200,000 free shares
2024.
Primarily represents amounts paid for use of a company car and
additional retirement benefits (known as “article 83”), among other
benefits.
2024 Compensation of Yannis Morel
The following table sets forth the compensation earned by Yannis Morel during the year ended on December 31, 2024:
Amount of Compensation Description
€300,000
€120,000
Gross fixed compensation pursuant to Yannis Morel’s employment
contract.
This amount represents Yannis Morel’s annual variable
compensation, based on his achievement of 100% of the annual
objectives.
This amount was calculated in accordance with the IFRS 2
valuation of the grant to Yannis Morel of 150,000 performance free
shares 2024.
Primarily represents amounts paid for use of a company car and
additional retirement benefits (known as “article 83”), among other
benefits.
Type of Compensation
Fixed Compensation
Annual Variable
Compensation—Cash
Performance Free Shares 2024
€280,500
Benefits in Kind
Total Compensation
€9,292
€709,792
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2024 Compensation of Sonia Quaratino
The following table sets forth the compensation earned by Sonia Quaratino during the year ended on December 31, 2024:
Type of Compensation
Fixed Compensation
Annual Variable
Compensation—Cash
Performance Free Shares 2024
Benefits in Kind
Total Compensation
Amount of Compensation Description
€350,000
€140,000
€280,500
0
€770,500
Gross fixed compensation pursuant to Sonia Quaratino’s
employment contract.
This amount represents Sonia Quaratino’s annual variable
compensation, based on his achievement of 100% of the annual
objectives .
This amount was calculated in accordance with the IFRS 2
valuation of the grant to Sonia Quaratino of 150,000 performance
free shares 2024.
N/A.
2024 Compensation of Arvind Sood
The following table sets forth the compensation earned by Arvind Sood during the year ended on December 31, 2024:
180
Type of Compensation
Fixed Compensation
Annual Variable
Compensation—Cash
Amount of Compensation Description
$299,038
$87,618
Performance Free Shares 2024
$303,613
Stock Options 2024
Free Shares 2024
Benefits in Kind
Total Compensation
$81,180
$62,509
$20,400
$854,358
Gross fixed compensation pursuant to Arvind Sood’s employment
contract.
This amount represents Arvind Sood’s annual variable
compensation, based on his achievement of 73,25% of the annual
objectives .
This amount was calculated in accordance with the IFRS 2
valuation of the grant to Arvind Sood of 150,000 performance free
shares 2024.
This amount was calculated in accordance with the IFRS 2
valuation of the grant to Arvind Sood of 100,000 stock options
2024.
This amount was calculated in accordance with the IFRS 2
valuation of the grant to Arvind Sood of 25,000 free shares 2024.
Primarily represents amounts paid for use of a company car and
additional retirement benefits (known as “article 83”), among other
benefits.
2025 Executive Board Members' Compensation
At the General Meeting to be held on May 22, 2025, the compensation of the members of the Executive Board sets forth in the following table
for the year ending on December 31, 2025 will be put to the vote of the shareholders:
Type of Compensation
Fixed Compensation
Maximum Annual Variable Compensation if 100% of the
objectives are reached
Maximum Annual Variable Compensation in case of over-
performance (150%)
Jonathan Dickinson
(1)
Yannis Morel
Sonia Quara no
€550,000
€275,000
€300,000
€120,000
€350,000
€140,000
€330,000
€180,000
€210,000
(1) Jonathan Dickinson was not eligible for the Annual Variable Compensation for the year ended on December 31, 2024.
181
The variable compensation for the year ending on December 31, 2025 is based on the achievement of the Company's main strategic pillars and
operational targets defined according to Innate Pharma's activities in order to (i) take into account the outperformance inherent to a fast-growing
biotech company and (ii) motivate the managers to exceed their objectives.
There are five pillars which are essential to the achievement of the strategic axes mentioned above.
Each pillar has been subdivided into:
(i) core objectives; and
(ii) outperformance targets.
The weights of each pillar are:
Core objectives
Outperformance targets
Clinical & BD
Clinical
Clinical
Research and Explanatory Development
Finance
25%
20%
20%
15%
20%
25%
20%
20%
15%
20%
The annual objectives thus defined make it possible to reward the Company's expected performance but also to assess outperformance.
If 100% of the basic core objectives are achieved, 100% of the corresponding bonus is paid. If not 100% of the core objectives are achieved, the
percentage of the bonus paid is proportional to the percentage of achievement of the core objectives. In case of outperformance for the year
2025, the amount of the bonus may be increased beyond 100% up to a limit of 150% based on other predefined criteria.
The outperformance targets may only be reached if 100% of the core objectives are reached.
At the General Meeting to be held on May 22, 2025, the allocation of free performance shares subject to capitalization evolution and internal
conditions as well as the allocation of free shares subject to specific performance criteria will be put to the vote of its shareholders.
Limitations on Liability and Indemnification Matters
Under French law, provisions of bylaws that limit the liability of the members of Executive and Supervisory Boards are prohibited. However,
French law allows sociétés anonymes to contract for and maintain liability insurance against civil liabilities incurred by members of Executive
and Supervisory Boards involved in a third-party action, provided that they acted in good faith and within their capacities as members of such
Boards of the Company. Criminal liability cannot be indemnified under French law, whether directly by the Company or through liability
insurance.
The Company has a liability insurance for its Executive and Supervisory Board members, and insurance coverage for liability under the
Securities Act. The Company also entered into agreements with its Executive and Supervisory Board members to provide contractual
indemnification. With certain exceptions and subject to limitations on indemnification under French law, these agreements provide for
indemnification for damages and expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by
any Executive or Supervisory Board member in any action or proceeding arising out of his or her actions in that capacity. The Company believes
that this insurance and these agreements are necessary to attract qualified Executive and Supervisory Board members.
182
These agreements may discourage shareholders from bringing a lawsuit against the Executive and Supervisory Board members for breach of
their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against the Executive and
Supervisory Board members, even though such an action, if successful, might otherwise benefit the Company and its shareholders. Furthermore,
a shareholder’s investment may be adversely affected to the extent the Company pays the costs of settlement and damages awards against its
Executive and Supervisory Board members pursuant to these insurance agreements.
Equity Incentives
The Company believes that the ability to grant equity incentives is a valuable and necessary compensation tool that allows the Company to
attract and retain the best personnel for positions of substantial responsibility, provides additional incentives to employees and promotes the
success of its business. Due to French corporate law and tax considerations, the Company has historically granted several different equity
incentive instruments to its Executive Board and Supervisory Board members, employees and consultants, including (i) warrants (BSAs), which
have historically only been granted to independent members of the Supervisory Board and consultants, (ii) redeemable warrants (BSAARs) and
(iii) free shares.
The Executive Board’s authority to grant these warrants and free shares and the aggregate amount authorized to be granted must be approved by
two-thirds of the shareholders present at the relevant extraordinary shareholders’ meeting. Once approved by the shareholders, the Executive
Board can continue to grant such awards for a specified period upon prior authorization of the Supervisory Board.
The Company has various compensation plans for its Executive Board members, Supervisory Board members, employees and consultants that
have been approved by the shareholders. The last allocation of BSAARs which occurred in 2015 no longer continues to vest following
termination of the employment, office or service of the holder within the first two years and all vested warrants must be exercised within post-
termination exercise periods set forth in the issuance agreement. In the event of certain changes in its share capital structure, such as a
consolidation or share split or dividend, French law and applicable issuance agreement provides for appropriate adjustments of the numbers of
ordinary shares issuable and/or the exercise price of the outstanding warrants.
As of December 31, 2024, the Company had the following equity awards, warrants and free shares outstanding:
•
•
•
•
167,460 ordinary shares issuable upon the exercise of 167,460 share warrants (BSA) outstanding as of December 31, 2024 at a weighted
average exercise price of 7,84 € per ordinary share;
1,045,722 ordinary shares issuable upon the exercise of 1,045,722 redeemable share warrants (BSAAR) outstanding as of December 31,
2024 at an exercise price of 7,20 € per ordinary share;
755,240 ordinary shares issuable upon conversion of 6,248 free preferred shares (AGAP 2016) outstanding as of December 31, 2024;
1
618,760 ordinary shares issuable upon the vesting of 618,760 free shares (AGA) as of December 31, 2024;
1
This section does not take into account the AGAP 2016 that can no longer be converted by their holders due to the failure to meet the presence
requirement, resulting in 6,248 exercisable AGAP 2016 out of the 6,494 granted.
183
•
•
•
•
1,622,500 ordinary shares issuable upon definitive acquisition of 1,622,500 free performance shares 2022 (AGA de Performance 2022),
assuming all performance and presence conditions are met;
2,023,750 ordinary shares issuable upon definitive acquisition of 2,023,750 free performance shares 2023 (AGA de Performance 2023),
assuming all performance and presence conditions are met;
2,287,900 ordinary shares issuable upon definitive acquisition of 2,287,900 free performance shares 2024 (AGA de Performance 2024),
assuming all performance and presence conditions are met; and
100,000 ordinary shares issuable upon the exercise of 100,000 stock options outstanding as of December 31, 2024 at a weighted average
exercise price of €2.18 per ordinary share.
Equity Warrants and Redeemable Share Subscription Warrants
Share Warrants (BSA)
Share warrants (BSA) are issued at a de minimis price and entitle the holder of one BSA to exercise the warrant for one underlying share, at an
exercise price per share determined by the Executive Board of the Company at the time of issue by reference to the then prevailing share price.
The Company has issued BSA to Supervisory Board members and certain consultants of the Company. The Company's BSA plans include
provisions that allow for the adjustment of the one-for-one exercise ratio to compensate for certain modifications of its share capital, such as
rights issues, stock splits, mergers and other events affecting all existing shareholders. None of those events have occurred yet. The Company's
BSA have an exercise period of 10 years – BSA not exercised after that time lapse and are automatically cancelled. The Company's BSA cannot
be sold.
184
The following table shows the BSA outstanding as of December 31, 2024:
Plan title
BSA 2015-1
BSA 2015-2
BSA 2017-1
BSA 2022-1
BSA 2023-1
Shareholder general meeting date April 27, 2015
April 27, 2015
June 2, 2016
May 20, 2022
May 12, 2023
Date of issue
April 27, 2015
July 1, 2015
September 20, 2017 October 3, 2022
October 19, 2023
Total number of BSA authorized
150,000
Total number of BSA issued
70,000
14,200
150,000
37,000
50,000
8,260
70,000
38,000
Start date of the exercise period
April 27, 2015
July 1, 2015
September 20, 2019 October 3, 2024
October 19, 2025
End date of the exercise period
April 26, 2025
June 30, 2025
September 20, 2027 October 3, 2032
October 19, 2033
Exercise price per BSA/share
€9.59
€14.05
€11.00
€2.31
€2.26
Number of BSA exercised as of
December 31, 2024
BSA cancelled or lapsed as of
December 31, 2024
BSA remaining as of December 31,
2024
0
0
0
0
0
0
0
0
0
0
70,000
14,200
37,000
8,260
38,000
Redeemable Share Warrants (BSAAR)
Redeemable share warrants, or BSAAR, are identical to the share warrants of BSA (including the one-for-one exercise ratio, its potential
adjustment for certain modifications of the share capital and the exercise period of 10 years), except for the following features:
•
•
the BSAAR are initially purchased by the beneficiary at their fair value, as determined by an expert, and
the BSAAR plans include a “forcing” clause making it possible to encourage holders to exercise their BSAAR when the market price
exceeds the exercise price and reaches a threshold defined in the BSAAR issuance agreement. The Company can then, subject to a time
period for notifying the holders that will permit them to exercise their BSAAR, decide to purchase the unexercised BSAAR at a unit price
equal to the BSAAR acquisition price initially paid by their holders.
Innate's redeemable share warrants cannot be sold. The BSAAR have been granted to certain of the executive officers and employees.
185
The following table shows the BSAAR outstanding as of December 31, 2024:
Plan title
Shareholder general meeting date
Date of issue
Total number of BSAAR issued
Start date of the exercise period
End date of the exercise period
BSAAR initial purchase price
Exercise price per BSAAR/share
Number of BSAAR exercised as of December 31, 2024
BSAAR cancelled or lapsed as of December 31, 2024
BSAAR 2015
April 27, 2015
July 1, 2015
1,050,382
July 1, 2015
June 30, 2025
€1.15
€7.20
1,940
2,720
BSAAR remaining as of December 31, 2024
1,045,722
Free Shares (AGA)
Free shares (AGA) are employee equity incentive instruments pursuant to which the beneficiaries are granted, for free, the possibility to receive
ordinary shares under certain conditions. Upon grant by the Executive Board of the Company, the AGA are subject to an acquisition, or vesting,
period of at least one year. At the end of this period, the free shares vest and the beneficiary becomes a full shareholder. However, if the vesting
period is less than a certain period set by law (currently two years), it must be followed by a holding period, so that the sum of the vesting period
and the holding period is equal to a minimum total period also set by law (currently two years). Vesting can be conditional or not. The vesting of
all or the Company's AGA is subject to a presence condition at the end of the vesting period. Some of the Company's AGA are also subject to
performance conditions. Over the years, the Company has established several AGA plans, for its employees or for management only, sometimes
as a “welcome package” (with no performance conditions). The Company's free share plans include provisions that allow for the adjustment of
the number of ordinary shares to which a beneficiary is entitled at the end of the vesting period to compensate for certain modifications of its
share capital, such as rights issues, stock splits, mergers and other events affecting all existing shareholders, during the vesting period. Certain of
the Company's plans also provide for an accelerated vesting in case of a tender offer on the Company during the vesting period.
186
The following table shows the AGAs outstanding as of December 31, 2024:
Plan title (1)
AGA Perf
Employees 2022
AGA Perf
Management 2022
AGA Perf
Employees 2023
AGA Perf
Management 2023
AGA Perf
Employees 2024
AGA Perf
Management 2024-
1
AGA Perf
Management 2024-
2
Shareholder general
meeting date
Date of grant
Vesting Period
Holding period
Performance Conditions
May 20, 2022
May 20, 2022
May 12, 2023
May 12, 2023
May 23, 2024
May 23, 2024
May 23, 2024
December 12,
2022
December 12, 2022
December 21,
2023
December 21,
2023
November 13,
2024
August 1, 2024
November 13,
2024
3 years
None
Yes
3 years
None
Yes
3 years
None
Yes
3 years
None
Yes
3 years
None
Yes
2 years
None
Yes
3 years
None
Yes
Number of AGA granted
1,371,500
550,000
1,403,500
750,000
1,162,900
150,000
975,000
umber of vested AGA as of
December 31, 2024
umber of lapsed AGA as of
December 31, 2024
Number of AGA under a
vesting period as of
December 31, 2024
0
299,000
0
0
0
129,750
0
0
0
0
0
0
0
0
1,072,500
550,000
1,273,750
750,000
1,162,900
150,000
975,000
(1) Usually after the end of the vesting period, the Executive Board will convene and acknowledge the number of free shares that have vested and the number of those that have not because the
presence condition and, as applicable, the performance conditions, have not been met. For the purpose of computing the amount of share-based compensation in its consolidated financial
statements, AGA that have lapsed because the presence condition has not been met, are excluded from the computation, even though the Executive Board has not met yet and formally
acknowledged this fact. As a result, certain of the numbers above are different from those in its consolidated financial statements.
187
Plan title (1)
AGA New members
2023
AGA New members
2024
AGA Employees
2024
AGA Management
2024
Shareholder general meeting
date
May 20, 2022
May 20, 2022
May 12, 2023
May 23, 2024
Date of grant
November 2, 2023
February 15, 2024 November 13, 2024 November 13, 2024
Vesting Period
Holding period
Performance Conditions
Number of AGA granted
Number of vested AGA as of
December 31, 2024
Number of lapsed AGA as of
December 31, 2024
umber of AGA under a vesting
period as of December 31,
2024
3 years
None
No
25,000
0
0
3 years
None
No
25,000
0
0
3 years
None
No
370,560
0
1,800
3 years
None
No
200,000
0
0
25,000
25,000
368,760
200,000
The following authorization will be submitted for approval to the general meeting of the shareholders to be held on May 22, 2025: (i) up to
1,275,000 free shares with performance conditions to the benefit of executive officers, employed members of the Leadership Team, employed
senior executives and/or corporate officers, (ii) up to 1,500,000 free shares with performance conditions to the benefit of employees, (iii) up to
100,000 free shares to the benefit of new executive officers without performance conditions, (iv) up to 150,000 free shares to the benefit of
executive officers, employed members of the Executive Committee, employed senior executives and/or corporate officers, (v) up to 500,000 free
shares to the benefit of employees, (vi) up to 300,000 free shares to the benefit of employees and Leadership
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Team and Executive Board (excluding the Chairman) members as part of the employee saving plan and (vii) up to 60,000 warrants to the benefit
of independent Supervisory Board members to be issued at the fair market value.
Free Preferred Shares (AGAP)
Free preferred shares (AGAP) are another employee equity incentive instrument similar to the free shares or AGA, except that, after a one-year
vesting period, the beneficiaries receive a preferred shares (shares B) which will become convertible into ordinary shares following a lock-up
period of two additional years, if the performance conditions (and a presence condition) are met at the end of this lock-up period. Each free
preferred share is convertible into a number of ordinary shares of the Company – which number depends upon the degree of fulfilment of the
performance conditions. The free preferred shares remain convertible into ordinary shares for a period of six years and six months. Free
preferred shares not converted at the end of this conversion period can be repurchased by Innate and cancelled. The Company's AGAP cannot be
sold.
The Company has established several AGAP plans in 2016 and 2017 for all of its employees or for management only.
Since the end of the lock-up period, holders of the 2016 AGAP that have not yet converted them into ordinary shares, are entitled to vote at the
shareholders’ meetings, to dividends and to preferential subscription rights, on the basis of the number of ordinary shares to which they are
entitled if they convert their AGAP.
On October 21, 2019, the performance criteria of the 2016-1 AGAP were assessed and the conversion ratio was determined as follows: one
2016-1 AGAP gives right to 130 ordinary shares.
On December 30, 2019, the performance criteria of the 2016-2 AGAP were assessed and the conversion ratio was determined as follows: one
2016-2 AGAP gives right to 111 ordinary shares.
The 2017 AGAP are not convertible since the performance criteria were not met.
The following table shows the AGAPs outstanding as of December 31, 2024:
Plan title
Shareholder general meeting date
Date of grant
Number of AGAP granted
Maximum number of ordinary shares into which
each AGAP can be converted
Number of AGAP lapsed during the vesting period
Number of vested AGAP
Number of lapsed AGAP during the lock up period
Number of outstanding AGAP
AGAP
Management
2016-1
June 2, 2016
AGAP Management
2016-2
AGAP Employees
2016-1
June 2, 2016
June 2, 2016
October 21, 2016 December 30, 2016 October 21, 2016
2,486
130
105
2,381
146
2,048
2,000
130
450
1,550
100
1,200
3,000
111
0
3,000
0
3,000
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C. Board Practices
Boards composition
The following table sets forth the names of our current members of the Executive Board and of the Supervisory Board, the years of their initial
appointment as directors and the expiration dates of their current term.
Name
Current Position
Year of Initial
Appointment
Term Expiration
Year
Executive Board Members
Jonathan Dickinson, MBA, BSc
Yannis Morel, Ph.D.
Sonia Quaratino, M.D., Ph.D.
Supervisory Board Members
Irina Staatz-Granzer, Ph.D.
Pascale Boissel
Jean-Yves Blay, Ph.D.
Gilles Brisson
Véronique Chabernaud, M.D.
Olivier Martinez
Sally Bennett
Supervisory Board
Chairman of the Executive Board
Member of the Executive Board
Member of the Executive Board
Chairwoman of the Supervisory Board
Vice Chairwoman of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
2024
2015
2024
2009
2020
2017
2007
2015
2017
2022
2027
2027
2027
2025
2025
2025
2025
2025
2025
2025
The Supervisory Board is made up of a minimum of three members and a maximum of eighteen. The members of the Supervisory Board are
appointed for a renewable term of two years at the general meeting of shareholders, which may revoke their appointments at any time. The
appointees are selected from among the shareholders and may be individuals or companies. Each member must own at least one of our ordinary
shares for the entire term of the appointment. Members of the Supervisory Board cannot be members of the Executive Board.
The number of members of the Supervisory Board who have reached the age of seventy years cannot be higher than a third of the members of
the Supervisory Board. If the age limitation is exceeded, the eldest member is deemed to have resigned automatically.
There was no directors' service contracts with the Company or any of its subsidiaries providing for benefits upon termination of employment, for
the Company's last completed fiscal year.
Role of the Supervisory Board in Risk Oversight
The Supervisory Board is primarily responsible for the oversight of the risk management activities and has delegated to the Audit Committee the
responsibility to assist the Supervisory Board in this task. While the Supervisory Board oversees risk management, management, through the
Executive Board is responsible for day-to-day risk management processes. The Supervisory Board expects the management to consider risk and
risk management in each business decision, to proactively develop and monitor risk management strategies and processes for day-to-day
activities and to effectively implement risk management strategies adopted by the Supervisory Board. The Company believes this division of
responsibilities is the most effective approach for addressing the risks the Company faces.
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Supervisory Board Committees
The Supervisory Board has established an Audit Committee, a Compensation and Nomination Committee, a Corporate and Social Responsibility
Committee and a Transactions Committee, which operate pursuant to rules set forth in the charter of the Supervisory Board.
Subject to available exemptions, the composition and functioning of all of the committees will comply with all applicable requirements of the
French Commercial Code, the Exchange Act, the Nasdaq listing rules and SEC rules and regulations.
In accordance with French law, committees of the Supervisory Board only have an advisory role and can only make recommendations to the
Supervisory Board. As a result, decisions are made by the Supervisory Board taking into account non-binding recommendations of the relevant
Supervisory Board committee.
Audit Committee
Innate's Audit Committee assists the Supervisory Board in its oversight of the corporate accounting and financial reporting and oversees the
selection of the auditors, their remuneration and independence and keeps the Supervisory Board informed on control systems, key processes and
procedures, security and risks. From May 2022, the members of the Audit Committee as of the date of this Annual Report are Pascale Boissel,
Irina Staatz-Granzer and Sally Bennett. Pascale Boissel is the Chairman of the Audit Committee.
The Company's Supervisory Board has determined that Sally Bennett, Irina Staatz-Granzer and Pascale Boissel are independent within the
meaning of the applicable Nasdaq listing rules and the independence requirements contemplated by Rule 10A-3 under the Exchange Act. The
Supervisory Board has further determined that Pascale Boissel is an “audit committee financial expert” as defined by the Nasdaq listing rules and
that each of the members qualifies as financially sophisticated under the Nasdaq Listing Rules.
The principal responsibility of the Audit Committee is to monitor the existence and efficacy of the financial audit and risk control procedures on
an ongoing basis, and the Audit Committee charter is contained in the Supervisory Board’s charter.
Innate's Supervisory Board has specifically assigned the following duties to the Audit Committee:
•
•
•
•
•
legal control of the half-year and annual accounts;
evaluating internal control practices, risk analysis;
supervising the creation of the financial statements published by us;
assessing accounting methods; and
selecting statutory auditors, negotiating their fees, reviewing of their conclusions and reviewing their independence.
The Audit Committee reviews and approves the report from the Chairman of the Supervisory Board on internal control.
Compensation and Nomination Committee
Innate's Compensation and Nomination Committee assists the Supervisory Board in reviewing and making recommendations to the Supervisory
Board with respect to the appointment and the compensation of the members of the Executive Board, Supervisory Board and Leadership Team
and other key
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employees. In accordance with the Compensation and Nomination Committee charter contained in the Supervisory Board's charter, the
Compensation and Nomination Committee is composed of at least two members appointed by the Supervisory Board. As of December 31, 2024,
the members of the committee are Pascale Boissel, Irina Staatz-Granzer, Véronique Chabernaud and Jean-Yves Blay. The Company's
Supervisory Board has determined that Pascale Boissel, Irina Staatz-Granzer, Véronique Chabernaud and Jean-Yves Blay are independent within
the meaning of the applicable Nasdaq listing rules and the independence requirements contemplated by Rule 10A-3 under the Exchange Act.
The Company's Supervisory Board has specifically assigned the following duties to the Compensation and Nomination Committee:
•
•
•
reviewing the remuneration policy, in particular the description of the collective objectives (applicable company-wide) and individual
objectives (for members of the Executive Board and the Leadership Team);
reviewing the compensation of the members of the Executive Board and the Leadership Team, the policy concerning the distribution of
equity such as warrants, stock options, grants and capital increases reserved for members of the savings plan, examining the amount of
attendance fees among the Supervisory Board and the committees members;
assisting the Supervisory Board in the selection of the members of the Executive Board and committees; and
• making recommendations with respect to the independence of the members of the Supervisory Board and committees and preventing
conflicts of interest within the Supervisory Board.
Transactions Committee
Innate's Transactions Committee assists the Supervisory Board in examining the business and corporate development opportunities available to
us, which may include the acquisition of rights to products or the acquisition of other companies as well as out-licensing opportunities. As of
December 31, 2024, the members of this committee are Irina Staatz-Granzer, Bpifrance and Gilles Brisson. Currently, Irina Staatz-Granzer is an
independent member and Chairman of the Transactions Committee.
Innate Pharma's Supervisory Board has specifically assigned the following duties to the Transactions Committee:
•
•
to analyze the fundamentals of the products and/or companies targeted by us, the feasibility of targeted acquisitions; and
to participate in the selection of investment bankers and/or consultants.
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CSR Committee
The Supervisory Board of September 14, 2022, on the recommendation of the Compensation and Nomination Committee of September 12,
2022, decided to set up a CSR Committee. The first meeting of the committee was held on July 5, 2023.
As of December 31, 2024, the members of the CSR Committee are Sally Bennett, Véronique Chabernaud, Irina Staatz-Granzer and Olivier
Martinez.
The main duties of the CSR Committee are to:
• make recommendations on the CSR policy and its implementation by the Company;
•
•
•
examine the content of the non-financial information;
review the Company's CSR publications; and
determine the CSR criteria for the annual and multi-annual variable remuneration.
Other Committees
The Strategic Advisory Board
The Company also has a Strategic Advisory Board composed of six external consultants, consisting of three individuals from the medical
community and three individuals from the scientific community. The Strategic Advisory Board is not a committee of the Supervisory Board
within the meaning of Article R.225-29 of the French Commercial Code; its members are chosen by the Executive Board. This kind of advisory
committee is common in French companies in the biotechnology sector.
The Strategic Advisory Board’s role is to assist Innate in the strategic choices in scientific and technical fields. Its main missions are to evaluate
the relevance of the choices in terms of product development and to propose, if necessary, changes to strategic or technical approaches; to advise
management and guide the scientific direction in identifying strategies and selecting product candidates, based, in particular, on the scientific
results obtained by us, including new targets and new compounds and to promote and advise Innate in the alliance strategies, such as external
growth supporting synergies, including acquisition of new competences, purchase of operating rights, product candidates and innovative
technologies. The Strategic Advisory Board is comprised of Aurélien Marabelle, Diane Mathis, Miriam Merad, Katy Rezvani, and Mario Sznol.
Dr. Merad is the Chairman of the Strategic Advisory Board.
Aurélien Marabelle, M.D., Ph.D., is a medical oncologist and immunologist. His clinical practice is dedicated to early Phase clinical trials of
cancer immunotherapies at the Gustave Roussy Cancer Center where he also leads a translational research laboratory dedicated to cancer
immunology & immunotherapies (INSERM U1015 & CIC1428). He is a full professor of Clinical Immunology at the University of Paris Saclay,
an active member of ESMO, ASCO, AACR, SITC, EATI and is the current vice-president and co-founder of the French Society for Cancer
Immunotherapies (FITC). He has published more than 280 peer reviewed publications and has an H-index of 71.
Diane Mathis, obtained a Ph.D. from the University of Rochester and performed postdoctoral studies at the Laboratoire de Génétique
Moléculaire des Eucaryotes in Strasbourg, France and Stanford University Medical Center. She returned to Strasbourg at the end of 1983,
establishing a laboratory at the LGME (later the Institut de Genetique et de Biologie Moleculare et Cellulaire (IGBMC)) in conjunction with Dr.
Christophe Benoist. The lab moved to the Joslin Diabetes Center in Boston in 1999. Through 2008, Dr. Mathis was a Professor of Medicine at
Brigham and Women’s Hospital and Harvard Medical School (HMS), and Associate Research Director and Head of the Section on Immunology
and Immunogenetics at Joslin. She is currently a Professor in the Department of Immunology at HMS and holder of the Morton
193
Grove-Rasmussen Chair in Immunohematology. She is also a Principal Faculty Member at the Harvard Stem Cell Institute and an Associate
Faculty Member of the Broad Institute. She presently serves on the advisory boards of Rockefeller University, the Howard Hughes Medical
Institute, Genentech, Pfizer, Amgen, Janssen and Goldman Sachs Life Sciences (amongst others), and of several research institutes worldwide.
Diane Mathis was elected to the U.S. National Academy of Sciences in 2003, the German Academy in 2007, and the American Academy of Arts
and Sciences in 2012. She received the Excellence in Science Award from the Federation of American Societies in Experimental Biology in
2016, the inaugural Menarini Prize for outstanding Woman Immunologist from the International Union of Immunological Societies in 2023 and
the William B Coley Award for Distinguished Research in Basic Immunology from the Cancer Research Institute in 2024. Her lab works in the
fields of T cell differentiation, immunological tolerance, autoimmunity and inflammation. She has trained over 175 students and postdoctoral
fellows from all over the world.
Miriam Merad, M.D., Ph.D., is Director of the Precision Immunology Institute at Mount Sinai School of Medicine in New York (PrIISM),
Inaugural chai of the Department of Immunology and Immunotherapy and the Director of the Mount Sinai Human Immune Monitoring Center
(HIMC). Miriam Merad is an internationally renowned physician-scientist with expertise in human disease immunology. Miriam Merad has
identified the tissue-resident macrophage lineage and revealed its distinct role in organ physiology and pathophysiology. She has demonstrated
the contribution of this macrophage lineage to cancer progression and inflammatory diseases. She is currently working on the development of
new therapies targeting macrophages for these pathologies. In addition to her work on macrophages, Miriam Merad is known for her work on
dendritic cells, a group of cells that control adaptive immunity. She has identified a new subset of dendritic cells, which is now considered to be
a key target for antiviral and antitumor immunity. Miriam Merad is the author of more than 300 articles and reviews in leading journals. Her
work has been cited several thousand times. She is an elected member of the American Society of Clinical Investigation and has received the
William B. Coley Award for her contributions to the field of cancer immunology. She is an elected member of the U.S. National Academy of
Sciences and in 2023 to the U.S. National Academy of Medicine and a Fellow of the AACR academy and ImmunoOncology academies. She is
also President of the International Union of Immunological Societies (IUIS)
Katy Rezvani, M.D., Ph.D., is a professor of medicine at the University of Texas MD Anderson Cancer Center, where she serves as the Vice
President & Head, Cell Therapy Institute for Discovery and Innovation, Sally Cooper Murray Chair in Cancer Research, and medical director of
the GMP Facility. She leads a research lab with a focus on NK cell biology and developing novel NK cell engineering strategies for cancer, with
the aim of translating these discoveries to the clinic. Katy Rezvani completed her medical training at University College London, England and
her Ph.D. at Imperial College London. She completed her training in immunology and transplantation biology at the National Institutes of
Health, Bethesda, MD. In addition, she has co-authored over 250 peer-reviewed publications and received multiple prizes and awards, including
the American Society of Hematology E. Donnall Thomas award.
Mario Sznol, M.D., is Professor of Internal Medicine, Leader of the Clinical Research Team in Melanoma and Kidney Cancer, and Co-Leader of
the Cancer Immunology Program. Mario Sznol is a graduate of Rice University and Baylor College of Medicine (BCM) in Houston, Texas. He
trained in internal medicine at BCM and completed a fellowship in medical oncology in the Department of Neoplastic Diseases at Mount Sinai
Hospital, New York. He spent the next twelve years in the Biologics Evaluation Section (BES), Investigational Drug Branch (IDB), Cancer
Therapy Evaluation Program of the National Cancer Institute, and was BES Chief from 1994 to 1999. He was on the inpatient units of the
Biological Response Modifiers Program, NCI, from 1988 to 1996, and on the immunotherapy service of the Surgery Branch, NCI, from 1997 to
1999. From 1999 to 2004, he served as Vice President of Clinical Development of Vion Pharmaceuticals in New Haven, Connecticut. Mario
Sznol is a past president of the
194
Society for Immunotherapy of Cancer (SITC). Mario Sznol's areas of interest include early drug development, immunotherapy and treatments
for advanced melanoma and kidney cancer.
Leadership Team
The Company also has a Leadership Team composed of members with significant experience in strategy, financial management, medical
research, research and development project management, the negotiation of industrial and commercial agreements in the field of innovative
companies, including biotechnology companies, compliance and regulations and in business development. The Leadership Team meets at least
once a month and deals with all subjects regarding the activities and the management of the Company.
As of December 31, 2024, the members of the Leadership Team were Jonathan Dickinson, Yannis Morel, Sonia Quaratino, Arvind Sood, Odile
Belzunce, Odile Laurent, Nicola Beltraminelli, Claire de Saint Blanquat, Henry Wheeler and Frédéric Lombard. Eric Vivier, the Senior Vice
President, Chief Scientific Officer, is a permanent guest to the meetings of the Leadership Team.
Corporate Governance Practices
As a general matter, the Company’s Supervisory Board practices comply with the recommendations of the Middlenext corporate governance
code, with certain exceptions.
For an overview of Innate's corporate governance practices and the ways they may differ from Nasdaq’s corporate governance listing rules, see
“Item 16G.—Corporate Governance.”
Code of Ethics
The Company has adopted a Code of Ethics applicable to all of its employees and members of its Executive Board and Supervisory Board. The
Code of Ethics is available on its website. The Company expects that any amendments to the Code of Ethics, or any waivers of its requirements,
will be disclosed on its website.
Executive Compensation Arrangements
Except the arrangements described in “Item 7.B—Related Party Transactions—Arrangements with the members of the Executive and
Supervisory Boards,” there are no arrangements or understanding between Innate and any of the other members of the Executive and
Supervisory Boards providing for benefits upon termination of their employment, other than as required by applicable law.
D. Employees
As of December 31, 2024, the Company had 181 employees. Pursuant to French law, employees of Innate Pharma are subject to the French
national collective bargaining agreement of Pharmaceutical Industries (Convention collective Nationale des Industries Pharmaceutiques). The
Company believes that it maintains good relations with its employees. The following tables show the number of employees as of December 31,
2024, broken out by department:
Full-time equivalent employees of Innate Pharma SA and Innate Pharma Inc.
As of December 31, 2024
Research and development
General and administrative
Leadership Team
Total
135
36
10
181
195
E. Share Ownership
For information regarding the share ownership of the directors and executive officers, see “Item 6.B—Compensation” and “Item 7.A—Major
Shareholders.”
F. Disclosure of any action to recover erroneously awarded compensation
Not applicable.
196
Item 7. Major Shareholders and Related Party Transactions
A. Major Shareholders
The following table and accompanying footnotes set forth, as of April 25, 2025, information regarding beneficial ownership of the ordinary
shares by:
•
•
•
each person, or group of affiliated persons, known by Innate to beneficially own more than 5% of the ordinary shares;
each of the Leadership Team and Supervisory Board members individually; and
all of the Executive Board and Supervisory Board members as a group.
Assuming that all of the ordinary shares represented by ADSs are held by residents of the United States, as of December 31, 2024, the Company
estimates that approximately 4.7 million shares, or 5.67% of the outstanding ordinary shares were held of record by residents of the United
States.
Beneficial ownership is determined according to the rules of the SEC and generally means that a person has beneficial ownership of a security if
he, she or it possesses sole or shared voting or investment power of that security, including free shares that vest within 60 days of April 25, 2025
and options and warrants that are currently exercisable or exercisable within 60 days of April 25, 2025. Ordinary shares subject to free shares,
options and warrants currently exercisable or exercisable within 60 days of April 25, 2025 are deemed to be outstanding for computing the
percentage of ownership of the person holding these free shares, options or warrants and the percentage of ownership of any group of which the
holder is a member, but are not deemed outstanding for computing the percentage of any other person. Beneficial ownership representing less
than 1% is denoted with an asterisk (*).
Except as indicated by the footnotes below, the Company believes, based on the information furnished to us, that the persons named in the table
below have sole voting and investment power with respect to all ordinary shares shown that they beneficially own, subject to community
property laws where applicable. The information does not necessarily indicate beneficial ownership for any other purpose, including for purposes
of Sections 13(d) and 13(g) of the Securities Act.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Innate Pharma S.A., 117, Avenue de Luminy –
BP 30191, 13009 Marseille, France.
197
Number of Ordinary Shares Beneficially
Owned
Percentage of Ordinary Shares Beneficially
Owned
Novo Nordisk A/S(1)
Sanofi(2)
MedImmune Limited(3)
Bpifrance Participations S.A.(4)
All 5% Shareholders
5% Shareholders:
9,817,546
8,345,387
7,485,500
6,389,406
32,037,839
10.65%
9.05%
8.12%
6.93%
34.76%
Executive Board and Supervisory Board members and other executive officers:
Jonathan Dickinson, MBA, BSc(5)
0
Yannis Morel, Ph.D.(6)
420,692
Sonia Quaratino, MD, PhD (7)
Arvind Sood (8)
Irina Staatz-Granzer (9)
Gilles Brisson (10)
Véronique Chabernaud(11)
Jean-Yves Blay (12)
Pascale Boissel(13)
Sally Bennett(14)
Eric Vivier, D.V.M.(15)
Odile Belzunce(16)
Odile Laurent (17)
Frédéric Lombard (18)
Nicola Beltraminelli (19)
Claire de St Blanquat (20)
Henry Wheeler (21)
0
0
45,100
98,059
24,860
50
9,260
2,500
235,911
102,749
63,662
35,362
4,246
25,668
18,785
—%
*%
—%
—%
*%
*%
*%
*%
*%
*%
*%
*%
*%
*%
*%
*%
*%
All members of our Executive Board, Supervisory
Board and other Leadership Team member as a
group
1,086,904
1.18%
(1) Amounts beneficially owned were reported pursuant to a Schedule 13G filed with the SEC on February 3, 2020. Consists of 9,817,546 ordinary shares. The principal business address for Novo
Nordisk A/S is Novo Allé, 2880 Bagsvaerd, Denmark. The percentage of beneficial ownership is based on 92,157,148 ordinary shares outstanding (excluding treasury shares held by the Issuer)
as of April 25, 2025.
(2) Amounts beneficially owned were reported pursuant to a Schedule 13G filed with the SEC on April 29, 2025. Consists of 8,345,387 ordinary shares held by Sanofi-Aventis Participations SAS,
an indirectly wholly-owned subsidiary of Sanofi. The principal business address of Sanofi is 46, avenue de la Grande Armée, 75017 Paris, France. Sanofi’s percentage of beneficial ownership
is based on 92,157,148 ordinary shares outstanding (excluding treasury shares held by the Issuer) as of April 25, 2025.
198
(3) Amounts beneficially owned were reported pursuant to a Schedule 13D filed with the SEC on October 25, 2019. Consists of 7,485,500 ordinary shares held by MedImmune Limited, a wholly-
owned subsidiary of AstraZeneca PLC. The principal business address for MedImmune Limited is Milstein Building, Granta Park, Cambridge, CB21 6GH, United Kingdom. AstraZeneca PLC
and MedImmune Limited may each be deemed to have sole voting and dispositive power over all of the Ordinary Shares held by MedImmune Limited. AstraZeneca PLC may be deemed to
beneficially own the ordinary shares. The principal business address for AstraZeneca PLC is 1 Francis Crick Avenue, Cambridge Biomedical Campus, Cambridge, CB2 0AA, United Kingdom.
Percentage of beneficial ownership is based on 92,157,148 ordinary shares outstanding (excluding treasury shares held by the Issuer) as of April 25, 2025.
(4) Amounts beneficially owned were reported pursuant to a Schedule 13D amendment filed with the SEC on December 6, 2022. Consists of 6,389,406 ordinary shares. The principal business
address for Bpifrance Participations S.A. is 27-31, avenue du Général Leclerc, 94 710 Maisons Alfort Cedex, France. Bpifrance S.A. may be deemed to be the beneficial owner of 6,389,406
ordinary shares (corresponding to 6,389,406 voting rights), indirectly through its ownership of Bpifrance Participations S.A. The principal business address for Bpifrance S.A. is 27-31, avenue
du Général Leclerc, 94 710 Maisons Alfort Cedex, France. EPIC Bpifrance may be deemed to be the beneficial owner of 6,389,406 ordinary shares (corresponding to 6,389,406 voting rights),
indirectly through its joint ownership and control of Bpifrance S.A. The principal business address for EPIC Bpifrance is 27-31, avenue du Général Leclerc, 94 710 Maisons Alfort Cedex,
France. Caisse des Dépôts et consignations may be deemed to be the beneficial owner of (i) 6,389,406 ordinary shares, indirectly through its joint ownership and control of Bpifrance S.A., and
(ii) 797,222 ordinary shares, indirectly through CDC Croissance S.A., its wholly-owned subsidiary. The principal business address for Caisse des Dépôts et consignations is c/o 56, rue de Lille,
75007 Paris, France. Percentage of beneficial ownership is based on 92,157,148 ordinary shares outstanding (excluding treasury shares held by the Issuer) as of April 25, 2025.
(5) N/A
(6) Consists of 274,192 ordinary shares, 450 preferred shares 2016 which are convertible into 58,500 ordinary shares (AGAP 2016) and 88,000 redeemable warrants which are exercisable since
July 1, 2015 (BSAAR 2015).
(7) N/A
(8) N/A
(9) Consists of 25,100 ordinary shares, 10,000 warrants which are exercisable since April 27, 2015 (BSA 2015-1), 10,000 warrants which are exercisable since September 20, 2019 (BSA 2017).
(10)Consists of 73,059 ordinary shares, 15,000 warrants which are exercisable since April 27, 2015 (BSA 2015-1), 10,000 warrants which are exercisable since September 20, 2019 (BSA 2017).
(11)Consists of 660 ordinary shares, 14,200 warrants which are exercisable since July 1, 2015 (BSA 2015-2), 10,000 warrants which are exercisable since September 20, 2019 (BSA 2017).
(12)Consists of 50 ordinary shares.
(13)Consists of 1,000 ordinary shares and 8,260 warrants which are exercisable since October 3, 2024 (BSA 2022).
(14) Consists of 2,500 ordinary shares.
(15) Consists of 235,911 ordinary shares.
(16) Consists of 86,249 ordinary shares, 50 preferred shares 2016 which are convertible into 6,500 ordinary shares (AGAP 2016) and 10,000 redeemable warrants which are exercisable since July
1, 2015 (BSAAR 2015).
(17) Consists of 63,662 ordinary shares.
(18) Consists of 35,362 ordinary shares.
(19) Consists of 4,246 ordinary shares.
(20) Consists of 25,668 ordinary shares.
(21) Consists of 18,785 ordinary shares.
None of the principal shareholders has voting rights different than the other shareholders.
To the best of our knowledge, no other shareholder currently holds, directly or indirectly and acting alone or in concert, more than 5% of our
share capital or voting rights. Furthermore, we believe that we are not directly or indirectly owned or controlled by another corporation or
government, or by any other natural or legal persons. To our knowledge, there are no arrangements that may result in a change of control.
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B. Related Party Transactions.
Since January 1, 2024, the Company has engaged in the following transactions with members of its Executive and Supervisory Boards and
holders of more than 5% of its outstanding voting securities, and their respective affiliates, which Innate refers to as its related parties.
Arrangements with the Members of the Executive and Supervisory Boards
Director and Executive Officer Compensation
See “Item 6B—Compensation—Limitations on Liability and Indemnification Matters” for information regarding compensation of the members
of the Supervisory and Executive Boards.
On December 15, 2023, following Mondher Mahjoubi’s resignation from his position as Chairman of the Executive Board effective December
31, 2023, the Supervisory Board authorized the conclusion of a service agreement with him for the month of January 2024, for compensation
equivalent to his monthly fixed salary, i.e., the sum of €39,000
On January 3, 2024, following his appointment as Interim Chairman of the Executive Board, the Supervisory Board authorized the conclusion of
a mandate agreement between the Company and Hervé Brailly, which includes the benefit of a French pension contract of €5,503.28.
On January 3, 2024, following his appointment as Chief Operating Officer, member of the Executive Board, the Supervisory Board authorized
the entry into of an amendment to an employment contract between the Company and Yannis Morel, which includes, a fixed annual
remuneration of €300,000 and a French pension contract of €5,662.02.
On January 3, 2024, following her appointment as a member of the Executive Board, the Supervisory Board authorized the entry into of an
amendment to an employment contract between the Company and Sonia Quaratino, which includes an individual bonus of 40% based on
reaching certain specified targets, rising to 60% in the event of outperformance.
On October 11, 2024, the Supervisory Board authorized the conclusion of a consulting agreement with Addexpert and then, after expiration of
that agreement, with Kervrant Biotech, a company wholly owned by Hervé Brailly, to continue the consulting and support services for the new
Chairman of the Executive Board during the transition period, until May 31, 2025, at the latest, for a maximum amount of 10,000 € a month,
depending on time spent.
On June 1, 2024, the Supervisory Board authorized the conclusion of a consulting agreement with Ariana Pharmaceuticals, a company in which
Véronique Chabernaud is acting CMO and Jean-Yves Blay is a scientific advisor, aimed at using artificial intelligence to accelerate the
development of the Company's products.
On May 12, 2023, the Supervisory Board authorized the conclusion of an agreement between Innate Pharma and Jean-Yves Blay in his capacity
as a member of the Supervisory Board, to define the terms and conditions under which Jean-Yves Blay participates in the Supervisory Board.
Transaction with Related Companies
From time to time, in the ordinary course of its business, the Company may contract for services from companies or institutions in which certain
members of its Executive Board or Supervisory Board may serve as a director or advisor. The cost and provision of these services are negotiated
on an arm's-length basis, and none of these arrangements are material.
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Related Person Transaction Policy
The Company complies with French law regarding approval of transactions with related parties. On September 12, 2019, the Supervisory Board
adopted a related person transaction policy that sets forth its procedures for the identification, review, consideration and approval or ratification
of related person transactions. The policy became effective immediately upon the execution of the underwriting agreement for the October 2019
global offering. For purposes of its policy only, a related person transaction is a transaction, arrangement or similar contractual relationship, or
any series of similar transactions, arrangements or relationships, in which the Company and any related person are, were or will be participants
and the amount involved in the transaction exceeds $120,000, with the exception of usual transactions concluded under normal conditions. A
related person is any member of the Executive Board or Supervisory Board or beneficial owner of more than 5% of any class of its voting
securities, including any of their immediate family members and any entity owned or controlled by such persons.
Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person
transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to
consummation, the management must present information regarding the related person transaction to the Supervisory Board for review,
consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests,
direct and indirect, of the related persons, the benefits to Innate of the transaction and whether the transaction is on terms that are comparable to
the terms available to or from, as the case may be, an unrelated third party or to or from employees generally. Under the policy, the Company
will collect information that the Company deems reasonably necessary from each member of its Executive Board and Supervisory Board and, to
the extent feasible, significant shareholder to enable Innate to identify any existing or potential related-person transactions and to effectuate the
terms of the policy.
In addition, under its Code of Business Conduct and Ethics, which Innate Pharma adopted on September 12, 2019, its employees and Executive
and Supervisory Board members have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected
to give rise to a conflict of interest.
In considering related person transactions, the Supervisory Board will take into account the relevant available facts and circumstances including,
but not limited to:
•
•
•
•
the risks, costs and benefits to us;
the impact on the independence of a member of the Executive Board or Supervisory Board in the event that the related person is a member
of the Executive Board or Supervisory Board, an immediate family member of a member of the Executive Board or Supervisory Board or
an entity with which a member of Executive Board or Supervisory Board is affiliated;
the availability of other sources for comparable services or products; and
the terms available to or from, as the case may be, unrelated third parties or to or from employees generally.
The policy requires that, in determining whether to approve, ratify or reject a related person transaction, the Supervisory Board must consider, in
light of known circumstances, whether the transaction is in, or is not inconsistent with, the Company's best interests and those of its shareholders,
as the Supervisory Board determines in the good faith exercise of its discretion.
All of the transactions described above were evaluated and approved by the Supervisory Board.
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C. Interests of Experts and Counsel.
Not applicable.
Item 8. Financial Information
A. Consolidated Statements and Other Financial Information.
Consolidated Financial Statements
Our consolidated financial statements are included as part of this Annual Report, starting at page F-1.
Legal Proceedings
From time to time, the Company may be involved in various claims and legal proceedings relating to claims arising out of our operations. The
Company is not currently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on
our business. Regardless of outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion
of management resources and other factors.
With respect to an arbitral decision rendered in December 2021 relating to milestone payments received by the Company under the collaboration
and option agreement that the Company signed the 2018 AZ Option Agreement, see Note 6 to the consolidated financial statements included as
part of this Annual Report.
Dividend Policy
The Company has never declared or paid any dividends on our ordinary shares. The Company does not anticipate paying cash dividends on our
equity securities in the foreseeable future and intends to retain all available funds and any future earnings for use in the operation and expansion
of our business, given our state of development.
Subject to the requirements of French law and our bylaws, dividends may only be distributed from our distributable profits, plus any amounts
held in our available reserves which are reserves other than legal and statutory and revaluation surplus. Dividend distributions, if any in the
future, will be made in euro and converted into U.S. dollars with respect to the ADSs, as provided in the deposit agreement. See the information
set forth in our prospectus dated October 16, 2019, filed with the SEC pursuant to Rule 424(b), under the heading “Description of Share Capital”
for more information.
B. Significant Changes.
Not applicable.
Item 9. The Offer and Listing.
A. Offer and Listing Details.
The Company's ADSs have been listed on the Nasdaq Global Select Market under the symbol “IPHA” since October 21, 2019. The Company's
ordinary shares have been trading on Euronext Paris under the symbol “IPH” since November 3, 2006. Prior to that date, there was no public
trading market for the Company's ADSs or its ordinary shares.
B. Plan of Distribution.
Not applicable.
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C. Markets.
The Company's ADSs have been listed on Nasdaq under the symbol “IPHA” since October 21, 2019. The Company's ordinary shares have been
trading on Euronext Paris under the symbol “IPH” since November 3, 2006.
D. Selling Shareholders.
Not applicable.
E. Dilution.
Not applicable.
F. Expenses of the Issue.
Not applicable.
Item 10. Additional Information.
A. Share Capital.
Not applicable.
B. Memorandum and Articles of Association.
Listing
Our ADSs are listed on the Nasdaq Global Select Market under the symbol “IPHA.” Our ordinary shares are listed on Euronext Paris under the
symbol “IPH.”
Transfer Agent and Registrar
The transfer agent and registrar for our ADSs is Citibank, N.A. Our share register for our ordinary shares is maintained by Société Générale
Securities Services. The share register reflects only record owners of our ordinary shares. Holders of our ADSs are not treated as our
shareholders and their names are therefore not entered in our share register. The depositary, the custodian or their nominees are the holder of the
shares underlying our ADSs. Holders of our ADSs have a right to receive the ordinary shares underlying their ADSs. For discussion on our ADSs
and ADS holder rights, please refer to Exhibit 2.3 “Description of Securities” of this Annual Report.
Corporate Purpose (Article 4 of the Bylaws)
Our corporate purpose, directly or indirectly, in France or other countries is to:
•
•
carry out, on our own behalf or on behalf of third parties, any research, development, studies and development of manufacturing or
marketing procedures for pharmaceutical products;
register or grant any patent or license directly or indirectly connected with our activity; and
• more generally, perform any operation of any kind, whether economic, legal, financial, civil or commercial, which may be directly or
indirectly related to our corporate purpose or any similar, associated or complementary purpose.
Executive Board (Articles 14 to 16 of the Bylaws)
The Executive Board is responsible for our management and is composed of a minimum of two members and a maximum of seven members
who perform their duties under the supervision of the Supervisory Board.
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Members of the Executive Board
The members of the Executive Board are appointed or have their appointments renewed by the Supervisory Board. The members of the
Executive Board must be individuals. They are not required to be shareholders. They may be French citizens or citizens of other countries.
Members of the Executive Board cannot be members of the Supervisory Board.
The maximum age for being a member of the Executive Board is 70 years. If the age limitation is exceeded, the term of the exceeding member
of the Executive Board expires during the General Meeting of the shareholders following the anniversary date.
The limitations on having an appointment concurrently with an appointment in another company are subject to the applicable legal and
regulatory provisions.
The term of office for the members of the Executive Board is three years and may be renewed. If there is a vacancy, the Supervisory Board must
fill the vacancy within two months. The replacement is appointed for the time remaining until the Executive Board is up for renewal.
The members of the Executive Board may be removed from office, with or without cause and without notice, by the Supervisory Board or at any
General Meeting of shareholders, by a simple majority vote of the shareholders present and voting at the meeting in person or by proxy.
Chairman of the Executive Board
The Supervisory Board elects a Chairman from among the members of the Executive Board to serve for the duration of his appointment as a
member of the Executive Board. The Chairman of the Executive Board represents us in our relations with third parties.
The Supervisory Board may assign this power of representation to one or more other members of the Executive Board. Assignees have the title
of General Manager.
Meetings and Powers of the Executive Board
The Executive Board meets as often as is in our interest, but at least once per quarter. Meetings are called by the Chairman or a member of the
Executive Board appointed for this purpose.
At least three-quarters of the members of the Executive Board must be present or represented to constitute a quorum and decisions are made by a
majority of the members of the Executive Board present or represented. Each member has one vote. In case of equality of expressed votes either
in favor or against a decision (abstentions are not taken into account), the Chairman of the Executive Board has a casting vote.
The Executive Board has broad power to act under all circumstances on our behalf. It exercises this power within the limits of our corporate
purpose and subject to any powers expressly given to the Supervisory Board and Shareholders’ Meetings by law and according to our bylaws,
and abiding by any restrictions on powers decided by the Supervisory Board. There are currently no limits imposed on the amounts of loans or
borrowings that the Executive Board may approve.
Compensation of the Executive Board
The method and amount of compensation for each member of the Executive Board is determined by the Supervisory Board when appointing
such member, as the case may be.
Supervisory Board (Articles 17 to 22 of the Bylaws)
Members of the Supervisory Board
The Executive Board is supervised by a Supervisory Board made up of a minimum of three members and a maximum of eighteen. The members
of the Supervisory Board are appointed for a renewable term of
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two years at the general meeting of shareholders, which may revoke their appointments at any time. The appointees are selected from among the
shareholders or not, and may be individuals or companies. Each member must own at least one of our ordinary shares for the entire term of the
appointment. Members of the Supervisory Board cannot be members of the Executive Board.
The number of members of the Supervisory Board who have reached the age of seventy years cannot be higher than a third of the members of
the Supervisory Board. If the age limitation is exceeded, the eldest member is deemed to have resigned automatically.
Chairman of the Supervisory Board
The Supervisory Board appoints from its members who are individuals a Chairman and a Vice-Chairman, who are in charge of convening the
Supervisory Board and leading the debates.
Meetings and Powers of the Supervisory Board
The Supervisory Board meets as often as is in our interests but at least once per quarter. Meetings are called by the Chairman or Vice-Chairman,
or by a member of the Executive Board or at least one-third of the members of the Supervisory Board, under the circumstances and according to
the conditions set forth in the bylaws.
At least half of the members of the Supervisory Board must be present (or deemed present in case of use of videoconference or any other
telecommunication means) to constitute a quorum and decisions are made by a majority of the members of the Supervisory Board present (or
deemed present in case of use of videoconference or any other telecommunication means) or represented, it being specified that in a case of a
split-vote, the Chairman of the meeting shall have the tiebreaking vote.
The Supervisory Board exercises permanent control over our management by the Executive Board and the powers explicitly conferred on it by
the French laws. It alone has the authority to authorize certain significant transactions.
Under French law, any agreement entered into, directly or through an intermediary, between us and one of the members of the Executive Board
or Supervisory Board, or a shareholder that holds over 10% of the voting rights, or, if such shareholder is a company, the controlling company
thereof, must be subject to prior authorization from the Supervisory Board. The interested member cannot participate in the deliberations, nor
vote on such decision. The same applies to agreements in which a person referred above has an indirect interest. Such prior authorization also
applies to agreements between us and another company if one of the members of our Executive Board or Supervisory Board is the owner, a
partner with unlimited liability, manager, director, managing director, member of the Executive Board or of the Supervisory Board, or, in a
general manner is in a position of responsibility within the other company. These provisions are not applicable to agreements concerning day-to-
day operations entered into under normal conditions.
In a report to the General Meeting of shareholders attached to the Executive Board’s Management Report, the Supervisory Board reports on the
conditions for preparing and organizing the work of the Supervisory Board as well as the internal control procedures set up by us.
Compensation of the Supervisory Board
Compensation for their attendance at board meetings (formerly known as jetons de présence) is determined at the annual ordinary General
Meeting. The General Meeting of shareholders may allocate an annual fixed sum and our Supervisory Board allocates this sum among its
members as it sees fit. In addition, the Supervisory Board may allocate exceptional compensation (rémunération exceptionnelle) for missions or
mandates entrusted to its members; in this case, this remuneration is subject to the provisions regarding related-parties agreements.
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Committees
The Supervisory Board may decide to establish committees responsible for reviewing matters which the Supervisory Board or its Chairman wish
to submit to them for examination and advice.
Observers (Article 23 of the Bylaws)
At the general meeting of shareholders, one or more observers (censeurs) may be appointed, at the discretion of the shareholders for a term of
office expiring at the shareholders meeting convened to decide on the financial statements for the preceding financial year after the first
anniversary date of their appointment. This mandate is renewable without limit. Observers may be individuals or companies and are not required
to be shareholders.
The observers attend all Supervisory Board meetings, with the right to participate but with a consultative vote only. They hold the same
information and communication rights than the Supervisory Board’s members and they are bound to the same confidentiality obligations.
General Meeting of Shareholders (Articles 26 to 37 of the Bylaws)
Calling Meetings and Conditions for Admission (Articles 27 to 30 of the Bylaws)
General Meetings of shareholders are called by the Executive Board, or failing that, by the Supervisory Board. They can also be called by the
auditor(s) or an officer appointed by a court upon request, by any interested party or by the Works Council in an emergency, by one or more
shareholders holding at least five percent of the ordinary shares or by an association of our shareholders. Meetings are held at our registered
offices or at any other location indicated in the convening notice.
The meeting is published in the French Bulletin of Mandatory Legal Notices (Bulletin des Annonces Légales Obligatoires or BALO) at least 35
days prior to the date of a General Meeting of shareholders. In addition to the information concerning us, the notice indicates in particular the
agenda of the General Meeting of shareholders and the draft resolutions that will be presented.
In the 21 days preceding the meeting, we will publish the information and documents relating to the meeting on our website.
The General Meeting of shareholders must be announced at least 15 days beforehand, by a notice placed in a journal that publishes legal
announcements in the department where the headquarters are located, and in the BALO. Holders of registered shares who have owned them for
at least one month as of the date on which the latest notice is published receive individual notices. When a General Meeting of shareholders is
unable to take action because the requisite quorum is not present, a second meeting is called at least ten days in advance using the same
procedure as the first one.
The General Meeting of shareholders may only take action on items on the agenda. However, it may dismiss and replace one or more members
of the Supervisory Board at any time. The General Meeting may also dismiss the members of the Executive Board. One or more shareholders
representing at least the percentage of share capital fixed by law, and acting according to the legally required conditions and deadlines, are
allowed to request that items and/or draft resolutions be added to the agenda of the General Meeting of shareholders.
Each shareholder has the right to attend the meetings and take part in deliberation (i) personally; (ii) by granting proxy to another shareholder,
his or her spouse or partner in a civil union or any other natural or legal person of his or her choice; (iii) by sending a proxy to the Company
without indication of the beneficiary; (iv) by voting by correspondence; or (v) by videoconference or another means of telecommunication,
including internet, in accordance with applicable laws and regulations that allow identification; by presenting proof of identity and ownership of
shares, subject to:
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•
•
for holders of registered shares, an entry in the shareholder registry at least two business days before the General Meeting of
shareholders; and
for holders of bearer shares, filing, under the conditions provided by law, of a certificate of participation issued by an authorized
intermediary two business days before the date of the General Meeting of shareholders.
The final date for returning the votes is set forth by law.
A shareholder who has voted by correspondence will no longer be able to participate directly in the meeting or to be represented. In the case of
returning the proxy form and the voting by correspondence form, the proxy form is taken into account, subject to the votes cast in the voting by
correspondence form.
A shareholder may be represented at meetings by any individual or legal entity by means of a proxy form which we send to such shareholder
either at the shareholder’s request or at our initiative. A shareholder’s request for a proxy form must be received at the registered office at least
five days before the date of the meeting. The proxy is only valid for a single meeting, for two meetings (an ordinary and an extraordinary
meeting convened for the same day or within 15 days) or for successive meetings convened with the same agenda.
A shareholder may vote by correspondence by means of a voting form, which we send to such shareholder either at the shareholder’s request or
at our initiative, or which we include in an appendix to a proxy voting form under the conditions provided for by current laws and requirements.
A shareholder’s request for a voting form must be received at the registered office at least six days before the date of the meeting. The voting
form is also available on our website at least 21 days before the date of the meeting. The voting by correspondence form addressed by a
shareholder is only valid for a single meeting or for successive meetings convened with the same agenda.
C. Material Contracts.
Strategic Collaborations and License Agreements
AstraZeneca
Co-Development Agreement (monalizumab)
In October 2018, the Company entered into a co-development and license agreement relating to all products containing monalizumab (the "Co-
Development Agreement") with MedImmune, a wholly owned subsidiary of AstraZeneca, which Innate refers to as AstraZeneca. Under the Co-
Development Agreement, the Company granted to AstraZeneca a worldwide, exclusive license, subject to certain exclusions, to certain of its
patents and know-how to develop, manufacture and commercialize licensed products, including monalizumab, in the field of diagnosis,
prevention and treatment of oncology diseases and conditions. The Company further granted to AstraZeneca a worldwide, non-exclusive license
to certain of its other patents to develop, manufacture and commercialize licensed products, including monalizumab, in the field of diagnosis,
prevention and treatment of oncology diseases and conditions. The Company retains the rights under the licensed patents and know-how to,
among other things, co-promote licensed products in certain European countries,pursuant to its option to co-promote, and exploit the licensed
patents and know-how to research, develop and commercialize the licensed products outside of the field of diagnosis, prevention and treatment
of oncology diseases and conditions.
Under the Co-Development Agreement, the Company is required to collaborate with AstraZeneca to develop and commercialize licensed
products. AstraZeneca will be the lead party in developing the licensed products and licensed product in certain major markets. Each party will
have to use
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commercially reasonable efforts to complete certain development activities in accordance with a specified development plan.
The Company is required for a defined period of time to co-fund 30% of the Phase 3 clinical trials of licensed products, subject to an aggregate
cap, in order to receive 50% of the profits in Europe.
On July 31, 2019, the Company notified AstraZeneca of its decision to co-fund future monalizumab Phase 3 clinical development program. In
October 2020, AstraZeneca enrolled the first patient in the first Phase 3 trial which triggered a $50 million milestone payment from AstraZeneca
to Innate.
In August 2022, the Company announced that the planned futility interim analysis of the INTERLINK-1 Phase 3 study sponsored by
AstraZeneca did not meet a pre-defined threshold for efficacy. Based on this result and the recommendation of an Independent Data Monitoring
Committee, AstraZeneca has informed Company that the study will be discontinued.
In September 2021, AstraZeneca, based on data from the randomized Phase 2 trial in patients with unresectable, Stage III non-small cell lung
cancer (NSCLC) presented at the European Society for Medical Oncology (ESMO) Congress, announced plans to initiate a Phase 3 trial for both
combinations of monalizumab or oleclumab plus durvalumab in the unresectable, Stage III NSCLC setting for patients who had not progressed
after concurrent chemoradiationtherapy.
In April 2022, the Company announced that AstraZeneca enrolled the first patient in a second Phase 3 trial, PACIFIC-9, evaluating durvalumab
in a combination with monalizumab or oleclumab in patients with unresectable, Stage III NSCLC, which triggered a $50 million milestone
payment from AstraZeneca Innate.
Separately, AstraZeneca also announced that it is starting a Phase 2 clinical trial, NeoCOAST-2, that includes a treatment arm with durvalumab
in combination with chemotherapy and monalizumab in resectable, early-stage NSCLC.
AstraZeneca is responsible for the promotion of licensed products worldwide, subject to Innate's option to co-promote the licensed products in
certain European countries. Should the Company elect not to co-promote, its share of profits in Europe will be reduced by a specified amount of
percentage points not to exceed the mid-single digits.
The development by AstraZeneca of a licensed product under the Co-Development Agreement is subject to certain reciprocal non-compete
obligations.
AstraZeneca is obligated to pay Innate up to $775 million in the aggregate upon the achievement of certain development and regulatory
milestones ($350 million), and commercialization milestones ($425 million). As described above, the arrangement also provides for a 50% profit
share and, subject to certain deferrals of reimbursement, loss share of licensed products in Europe if the Company does not opt out of its co-
funding and co-promoting obligations. In addition, the Company will be eligible to receive tiered royalties ranging from a low double-digit to
mid-teen percentage on net sales of licensed products outside of Europe. The royalties payable to Innate under the Co-Development Agreement
may be reduced under certain circumstances, including loss of exclusivity or lack of patent protection.
Innate's right to receive royalties under the Co-Development Agreement expires, on a licensed product-by-licensed product and country-by-
country basis, on the latest of: (i) the tenth anniversary of the first commercial sale of such licensed product in such country, or in the case of
European countries, in any European country, (ii) the expiration of regulatory exclusivity for such licensed product in such country and (iii) the
expiration of the last-to-expire valid licensed patent claim subject to the agreement that covers such licensed product in such country.
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Unless earlier terminated, the term of the Co-Development Agreement will expire on the date on which all of AstraZeneca’s payment obligations
have expired. The Company may terminate the Co-Development Agreement if AstraZeneca challenges any patent licensed to it under the
agreement. AstraZeneca may terminate the Co-Development Agreement in its entirety for convenience at any time effective upon 120 days’ prior
written notice to us. Either party may terminate the Co-Development Agreement in the event of an uncured material breach by the other party or
for certain bankruptcy or insolvency events involving the other party.
If the Co-Development Agreement is terminated by AstraZeneca for convenience or by Innate for AstraZeneca’s material breach, insolvency or a
patent challenge by AstraZeneca, all licenses and rights granted under the agreement terminate, however, upon any such termination,
AstraZeneca would grant Innate an exclusive, worldwide, royalty-bearing right and license, with the right to grant sublicenses, under technology
developed by AstraZeneca and incorporated into or necessary for the exploitation of licensed products, except for certain manufacturing
technology that would require a separate agreement. If the Co-Development Agreement is terminated by AstraZeneca for Innate's material breach
or insolvency, AstraZeneca has the right to continue the agreement by providing written notice to us. If AstraZeneca provides Innate with such
written notice, among other things, its rights under the co-promote option will terminate and the Company must cease any development,
manufacture or commercialization activities under the agreement.
Collaboration and Option Agreement with AstraZeneca relating to CD39
In October 2018, the Company entered into a collaboration and option agreement relating to IPH5201, or the CD39 Option Agreement. The
Company received an initial payment of $50 million under this agreement, $26 million of which was received in October 2018 and $24 million
of which was received in January 2019. Pursuant to the 2018 CD39 Option Agreement, the Company granted to AstraZeneca an exclusive option
to obtain an exclusive license to certain of its patents and know-how to develop and commercialize licensed products, including IPH5201 in the
field of the diagnosis, prevention and treatment of all diseases and conditions in humans or animals, subject to certain limitations.
Under the 2018 CD39 Option Agreement, the Company must collaborate with AstraZeneca to develop CD39 option products. Prior to the
expiration of the option period, the Company and AstraZeneca are subject to certain non-compete obligations.
AstraZeneca is responsible for funding the research and development costs of CD39 option products contemplated in the joint development plan.
Additionally, the Company may conduct certain exploratory clinical studies at its own cost, subject to reimbursement by AstraZeneca with a
premium under certain circumstances related to subsequent development by AstraZeneca.
Following the dosing of the first patient on March 9, 2020 in the IPH5201 Phase 1 clinical trial, AstraZeneca made a $5 million milestone
payment to Innate.
In June 2022, the 2018 CD39 Option Agreement was amended. Innate received a $5 million milestone payment from AstraZeneca upon
signature of the amendment and is responsible for conducting a new Phase 2 multicenter, open label, non-randomized study of neoadjuvant and
adjuvant treatment with IPH5201, durvalumab and chemotherapy in patients with resectable, early-stage non-small cell lung cancer (NSCLC).
The "MATISSE" Study has started. AstraZeneca and Innate will share study costs and AstraZeneca will supply clinical trial drugs. Innate made a
€0.6 million milestone payment to Orega Biotech SAS pursuant to Innate’s exclusive licensing agreement (see below).
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On June 26, 2023, the Company announced the first patient was dosed in MATISSE, a Phase 2 multicenter single-arm study (NCT05742607),
sponsored by the Company, evaluating neoadjuvant and adjuvant treatment with IPH5201, an anti-CD39 blocking monoclonal antibody, in
combination with durvalumab (anti-PD-L1) and chemotherapy, in treatment-naïve patients with resectable early stage non-small cell lung cancer
(NSCLC). The primary objectives of the study are to assess antitumor activity of neoadjuvant treatment based on pathological complete response
(pCR) and safety. The Company is responsible for conducting the study and shares study costs with AstraZeneca. AstraZeneca supplies clinical
trial drugs. More information about the Phase 2 MATISSE trial, see “Item 4.B—Business Overview—IPH5201, an Anti-CD39 Antibody
Targeting the Immunosuppressive Adenosine Pathway.” The Company received a $5 million milestone payment from AstraZeneca when the
decision was made to progress IPH5201 to a Phase 2 clinical trial.
Unless earlier terminated, the term of the 2018 CD39 Option Agreement will expire on the earlier of exercise of the option or expiration of the
option period in the event that AstraZeneca does not exercise the option. The Company may terminate the 2018 CD39 Option Agreement if
AstraZeneca challenges any option patent. AstraZeneca may terminate the 2018 CD39 Option Agreement in its entirety for convenience at any
time effective upon three months’ prior written notice to us. Either party may terminate the 2018 CD39 Option Agreement in the event of an
uncured material breach by the other party or for certain bankruptcy or insolvency events involving the other party.
CD39 Co-Development and License Agreement Upon Option Exercise by AstraZeneca
Upon exercise of the option under the 2018 CD39 Option Agreement, the Company would enter into a co-development and license agreement
with AstraZeneca, or the CD39 Potential License Agreement.Under the CD39 Potential License Agreement, the Company would grant to
AstraZeneca a worldwide,exclusive license, subject to certain exclusions, to certain of its patents and know-how regarding, among other things,
its IPH5201 candidate, to develop, manufacture and commercialize licensed products in the field of diagnosis, prevention and treatment of
diseases and conditions in humans and in animals, subject to certain limitations. The Company would retain certain rights under the licensed
patents and know-how to, among other things, co-promote licensed products in certain European countries, pursuant to its option to co-promote.
The CD39 Potential License Agreement provides for a payment of $25 million upon exercise. Additionally, AstraZeneca would be obligated to
pay Innate up to $795 million in the aggregate upon the achievement of certain development and regulatory milestones ($295 million) and
commercialization milestones ($500 million). The arrangement also provides for a 50% profit share in Europe if the Company opts into certain
co-promoting and late stage co-funding obligations. In addition, the Company would be eligible to receive tiered royalties ranging from a high-
single digit to mid-teen percentage on net sales of IPH5201, or from a mid-single digit to low-double digit percentage on net sales of other types
of licensed products, outside of Europe. The royalties payable to Innate under the CD39 Potential License Agreement may be reduced under
certain circumstances, including loss of exclusivity or lack of patent protection.
Under the CD39 Potential License Agreement, unless the Company has elected not to co-fund, the Company would be required to collaborate
with AstraZeneca to develop and commercialize licensed products. AstraZeneca would be the lead party in developing and commercializing the
licensed products and each party must use commercially reasonable efforts to develop, obtain regulatory approval and commercialize at least one
licensed product in certain major markets. Each party would have to use commercially reasonable efforts to complete its development activities
in accordance with a specified development plan.
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The Company would have the option to co-fund 30% of the Phase 3 clinical trials of licensed products in order to share in 50% of the profits and
losses of licensed products in Europe. If the Company does not exercise this co-funding option, among other things, its right to share in 50% of
the profits and losses in Europe and right to co-promote in certain European countries will terminate and will be replaced by rights to receive
royalties on net sales at the rates applicable to outside of Europe. Additionally, certain milestone payments that may be payable to Innate would
be reduced. AstraZeneca would be responsible for the promotion of licensed products worldwide, subject to its option to co-promote the licensed
products in certain European countries if the Company elects to co-fund. Additionally, the Company would have a right of first negotiation in the
event that AstraZeneca wishes to grant a third-party the right to commercialize licensed products in Europe or the United States.
The development by AstraZeneca of a licensed product under the Potential License Agreement is subject to certain reciprocal non-compete
obligations.
Innate's right to receive royalties under the CD39 Potential License Agreement expires, on a licensed product-by-licensed product and country-
by-country basis, on the latest of: (i) the tenth anniversary of the first commercial sale of such licensed product in such country, or, in the case of
European countries, in any European country, (ii) the expiration of regulatory exclusivity for such licensed product in such country and (iii) the
expiration of the last-to-expire valid licensed patent claim subject to the agreement that covers such licensed product in such country.
Unless earlier terminated, the term of the CD39 Potential License Agreement would expire on the date on which all of AstraZeneca’s payment
obligations have expired. The Company may terminate the CD39 Potential License Agreement if AstraZeneca challenges any patent licensed to
it under the agreement.AstraZeneca may terminate the CD39 Potential License Agreement in its entirety for convenience at any time effective
upon 120 days’ prior written notice to us. Either party may terminate the CD39 Potential License Agreement in the event of an uncured material
breach by the other party or for certain bankruptcy or insolvency events involving the other party.
Novo Nordisk A/S
Development and License Agreement relating to monalizumab
On February 5, 2014, the Company in-licensed the full development and commercialization rights to monalizumab from Novo Nordisk A/S. In
consideration for these rights, the Company paid Novo Nordisk A/S €2 million in cash and 600,000 of its ordinary shares at a price of €8.33 per
share. Novo Nordisk A/S is eligible to receive a total of €20 million in potential regulatory milestones and tiered mid-to-high single-digit
percentage royalties on future net sales.
The agreement with Novo Nordisk A/S included a right to additional consideration in the event of an out-licensing agreement. Consequently,
following the agreement signed with AstraZeneca in April 2015, the Company paid Novo Nordisk A/S an additional consideration amount of
€6.5 million.
In October 2018 AstraZeneca exercised its option under the 2015 Option Agreement to acquire an exclusive license to monalizumab. Pursuant to
this option exercise, AstraZeneca paid $100 million to Innate and, as a result, Novo Nordisk A/S became entitled to a second and final payment
amounting to $15.0 million (€13.1 million). If the AstraZeneca agreement is terminated for any reason, the Company will pay to Novo Nordisk
A/S a portion of any amounts that have been budgeted but have not been spent or will not be spent under the initial research and development
budget. In light of current development plans and research and development costs incurred to date, the Company does not currently expect any
amounts to be paid pursuant to this provision.
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License Agreement relating to avdoralimab
In July of 2017 the Company entered into an exclusive license agreement with Novo Nordisk A/S relating to avdoralimab, or the 2017 Novo
Agreement, pursuant to which the Company obtained a worldwide, exclusive license under certain patents and know-how of Novo Nordisk A/S
to develop, manufacture and commercialize pharmaceutical products that contain or comprise an Anti-C5aR antibody. The Company made an
initial payment to Novo Nordisk A/S of €40.0 million under the 2017 Novo Agreement which was offset against Novo Nordisk A/S’s
subscription in new shares. The Company is obligated to pay Novo Nordisk A/S in the aggregate up to €370.0 million upon achievement of
certain development, regulatory and sales milestones and tiered royalties ranging from a low double-digit to low teen percentage on net sales.
The Company's royalty payment obligations are subject to certain reductions and expire on a product-by-product and country-by-country basis
upon the later of the date the exploitation of a licensed product is no longer covered by a claim of a licensed patent in such country, loss of data
or regulatory exclusivity in such country, and the twelfth anniversary of the first commercial sale of such product in such country. In connection
with the 2017 Novo Agreement, the Company obtained an exclusive sublicense from Novo Nordisk A/S under certain third-party intellectual
property rights. In consideration for such sublicense, the Company may be obligated to pay a mid-single digit royalty on its net sales of a
licensed product, however, the Company will be entitled to offset such payments against royalties payable to Novo Nordisk A/S.
Under the 2017 Novo Agreement, the Company is obligated to use commercially reasonable efforts to develop and seek regulatory approval for a
licensed product.
The 2017 Novo Agreement shall expire upon expiration of the last royalty payment obligation under the agreement. Either party may terminate
the 2017 Novo Agreement upon any uncured material breach of the agreement by the other party or upon a bankruptcy or insolvency of the other
party. Additionally, Novo Nordisk A/S may terminate the agreement in the event the Company challenges any patent licensed under the
agreement. The Company may terminate the 2017 Novo Agreement upon prior notice to Novo Nordisk A/S.
In 2020, the Company made a payment to Novo Nordisk A/S of €1 million under the 2017 Novo Agreement, covered by Bpifrance funding, in
respect of the start of a Phase 2 clinical trial of avdoralimab in COVID-19 patients with severe pneumonia. In July 2021, based on the Phase 2
clinical trial of avdoralimab in COVID-19 patients with severe pneumonia, results of which did not meet its primary endpoints in all three
cohorts of the trial, the Company has stopped stop exploring avdoralimab in COVID-19.
Following a strategic review in 2021, the Company was solely pursuing avdoralimab in bullous pemphigoid ("BP"), an inflammatory disease,
through an investigator-sponsored study and stopped further development in all other indications.
In last quarter of 2022, the Company was informed by the Sponsor, the Centre Hospitalier Universitaire de Nice, that the ongoing Phase 2 study
for the treatment of BP will be discontinued. Consequently, the Company decided to stop further development in BP indication and will continue
to review its strategy on avdoralimab.
Sanofi
Collaboration and Licensing agreement (2016) IPH6101 and IPH6401
IPH6101
The Company entered into a research collaboration and licensing agreement with Sanofi in January 2016 to apply its proprietary technology to
the development of bispecific antibody formats engaging NK cells
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to kill tumor cells through the activating receptor NKp46. The Company granted to Sanofi under certain of its intellectual property a non-
exclusive, worldwide, royalty-free research license, as well as an exclusive, worldwide license to research, develop and commercialize products
directed against two specified targets, for all therapeutic, prophylactic and diagnostic indications and uses.
The Company will work together with Sanofi on the generation and evaluation of up to two bispecific NK cell engagers, using its technology
and Sanofi’s tumor targets. Under the terms of the license agreement, Sanofi will be responsible for the development, manufacturing and
commercialization of products resulting from the research collaboration. The Company will be eligible for up to €192.0 million in payments,
primarily upon the achievement of development and commercial milestones, as well as royalties ranging from a mid to high single-digit
percentage on net sales.
On January 5, 2021, the Company announced that Sanofi has made the decision to progress IPH6101/SAR443579 into investigational new drug
(IND) enabling studies. IPH6101/SAR443579 is a NKp46-based NK cell engager (NKCE) using Innate’s proprietary multi-specific antibody
format. The decision triggered a €7 million milestone payment from Sanofi to Innate. Sanofi will be responsible for all future development,
manufacturing and commercialization of IPH6101/SAR443579. Additionally, in January 2021, a GLP-toxicology study was initiated for the
IPH6101/SAR443579 program. In December 2021, the Company announced that the first patient was dosed in a Phase 1/2 clinical trial,
evaluating IPH6101/SAR443579, in patients with relapsed or refractory acute myeloid leukemia (R/R AML), B-cell acute lymphoblastic
leukemia (B-ALL) or high risk-myelodysplastic syndrome (HR-MDS). The start of the trial triggered a milestone payment. The Company
received €3.0m from Sanofi following the initiation of a GLP-tox Study and the launching of the first Phase 1 clinical trial in humans in relapsed
of refractory AML with IPH6101/SAR443579, respectively in January and December 2021.
In April 2024, Sanofi advanced SAR’579 / IPH6101, to the Phase 2 preliminary dose expansion of the trial. Under the terms of the research
collaboration and licensing agreement, the progression to the dose expansion part of the trial triggered a milestone payment from Sanofi to
Innate of €4 million.
On April 23, 2025, the Company announced that, in alignment with both company's current strategic priorities, Sanofi and Innate agreed to
terminate the 2016 Agreement as it relates to SAR’579/IPH6101 (CD123 ANKET®), effective as of June 30, 2025. Innate will regain its rights
on July 1, 2025.
IPH6401
In July 2022, the Company announced that Sanofi has made the decision to progress IPH6401/SAR’514 into investigational new drug (IND)
enabling studies, triggering a €3 million milestone payment.
On July 11, 2023, the Company announced that the first patient was dosed in a Sanofi-sponsored Phase 1/2 clinical trial (NCT05839626),
evaluating SAR’514 / IPH6401 in relapsed/refractory multiple myeloma (RRMM) and Relapsed/Refractory Light-chain Amyloidosis (RRLCA).
SAR’514 is a trifunctional anti-BCMA NKp46xCD16 NK cell engager, using Sanofi’s proprietary CROSSODILE® multi-functional platform,
which comprises the Cross-Over-Dual-Variable-Domain (CODV) format. It induces a dual targeting of the NK activating receptors, NKp46 and
CD16, for an optimized NK cell activation, based on the Company’s ANKET proprietary platform. The purpose of the dose escalation and dose
expansion study is to evaluate the safety, pharmacokinetics and preliminary efficacy of SAR’514 in monotherapy in patients with RRMM and
RRLCA. The start of the trial has triggered a milestone payment from Sanofi to Innate, which is part of a previously announced research
collaboration
®
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with Sanofi. More information about the Phase 1/2 trial, see “Item 4.B—Business Overview—IPH6401/SAR’514, a BCMA-targeting NK Cell
Engager.”
The Company announced on March 27, 2025, that the clinical study will be terminated early as Sanofi will now pursue the development of
IPH6401/SAR'514 in autoimmune indications.
Research Collaboration and Licensing agreement (2022) relating to Innate’s ANKET® program - IPH62 and IPH67
IPH62
In December 2022, the Company entered into a research collaboration and licensing agreement with Genzyme Corporation, a wholly owned
subsidiary of Sanofi under which the Company grants Sanofi an exclusive license to Innate’s B7H3 ANKET program (IPH62) and options for
two additional targets to be named. Upon candidate selection, Sanofi will be responsible for all development, manufacturing and
commercialization.
®
Under the terms of the research collaboration and license agreement, Innate has received in March 2023 €25 million as upfront payment and will
receive, during the term of the Research and Collaboration Agreement, up to €1.35 billion total in preclinical, clinical, regulatory and
commercial milestones plus royalties on potential net sales.
IPH67
®
On December 19, 2023, Innate announced that Sanofi had exercised its option to license a natural killer (NK) cell engager program in solid
tumors from the Company’s ANKET platform (IPH67) pursuant to the terms of the research collaboration and license agreement signed in
December 2022. Following a research collaboration period, Sanofi will be responsible for all development, manufacturing and
commercialization. Sanofi still retains the option to one additional ANKET target as per the research collaboration and licensing agreement with
Genzyme Corporation. Under the terms of the research collaboration and licensing agreement, the Company has received a €15 million payment
for the exercise of this option. The Company is eligible for up to €1.35 billion total in preclinical, clinical, regulatory and commercial milestones
plus royalties on potential net sales.
®
During the third quarter 2024, Sanofi terminated the IPH67 license. As a consequence, Innate has regained the full rights to IPH67, an NK-cell
engager program in solid tumors from Innate’s ANKET® platform. As a result of such termination and resumptions of rights, Sanofi retains a
right to compensation regarding any future revenue that Innate Pharma may receive for licenses of or assigning rights related to Nectin-4, as well
as payments based on milestones upon certain authorizations being obtained should the Company develop IPH67 itself, and an ongoing royalty
fee in the low-single digits on future net sales. The rest of the 2022 research collaboration and license agreement remains unchanged.
Orega
Orega License Agreement with Orega relating to IPH5201
Pursuant to its licensing agreement with Orega Biotech, Innate acquired an exclusive license to Orega Biotech’s intellectual property rights
relating to its anti-CD39 checkpoint inhibitor program. As of December 31, 2018, the Company had paid a total amount of €1.8 million to Orega
Biotech for the acquisition of these intellectual property rights, and in June 2019, the Company paid Orega Biotech €7.0 million in relation to the
anti-CD39 program as consideration relating to the 2018 AZ Option Agreement. Following the dosing of the first patient on March 9, 2020 in the
IPH5201 Phase 1 clinical trial, AstraZeneca made a $5 million milestone pursuant to Innate’s collaboration agreement with AstraZeneca
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and Innate made a €2.5 million milestone payment in April 2020 and a €0.2 million milestone payment in June 2020 to Orega Biotech SAS
pursuant to its licensing agreement with Orega Biotech SAS. In June 2022, Innate received a $5 million milestone payment from AstraZeneca
upon signature of an amendment to the 2018 CD39 Option Agreement (see above) and made a €0.6 million milestone payment to Orega Biotech
SAS pursuant to its licensing agreement with Orega Biotech SAS.
Unless earlier terminated, the Company may also pay Orega Biotech up to an additional €47 million in the aggregate upon the achievement of
development and regulatory milestones. Finally, the Company will be required to pay a low-teen percentage of sub-licensing revenues received
by the Company pursuant to its agreement with AstraZeneca regarding IPH5201.
Bank Loans
On July 17, 2017, the Company entered into one loan agreement with Société Générale, pursuant to which the Company obtained a financing in
an amount equal to €15.2 million with a term of 12 years.
On December 22, and December 17, 2021, the Company entered into two loan agreements with Société Générale and BNP Paribas, respectively,
pursuant to which the Company obtained non-dilutive financing in an aggregate amount equal to €28.7 million.
The two loans have an initial term of one year with an extension up to five years at Innate’s option. They are 90% guaranteed by the French state
(“PGE”) as part of the package of measures put in place by the French government to support companies during the COVID-19 pandemic.
In August 2022, the Company requested the extension of these two loans repayment for an additional period of five years starting in 2022 and
including a one-year grace period (2023). Consequently, the Company has obtained agreements from Société Générale and BNP Paribas. The
effective interest rates applied to these contracts during the additional period are 1.56% and 0.95% for Société Générale and BNP Paribas loans,
respectively, excluding insurance and guarantee fees, with an amortization exemption for the entire year 2023. During this grace period, the
Company was only liable for the payment of interest and the guarantee fees, with amortization of the two loans starting in 2024 over a period of
four years.
The summaries provided above do not purport to be complete and are qualified in their entirety by reference to the complete agreements, which
are attached as exhibits to this Annual Report on Form 20-F. For additional information on its material contracts, please see “Item 4. Information
on the Company,” “Item 6. Directors, Senior Management and Employees,” and “Item 7.B. Related Party Transactions” of this Annual Report on
20-F.
D.
Exchange Controls.
Under current French foreign exchange regulations there are no restrictions on the amount of cash transfers that may be made to residents of
foreign countries (subject to the absence of any specific decision taken by the government otherwise). Laws and regulations concerning foreign
exchange controls do, however, require that all payments or transfers of funds made by a French resident to a non-resident such as dividend
payments be handled by an accredited intermediary. All registered banks and substantially all credit institutions in France are accredited
intermediaries. For completeness, there is a reporting obligation to the custom officer for transfer of cash in banknotes and coins of €10,000 or
more carried into, or out of, the European Union.
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E.
Taxation.
Material U.S. Federal Income Tax Considerations
The following describes material U.S. federal income tax considerations relating to the acquisition, ownership and disposition of the ordinary
shares or ADSs by a U.S. holder (as defined below) who hold the ordinary shares or ADSs as capital assets. This summary does not address all
U.S. federal income tax matters that may be relevant to a particular U.S. holder, such as the effects of Section 451(b) of the Code. This summary
does not address tax considerations applicable to a holder of the ordinary shares or ADSs that may be subject to special tax rules including,
without limitation, the following:
•
•
•
•
•
•
•
•
•
•
•
banks, financial institutions or insurance companies;
brokers, dealers or traders in securities, currencies, commodities, or notional principal contracts;
tax-exempt entities or organizations, including an “individual retirement account” or “Roth IRA” as defined in Section 408 or 408A of the
Code (as defined below), respectively;
real estate investment trusts, regulated investment companies or grantor trusts;
persons that hold the ordinary shares or ADSs as part of a “hedging,” “integrated,” “wash sale” or “conversion” transaction or as a position
in a “straddle” for U.S. federal income tax purposes;
S corporations, partnerships, or other entities or arrangements classified as partnerships, for U.S. federal income tax purposes;
certain former citizens or long-term residents of the United States;
persons that received the ordinary shares or ADSs as compensation for the performance of services;
persons acquiring the ordinary shares or ADSs in connection with a trade or business conducted outside of the United States, including a
permanent establishment or a fixed base in France;
holders that own directly, indirectly, or through attribution 10% or more of the voting power or value of the ordinary shares or ADSs; and
holders that have a “functional currency” other than the U.S. dollar.
Holders of the ordinary shares or ADSs who fall within one of the categories above are advised to consult their tax advisor regarding the specific
tax consequences which may apply to their particular situation.
For the purposes of this description, a “U.S. holder” is a beneficial owner of the ordinary shares or ADSs that is (or is treated as), for U.S. federal
income tax purposes:
•
•
•
•
an individual who is a citizen or resident of the United States;
a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or
the District of Columbia;
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
a trust, if a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have
the authority to control all of the substantial decisions of such trust, or if such trust has a valid election in effect under applicable U.S.
Treasury Regulations to be treated as a U.S. person.
If a partnership (or any other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds the ordinary shares or
ADSs, the tax consequences relating to an investment in the
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ordinary shares or ADSs will depend in part upon the status of the partner and the activities of the partnership. Such a partner or partnership
should consult its tax advisor regarding the specific tax considerations of acquiring, owning and disposing of the ordinary shares or ADSs in its
particular circumstances.
Persons considering an investment in the ordinary shares or ADSs should consult their own tax advisors as to the particular tax
consequences applicable to them relating to the acquisition, ownership and disposition of the ordinary shares or ADSs, including the
applicability of U.S. federal, state and local tax laws, French tax laws and other non-U.S. tax laws.
This description does not address the U.S. federal estate, gift or alternative minimum tax considerations, the Medicare tax on net investment
income or any U.S. state, local or non-U.S. tax considerations of the acquisition, ownership and disposition of the ordinary shares or ADSs.
This description is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code, existing, proposed and temporary U.S. Treasury
Regulations promulgated thereunder and administrative and judicial interpretations thereof, in each case as of the date hereof. All the foregoing
is subject to change, which change could apply retroactively, and to differing interpretations, all of which could affect the tax considerations
described below. There can be no assurances that the U.S. Internal Revenue Service, or the IRS, will not take a position concerning the tax
consequences of the acquisition, ownership and disposition of the ordinary shares or ADSs or that such a position would not be sustained by a
court. The Company has not obtained, nor does the Company intend to obtain, a ruling with respect to the U.S. federal income tax considerations
of the purchase, ownership or disposition of its ordinary shares or ADSs. Accordingly, holders should consult their own tax advisors concerning
the U.S. federal, state, local and non-U.S. tax consequences of acquiring, owning and disposing of the ordinary shares or ADSs in their particular
circumstances.
As indicated below, this summary is subject to the discussion below of the U.S. federal income tax rules applicable to a “passive foreign
investment company” (PFIC).
In general, and taking into account the earlier assumptions, for U.S. federal income tax purposes, a U.S. holder holding ADSs will be treated as
the owner of the ordinary shares represented by the ADSs. Exchanges of ordinary shares for ADSs, and ADSs for ordinary shares, generally will
not be subject to U.S. federal income tax.
Distributions. Subject to the discussion under “—Passive Foreign Investment Company Considerations,” below, the gross amount of any
distribution (including any amounts withheld in respect of foreign tax) actually or constructively received by a U.S. holder with respect to the
ordinary shares or ADSs will generally be taxable to the U.S. holder as a dividend to the extent of the U.S. holder’s pro rata share of the current
or accumulated earnings and profits as determined under U.S. federal income tax principles. Distributions in excess of earnings and profits will
generally be non-taxable to the U.S. holder to the extent of, and will be applied against and reduce, the U.S. holder’s adjusted tax basis in the
ordinary shares or ADSs. Distributions in excess of earnings and profits and such adjusted tax basis will generally be taxable to the U.S. holder
as either long-term or short-term capital gain depending upon whether the U.S. holder has held the ordinary shares or ADSs for more than one
year as of the time such distribution is received. However, since the Company does not calculate its earnings and profits under U.S. federal
income tax principles, it is expected that any distribution will be reported as a dividend, even if that distribution would otherwise be treated as a
non-taxable return of capital or as capital gain under the rules described above. Non-corporate U.S. holders may qualify for the preferential rates
of taxation with respect to dividends on the ordinary shares or ADSs applicable to long-term capital gains (i.e., gains from the sale of capital
assets held for more than one year), or qualified dividend income if the Company is a
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“qualified foreign corporation” and certain other requirements are met. A non-U.S. corporation (other than a corporation that is a PFIC for the
taxable year in which the dividend is paid or the preceding taxable year) generally will be considered to be a qualified foreign corporation (a) if it
is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is
satisfactory for purposes of this provision and which includes an exchange of information provision, or (b) with respect to any dividend it pays
on ADSs which are readily tradable on an established securities market in the United States. The ADSs are listed on the Nasdaq Global Select
Market, which is an established securities market in the United States, and the Company believes the ADSs are readily tradable on the Nasdaq
Global Select Market. There can be no assurance that the ADSs will continue to be considered readily tradable on an established securities
market in the United States in later years. The Company, which is incorporated under the laws of France, believes that it qualifies as a resident of
France for purposes of, and is eligible for the benefits of, the U.S.-France Tax Treaty (as defined below), although there can be no assurance in
this regard. Further, the IRS has determined that the U.S.-France Tax Treaty is satisfactory for purposes of the qualified dividend rules and that it
includes an exchange-of-information program. Therefore, subject to the discussion under “—Passive Foreign Investment Company
Considerations,” below, such dividends will generally be “qualified dividend income” in the hands of individual U.S. holders, provided that a
holding period requirement (more than 60 days of ownership, without protection from the risk of loss, during the 121-day period beginning 60
days before the ex-dividend date) and certain other requirements are met. The dividends will not be eligible for the dividends-received deduction
generally allowed to corporate U.S. holders.
Subject to applicable limitations and the Foreign Tax Credit Regulations (as defined below), a U.S. holder generally may claim the amount of
any French withholding tax on a distribution not exceeding the rate provided by the U.S.-France Tax Treaty as either a deduction from gross
income or a credit against its U.S. federal income tax liability. French taxes withheld in excess of the rate applicable with respect to such U.S.
holder under the U.S.-France Tax Treaty will not be eligible for a credit against a U.S. holder’s federal income tax liability. U.S. holders should
consult their tax advisors regarding the availability of foreign tax credits for any amounts withheld with respect to dividends on ADSs or
ordinary shares.
The foreign tax credit is subject to numerous complex limitations that must be determined and applied on an individual basis. Generally, the
credit cannot exceed the proportionate share of a U.S. holder’s U.S. federal income tax liability that such U.S. holder’s taxable income bears to
such U.S. holder’s worldwide taxable income. In applying this limitation, dividends received generally will be treated as income from foreign
sources and generally will be “passive category income,” or in certain cases “general category income” or “foreign branch income,” which is
treated separately from other types of income for purposes of computing the foreign tax credit allowable to U.S. holders. In addition, the
creditability of foreign taxes could be affected by actions taken by intermediaries in the chain of ownership between the holders of ADSs or
ordinary shares and the Company if, as a result of such actions, the holders of our ADSs or ordinary shares are not properly treated as beneficial
owners of the underlying ordinary shares. Further, certain Treasury regulations addressing foreign tax credits (the “Foreign Tax Credit
Regulations”) impose additional requirements for foreign taxes to be eligible for a foreign tax credit if the relevant taxpayer does not elect to
apply the benefits of an applicable income tax treaty, and there can be no assurance that those requirements will be satisfied. Recent notices from
the IRS provide temporary relief by allowing taxpayers that comply with applicable requirements to apply many aspects of the foreign tax credit
regulations as they previously existed (before the release of the current Foreign Tax Credit Regulations) for taxable years ending before the date
that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other
guidance). Each U.S. holder should consult its own tax advisors regarding the foreign tax credit rules, including under the Foreign Tax Credit
Regulations.
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In general, the amount of a distribution paid to a U.S. holder in a foreign currency will be the U.S. dollar value of the foreign currency calculated
by reference to the spot exchange rate on the day the depositary receives the distribution, in the case of the ADSs, or on the day the distribution is
received by the U.S. holder, in the case of ordinary shares, regardless of whether the foreign currency is converted into U.S. dollars at that time.
Any foreign currency gain or loss a U.S. holder realizes on a subsequent conversion of foreign currency into U.S. dollars will be U.S. source
ordinary income or loss. If dividends received in a foreign currency are converted into U.S. dollars on the day they are received, a U.S. holder
should not be required to recognize foreign currency gain or loss in respect of the dividend.
Sale, Exchange or Other Taxable Disposition. A U.S. holder will generally recognize gain or loss for U.S. federal income tax purposes upon the
sale, exchange or other taxable disposition of the ordinary shares or ADSs in an amount equal to the difference between the amount realized from
such sale or exchange and the U.S. holder’s adjusted tax basis in those ordinary shares or ADSs, each as determined in U.S. dollars. U.S. holders
should consult their own tax advisors about how to account for proceeds received on the sale, exchange or other taxable disposition of ordinary
shares or ADSs that are not paid in U.S. dollars. Subject to the discussion under “—Passive Foreign Investment Company Considerations”
below, this gain or loss will generally be a capital gain or loss. The adjusted tax basis in the ordinary shares or ADSs generally will be equal to
the U.S. dollar cost of such ordinary shares or ADSs. Capital gain from the sale, exchange or other taxable disposition of the ordinary shares or
ADSs by a non-corporate U.S. holder is generally eligible for a preferential rate of taxation applicable to capital gains, if the non-corporate U.S.
holder’s holding period determined at the time of such sale, exchange or other taxable disposition for such ordinary shares or ADSs exceeds one
year (i.e., such gain is long-term taxable gain). The deductibility of capital losses for U.S. federal income tax purposes is subject to limitations.
Any such gain or loss that a U.S. holder recognizes generally will be treated as U.S. source gain or loss for foreign tax credit limitation purposes.
Passive Foreign Investment Company Considerations. If the Company is a PFIC in any taxable year, a U.S. holder will be subject to special
rules generally intended to reduce or eliminate any benefits from the deferral of U.S. federal income tax that a U.S. holder could derive from
investing in a non-U.S. company that does not distribute all of its earnings on a current basis.
The Company will be a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying certain look-through rules with
respect to the income and assets of its subsidiaries, either: (1) at least 75% of the gross income is “passive income” or (2) at least 50% of the
average quarterly value of the total gross assets (which would generally be measured by fair market value of its assets, and for which purpose the
total value of its assets may be determined in part by the market value of the ADSs and its ordinary shares, which are subject to change) is
attributable to assets that produce “passive income” or are held for the production of “passive income.”
Passive income for this purpose generally includes dividends, interest, royalties, rents, gains from commodities and securities transactions, the
excess of gains over losses from the disposition of assets which produce passive income, and includes amounts derived by reason of the
temporary investment of funds raised in offerings of the ordinary shares or ADSs. If a non-U.S. corporation owns directly or indirectly at least
25% by value of the stock of another corporation or entity treated as a partnership for U.S. federal income tax purposes, the non-U.S. corporation
is treated for purposes of the PFIC tests as owning its proportionate share of the assets of such entity and as receiving directly its proportionate
share of the other entity’s income. The determination of whether the Company is a PFIC is a fact-intensive determination made on an annual
basis, and the applicable law is subject to varying interpretation. If the Company is a PFIC in any taxable year during which a U.S. holder owns
its ordinary shares or ADSs,
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such U.S. holder will be subject to special tax rules discussed below and could suffer adverse tax consequences.
The market value of the assets may be determined in large part by reference to the market price of the ADSs and its ordinary shares. Therefore,
fluctuations in the market price of the ordinary shares or ADSs may result in the Company being a PFIC for any taxable year. Whether the
Company is a PFIC for any taxable year will depend on income, assets, activities and market capitalization in each year, and because this is a
factual determination made annually after the end of each taxable year, there can be no assurance that the Company will not be a PFIC in any
taxable year. The Company does not believe it was characterized as a PFIC in its taxable year ended December 31, 2024. However, there can be
no assurance that the Company will not be a PFIC in the current year or for any future taxable year. Its U.S. counsel expresses no opinion
regarding its conclusions or its expectations regarding its PFIC status.
If the Company is a PFIC in any year with respect to which a U.S. holder owns its ordinary shares or ADSs, the Company will continue to be
treated as a PFIC with respect to such U.S. holder in all succeeding years during which the U.S. holder owns the ordinary shares or ADSs,
regardless of whether the Company continue to meet the tests described above unless the Company ceases to be a PFIC and the U.S. holder has
made a “deemed sale” election under the PFIC rules or is eligible to make and makes a mark-to-market election (as described below), with
respect to all taxable years during such U.S. holder’s holding period in which the Company is a PFIC. If the “deemed sale” election is made, a
U.S. holder will be deemed to have sold the ordinary shares or ADSs the U.S. holder holds at their fair market value as of the date of such
deemed sale and any gain from such deemed sale would be subject to the rules described below. After the deemed sale election, so long as the
Company does not become a PFIC in a subsequent taxable year, the U.S. holder’s ordinary shares or ADSs with respect to which such election
was made will not be treated as shares in a PFIC and the U.S. holder will not be subject to the rules described below with respect to any “excess
distribution” the U.S. holder receives from the Company or any gain from an actual sale or other disposition of the ordinary shares or ADSs. U.S.
holders should consult their tax advisors as to the possibility and consequences of making a deemed sale election if such election becomes
available.
If the Company is a PFIC, and you are a U.S. holder that does not make one of the elections described above (and below in further detail), a
special tax regime will apply to both (a) any “excess distribution” by the Company to you (generally, your ratable portion of distributions in any
year which are greater than 125% of the average annual distribution received by you in the shorter of the three preceding years or your holding
period for its ordinary shares or ADSs) and (b) any gain realized on the sale or other disposition of its ordinary shares or ADSs. Under this
regime, any excess distribution and realized gain will be treated as ordinary income and will be subject to tax as if (a) the excess distribution or
gain had been realized ratably over your holding period for the ordinary shares or ADSs, (b) the amount deemed realized in each year had been
subject to tax in each year of that holding period at the highest marginal rate for such year (other than income allocated to the current period or
any taxable period before the Company became a PFIC, which would be subject to tax at the U.S. holder’s regular ordinary income rate for the
current year and would not be subject to the interest charge discussed below), and (c) the interest charge generally applicable to underpayments
of tax had been imposed on the taxes deemed to have been payable in those years. In addition, dividend distributions made to you will not
qualify for the lower rates of taxation applicable to qualified dividends discussed above under “Distributions.”
Certain elections may alleviate some of the adverse consequences of PFIC status and would result in an alternative treatment of the ordinary
shares or ADSs. If a U.S. holder makes a mark-to-market election, the U.S. holder generally will recognize as ordinary income any excess of the
fair market value of the ordinary shares or ADSs at the end of each taxable year over their adjusted tax basis, and will recognize an ordinary loss
in respect of any excess of the adjusted tax basis of the ordinary shares or ADSs over
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their fair market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the
mark-to-market election). If a U.S. holder makes the election, the U.S. holder’s tax basis in the ordinary shares or ADSs will be adjusted to
reflect these income or loss amounts. Any gain recognized on the sale or other disposition of the ordinary shares or ADSs in a year in which the
Company is a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of
income previously included as a result of the mark-to-market election). The mark-to-market election is available only if the Company is a PFIC
and its ordinary shares or ADSs are “regularly traded” on a “qualified exchange.” Its ordinary shares or ADSs will be treated as “regularly
traded” in any calendar year in which more than a de minimis quantity of its ordinary shares or ADSs are traded on a qualified exchange on at
least 15 days during each calendar quarter (subject to the rule that trades that have as one of their principal purposes the meeting of the trading
requirement are disregarded). The Nasdaq Global Select Market is a qualified exchange for this purpose and, consequently, if the ADSs are
regularly traded, the mark-to-market election will be available to a U.S. holder. It should be noted that only the ADSs and not its ordinary shares
are listed on the Nasdaq Global Select Market. Consequently, its ordinary shares may not be marketable if Euronext Paris (where its ordinary
shares are listed) does not meet the applicable requirements. U.S. holders should consult their tax advisors regarding the availability of the mark-
to-market election for ordinary shares that are not represented by ADSs.
However, a mark-to-market election generally cannot be made for equity interests in any lower-tier PFICs that the Company owns, unless shares
of such lower-tier PFIC are themselves “marketable.” As a result, even if a U.S. holder validly makes a mark-to-market election with respect to
its ordinary shares or ADSs, the U.S. holder may continue to be subject to the PFIC rules (described above) with respect to its indirect interest in
any of its investments that are treated as an equity interest in a PFIC for U.S. federal income tax purposes. U.S. holders should consult their tax
advisors as to the availability and desirability of a mark-to-market election, as well as the impact of such election on interests in any lower-tier
PFICs.
The Company does not currently intend to provide the information necessary for U.S. holders to make a “qualified electing fund election” if the
Company is treated as a PFIC for any taxable year. U.S. holders should consult their tax advisors to determine whether this election would be
available and if so, what the consequences of the alternative treatments would be in their particular circumstances.
If the Company is a PFIC, the general tax treatment for U.S. holders described in this section would apply to indirect distributions and gains
deemed to be realized by U.S. holders in respect of any of its subsidiaries that also may be PFICs. U.S. holders should consult their tax advisors
regarding the application of the PFIC rules to the Company's subsidiaries.
If a U.S. holder owns its ordinary shares or ADSs during any taxable year in which the Company is a PFIC, the U.S. holder generally will be
required to file an IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund)
with respect to the Company, generally with the U.S. holder’s federal income tax return for that year. If the Company is a PFIC for a given
taxable year, then you should consult your tax advisor concerning your annual filing requirements.
The U.S. federal income tax rules relating to PFICs are complex. Prospective U.S. investors are urged to consult their own tax advisors
with respect to the acquisition, ownership and disposition of the ordinary shares or ADSs, the consequences to them of an investment in
a PFIC, any elections available with respect to the ordinary shares or ADSs and the IRS information reporting
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obligations with respect to the acquisition, ownership and disposition of the ordinary shares or ADSs.
Backup Withholding and Information Reporting. U.S. holders generally will be subject to information reporting requirements with respect to
dividends on the ordinary shares or ADSs and on the proceeds from the sale, exchange or disposition of the ordinary shares or ADSs that are paid
within the United States or through U.S.-related financial intermediaries, unless the U.S. holder is an “exempt recipient.” In addition, U.S.
holders may be subject to backup withholding on such payments, unless the U.S. holder provides a taxpayer identification number and a duly
executed IRS Form W-9 or otherwise establishes an exemption. Backup withholding is not an additional tax, and the amount of any backup
withholding will be allowed as a credit against a U.S. holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided
that the required information is timely furnished to the IRS.
Foreign Asset Reporting. Certain individual U.S. holders are required to report information relating to an interest in the ordinary shares or
ADSs, subject to certain exceptions (including an exception for shares held in accounts maintained by U.S. financial institutions) by filing IRS
Form 8938 (Statement of Specified Foreign Financial Assets) with their federal income tax return. In addition, a U.S. holder should consider the
possible obligation to file online a FinCEN Form 114 - Foreign Bank and Financial Accounts Report as a result of holding shares or ADSs. U.S.
holders are urged to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and
disposition of the ordinary shares or ADSs.
THE DISCUSSION ABOVE IS A SUMMARY OF THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF AN INVESTMENT IN
THE ORDINARY SHARES OR ADSs AND IS BASED UPON LAWS AND RELEVANT INTERPRETATIONS THEREOF IN EFFECT
AS OF THE DATE OF THIS ANNUAL REPORT, ALL OF WHICH ARE SUBJECT TO CHANGE, POSSIBLY WITH
RETROACTIVE EFFECT. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE
TAX CONSEQUENCES TO IT OF AN INVESTMENT IN THE ORDINARY SHARES OR ADSs IN LIGHT OF THE INVESTOR’S
OWN CIRCUMSTANCES.
Material French Tax Considerations
The following describes the material French income tax consequences to U.S. holders of purchasing, owning and disposing of ordinary shares or
the ADSs.
This discussion does not purport to be a complete analysis or listing of all potential tax effects of the acquisition, ownership or disposition of our
ordinary shares or the ADSs to any particular investor, and does not discuss tax considerations that arise from rules of general application or that
are generally assumed to be known by investors. All of the following is subject to change. Such changes could apply retroactively and could
affect the consequences described below.
In particular, the French finance bill for 2025 (loi de finances pour 2025) enacted on February 14, 2025 contains certain measures that affect the
French taxation of U.S. holders purchasing, owning and disposing of ordinary shares or ADSs
This summary does not constitute a legal opinion or tax advice. U.S. holders are advised to consult their own tax advisors regarding the tax
consequences of the purchase, ownership and disposition of ordinary shares or ADSs in light of their particular circumstances, including the
effect of any U.S. federal, state, local or other national tax laws.
French tax rules applicable to French assets that are held by or in foreign trusts generally provide inter alia for the inclusion of trust assets in the
settlor’s net assets for the purpose of applying the French real
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estate wealth tax, for the application of French gift and estate tax to French assets held in trust, for a specific tax on capital on the French assets
of foreign trusts not already subject to the French real estate wealth tax and for a number of French tax reporting and disclosure obligations. The
following discussion does not address the French tax consequences applicable to securities (including ordinary shares or ADSs) held in trusts. If
our ordinary shares or ADSs are held in trust, the grantor, trustee and beneficiary are advised to consult their own tax advisor regarding the
specific tax consequences of acquiring, owning and disposing of such securities.
The description of the French income tax and real estate wealth tax consequences set forth below is based on the double tax treaty entered into
between the Government of the United States of America and the Government of the French Republic for the Avoidance of Double Taxation and
the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital of August 31, 1994 (the “U.S.-France Tax Treaty”), which came
into force on December 30, 1995 (as amended by any subsequent protocols, including the protocol of January 13, 2009), and the tax guidelines
issued by the French tax authorities in force as of the date of this Annual Report.
For the purposes of this discussion, the term “U.S. Holder” means a beneficial owner of securities that is (1) an individual who is a U.S. citizen
or resident for U.S. federal income tax purposes, (2) a U.S. domestic corporation or certain other entities created or organized in or under the
laws of the United States or any state thereof, or (3) otherwise subject to U.S. federal income taxation on a net income basis in respect of
securities.
If a partnership holds ADSs, the tax treatment of the partnership and a partner in such partnership generally will depend on the status of the
partner and the activities of the partnership. Such partner or partnership is urged to consult its own tax advisor regarding the specific tax
consequences of acquiring, owning and disposing of ADSs.
This discussion applies only to investors that hold ADSs as capital assets that are entitled to Treaty benefits under the “Limitation on Benefits”
provision contained in the U.S.-France Tax Treaty, and whose ownership of the ordinary shares or ADSs is not effectively connected to a
permanent establishment or a fixed base in France. Certain U.S. Holders (including, but not limited to, U.S. expatriates, partnerships or other
entities classified as partnerships for U.S. federal income tax purposes, banks, insurance companies, regulated investment companies, tax-exempt
organizations, financial institutions, persons subject to the alternative minimum tax, persons who acquired the securities pursuant to the exercise
of employee share options or otherwise as compensation, persons that own (directly, indirectly or by attribution) 5% or more of our voting stock
or 5% or more of our outstanding share capital, dealers in securities or currencies, brokers, mutual funds, individual retirement or other tax-
deferred accounts persons that elect to mark their securities to market for U.S. federal income tax purposes and persons holding securities as a
position in a synthetic security, straddle or conversion transaction) may be subject to special rules not discussed below, and are advised to consult
their usual tax advisor regarding the specific tax consequences which may apply to their particular situation.
U.S. Holders are advised to consult their own tax advisor regarding the tax consequences of the purchase, ownership and disposition of securities
in light of their particular circumstances, especially with regard to the “Limitations on Benefits” provision contained in the U.S.-France Tax
Treaty.
Tax on Sale or other Disposals
As a matter of principles, under French tax law subject to limited exemptions,and to the extent Innate is not a real estate company for the purpose
of Article 244 bis A of the French Tax Code (Code général des impôts, the “FTC”), a U.S. Holder should not be subject to any French tax on any
capital gain from the sale, exchange, repurchase or redemption by Innate of ordinary shares or ADSs, provided such U.S.
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Holder is not a French tax resident for French tax purposes and has not held more than 25% of the dividend rights, known as “droits aux
bénéfices sociaux,” at any time during the preceding five years, either directly or indirectly, and, as relates to individuals, alone or with relatives
it has not transferred ordinary shares or ADSs as part of redemption by Innate, in which case the proceeds may under certain circumstances be
partially or fully characterized as dividends under French domestic law and, as result, be subject to French dividend withholding tax.
As an exception, a U.S. Holder resident established or incorporated in certain non-cooperative States or territories as defined in Article 238-0 A
of the FTC should be subject to a 75% withholding tax in France on any such capital gain, regardless of the fraction of the dividend rights it
holds, subject to safe-harbor provisions and the more favorable provisions of the U.S.-France Tax Treaty. The list of non-cooperative State or
territory is published by decree and is in principle updated annually. This list was last updated on 16 February 2024, and currently includes
American Samoa, Anguilla, Antigua and Barbuda, the Bahamas, Belize, Fiji, Guam, Palaos, Panama, Russia, Samoa, Seychelles, Trinidad and
Tobago, Turk and Caicos, the United States Virgin Islands and Vanuatu. States referred to in Article 238-0 A, 2 bis-2° of the FTC, and thus
outside of the scope of Article 244 bis B of the FTC, are currently Antigua and Barbuda, Belize, Fiji, Guam, United States Virgin Islands, Palaos,
Panama, Russia, Samoa, American Samoa and Trinidad and Tobago.
Under application of the U.S.-France Tax Treaty, a U.S. Holder who is a U.S. resident for purposes of the U.S.-France Tax Treaty and entitled to
Treaty benefits will not be subject to French tax on such capital gain unless the ordinary shares or the ADSs form part of the business property of
a permanent establishment or fixed base that the U.S. Holder has in France. U.S. Holders who own ordinary shares or ADSs through U.S.
partnerships that are not resident for U.S.-France Tax Treaty purposes are advised to consult their own tax advisor regarding their French tax
treatment and their eligibility for Treaty benefits in light of their own particular circumstances.
A U.S. Holder that is not a U.S. resident for U.S.-France Tax Treaty purposes or is not entitled to Treaty benefits (and in both cases is not
resident, established or incorporated in certain non-cooperative States or territories as defined in Article 238-0 A of the FTC) and has held more
than 25% of the dividend rights, known as “droits aux bénéfices sociaux” at any time during the preceding five years, either directly or indirectly,
and, as relates to individuals, alone or with relatives will be subject to a levy in France (i) at the rate of 12.8% for individuals, and (ii) 25% for
legal persons. However, eligible non-French tax resident legal entities may claim a refund of the 25% French levy to the extent such tax exceeds
the amount that would have been due under French corporate income tax if they had been French tax residents. This refund mechanism is only
available to certain legal entities. Non-French tax resident legal entities are advised to consult their own tax advisor regarding their French tax
treatment and their eligibility to this refund mechanism.
The above French provisions expressly apply to sale, repurchase or redemption by us of ordinary shares.
Special rules apply to U.S. Holders who are residents of more than one country.
Financial Transactions Tax
Pursuant to Article 235 ter ZD of the FTC, purchases of shares or ADSs of a French company listed on a regulated market of the European Union
or on a foreign regulated market formally acknowledged by the AMF, provided inter alia that the issuer's market capitalization exceeds €1 billion
as of December 1 of the year preceding the taxation year, are subject to a French tax on financial transactions at a 0.3% rate until March 31,
2025, and then at a 0.4% rate as from April 1, 2025 (pursuant to Article 98 of the finance bill for 2025).
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A list of companies whose market capitalization exceeds 1 billion euros as of December 1 of the year preceding the taxation year, within the
meaning of Article 235 ter ZD of the FTC, is published annually by the French tax authorities in their official guidelines. As at December 1,
2024, the market capitalization did not exceed 1 billion euros, pursuant to BOI-ANNX-000467-23/12/2024 issued on December 23, 2024.
Moreover, Nasdaq Global Select Market, on which ADSs are listed, is not currently acknowledged by the AMF, but this may change in the
future.
As a consequence, neither the ADSs nor the ordinary shares are currently within the scope of the French tax on financial transactions.
Purchases of our securities may be subject to such tax in the future provided that the market capitalization exceeds 1 billion euros in the year
preceding the taxation year and that the Nasdaq Global Select Market is acknowledged by the French AMF.
Registration Duties
In the case where Article 235 ter ZD of the FTC is not applicable, transfers of shares issued by a French company which are listed on a regulated
or organized market within the meaning of the French monetary and financial code ("Code monétaire et financier") are subject to uncapped
registration duties at the rate of 0.1% if the transfer is evidenced by a written statement (“acte”) executed either in France or outside France. As
ordinary shares of the company are listed on Euronext Paris, which is an organized market within the meaning of the French monetary code,
their transfer should be subject to uncapped registration duties at the rate of 0.1% subject to the existence of a written statement (“acte”), and
provided that Article 235 ter ZD of the FTC is not applicable. Although there is no case law or official guidelines published by the French tax
authorities on this point, transfer of ADSs should remain outside of the scope of the aforementioned 0.1% registration duties. U.S. Holders are
urged to consult their own tax advisor about the possible application of the registration duty upon the transfer of ADSs.
Taxation of Dividends
Dividends paid by a French corporation to non-residents of France are generally subject to French withholding tax at a rate of (i) 25% for
payment benefiting legal persons who are beneficial owners and are not French tax residents (and 15% for distributions made to not-for-profit
organizations with a head office in a Member State of the European Economic Area that would be subject to the tax regime set forth under
Article 206 paragraph 2 of the FTC if its head office were located in France and that meet the criteria set forth in the tax guidelines BOI-RPPM-
RCM-30-30-10-70-24/12/2019, No. 130, dated December 24, 2019), and (ii) 12.8% for payment benefiting individuals who are beneficial
owners and are not French tax residents. Dividends paid by a French corporation in certain non-cooperative States or territories, as defined in
Article 238-0 A of the FTC, will generally be subject to French withholding tax at a rate of 75%, irrespective of the tax residence of the
beneficiary of the dividends if the dividends are received in such States or territories. However, eligible U.S. Holders entitled to Treaty benefits
under the “Limitation on Benefits” provision contained in the U.S.-France Tax Treaty who are U.S. residents, as defined pursuant to the
provisions of the U.S.-France Tax Treaty, will not be subject to this 25% or 75% withholding tax rate, but may be subject to the withholding tax
at a reduced rate (as described below).
Under the U.S.-France Tax Treaty, the rate of French withholding tax on dividends paid to an eligible U.S. Holder who is a U.S. resident as
defined pursuant to the provisions of the U.S.-France Tax Treaty and whose ownership of the ordinary shares or ADSs is not effectively
connected with a permanent establishment or fixed base that such U.S. Holder has in France, is generally reduced to 15%, or to 5% if such U.S.
Holder is a corporation and owns directly or indirectly at least 10% of the share capital of the
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issuer; such U.S. Holder may claim a refund from the French tax authorities of the amount withheld in excess of the U.S.-France Tax Treaty rates
of 15% or 5%, if any.
For U.S. Holders that are not individuals but are U.S. residents, as defined pursuant to the provisions of the U.S.-France Tax Treaty, the
requirements for eligibility for Treaty benefits, including the reduced 5% or 15% withholding tax rates contained in the “Limitation on Benefits”
provision of the U.S.-France Tax Treaty, are complex, and certain technical changes were made to these requirements by the protocol of January
13, 2009. U.S. Holders are advised to consult their own tax advisor regarding their eligibility for Treaty benefits in light of their own particular
circumstances.
Dividends paid to an eligible U.S. Holder may immediately be subject to the reduced rates of 5% or 15% provided that:
•
•
such holder establishes before the date of payment that it is a U.S. resident under the U.S.-France Tax Treaty by completing and providing
the depositary with a treaty form (Form 5000) in accordance with French guidelines (BOI-INT-DG-20-20-20-20-12/09/2012 dated
September 12, 2012); or
the depositary or other financial institution managing the securities account in the U.S. of such holder provides the French paying agent
with a document listing certain information about the U.S. Holder and its ordinary shares or ADSs and a certificate whereby the financial
institution managing the U.S. Holder’s securities account in the United States takes full responsibility for the accuracy of the information
provided in the document.
Otherwise, dividends paid to a U.S. Holder, if such U.S. Holder is a legal person, will be subject to French withholding tax at the rate of 25%, or
75% if paid in certain non-cooperative States or territories (as defined in Article 238-0 A of the FTC), and then reduced at a later date to 5% or
15%, provided that such holder duly completes and provides the French tax authorities with the treaty forms Form 5000 and Form 5001 (due to
recent case law regarding status of limitation for filing a withholding tax claim; U.S. Holders are advised to consult their own tax advisors in this
respect).
Certain qualifying pension funds and certain other tax-exempt entities and certain U.S. residents may be subject to specific filing requirements.
They are advised to consult their own tax advisors on this point.
Form 5000 and Form 5001, together with instructions, will be provided by the depositary to all U.S. Holders registered with the depositary. The
depositary will arrange for the filing with the French tax authorities of all such forms properly completed and executed by U.S. Holders of
ordinary shares or ADSs and returned to the depositary in sufficient time so that they may be filed with the French tax authorities before the
distribution in order to immediately obtain a reduced withholding tax rate. Otherwise, the depositary must withhold tax at the full rate of 25% or
75% as applicable. In that case, the U.S. Holders may claim a refund from the French tax authorities of the excess withholding tax.
In any case, individual taxpayers who are not fiscally domiciled in France should not have to comply with these procedures if the French
withholding tax applying to them is lower than 15%.
In particular, since the withholding tax rate applicable under French domestic law to U.S. Holders who are individuals does not exceed the cap
provided in the U.S.-France Tax Treaty (i.e., 15%), the 12.8% rate shall apply, without any reduction provided under the U.S.-France Tax Treaty
(except in the particular situation when the dividends are paid to such U.S. Holders out of France in a non-cooperative State or territory as
defined in Article 238-0 A of the FTC other than those mentioned in 2° of 2 bis of the same Article 238-0 A of the FTC and are subject to the
75% withholding tax in France).
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Besides, please note that pursuant to Article 235 quater of the FTC (introduced by the French finance bill No. 2019-1479 for 2020) and under
certain conditions (in particular, in addition to certain reporting obligations, the interest held in the distributing company must not enable the
beneficiary to participate effectively in the management or control of that company and the beneficiary company is located in a country that has
signed an administrative assistance agreement with France to combat tax evasion and avoidance, as well as an administrative assistance
agreement on tax collection, and that is not a non-cooperative country), a corporate U.S. Holder which is in a tax loss position or which tax result
is nil due to offset of tax losses (French Administrative Supreme Court, October 18, 2022, n° 466329) for the fiscal year during which the
dividend is received may be entitled to a deferral regime, and obtain a withholding tax refund. The tax deferral ends in respect of the first
financial year during which this U.S. Holder is in a profit-making position, as well as in the cases set out in Article 235 quater of the FTC. The
refund must be claimed within the same period applicable to claim related to taxes other than local taxes. Also, pursuant to Article 235 quinquies
of the FTC and under certain conditions, a corporate U.S. Holder may be entitled to a refund of a fraction of the withholding tax, up to the
difference between the withholding tax paid (on a gross basis) and the withholding tax based on the dividend net of the expenses incurred for the
acquisition and conservation directly related to the income, provided (i) that these expenses would have been tax deductible had the U.S. Holder
been established in France, and (ii) that the tax rules in the United States do not allow the U.S. Holder to offset the withholding tax.
Given the special features of the ADSs, U.S. Holders are advised to consult their own tax advisor about the possible application to ADSs of such
provisions in light of their own circumstances.
Estate and Gift Taxes
In general, a transfer of securities by gift or by reason of death of a U.S. Holder that would otherwise be subject to French gift or inheritance tax,
respectively, will not be subject to such French tax by reason of the double tax treaty entered into between the Government of the United States
of America and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect
to Taxes on Estates, Inheritances and Gifts, dated November 24, 1978 (as amended from time to time), unless (i) the donor or the transferor is
domiciled in France at the time of making the gift or at the time of his or her death, or (ii) the securities were used in, or held for use in, the
conduct of a business through a permanent establishment or a fixed base in France.
Real Estate Wealth Tax
As from January 1, 2018, the French wealth tax (impôt de solidarité sur la fortune) is repealed and replaced by the French real estate wealth tax
(impôt sur la fortune immobilière or IFI). The scope of such new tax is narrowed to French real estate assets (and certain assets deemed to be real
estate assets) or rights, held directly or indirectly through one or more legal entities and whose net taxable assets amount at least to €1,300,000.
Broadly, subject to provisions of double tax treaties and to certain exceptions, individuals who are not residents of France for tax purposes within
the meaning of Article 4 B of the FTC are subject to the IFI in France in respect of the portion of the value of their shares of the company
representing real estate assets (Article 965, 2° of the FTC). Some exceptions are provided by the FTC. In particular, Innate’s ordinary shares or
ADSs owned by a U.S. Holder should not fall within the scope of the IFI provided that such U.S. Holder does not own (together with the
members of his/her household) directly or indirectly a shareholding exceeding 10% of the financial rights and voting rights of Innate. U.S.
Holders holding directly or indirectly a shareholding exceeding 10% of the financial rights and voting rights of Innate should seek additional
advice.
227
Under the U.S.-France Tax Treaty (the provisions of which should be applicable to this IFI in France), the IFI will however generally not apply
to securities held by an eligible U.S. Holder who is a U.S. resident, as defined pursuant to the provisions of the U.S.-France Tax Treaty, provided
that such U.S. Holder (i) does not own directly or indirectly more than 25% of the issuer’s financial rights and (ii) that the ADSs do not form part
of the business property of a permanent establishment or fixed base in France.
U.S. Holders are advised to consult their own tax advisor regarding the specific tax consequences which may apply to their particular situation
with respect to such IFI.
F. Dividends and Paying Agents.
Not applicable.
G. Statement by Experts.
Not applicable.
H. Documents on Display.
The Company is subject to the information reporting requirements of the U.S. Securities Exchange Act of 1934, as amended, (the “Exchange
Act”) applicable to foreign private issuers and under those requirements will file reports with the SEC. Those reports may be inspected without
charge at the locations described below. As a foreign private issuer, the Company is exempt from the rules under the Exchange Act related to the
furnishing and content of proxy statements, and its officers, directors and principal shareholders are exempt from the reporting and short-swing
profit recovery provisions contained in Section 16 of the Exchange Act. In addition, the Company is not required under the Exchange Act to file
periodic reports and financial statements with the SEC as frequently or as promptly as United States companies whose securities are registered
under the Exchange Act. Nevertheless, the Company will file with the SEC an Annual Report on Form 20-F containing financial statements that
have been examined and reported on, with an opinion expressed by an independent registered public accounting firm.
The Company maintains a corporate website at www.innate-pharma.com. The Company intends to post its Annual Report on Form 20-F on its
website promptly following it being filed with the SEC. Information contained on, or that can be accessed through, its website does not
constitute a part of this Annual Report. The Company has included its website address in this Annual Report solely as an inactive textual
reference.
The Securities and Exchange Commission maintains a website (www.sec.gov) that contains reports, proxy and information statements and other
information regarding registrants, such as us, that file electronically with the SEC.
With respect to references made in this Annual Report to any contract or other document of the Company, such references are not necessarily
complete and you should refer to the exhibits attached or incorporated by reference to this Annual Report for copies of the actual contract or
document.
I. Subsidiary Information.
Not required.
J. Annual Report to Security Holders
To the extent we furnish an annual report to security holders, we will promptly submit an English version of this annual report to U.S. security
holders under the cover of Form 6-K.
228
Item 11. Quantitative and Qualitative Disclosures About Market Risk.
The Company's activities are exposed to liquidity risk, foreign currency exchange risk, interest rate risk and credit risk.
Liquidity risk
The Company does not believe that it is exposed to short-term liquidity risk, considering its cash and cash equivalents and short-term
investments of €80.8 million as of December 31, 2024, which consist primarily of cash and money market funds and term deposits, are
convertible into cash immediately without penalty.
Foreign currency exchange rate risk
The Company is exposed to foreign exchange risk inherent in certain subcontracting activities related to its operations in the United States,
which are invoiced in U.S. dollars. The Company does not currently have material recurring revenues in euro, dollars or in any other currency.
As the Company further increases its business, particularly in the United States, the Company expects to face greater exposure to exchange rate
risk.
Innate's revenue denominated in U.S. dollars has represented approximately 92%, 29% and 52% of revenue in the years ended December 31,
2022, 2023 and 2024, respectively. Payments in U.S. dollars represented approximately 50%, 43%, and 35% of the payments in the years ended
December 31, 2022, 2023 and 2024, respectively. In order to cover this foreign currency exchange rate risk, the Company kept in U.S. dollars a
part of the consideration received from AstraZeneca in June 2015, January 2019 and September 2020. The Company kept the entire U.S dollars
portion of the proceeds received from its October 2019 global offering in U.S dollars. The Company does not use hedging instruments in its
current operations. Refer to Item 3.D. Risk Factors - Innate's business may be exposed to foreign exchange risks.
Interest rate risk
The Company has limited exposure to interest rate risk. Its exposure primarily relates to money market funds and time deposit accounts. Changes
in interest rates have a direct impact on the rate of return on these investments and the cash flows generated. The Company does not have any
credit facilities bearing variable interest rates. The repayment of the advances from Bpifrance, the borrowings subscribed in 2017 and the two
State Guaranteed Loans obtained in 2021 and extended in 2022, are not subject to interest rate risk. The effect of an increase or decrease in
interest rates would have an immaterial effect on profit or loss.
Credit risk
The credit risk related to the cash equivalents, short-term investments and non-current financial assets is not significant in light of the quality of
the issuers. The Company deemed that no instrument of its portfolio is exposed to credit risk.
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Item 12. Description of Securities Other than Equity Securities.
A. Debt Securities.
Not applicable.
B. Warrants and Rights.
Not applicable.
C. Other Securities.
Not applicable.
D. American Depositary Shares.
Citibank, N.A. ("Citibank") acts as the depositary bank for the ADSs. Citibank’s depositary offices are located at 388 Greenwich Street, New
York, New York 10013. ADSs represent ownership interests in securities that are on deposit with the depositary bank. ADSs may be represented
by certificates that are commonly known as American Depositary Receipts (ADRs). Each ADS represents one ordinary share (or the right to
receive one ordinary share). The depositary bank typically appoints a custodian to safekeep the securities on deposit. In this case, the custodian is
Citibank Europe plc, 1 North Wall Quay, Dublin 1, Ireland.
The Company has appointed Citibank, N.A. as depositary bank pursuant to a deposit agreement. A copy of the deposit agreement has been filed
with the SEC under cover of a Registration Statement on Form F-6 (Registration No. 333-234063). You may obtain a copy of the deposit
agreement from the SEC’s website at www.sec.gov.
For additional information on our ADSs, please refer to Exhibit 2.3 “Description of Securities Other than Equity Securities – American
Depositary Shares” of this Annual Report.
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Fees and Expenses
Pursuant to the terms of the amended and restated deposit agreement, the holders of the ADSs are required to pay the following fees to the
depositary bank:
Service
Issuance of ADSs (e.g., an issuance of ADS upon a deposit of ordinary shares,
upon a change in the ADSs-to-ordinary shares ratio, or for any other reason),
excluding ADS issuances as a result of distributions of ordinary shares)
Up to U.S. 5¢ per ADS issued
Fees
Cancellation of ADSs (e.g., a cancellation of ADSs for delivery of deposited
property, upon a change in the ADSs-to-ordinary shares ratio, or for any other
reason)
Up to U.S. 5¢ per ADS cancelled
Distribution of cash dividends or other cash distributions (e.g., upon a sale of
rights and other entitlements)
Up to U.S. 5¢ per ADS held
Distribution of ADSs pursuant to (i) stock dividends or other free stock
distributions, or (ii) exercise of rights to purchase additional ADSs
Up to U.S. 5¢ per ADS held
Distribution of securities other than ADSs or rights to purchase additional
ADSs (e.g., upon a spin-off)
Up to U.S. 5¢ per ADS held
ADS Services
Up to U.S. 5¢ per ADS held on the applicable record date(s) established by the
depositary bank
Registration of ADS transfers (e.g., upon a registration of the transfer
of registered ownership of ADSs, upon a transfer of ADSs into DTC
and vice versa, or for any other reason)
Conversion of ADSs of one series for ADSs of another series (e.g.,
upon conversion of Partial Entitlement ADSs for Full Entitlement
ADSs, or upon conversion of Restricted ADSs (each as defined in the
Deposit Agreement) into freely transferable ADSs, and vice versa).
ADS holders are responsible to pay certain charges such as:
Up to U.S. 5¢ per ADS (or fraction thereof) transferred
Up to U.S. 5¢ per ADS (or fraction thereof) converted
•
•
taxes (including applicable interest and penalties) and other governmental charges;
the registration fees as may from time to time be in effect for the registration of ordinary shares on the share register and applicable to
transfers of ordinary shares to or from the name of the
231
custodian, the depositary bank or any nominees upon the making of deposits and withdrawals, respectively;
certain cable, telex and facsimile transmission and delivery expenses;
the fees, expenses, spreads, taxes and other charges of the depositary bank and/or service providers (which may be a division, branch or
affiliate of the depositary bank) in the conversion of foreign currency;
the reasonable and customary out-of-pocket expenses incurred by the depositary bank in connection with compliance with exchange
control regulations and other regulatory requirements applicable to ordinary shares, ADSs and ADRs; and
the fees, charges, costs and expenses incurred by the depositary bank, the custodian, or any nominee in connection with the ADR program.
•
•
•
•
ADS fees and charges for (i) the issuance of ADSs, and (ii) the cancellation of ADSs are charged to the person for whom the ADSs are issued (in
the case of ADS issuances) and to the person for whom ADSs are cancelled (in the case of ADS cancellations). In the case of ADSs issued by the
depositary bank into DTC, the ADS issuance and cancellation fees and charges may be deducted from distributions made through DTC, and may
be charged to the DTC participant(s) receiving the ADSs being issued or the DTC participant(s) holding the ADSs being cancelled, as the case
may be, on behalf of the beneficial owner(s) and will be charged by the DTC participant(s) to the account of the applicable beneficial owner(s) in
accordance with the procedures and practices of the DTC participants as in effect at the time. ADS fees and charges in respect of distributions
and the ADS service fee are charged to the holders as of the applicable ADS record date. In the case of distributions of cash, the amount of the
applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS
service fee, holders as of the ADS record date will be invoiced for the amount of the ADS fees and charges and such ADS fees and charges may
be deducted from distributions made to holders of ADSs. For ADSs held through DTC, the ADS fees and charges for distributions other than
cash and the ADS service fee may be deducted from distributions made through DTC, and may be charged to the DTC participants in accordance
with the procedures and practices prescribed by DTC and the DTC participants in turn charge the amount of such ADS fees and charges to the
beneficial owners for whom they hold ADSs. In the case of (i) registration of ADS transfers, the ADS transfer fee will be payable by the ADS
Holder whose ADSs are being transferred or by the person to whom the ADSs are transferred, and (ii) conversion of ADSs of one series for
ADSs of another series, the ADS conversion fee will be payable by the Holder whose ADSs are converted or by the person to whom the
converted ADSs are delivered.
In the event of refusal to pay the depositary bank fees, the depositary bank may, under the terms of the deposit agreement, refuse the requested
service until payment is received or may set off the amount of the depositary bank fees from any distribution to be made to the ADS holder. Note
that the fees and charges you may be required to pay may vary over time and may be changed by Innate and by the depositary bank. You will
receive prior notice of such changes. The depositary bank may reimburse Innate for certain expenses incurred by Innate Pharma in respect of the
ADR program, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and
conditions as the Company and the depositary bank agree from time to time.
Payment of Taxes
ADS holders are responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs. We,
the depositary bank and the custodian may deduct from any
232
distribution the taxes and governmental charges payable by holders and may sell any and all property on deposit to pay the taxes and
governmental charges payable by holders. You are liable for any deficiency if the sale proceeds do not cover the taxes that are due.
The depositary bank may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all taxes and
charges are paid by the applicable holder. The depositary bank and the custodian may take reasonable administrative actions to obtain tax refunds
and reduced tax withholding for any distributions on your behalf. However, you may be required to provide to the depositary bank and to the
custodian proof of taxpayer status and residence and such other information as the depositary bank and the custodian may require to fulfill legal
obligations. You are required to indemnify us, the depositary bank and the custodian for any claims with respect to taxes based on any tax benefit
obtained for you.
Depositary Payments for 2024
Not applicable.
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies.
Not applicable.
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.
Not applicable
Item 15. Controls and Procedures.
Disclosure Controls and Procedures
The management, with the participation of the Chief Executive Officer (principal executive officer) and the Chief Financial Officer (principal
financial officer), after evaluating the effectiveness of the disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)), as of December 31, 2024, have concluded that, the disclosure controls and procedures were effective as of December 31, 2024.
Management’s Annual Report on Internal Control over Financial Reporting
The management is responsible for establishing and maintaining adequate internal controls over financial reporting, as such term is defined in
Exchange Act Rule 13a-15(f) and 15d-15(f) for the assessment of the effectiveness of our internal control over financial reporting. Because of its
inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of the Chief Executive Officer (principal executive officer) and the Chief Financial Officer
(principal financial officer), the management conducted an evaluation of internal control over financial reporting based upon the criteria
established in internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
Based on that evaluation under these criteria, the management concluded that, as of December 31, 2024, the Company's internal control over
financial reporting was effective to provide reasonable assurance
233
regarding the reliability of its financial reporting and the preparation of its financial statements for external purposes, in accordance with IFRS
Accounting Standards (IFRS) principles.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, and can only provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Remediation of Previously Identified Material Weakness in Internal Control over Financial Reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the financial statements will not be prevented or detected on a timely basis.
As previously disclosed in “Item 15 - Controls and Procedures” of our Annual Report on Form 20-F for the year ended December 31, 2023,
management concluded that, as of December 31, 2023, the Company’s internal control over financial reporting was effective.
Attestation Report of the Registered Public Accounting Firm
Because the Company does not qualify as an emerging growth company as defined in Section 2(a) of the Securities Act, as modified by the
Jumpstart Our Business Startups Act of 2012 (the JOBS Act) since December 31, 2024, this Annual Report includes an attestation report of our
registered public accounting firms provided below.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
To the shareholders and the Board of Directors of Innate Pharma S.A.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Innate Pharma S.A. and its subsidiary (the “Company”) as of December 31,
2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
consolidated statements of financial position of the Company as of December 31, 2024, the related consolidated statements of income (loss),
comprehensive income (loss), changes in shareholders’ equity and cash flows for the year ended December 31, 2024 and our report dated April
30, 2025, expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in the accompanying “Management’s Annual Report on Internal Control over
Financial Reporting”. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We are public accounting firms registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
234
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A
company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
/s/Deloitte & Associés /s/ PricewaterhouseCoopers Audit
Paris la Défense, France and Neuilly-sur-Seine, France April 30, 2025
Deloitte & Associés and PricewaterhouseCoopers Audit have served as the Company’s auditor since 2014 and 2024, respectively.
Changes in Internal Control over Financial Reporting
There were no changes in the internal control over financial reporting during the year ended December 31, 2024 that have materially affected, or
are reasonably likely to materially affect, the internal control over financial reporting.
Item 16. Reserved.
Not applicable.
Item 16A. Audit Committees Financial Expert.
Innate's Supervisory Board has determined that Pascale Boissel is an "audit committee financial expert" as defined by SEC rules and regulations
and each of the members of the Audit Committee has the requisite financial sophistication under the applicable rules and regulations of the
Nasdaq Stock Market. Pascale Boissel, Irina Staatz-Granzer and Sally Bennett are independent as such term is defined in Rule 10A-3 under the
Exchange Act and under the listing standards of the Nasdaq Stock Market.
235
Item 16B. Code of Business Conduct and Ethics.
and
directors. A
The Company has adopted a Code of Business Conduct and Ethics, or the Code of Ethics, that is applicable to all of its employees, executive
https://investors.innate-
officers
pharma.com/English/investors/governance/governance-documents/default.aspx. The Audit Committee of its Supervisory board is responsible for
overseeing the Code of Ethics and must approve any waivers of the Code of Ethics for employees, executive officers and directors. The
Company expects that any amendments to the Code of Ethics, or any waivers of its requirements, will be disclosed on its website.
its website
the Code
of Ethics
available
copy
on
of
at
is
Item 16C. Principal Accountant Fees and Services.
Deloitte & Associés has served as the independent registered public accounting firm for 2023 and 2024. PricewaterhouseCoopers Audit has
served as independent auditor for 2024. The accountants billed the following fees to Innate for professional services in each of those fiscal years,
all of which were approved by the Audit Committee:
(in thousands of euro)
Audit fees
Audit related fees
Total
Year ended December 31,
Year ended December 31,
2023
Deloitte & Associés
Deloitte & Associés
2024
PwC
725
213
938
523
208
731
475
100
575
Total
998
308
1,306
“Audit fees” are the aggregate fees billed for the audit of the annual financial statements. This category also includes services that Deloitte &
Associés and PricewaterhouseCoopers Audit provides, such as consents and assistance with and review of documents filed with the SEC.
“Audit related fees” are the aggregate fees billed for services related to the production of certification in the context of the declaration of
expenses for the obtention of grants and the preparation of a comfort letter and special reports relating to certain operations on the Company’s
capital. There were no tax fees included in "audit related fees" as of December 31, 2023 and 2024, respectively.
Audit and Non-Audit Services Pre-Approval Policy
The Audit Committee has responsibility for appointing, setting compensation of and overseeing the work of the independent registered public
accounting firm. In recognition of this responsibility, the Audit Committee has adopted a policy governing the pre-approval of all audit and
permitted non-audit services performed by the independent registered public accounting firm to ensure that the provision of such services does
not impair the independent registered public accounting firm’s independence from Innate and the management. Unless a type of service to be
provided by the independent registered public accounting firm has received general pre-approval from the Audit Committee, it requires specific
pre-approval by the Audit Committee. The payment for any proposed services in excess of pre-approved cost levels requires specific pre-
approval by the Audit Committee.
Pursuant to its pre-approval policy, the Audit Committee may delegate its authority to pre-approve services to the chairperson of the Audit
Committee. The decisions of the chairperson to grant pre-approvals must be presented to the full Audit Committee at its next scheduled meeting.
The Audit Committee may not delegate its responsibilities to pre-approve services to the management.
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The Audit Committee has considered the non-audit services provided by Deloitte & Associés and PricewaterhouseCoopers Audit as described
above and believes that they are compatible with maintaining Deloitte & Associés’s and PricewaterhouseCoopers Audit's independence as the
independent registered public accounting firms.
Item 16D. Exemptions from the Listing Standards for Audit Committees.
Not applicable.
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
Not applicable.
Item 16F. Change in Registrant’s Certifying Accountant.
The term of office of Odycé Nexia SAS, former joint principal statutory auditor of the Company, expired following the general meeting of
shareholders of May 23, 2024. The report of Odycé Nexia SAS on the consolidated financial statements for each of the years ended December
31, 2023 and 2022 was conducted for French law purposes only. Odycé Nexia SAS is not a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB), and therefore did not conduct its audits in accordance with the standards of the
PCAOB and was not engaged as the principal accountant to audit the registrant’s financial statements for such purposes.
The general meeting of shareholders appointed PricewaterhouseCoopers Audit as new Statutory Auditor to replace Odycé Nexia SAS, and to act
as joint principal statutory auditor to audit the Company’s financial statements in accordance with the standards of the PCAOB. Consequently,
the Supervisory Board proposed to the general meeting of shareholders of May 23, 2024 to appoint PricewaterhouseCoopers Audit as joint
principal statutory auditor for a 6-year term, i.e. until the general meeting of shareholders to be held in 2030, which will approve the financial
statements for the year 2029.
Furthermore, for the years ending on December 31, 2022 and 2023 and the subsequent interim period through May 23, 2024, we had not
consulted with PricewaterhouseCoopers Audit regarding either (1) the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered with respect to our consolidated financial statements, and neither a
written report was provided to Innate Pharma or oral advice was provided that PricewaterhouseCoopers Audit concluded was an important factor
considered by Innate Pharma in reaching a decision as to the accounting, auditing or financial reporting issue; or (2) any matter that was the
subject of a disagreement or a reportable event.
The selection procedure of PricewaterhouseCoopers Audit was overseen by the Audit Committee, following which a recommendation to the
Supervisory Board was issued.
Item 16G. Corporate Governance.
As a French société anonyme, the Company is subject to various corporate governance requirements under French law. The Company is a
“foreign private issuer” under the U.S. federal securities laws and the Nasdaq listing rules. As a foreign private issuer listed on the Nasdaq
Global Market, we will be subject to Nasdaq's corporate governance listing rules. However, the Nasdaq Global Market’s listing rules provide that
foreign private issuers, as defined in the rules promulgated under the U.S. Securities
237
Exchange Act of 1934, as amended (the "Exchange Act"), are permitted to follow home country corporate governance practices instead of certain
Nasdaq listing rules, with certain exceptions. A foreign private issuer that elects to follow a home country practice instead of Nasdaq's listing
rules must submit to Nasdaq a written statement from an independent counsel in such issuer’s home country certifying that the issuer’s practices
are not prohibited by the home country’s laws.
As a general matter, the Company follows the French Middlenext corporate governance code for corporate governance matters and it intends to
follow home country practice to the maximum extent possible.
Certain corporate governance practices in France may differ significantly from Nasdaq’s corporate governance listing standards. For example,
while Nasdaq Listing Rule 5605(b) would require a majority of the Supervisory Board to be independent, neither the corporate laws of France,
nor the Middlenext corporate governance code nor the Company's bylaws require that (i) a majority of the members of our Supervisory Board be
independent or (ii) the independent members of the Supervisory Board hold regularly scheduled meetings at which only independent members of
the Supervisory Board are present. However, the Middlenext code recommends that at least two members of the Supervisory Board be
independent (as such term is defined under the code). Currently, all of the members of the Company’s Supervisory Board are independent and
therefore the Supervisory Board meets both the Middlenext requirement and the Nasdaq requirement for independence; however, in the future
the Board composition could change such that the Company only meets the Middlenext requirement, but not the Nasdaq requirement for
independence.
Moreover, in accordance with French law, each of the committees of our Supervisory Board will only have an advisory role and can only make
recommendations to our Supervisory Board. As a result, decisions will be made by our Supervisory Board taking into account nonbinding
recommendations of the relevant Supervisory Board committee.
With respect to the Audit Committee, as a foreign private issuer, the Sarbanes-Oxley Act of 2002 and the Nasdaq listing rules require that our
Audit Committee be composed of at least three independent members. Rule 10A-3 under the Exchange Act provides that the Audit Committee
must have direct responsibility for the nomination, compensation and choice of the auditors, as well as control over the performance of their
duties, management of complaints made, and selection of consultants. Under Rule 10A-3, if the laws of a foreign private issuer’s home country
require that any such matter be approved by our Supervisory Board or the shareholders of the Company, the Audit Committee’s responsibilities
or powers with respect to such matter may instead be advisory. Under French law, the Audit Committee may only have an advisory role and
appointment of the statutory auditors, in particular, must be decided by the shareholders at the annual meeting.
In addition, Nasdaq listing rules require that a listed company specify that the quorum for any meeting of the holders of share capital be at least
33 1/3% of the outstanding shares of the company’s ordinary voting shares. The Company follows its French home country practice, rather than
complying with this Nasdaq listing rule. Consistent with French law, the Company's bylaws provide that when first convened, general meetings
of shareholders may validly convene only if the shareholders present or represented hold at least (1) 20% of the voting shares in the case of an
ordinary general meeting or of an extraordinary general meeting where shareholders are voting on a capital increase by capitalization of reserves,
profits or share premium, or (2) 25% of the voting shares in the case of any other extraordinary general meeting. If such quorum required by
French law is not met, the meeting is adjourned. There is no quorum requirement under French law when an ordinary general meeting or an
extraordinary general meeting is reconvened where shareholders are voting on a capital increase by capitalization of reserves, profits or share
premium, but the reconvened meeting may consider only questions that were on the agenda of the
238
adjourned meeting. When any other extraordinary general meeting is reconvened, the required quorum under French law is 20% of the shares
entitled to vote. The reconvened meeting may consider only questions that were on the agenda of the adjourned meeting. If a quorum is not met
at a reconvened meeting requiring a quorum, then the meeting may be adjourned for a maximum of two months.
Finally, the Company follows French law with respect to shareholder approval requirements in lieu of the various shareholder approval
requirements of Nasdaq Listing Rule 5635, which requires a Nasdaq listed company to obtain shareholder approval prior to certain issuances of
securities, including: (a) issuances in connection with the acquisition of the stock or assets of another company if upon issuance the issued shares
will equal 20% or more of the number of shares or voting power outstanding prior to the issuance, or if certain specified persons have a 5% or
greater interest in the assets or company to be acquired (Nasdaq Listing Rule 5635(a)); (b) issuances or potential issuances that will result in a
change of control of us (Nasdaq Listing Rule 5635(b)); (c) issuances in connection with equity compensation arrangements (Nasdaq Listing Rule
5635(c)); and (d) 20% or greater issuances in transactions other than public offerings, as defined in the Nasdaq rules (Nasdaq Listing Rule
5635(d)). Under French law, the Company’s shareholders may approve issuances of equity, as a general matter, through the adoption of
delegation of authority resolutions at the Company’s meeting of shareholders pursuant to which shareholders may delegate their authority to the
Executive Board to increase the Company’s share capital within specified parameters set by the shareholders, which may include a time
limitation to carry out the share capital increase, the cancellation of their preferential subscription rights to the benefit of named persons or a
category of persons, specified price limitations and/or specific or aggregate limitations on the size of the share capital increase. Due to
differences between French law and corporate governance practices and Nasdaq Listing Rule 5635, the Company follows French home country
practice, rather than complying with this Nasdaq Listing Rule.
Item 16H. Mine Safety Disclosure.
Not applicable.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Item 16J. Insider Trading Policies
Innate has adopted Insider Trading Policies governing the purchase, sale, and other dispositions of securities by directors, senior management,
and employees that is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any applicable
listing standards. A copy of the policy is included as Exhibit 11.1.
Item 16K. Cybersecurity
In order to assess, identify and manage material risks from cybersecurity threats, the Company maintains a cybersecurity roadmap, which
includes processes for information technology, or IT, operations, technologies, business continuity and governance. The cybersecurity roadmap
is based on an assessment performed by a third-party consultant.
To assess and manage material cybersecurity risks, the Company has established a dedicated steering committee, chaired by the Chief Financial
Officer. The steering committee is responsible for:
•
defining the cybersecurity priorities,
239
•
endorsing the cybersecurity roadmap and overseeing its execution,
• monitoring the ongoing implementation of our risk management strategy for IT infrastructure, systems, vendors, and regulatory
compliance,
tracking cybersecurity incidents, and
preparing and overseeing mitigation plans implementation.
•
•
Employees at each level of the organization receive regular training sessions about cybersecurity risks. Moreover, the company relies on external
specialists and vendors for technical matters for which the Company has limited skills or infrastructure. All external subcontractors and IT
systems that manage sensitive processes or data are selected taking into account cybersecurity and data protection considerations, in particular by
checking the certifications held by service providers or suppliers and performing, when appropriate, qualification and follow-up audits.
At Innate Pharma, cybersecurity risks are integrated within our overall risk management framework. Each year, the Vice President, Compliance
& Operations gathers input from various stakeholders at the Company and identifies the risks facing our business and regularly presents the
identified material risks, including cybersecurity risks to the Audit Committee. This reporting covers various matters, including the cybersecurity
risks identified and proposed mitigation or preventative measures. Our risk assessment is performed regularly and is subject to change in case of
any significant change or event during the year. In case of a significant cybersecurity incident, the cybersecurity steering committee would assess
the incident severity, propose the appointment of an appropriate crisis unit and submit an action plan for the Executive Board’s endorsement. If
the incident is considered as critical to the Company’s cybersecurity, the incident will be escalated to the Audit Committee and to the
Supervisory Board.
As of the filing of this Form 20-F, the Company is not aware of any cyber-attacks that have occurred since the beginning of 2024 that have
materially affected, or are reasonably likely to materially affect the Company, including its business strategy, results of operations or financial
condition. Although we have put in place the cybersecurity processes described above, we remain exposed to cybersecurity attacks and incidents
and misuse or manipulation of any of our IT systems, which could have a material adverse effect on our business strategy, results of operations
or financial condition. See “Risk Factors – Risks Related to Innate Pharma's Organization and Operations” in Item 3.D. of this Annual Report.
PART III
Item 17. Financial Statements.
See "Item 18. Financial Statements" of this Annual Report.
Item 18. Financial Statements.
See the financial statements beginning on page F-l of this Annual Report.
Item 19. Exhibits.
The following exhibits are filed as part of this Annual Report:
Exhibit
Number
Description of Exhibit
Schedule/
Form
File Number
Exhibit
File Date
1.1*
By-laws (status) of the registrant (English translation)
2.1
2.2
Form of Deposit Agreement
Form of American Depositary Receipt (included in Exhibit
2.1)
F-1
F-1
333-233865
333-233865
4.1
4.2
10/04/19
10/04/19
240
Exhibit
Number
Description of Exhibit
Schedule/
Form
File Number
Exhibit
File Date
F-1
333-233865
10.1
09/20/19
20-F
001-39084
4.2
04/04/22
F-1
333-233865
10.3
09/20/19
F-1
333-233865
10.4
09/20/19
F-1
333-233865
10.5
09/20/19
F-1
333-233865
10.6
09/20/19
20-F
001-39084
20-F
001-39084
20-F/A
001-39084
4.7
4.8
4.9
04/04/22
04/04/22
04/20/23
20-F
001-39084
4.10
04/04/24
F-1
333-233865
21.1
09/20/19
2.3*
4.1†
4.2†
4.3†
4.4†
4.4.1*
4.5†
4.6†
4.7†
4.8†
4.9†
4.10
8.1
11.1*
12.1*
12.2*
Description of Securities registered under Section 12 of the
Exchange Act
Co-Development and License Agreement between Innate
Pharma S.A. and MedImmune Limited, dated April 24, 2015,
as amended to date.
Termination and Transition Agreement, between Innate
Pharma SA. and MedImmune Limited, dated June 30, 2021,
as amended to date
Amendment and Restatement Agreement of the
Collaboration and Option Agreement Relating to CD39,
between Innate Pharma S.A. and MedImmune Limited, dated
April 16, 2019.
Joint Research, Development, Option and License
Agreement between Innate Pharma S.A. and Novo Nordisk
A/S, dated March 28, 2006, as amended to date.
Amendment No. 9 to Joint Research, Development, Option
and License Agreement between Innate Pharma S.A. and
Novo Nordisk A/S dated March 28, 2006, dated July 18,
2024
Finance Lease Agreement between Innate Pharma S.A. and
Sogebail S.A., dated June 9, 2008 (English translation).
Amendment to Finance Lease Agreement between Innate
Pharma S.A. and Sogebail S.A., dated September 29, 2016
(English translation).
Loan Agreement with Société Générale, dated December 22,
2021 (English translation)
Loan Agreement with BNP Paribas, dated December 17,
2021 (English translation)
Research Collaboration and License Agreement between
Innate Pharma S.A. and Genzyme, Corporation, dated
December 16, 2022
Exclusive License Agreement between Innate Pharma S.A.
and Takeda Pharmaceuticals U.S.A. Inc. dated March 31,
2023.
List of subsidiaries of the registrant
Market Ethics Charter
Certificate of Principal Executive Officer pursuant to
Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002
Certification by the Principal Financial Officer pursuant to
Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002
241
Exhibit
Number
13.1**
Description of Exhibit
Schedule/
Form
File Number
Exhibit
File Date
Certification by the Principal Executive Officer and the
Principal Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
15.1*
15.2*
97.1
Consent of Deloitte & Associés
Consent of PricewaterhouseCoopers Audit
Executive Compensation Clawback Policy
101.INS* XBRL Instance Document
101.SCH* XBRL Taxonomy Extension Schema Document
101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* XBRL Taxonomy Extension Label Linkbase Document
101.PRE* XBRL Taxonomy Extension Presentation Linkbase
Document
*
Filed herewith.
** Furnished herewith.
20-F
001-39084
97.1
04/04/24
† Certain portions of this exhibit have been omitted because they are not material and would likely cause competitive harm to the registrant if disclosed
242
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.
SIGNATURES
Innate Pharma S.A.
By: /s/ Jonathan Dickinson
Name: Jonathan Dickinson.
Title: Chief Executive Officer
Date: April 30, 2025
243
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements as of and for the Years Ended December 31, 2022, 2023 and 2024
Reports of Independent Registered Public Accounting Firms (Deloitte & Associés PCAOB ID 1756 - PricewaterhouseCoopers Audit - PCAOB
ID 1347)
Consolidated Statements of Financial Position as of December 31, 2022, 2023 and 2024
Consolidated Statements of Income (Loss) for the Years Ended December 31, 2022, 2023 and 2024
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2022, 2023 and 2024
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2023 and 2024
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2022, 2023 and 2024
Notes to the Consolidated Financial Statements
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
To the shareholders and the Board of Directors of Innate Pharma S.A.
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Innate Pharma S.A. and its subsidiary (the “Company”) as of
December 31, 2024, the related consolidated statements of income (loss), comprehensive income (loss), change in shareholders’ equity, and cash
flows, for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the
financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its
operations and its cash flows for the year then ended, in conformity with IFRS Accounting Standards as issued by the International Accounting
Standards Board (IASB).
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 30, 2025,
expressed an unqualified opinion on the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audit. We are public accounting firms registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included
performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was
communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the
financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter
below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
F-2
Collaboration and licensing agreements with AstraZeneca and Sanofi
Critical Audit Matter Description
As described in the note 13.1- Revenue from collaboration and licensing agreements, the Company has recognized revenue and contract
liabilities for the fiscal year 2024 from the following collaboration agreements:
(i) Co-development and commercialization agreement with AstraZeneca signed in 2015 for the product Monalizumab and a multi-term
agreement signed in 2018 and subsequent amendment signed in 2020 granting the entirety of the oncology rights to Monalizumab. The execution
of these agreements resulted in:
–
–
recognized revenue of 4,4 million euros for the year ended December 31, 2024, and
collaboration liabilities of 48,6 million euros as of December 31, 2024;
(ii) Collaboration and license agreement with Sanofi signed in 2016 for the development of "NK Cell engagers" in oncology. For the year ended
December 31, 2024, the execution of this contract resulted in recognized revenue of 4 million euros;
(iii) Co-development and license agreement for IPH5201 signed with AstraZeneca in 2018 and subsequent amendment signed in 2022. For the
year ended December 31, 2024, the execution of this contract resulted in recognized revenue of 2,1 million euros;
(iv) Research collaboration and license agreement with Sanofi signed in 2022 for the ANKET® program for the development of "NK Cell
engagers first-in-class". The execution of these agreements resulted in:
–
–
recognized revenue of 2,1 million euros for the year ended December 31, 2024, and
deferred revenues of 3,2 million euros as of December 31, 2024;
In assessing the revenue recognition accounting treatment of such complex agreements, Management considers the contractual terms that could
impact performance obligations, transaction price allocation, and the timing of revenue recognition. This assessment involves significant
judgements from Management.
The principal considerations for our determination that performing procedures relating to Research collaboration and license agreements with
AstraZeneca and Sanofi is a critical audit matter are (i) the significant judgment by management in identifying the performance obligations,
determining and allocating the transaction price, and assessing the timing of the revenue recognition, including significant judgments and
assumptions on a contract by contract basis and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and
evaluating audit evidence related to management’s assessment of the revenue recognition accounting treatment.
How the Critical Audit Matter was Addressed in the Audit
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the
consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s assessment of the
revenue recognition. These procedures also included, among others,
(i) analyzing the accounting position papers prepared by management in accordance with applicable accounting principles,
(ii) reviewing the agreements and amendments signed between Innate Pharma and its partners to assess the potential impacts on performance
obligations, transaction price determination and allocation, and the timing of revenue recognition,
F-3
(iii) confirming with AstraZeneca the repayment costs impacting the collaboration liabilities,
(iv) obtaining and reconciling the key operational documents like related clinical projects budgets with the accounting memos provided by
Management,
(v) verifying that the note to the consolidated financial statements “13.1- Revenue from collaboration and licensing agreements” is appropriate.
/s/ Deloitte & Associés /s/ PricewaterhouseCoopers Audit
Paris la Défense, France and Neuilly-sur-Seine, France April 30, 2025
Deloitte & Associés and PricewaterhouseCoopers Audit have served as the Company’s auditor since 2014 and 2024, respectively.
F-4
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Innate Pharma S.A.
Opinion on the Financial Statements
We have audited the accompanying statements of financial position of Innate Pharma S.A. and its subsidiary (the “Company”) as of December
31, 2023 and 2022, the related consolidated statements of income (loss), comprehensive income (loss), change in shareholders’ equity, and cash
flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial
statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31,
2023, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required
to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.
/s/ Deloitte & Associés
Paris la Défense, France
April 3, 2024 (April 30, 2025 as to the effects of the offset of deferred taxes presentation described in Note 16)
Deloitte & Associés have served as the Company’s auditor since 2014.
F-5
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(amounts in thousands of euro)
Note
2022
2023
2024
Year Ended December 31,
ASSETS
Non-current assets
Intangible assets
Property and equipment
Non-current financial assets
Other non-current assets
Trade receivables and others - non-current
Total non-current assets
Current assets
Cash and cash equivalents
Short-term investments
Trade receivables and others - current
Total current assets
TOTAL ASSETS
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity
Share capital
Share premium
Retained earnings
Other reserves
Net income (loss)
Total shareholders’ equity
Non-current liabilities
Collaboration liabilities – non-current portion
Financial liabilities – non-current portion
Defined benefit obligations
Deferred revenue – non-current portion
Provisions – non-current portion
Total non-current liabilities
Current liabilities
Trade payables and others
Collaboration liabilities – current portion
Financial liabilities – current portion
Deferred revenue – current portion
Provisions – current portion
Total current liabilities
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
6
7
4
5
4
4
5
11
11
13
9
10
13
18
8
13
9
13
18
F-6
1,556
8,542
35,119
149
14,099
59,465
84,225
17,260
38,346
139,831
199,295
4,011
379,637
(272,213)
819
(58,103)
54,151
52,988
40,149
2,550
7,921
198
103,806
20,911
10,223
2,102
6,560
1,542
41,338
199,295
416
6,322
9,796
87
10,554
27,175
70,605
21,851
55,557
148,013
175,187
4,044
384,255
(329,323)
495
(7,570)
51,901
45,030
30,957
2,441
4,618
603
83,650
17,018
7,647
8,936
5,865
171
39,636
175,187
—
5,133
10,281
575
9,328
25,317
66,396
14,374
4,972
85,742
111,059
4,192
390,979
(336,893)
27
(49,471)
8,834
41,128
22,286
2,730
2,825
274
69,243
16,007
7,443
8,709
616
207
32,982
111,059
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(amounts in thousands of euro, except share and per share data)
Note
2022
2023
2024
Year ended December 31,
Revenue and other income
Revenue from collaboration and licensing agreements
Government financing for research expenditures
Other income
Total revenue and other income
Operating expenses
Research and development expenses
General and administrative expenses
Impairment of intangible assets
Total operating expenses
Operating income (loss)
Financial income
Financial expenses
Net financial income (loss)
Net income (loss) before tax
Income tax expense
Net income (loss) from continuing operations
Net income (loss) from discontinued operations
Net income (loss)
Basic income (loss) per share (€/share)
Diluted income (loss) per share (€/share)
- Basic income (loss) per share from continuing operations
- Diluted income (loss) per share from continuing operations
- Basic income (loss) per share from discontinued operations
- Diluted income (loss) per share from discontinued operations
13
13
14
14
6
15
15
16
17
20
20
20
20
20
20
F-7
49,580
8,035
59
57,674
(51,663)
(22,436)
(41,000)
(115,099)
(57,425)
4,775
(5,321)
(546)
(57,972)
—
(57,972)
(131)
(58,103)
(0.73)
(0.73)
(0.73)
(0.73)
—
—
51,901
9,729
11
61,641
(56,022)
(18,288)
—
(74,310)
(12,669)
6,934
(1,835)
5,099
(7,570)
—
(7,570)
—
(7,570)
(0.09)
(0.09)
(0.09)
(0.09)
—
—
12,622
7,488
11
20,121
(51,980)
(19,716)
—
(71,696)
(51,575)
6,079
(3,975)
2,104
(49,471)
—
(49,471)
—
(49,471)
(0.61)
(0.61)
(0.61)
(0.61)
—
—
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(amounts in thousands of euro)
(In thousands of euro)
Year Ended December 31,
Net income (loss) for the period
Elements which will be reclassified in the consolidated statement of income
(loss):
Change in fair value of short-term investments and non-current financial assets 4
Foreign currency translation gain (loss)
Items which will not be reclassified in the consolidated statement of income
(loss):
Actuarial gains and (losses) related to defined benefit obligations
10
Other comprehensive income (loss)
Total comprehensive income (loss)
Note
2022
2023
2024
(58,103)
(7,570)
(49,471)
—
(428)
790
362
(57,741)
—
276
394
670
(6,900)
—
(504)
36
(468)
(49,939)
F-8
CONSOLIDATED STATEMENT OF CASH FLOWS
(amounts in thousands of euro)
Year Ended December 31,
Note
2022
2023
2024
Net income (loss)
(58,103)
(7,570)
(49,471)
Reconciliation of the net income (loss) and the cash generated from (used for) the
operating activities
Depreciation and amortization, net
Employee benefits costs
Change in provisions
Share-based compensation expense
Change in fair value of financial assets
Foreign exchange (gains) losses on financial assets
Change in accrued interests on financial assets
Gains (losses) on assets and other financial assets
Disposal of property and equipment (scrapping)
Other profit or loss items with no cash effect
Operating cash flow before change in working capital
Change in working capital
Net cash generated from / (used in) operating activities (1)
Acquisition of intangible assets
Acquisition of property and equipment, net
Disposal of property and equipment
Disposal of other assets
Acquisition of other assets
Disposal of current financial instruments and paid interests
Disposal of non-current financial instruments
Net cash generated from / (used in) investing activities
Proceeds from the exercise / subscription of equity instruments
Repayment of borrowings
Net cash generated from / (used in) financing activities
Effect of the exchange rate changes
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
6, 7
10
14
4
4
4
6, 7
6.8
7.8
7
4
4
9
4
4
45,405
365
839
4,249
1,372
(912)
118
—
—
15
(6,652)
(12,503)
(19,155)
(587)
(535)
—
—
(1)
3,000
1,877
198
(2,026)
(1,828)
(428)
(19,532)
103,756
84,225
5,091
285
(966)
4,256
(1,592)
544
—
(991)
470
6
(467)
(32,092)
(32,559)
(2,000)
(351)
150
66
(3)
—
22,768
20,630
395
(2,361)
(1,966)
274
(13,619)
84,225
70,605
1,994
324
(293)
3,944
(1,335)
(885)
(380)
—
20
24
(46,058)
39,162
(6,896)
—
(391)
—
—
—
9,590
—
9,200
2,928
(8,936)
(6,008)
(505)
(4,209)
70,605
66,396
(1) Cash flows from operating activities include 1.3 million euros in interest paid in fiscal 2024, with 1.9 million euros interest received. In fiscal 2023, interest paid were 0.6 million euros and 2.2
millions euros in interests received.
F-9
Change in working capital
Note
December 31, 2023
December 31, 2024
Variance
Trade receivables and others (excluding rebates related to capital expenditures)
Trade payables and others (excluding payables related to capital expenditures)
Collaboration liabilities - current and non-current portion
Deferred revenue - current and non-current portion
5
8
13
13
Change in working capital
5% retained - Tax credit 2023 refund (1)
Change in working capital adjusted
66,111
(17,018)
(52,677)
(10,483)
(14,067)
—
(14,067)
14,300
(16,007)
(48,571)
(3,441)
(53,719)
490
(53,229)
51,811
(1,011)
(4,106)
(7,042)
39,652
(490)
39,162
(1) 95% of the pre-financed CIR 2023 has been collected. The 5% retained amount of €0.5 million recorded under ‘Trade receivables and others
non current’ at 31 December 2023 has been reclassified under ‘Other non current assets’ at 31 December 2024. It will be collected after a 3 years
delay.
Change in working capital
Note
December 31, 2022
December 31, 2023
Variance
Trade receivables and others (excluding rebates related to capital expenditures)
Trade payables and others (excluding payables related to capital expenditures)
Collaboration liabilities - current and non-current portion
Deferred revenue - current and non-current portion
Change in working capital
5
8
13
13
52,445
(20,911)
(63,211)
(14,481)
(46,158)
66,111
(17,018)
(52,677)
(10,483)
(14,067)
(13,666)
(3,893)
(10,534)
(3,998)
(32,092)
F-10
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(amounts in thousands of euro, except share data)
Note
Number of
shares
Share capital
Share
premium
Retained
earnings
Other
reserves
Net income
(loss)
Total Equity
December 31, 2021
Net loss
Actuarial losses on defined benefit obligations
Foreign currency translation loss
Total comprehensive income (loss)
Allocation of prior period loss
Exercise and subscription of equity instruments
Increase capital, net
Share-based payment
December 31, 2022
Net loss
Actuarial losses on defined benefit obligations
Foreign currency translation loss
Total comprehensive income (loss)
Allocation of prior period loss
Exercise and subscription of equity instruments
Increase capital, net
Share-based payment
December 31, 2023
Net loss
Actuarial gains on defined benefit obligations
Foreign currency translation gain
Total comprehensive income (loss)
Allocation of prior period loss
Exercise and subscription of equity instruments
Increase capital, net
Share-based payment
December 31, 2024
79,556,722
3,978
375,220
(219,404)
—
—
—
—
—
669,442
—
—
—
—
—
—
—
34
—
—
80,226,164
4,011
—
—
—
—
—
648,489
—
—
—
—
—
—
—
32
—
—
80,874,653
4,044
—
—
—
—
—
11
11
11.14
1,136,859
1,832,899
—
—
—
—
—
—
57
92
—
—
—
—
—
—
168
—
4,249
379,637
—
—
—
—
—
363
—
4,256
384,255
—
—
—
—
—
37
2,744
3,944
—
—
—
(52,809)
—
—
(272,213)
—
—
994
994
(58,103)
—
—
(329,323)
—
—
—
—
(7,570)
—
—
83,844,411
4,192
390,979
(336,893)
456
—
790
(428)
362
—
—
—
819
—
394
(718)
(324)
—
—
—
495
—
36
(504)
(468)
—
—
—
—
27
(52,809)
(58,103)
—
—
(58,103)
52,809
—
—
(58,103)
(7,570)
—
—
(7,570)
58,103
—
—
(7,570)
(49,471)
—
—
(49,471)
7,570
—
—
(49,471)
107,440
(58,103)
790
(428)
(57,741)
—
202
—
4,249
54,151
(7,570)
394
276
(6,900)
—
395
—
4,256
51,901
(49,471)
36
(504)
(49,939)
—
94
2,836
3,944
8,834
F-11
Note 1: The company
NOTES TO FINANCIAL STATEMENTS
Innate Pharma S.A. is a global, clinical-stage biotechnology company developing immunotherapies for cancer patients. Its innovative approach
aims to harness the innate immune system through three therapeutic approaches: monoclonal antibodies, multispecific NK Cell Engagers via its
ANKET® (Antibody-based NK cell Engager Therapeutics) proprietary platform and Antibody Drug Conjugates (ADC). Innate’s portfolio
includes its lead proprietary program lacutamab, developed in advanced form of cutaneous T cell lymphomas and peripheral T cell lymphomas,
monalizumab developed with AstraZeneca in non-small cell lung cancer, several ANKET® drug candidates to address multiple tumor types as
well as IPH4502 a differentiated ADC in development in solid tumors. Innate Pharma is a trusted partner to biopharmaceutical companies such
as Sanofi and AstraZeneca, as well as leading research institutions, to accelerate innovation, research and development for the benefit of patients.
From its inception, the Company has incurred losses due to its research and development (“R&D”) activity. The financial year ended December
31, 2024 generated a €49,471 thousand net loss. As of December 31, 2024, the shareholders’ equity amounted to €8,834 thousand. Subject to
potential new milestone payments related to its collaboration agreements, the Company anticipates incurring additional losses until such time, if
ever, that it can generate significant revenue from its product candidates in development.
The Company’s future operations are highly dependent on a combination of factors, including: (i) the success of its R&D; (ii) regulatory
approval and market acceptance of the Company’s future drug candidates; (iii) the timely and successful completion of additional financing; and
(iv) the development of competitive therapies by other biotechnology and pharmaceutical companies. As a result, the Company is and should
continue, in the short to mid-term, to be financed through partnership agreements for the development and commercialization of its drug
candidates and through the issuance of new equity instruments.
The Company’s activity is not subject to seasonal fluctuations.
As of December 31, 2024, the Company had one wholly owned subsidiary: Innate Pharma, Inc., incorporated under the laws of Delaware in
2009.
This subsidiary is fully consolidated.
1.1.
Significant contracts
The following paragraphs describe the key provisions of significant contracts.
a)
Agreements related to monalizumab with Novo Nordisk A/S and with AstraZeneca
2014 Novo Nordisk A/S monalizumab agreement
On February 5, 2014, the Company acquired from Novo Nordisk A/S full development and commercialization rights to monalizumab. Novo
Nordisk A/S received €2.0 million in cash and 600,000 ordinary shares at a price of €8.33 per share (€5.0 million). Novo Nordisk A/S is eligible
to receive up to €20.0 million in potential regulatory milestones and single-digit tiered royalties on sales of monalizumab products. The
agreement with Novo Nordisk A/S included a right to additional consideration in the event of an out-licensing agreement. Consequently,
following the agreement signed with AstraZeneca in April 2015 (as described below), the Company paid to Novo Nordisk A/S additional
consideration of €6.5 million (paid in April 2016). Following the exercise of the option by AstraZeneca in October 2018
F-12
(as described below), Novo Nordisk A/S became entitled to a second and final additional payment amounting to $15.0 million (€13.1 million)
which was recognized as a liability as of December 31, 2018 and was paid in February 2019. There are no other potential additional milestones
payments due to Novo Nordisk A/S. These amounts were added to the net book value of the intangible asset and are amortized according to the
same amortization plan as the initial €7.0 million recognized in 2014.
The net book value of the license amounted to €0 as of December 31, 2024.
Refer to Notes 2.h, 2.j and 6 for accounting description.
2015 AstraZeneca monalizumab agreements
Under co-development and option agreements signed with AstraZeneca in 2015, the Company granted to AstraZeneca an exclusive license,
subject to certain exclusions, to certain of its patents and know-how to develop, manufacture and commercialize licensed products, including
monalizumab, in the field of diagnosis, prevention and treatment of oncology diseases and conditions. The Company further granted to
AstraZeneca a worldwide, non-exclusive license to certain of its other patents to develop, manufacture and commercialize licensed products,
including monalizumab, in the field of diagnosis, prevention and treatment of oncology diseases and conditions.
The Company received an initial payment of $250 million under these agreements in June 2015, of which $100 million was paid to the Company
as an initial payment for the co-development agreement and $150 million was paid to the Company as consideration for the option agreement.
On October 22, 2018, AstraZeneca exercised this option and the Company and AstraZeneca entered into the 2018 AZ Option Agreement,
triggering the payment of $100.0 million, which was received by the Company in January 2019.
Following the option exercise, AstraZeneca became the lead party in developing the licensed products and must use commercially reasonable
efforts to develop, obtain regulatory approval for and commercialize each licensed product in certain major markets.
In July 31, 2019, the Company notified AstraZeneca of its decision to co-fund a future monalizumab Phase 3 clinical development program.
In September 2020, the Company signed an amendment to the collaboration and license agreement concluded with AstraZeneca in 2015.
Following the analysis of a longer patient follow-up as well as the maturation of the survival data of the Cohort 2, and after discussion with
AstraZeneca, the Company agreed to amend the original agreement. This amendment changed the financial terms relating to the milestone
payment expected following the treatment of the first patient with AstraZeneca in the first Phase 3 trial evaluating monalizumab. The original
agreement signed in 2015 provided for a milestone payment of $100 million. Following the inclusion by AstraZeneca of the first patient in the
first Phase 3 trial evaluating monalizumab (INTERLINK-1) in October 2020, and in accordance with the amendment signed in September 2020,
the Company received a payment of $50 million . An additional payment of $50 million was subject to an interim analysis. On August 1, 2022,
the Company announced that the combination of monalizumab and cetuximab did not reach the pre-specified efficacy threshold in the protocol-
planned interim futility analysis of the Phase 3 INTERLINK-1 clinical study conducted by AstraZeneca. AstraZaneca has thus informed the
Company that the study will be discontinued. Consequently, the Company is not eligible for the additional payment of $50.0 million as provided
for in the amendment signed in September 2020.
F-13
On June 2022, the Company received an additional payment of $50.0 million from AstraZeneca following the inclusion of the first patient in the
second trial evaluating monalizumab, on April 2022 ("PACIFIC-9").
In addition to the initial payment, the option exercise payment and the payment received for the inclusion of the first patient in the first Phase 3
trial, AstraZeneca is obligated to pay the Company up to $775 million in the aggregate upon the achievement of certain development and
regulatory milestones ($350 million) and commercialization milestones ($425 million). The Company is eligible to receive tiered royalties
ranging from a low double-digit to mid-teen percentage on net sales of licensed products outside of Europe. The Company is required for a
defined period of time to co-fund 30% of the Phase 3 clinical trials of licensed products, subject to an aggregate cap, in order to receive 50% of
the profits in Europe.
Refer to Notes 2.p and 13.a for accounting description.
b)
Agreement related to Lumoxiti with AstraZeneca
In October 2018, the Company obtained an exclusive license from AstraZeneca under certain patents and know-how to develop, manufacture
and commercialize Lumoxiti for all uses in humans and animals in the United States, the European Union and Switzerland. Under this
Agreement, AstraZeneca was obligated to provide support for the continued development and commercialization of Lumoxiti in the European
Union and Switzerland prior to regulatory submission and approval as well as support for the continued commercialization of Lumoxiti in the
United States for a specified period running until September 30, 2020. Following this transition period, the company took charge of all
marketing of Lumoxiti in the United States.
Under the agreement signed in 2018, the Company was obligated to pay a $50.0 million initial payment (€43.8 million), which it paid in January
2019, and a $15.0 million regulatory milestone (€13.4 million), which was paid in January 2020. The Company has reimbursed AstraZeneca for
the development, production and commercialization costs it incurs during the transition period, ended in September 30, 2020.
Further to the decision to terminate the Lumoxiti Agreement and termination notice sent in December 2020, a termination and transition
agreement was discussed and executed, effective as of June 30, 2021 terminating the Lumoxiti Agreement as well as Lumoxiti related
agreements (including the supply agreement, the quality agreement and other related agreements) and transferring of the U.S. marketing
authorization and distribution rights of Lumoxiti back to AstraZeneca. The FDA has effectively transferred the BLA to AstraZeneca on February
8, 2022. AstraZeneca has reimbursed Innate Pharma for all Lumoxiti related costs, expenses and benefited net sales. In the year ended December
31, 2020, the Company reported a contingent liability of up to $12.8 million in its consolidated financial statements, which was related to the
splitting of certain manufacturing costs. As part of the termination and transition agreement, Innate and AstraZeneca agreed to split these
manufacturing costs, and Innate has paid $6.2 million to AstraZeneca (€5.9 million) on April 2022.
Following the termination and transition agreement signed in 2021, Lumoxiti activities are presented as discontinued operations as of December
31, 2021 and 2022, respectively. As of December 31, 2023, the transition of all Lumoxiti rights and the transfer of activities to AstraZeneca has
been fully completed.
Refer to Notes 2.v and 17 for accounting description.
c)
Agreement related to IPH5201 with AstraZeneca
In October 2018, the Company signed a collaboration and option agreement with AstraZeneca for co-development and co-commercialization of
IPH5201. Under the agreement, AstraZeneca paid the
F-14
Company a $50.0 million upfront payment ($26.0 million paid in October 2018 and $24.0 million paid in January 2019), and a milestone
payment of $5.0 million paid in June 2020 following the assay of the first patient in the first Phase 1 trial evaluating IPH5201, in March 2020.
AstraZeneca is obligated to pay the Company up to an aggregate of $5.0 million upon the achievement of certain development milestones.
On June 1, 2022, the Company signed an amendment to the collaboration and license option agreement IPH5201 concluded with AstraZeneca in
October 2018. Subsequently, the Company announced on June 3, 2022 the progress of IPH5201 towards a study of Phase 2 in lung cancers for
which the Company will be the sponsor. In accordance with the amendment signed on June 1, 2022, the Company is eligible for a milestone
payment of $5.0 million by AstraZeneca. This milestone payment was received on August 2, 2022 by the Company.
Upon exercise of its option under the agreement, AstraZeneca is committed to pay an option exercise fee of $25.0 million and up to
$800.0 million in the aggregate upon the achievement of certain development and regulatory milestones ($300 million) and commercialization
milestones ($500 million). The arrangement also provides for a 50% profit share in Europe if the Company opts into certain co-promoting and
late stage co-funding obligations. In addition, the Company would be eligible to receive tiered royalties ranging from a high-single digit to mid-
teen percentage on net sales of IPH5201, or from a mid-single digit to low-double digit percentage on net sales of other types of licensed
products, outside of Europe. The royalties payable to the Company under the agreement may be reduced under certain circumstances, including
loss of exclusivity or lack of patent protection. As of December 31, 2020, since the Company had fulfilled all of its commitments on preclinical
work related to the start of Phase 1 of the IPH5201 program, the initial payment of $50.0 million and the milestone payment of $5.0 million were
fully recognized in revenue. The Company was reimbursed by AstraZeneca for certain research and development expenses related to IPH5201
for the year ended December 31, 2024. The Company has the option to co-fund 30% of the shared development expenses related to the Phase 3
clinical trials in order to acquire co-promotion rights and to share in 50% of the profits and losses of licensed products in Europe. If the
Company does not opt into the co-funding obligations, among other things, its right to share in 50% of the profits and losses in Europe and right
to co-promote in certain European countries will terminate and will be replaced by rights to receive royalties on net sales at the rates applicable
to outside of Europe. Additionally, certain milestone payments that may be payable to the Company would be materially reduced.
Refer to Notes 2.p and 13 for accounting description.
d)
Agreement related to additional preclinical molecules with AstraZeneca
In October 2018, the Company granted to AstraZeneca four exclusive options that are exercisable until IND approval to obtain a worldwide,
royalty-bearing, exclusive license to certain of the Company’s patents and know-how relating to certain specified pipeline candidates to develop
and commercialize optioned products in all fields of use. Pursuant to the agreement, AstraZeneca paid the Company a $20.0 million upfront
payment (€17.4 million) in October 2018. The Company recognized this upfront payment in the consolidated statement of financial position as
deferred revenue as of December 31, 2018, until the exercise or the termination of each option at the earliest.
During 2022 first semester, the Company received from AstraZeneca a notice that it will not exercise its option to license the four preclinical
programs covered in the "Future Programs Option Agreement". Innate has now regained full rights to further develop the four preclinical
molecules. Consequently, the entire initial payment of $20.0 million, or €17.4 million was recognized as revenue as of June 30, 2022
Refer to Notes 2.p and 13 for accounting description.
F-15
e)
Agreements related to avdoralimab with Novo Nordisk and with AstraZeneca
2017 avdoralimab in-licensing agreement with Novo Nordisk A/S
In July 2017, the Company signed an exclusive license agreement with Novo Nordisk A/S relating to avdoralimab. Under the agreement, Novo
Nordisk A/S granted the Company a worldwide, exclusive license to develop, manufacture and commercialize pharmaceutical products that
contain or comprise an anti-C5aR antibody, including avdoralimab. The Company made an upfront payment of €40.0 million, €37.2 million of
which was contributed in new shares and €2.8 million of which in cash. In 2020, the Company made an additional payment of €1.0 million to
Novo Nordisk A/S following the launch of the first Phase 2 trial of avdoralimab. The Company is obligated to pay up to an aggregate of
€369.0 million upon the achievement of development, regulatory and sales milestones and tiered royalties ranging from a low double-digit to
low-teen percentage of net sales.
Refer to Notes 2.h, 2.j and 6 for accounting description.
2018 avdoralimab AstraZeneca agreement
On January 1, 2018, the Company entered into a clinical trial collaboration agreement with AstraZeneca to sponsor a Phase 1/2 clinical trial
(STELLAR-001) to evaluate the safety and efficacy of durvalumab, an anti-PD-L1 immune checkpoint inhibitor, in combination with
avdoralimab, as a treatment for patients with select solid tumors. The Company is the sponsor of the trial and the costs are equally shared
between the two partners. This collaboration is a non-exclusive agreement and does not include any licensing rights on avdoralimab to
AstraZeneca. In the first half of 2020, and based on data from cohort extensions in the first two cohorts, the Company decided to stop recruiting
in the STELLAR-001 trial.
Refer to Notes 2.p, 6 and 13 for accounting description.
f)
Collaboration and license agreements concluded with Sanofi for the development of "NK Cell engages" in oncology
License and collaboration agreement with Sanofi signed in 2016
On January 2016, the Company entered into a research collaboration and licensing agreement with Sanofi to apply its proprietary technology to
the development of multi-specific antibody formats engaging NK cells to kill tumor cells through the activating receptor NKp46. The Company
granted to Sanofi under certain of its intellectual property a non-exclusive, worldwide, royalty-free research license, as well as an exclusive,
worldwide license to research, develop and commercialize products directed against two specified targets, for all therapeutic, prophylactic and
diagnostic indications and uses.
The Company works together with Sanofi on the generation and evaluation of multispecific NK cell engager IPH6401/SAR'514, using its
technology and Sanofi’s tumor targets and technology, which is now instead being examined for autoimmune indications. Under the terms of the
2016 Agreement, Sanofi will be responsible for the development, manufacturing and commercialization of products resulting from the research
collaboration. The Company will be eligible for up to approximately €192.0 million in payments, primarily upon the achievement of
development and commercial milestones, as well as royalties ranging from a mid to high single-digit percentage on net sales.
F-16
IPH6101/SAR4435
On January 5, 2021, the Company announced that Sanofi has made the decision to progress IPH6101/SAR443579 into investigational new drug
(IND) enabling studies. IPH6101/SAR443579 is a NKp46-based NK cell engager (NKCE) using Innate’s proprietary multi-specific antibody
format. The decision triggered a €7.0m milestone payment from Sanofi to Innate. Sanofi will be responsible for all future development,
manufacturing and commercialization of IPH6101/SAR443579. In December 2021, the Company announced that the first patient was dosed in a
Phase 1/2 clinical trial, evaluating IPH6101/SAR443579, in patients with relapsed or refractory acute myeloid leukemia (R/R AML), B-cell
acute lymphoblastic leukemia (B-ALL) or high risk-myelodysplastic syndrome (HR-MDS). Following the initiation of the trial, the Company
received a €3.0m milestone from Sanofi during 2021.
On April 15, 2024, the Company announced the treatment of the first patient in the phase 2 dose extension of the Sanofi-led study evaluating the
NK Cell Engager SAR443579/IPH6101 in various blood cancers. Under the terms of the 2016 agreement, this trial progress triggered a
milestone payment of 4.0 million euros, fully recognized in revenue during the first quarter of 2024 and collected by the Company on May 17,
2024.
On April 23, 2025, the Company announced that, in alignment with both company's current strategic priorities, Sanofi and Innate agreed to
terminate the 2016 Agreement as it relates to SAR’579/IPH6101 (CD123 ANKET), effective as of June 30, 2025. Innate will regain the rights on
July 1, 2025. Sanofi and Innate will discuss a transition plan with regard to ongoing studies.
IPH6401/SAR’514
During 2022 first semester, the Company was informed of Sanofi's decision to advance IPH6401/SAR’514 towards regulatory preclinical studies
aimed at studying an investigational new drug. As such, Sanofi has selected a second multi-specific antibody that engages NK cells as a drug
candidate. This selection triggered a €3.0 million milestone payment from Sanofi to the Company. On July 11, 2023, the company announced the
dosing as of June 7, 2023, of the first in a Sanofi-sponsored Phase 1/2 clinical trial, evaluating IPH6401/SAR’514 in relapsed/refractory Multiple
Myeloma. As a consequence, Sanofi made a milestone payment of €2.0 million to the Company. On March 27, 2025, the Company announced
that the clinical study will be terminated early as Sanofi will now pursue development of IPH6401/SAR’514 in autoimmune indications.
Refer to Notes 2.p and 13 for accounting description.
Collaboration and research license agreement with Sanofi signed in 2022
On December 19, 2022, the Company announced that it had entered into a research collaboration and license agreement with Genzyme
Corporation, a wholly-owned subsidiary of Sanofi (“Sanofi”) pursuant to which the Company granted Sanofi an exclusive license on the Innate
Pharma's B7H3 ANKET program and options on two additional targets. Once selected, Sanofi will be responsible for all development,
manufacturing and marketing.
®
Under the terms of the research collaboration and license agreement, the Company was eligible for an initial payment of €25.0 million, received
in March 2023. Under the agreement, the Company is eligible for the duration of the research and collaboration agreement, to milestone
payments of up to €1.35 billion in total, mainly linked to the achievement of preclinical, clinical, regulatory and commercial milestones (plus
royalties on potential net sales).
F-17
The Company considers that the license to the B7-H3 technology is a right to use the intellectual property granted exclusively to Sanofi from the
effective date of the agreement.
Under the terms of this agreement, the Company has also granted two exclusive options, exercisable no later than three years after the effective
date, for exclusive licenses to Innate's intellectual property for the research, development, manufacture and commercialization of NKCEs
specifically targeting two preclinical molecules. The Company considers that the option to acquire an exclusive license provide a material right
to Sanofi that it would not receive without entering into this agreement.
®
On December 19, 2023, the Company announced that Sanofi had exercised one of the two license options for a new program based on the
Company's ANKET platform, triggering a milestone payment of €15.0 million from Sanofi to the Company. On October 9, 2024, the company
received a letter terminating the license agreement for IPH67, a NKCE program, from ANKET platform, currently under development in solid
tumors. Termination was effective at the end of a 90 days notice period, i.e. on January 7, 2025. As a result, Innate did recover full rights to
IPH67.
®
The Company will also provide collaborative research services to Sanofi for an agreed period, extendable by mutual agreement. During this
period, Sanofi and Innate will collaborate and work on research activities defined in a contractual work program.
Under the terms of the agreement, Sanofi still retains a license option for a third preclinical molecule.
Refer to Notes 2.p and 13 for accounting description.
License agreement with Takeda signed in 2023
On April 3, 2023, the Company announced that it has entered into an exclusive license agreement with Takeda under which Innate grants Takeda
exclusive worldwide rights to research and develop antibody drug conjugates (ADC) using a panel of selected Innate antibodies against an
undisclosed target, with a primary focus in Celiac disease. Takeda would be responsible for the future development, manufacture and
commercialization of any potential products developed using the licensed antibodies. As such, the Company considered that the license granted
was a right to use the intellectual property, which was granted fully and perpetually to Takeda. On July 25, 2024, the Company received a letter
from Takeda terminating the exclusive license agreement signed on March 31, 2023. Termination was effective at the end of a 90 days notice
period, i.e. on October 24, 2024.
Refer to Notes 2.p and 13 for accounting description.
1.2.
Key events
a)
Key events for the year ended December 31, 2024
On March 6, 2024, the Company announced the first patient was dosed in its Phase 1/2, investigating the safety and tolerability of IPH6501, a
first-in-class CD20-targeting tetraspecific natural killer cell engager, from ANKET® platform, in patients with Relapsed and/or Refractory
CD20-expressing B-cell Non-Hodgkin’s Lymphoma.
On April 15, 2024, the Company announced that the first patient was dosed in the Phase 2 dose expansion part of the Sanofi-sponsored clinical
trial of SAR443579 / IPH6101, evaluating SAR443579 as a monotherapy for the treatment of blood cancers. Under the terms of the 2016
research collaboration with Sanofi, the progression to the dose expansion part of the trial has triggered a milestone payment from
F-18
Sanofi to Innate of €4m, received by the company on May 17, 2024 and fully recognized in revenue as of June 30, 2024.
On June 10, 2024, the Executive Board carried out a capital increase of €5,342 following the creation of 106,844 ordinary shares benefiting the
employees of the company, including 68,744 ordinary shares issued free of charge (subscription). The capital increase carried out can be broken
as follow : a creation of 68,744 free shares with a nominal value of €0.05 issued free of charge by deduction from the share premium, with a
creation of 38,100 ordinary shares with a nominal value of €0.05 and an issue price of €2.45 (i.e an increase in share premium of €91,440).
On July 25, 2024, the Company received from Takeda a letter terminating the exclusive license agreement signed on March 31, 2023.
Termination has been effective on October 24, 2024.
On September 23, 2024, Innate Pharma announced the U.S Food and Drug Administration (FDA) cleared its investigational new drug (IND)
application to initiate a Phase 1 clinical study of IPH4502, its novel and differentiated topoisomerase I inhibitor antibody drug conjugate (ADC)
targeting Nectin-4 in solid tumors.
On October 9, 2024, the Company received a letter terminating the license agreement with Sanofi for IPH67. Termination was effective on
January 7, 2025. Innate has regained full rights to IPH67, a natural killer cell engager, from ANKET® platform program currently under
development in solid tumors. The rest of the 2022 collaboration and license agreement with Sanofi remains unchanged.
On October 14, 2024, the Company announced that its Supervisory Board appointed Jonathan Dickinson as the Company’s new Chief Executive
Officer (CEO) and Chairman of the Executive Board, effective November 1, 2024. Jonathan Dickinson succeeded Hervé Brailly, interim CEO
During the third quarter of 2024, Innate received an initial notice from the FDA supporting its regulatory plans for lacutamab, including a Fast
Track designation for the treatment of patients with relapsed or refractory Sézary syndrome, and the Company is pursuing discussions with the
FDA regarding a confirmatory Phase 3 trial.
On December 6, 2024, the Company announced an agreement to clinically study the potential of IPH6501, Innate's anti-CD20 ANKET in
follicular lymphoma (FL) with The Institute for Follicular Lymphoma Innovation (IFLI). To support the Phase 1/2 trial and inclusion of FL
patients, IFLI will initially invest 3m USD into new shares of Innate, issued through a capital increase reserved to IFLI at a price of €1.56 per
share and representing 2.26% of the share capital of Innate at the time of such issuance. IFLI may also invest up to an additional 4.9m USD into
new shares of Innate, depending on the completion of certain milestones, at a price to be determined at the time of the such investments.
®
On December 10, the Company signed an agreement with Natixis for the assignment of research tax credit receivable relating to 2023
expenditure, without recourse discounting. The Company received 8.6 million euros in December 2024.
On November 13, 2024, the Executive Board granted 370,560 free shares to employees (“AGA Employees 2024-1”), 1,162,900 free
performances shares to employees of the Company and subsidiary (“AGA Perf Employees 2024-1”), and 750,000 free performances shares to
members of the management (“AGA Perf Management 2024-1”)
On December 31, 2024, the Executive Board approved the final performance as of December 31, 2024, relating to the "AGA Perf Employees
2021-1" and "AGA Perf Management 2021-1" free performances shares plans, granted on October 1, 2021. The definitive performance was
80%. Consequently, the Executive Board carried out a capital increase of €51,404 following (i) the definitive acquisition of 612,080 free
performance shares under the "AGA Perf Employee 2021-1" plan and (ii) the definitive
F-19
acquisition of 416,000 free performance shares under the "AGA Perf Management 2021-1" plan. Thus, 1,028,080 ordinary shares were created
with a nominal value of €0.05 issued free of charge by deduction from the issue premium.
2) Accounting policies and statement of compliance
a)
Basis of preparation
Consolidated financial statements of the Company for the years ended December 31, 2022, 2023 and 2024 (the “Consolidated Financial
Statements”) have been prepared under the responsibility of the management of the Company in accordance with the underlying assumptions of
going concern as the Company’s loss-making situation is explained by the innovative nature of the products developed, therefore involving a
multi-year research and development Phase.
The general accounting conventions were applied in compliance with the principle of prudence, in accordance with the underlying assumptions
namely (i) going concern, (ii) permanence of accounting methods from one year to the next and (iii) independence of financial years, and in
conformity with the general rules for the preparation and presentation of consolidated financial statements in accordance with IFRS, as defined
below.
Except for share data and per share amounts, the Consolidated Financial Statements are presented in thousands of euro. Amounts are rounded up
or down to the nearest whole number for the calculation of certain financial data and other information contained in these accounts. Accordingly,
the total amounts presented in certain tables may not be the exact sum of the preceding figures
b)
Statement of compliance
The Consolidated Financial Statements have been prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the
International Accounting Standard Board (“IASB”) and were approved and authorized for issuance by the Board of Directors of the Company on
April 24, 2025. They will be approved by the General Meeting of the Company on May 22, 2025, which has the right to modify them.
Due to the listing of ordinary shares of the Company on Euronext Paris and in accordance with the European Union’s regulation No. 1606/2002
of July 19, 2002, the Consolidated Financial Statements of the Company for the years ended December 31, 2022, 2023 and 2024 are also
prepared in accordance with IFRS, as adopted by the European Union (EU). For the years ended December 31, 2022, 2023 and 2024, all IFRS
that the IASB had published and that are mandatory are the same as those endorsed by the EU and mandatory in the EU. As a result, the
Consolidated Financial Statements comply with IFRS Accounting Standards as published by the IASB and as adopted by the EU.
IFRS include IFRS Accounting Standards (IFRS), International Accounting Standards (“IAS”), as well as the interpretations issued by the
Standing Interpretations Committee (“SIC”), and the International Financial Reporting Interpretations Committee (“IFRIC”). The main
accounting methods used to prepare the Consolidated Financial Statements are described below. These methods were used for all periods
presented.
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c)
Recently issued accounting standards and interpretations
Application of the following new and amended standards is mandatory for the first time for the financial period beginning on January 1, 2024
and, as such, they have been adopted by the Company:
• Amendments to IAS 1: Classification of Liabilities
• Amendments to IAS 7 and IFRS 7: Supplier Financing Arrangements
• Amendments to IFRS 16: Leaseback Liabilities
These amended standards had no impact on the consolidated financial statements.
The following new standards, amendments to existing standards and interpretations have been published but are not applicable in 2024 or have
not yet been adopted by the European Union, and have not been applied early:
•
•
•
•
IFRS 18 : Presentation of financial statements;
Amendment to IFRS 9 : Classification and Measurement of Financial Instruments;
Amendment to IAS 21 : Lack of Exchangeability;
Amendments to IFRS 7 and IFRS 9: Clarification on Nature-dependent electricity contracts
These standards have not been applied early. Impact studies relating to the application of IFRS 18 and the IFRS 9 Amendment on the
classification of financial instruments are in progress.
The accounting rules and valuation principles used for the financial statements at 31 December 2024 are identical to those used for the previous
comparative year.
d)
Change in accounting policies
There has been no change in accounting policies for any of the years presented.
e)
Translation of transactions denominated in foreign currency
Pursuant to IAS 21 The effects of changes in foreign exchange rates, transactions performed by consolidated entities in currencies other than
their functional currency are translated at the prevailing exchange rate on the transaction date.
Trade receivables and payables and liabilities denominated in a currency other than the functional currency are translated at the period-end
exchange rate. Unrealized gains and losses arising from translation are recognized in net operating income.
Foreign exchange gains and losses arising from the translation of inter-Group transactions or receivables or payables denominated in currencies
other than the functional currency of the entity are recognized in the line “net financial income (loss)” of the consolidated statements of income
(loss).
Foreign currency transactions are translated into the presentation currency using the following exchange rates:
€1 EQUALS TO
AVERAGE RATE CLOSING RATE AVERAGE RATE CLOSING RATE AVERAGE RATE CLOSING RATE
USD
1.0530
1.0666
1.0813
1.1050
1.0824
1.0389
December 31, 2022
December 31, 2023
December 31, 2024
F-21
f)
Consolidation method
The Group applies IFRS 10 Consolidated financial statements. IFRS 10 presents a single consolidation model identifying control as the criteria
for consolidating an entity. An investor controls an investee if it has the power over the entity, is exposed or has rights to variable returns from its
involvement with the entity and has the ability to use its power over the entity to affect the amount of the investor’s returns. Subsidiaries are
entities over which the Company exercises control. They are fully consolidated from the date the Group obtains control and are deconsolidated
from the date the Group ceases to exercise control. Intercompany balances and transactions are eliminated.
g)
Financial instruments
Financial assets
Financial assets are initially measured at fair value plus directly attributable transaction costs in the case of instruments not measured at fair
value through profit or loss. Directly attributable transaction costs of financial assets measured at fair value through profit or loss are recorded in
the consolidated statement of income (loss).
Under IFRS 9, financial assets are classified in the following three categories:
•
•
•
Financial assets at amortized cost;
Financial assets at fair value through other comprehensive income (“FVOCI”); and
Financial assets at fair value through profit or loss.
The classification of financial assets depends on:
•
•
The characteristics of the contractual cash flows of the financial assets; and
The business model that the entity follows for the management of the financial asset.
Financial assets at amortized cost
Financial assets are measured at amortized cost when (i) they are not designated as financial assets at fair value through profit or loss, (ii) they
are held within a business model whose objective is to hold assets in order to collect contractual cash flows and (iii) they give rise to cash flows
that are solely payments of principal and interest on the principal amount outstanding (“SPPI” criterion). They are subsequently measured at
amortized cost, determined using the effective interest method (“EIR”), less any expected impairment losses in relation to the credit risk. Interest
income, exchange gains and losses, impairment losses and gains and losses arising on derecognition are all recorded in the consolidated
statement of income (loss).
This category primarily includes trade receivables, as well as other loans and receivables. Long-term loans and receivables that are not interest-
bearing or that bear interest at a below-market rate are discounted when the amounts involved are material.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income is mainly comprised is composed of debt instruments whose contractual cash
flows represent payments of interest or repayments of principal, and which are managed with a view to collecting cash flows and selling the
asset. Gains and losses arising from changes in fair value are recognized in equity within the statement of comprehensive income in the period in
which they occur. When such assets are derecognized, the cumulative gains and losses previously recognized in equity are reclassified to profit
or loss for the period within the line items Financial income or Financial expenses. The Company did not hold this type of instrument as of
January 1, 2024 or as of December 31, 2024.
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Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss is comprised of:
•
•
financial assets that are not part of the above categories; and
instruments that management has designated as “fair value through profit or loss” on initial recognition.
Gains and losses arising from changes in fair value are recognized in profit or loss within the line items financial income or financial expenses.
Impairment of financial assets measured at amortized cost
The main assets involved are trade receivables and others. Trade receivables are recognized when the Company has an unconditional right to
payment by the customer. Impairment losses on trade receivables and others are estimated using the expected loss method, in order to take
account of the risk of payment default throughout the lifetime of the receivables. The expected credit loss is estimated collectively for all
accounts receivable at each reporting date using an average expected loss rate, determined primarily on the basis of historical credit loss rates.
However, that average expected loss rate may be adjusted if there are indications of a likely significant increase in credit risk. If a receivable is
subject to a known credit risk, a specific impairment loss is recognized for that receivable. The amount of expected losses is recognized in the
balance sheet as a reduction in the gross amount of accounts receivable. Impairment losses on accounts receivable are recognized within
Operating expenses in the consolidated statement of income (loss).
Financial liabilities
Financial liabilities comprise deferred revenue, collaboration liabilities, loans and trade and other payables.
Financial liabilities are initially recognized on the transaction date, which is the date that the Company becomes a party to the contractual
provisions of the instrument. They are derecognized when the Company’s contractual obligations are discharged, cancelled or expire.
Loans are initially measured at fair value of the consideration received, net of directly attributable transaction costs. Subsequently, they are
measured at amortized cost using the EIR method. All costs related to the issuance of loans, and all differences between the issuance proceeds
net of transaction costs and the value on redemption, are recognized within financial expenses in the consolidated statement of income (loss)
over the term of the debt using the EIR method.
Other financial liabilities include trade accounts payable, which are measured at fair value (which in most cases equates to face value) on initial
recognition, and subsequently at amortized cost.
Cash and cash equivalents
Cash equivalents are short-term, highly liquid investments, that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. Cash and cash equivalents comprise the cash that is held at the bank and petty cash as well as the short-
term fixed deposits for which the maturity is less than three months.
For the purpose of establishing the statement of cash flows, cash and cash equivalents include cash in hand, demand deposits and short fixed-
term deposits with banks and short-term highly liquid investments with original maturities of three months or less, net of bank overdrafts.
Cash and cash equivalents are initially recognized at their purchase costs on the transaction date, and are subsequently measured at fair value.
Changes in fair value are recognized in profit or loss.
F-23
Fair value of financial instruments
Under IFRS 13 Fair value measurement and IFRS 7 Financial instruments: disclosures, or IFRS 7, fair value measurements must be classified
using a hierarchy based on the inputs used to measure the fair value of the instrument. This hierarchy has three levels:
•
•
•
level 1: fair value calculated using quoted prices in an active market for identical assets and liabilities;
level 2: fair value calculated using valuation techniques based on observable market data such as prices of similar assets and liabilities
or parameters quoted in an active market; and
level 3: fair value calculated using valuation techniques based wholly or partly on unobservable inputs such as prices in an inactive
market or a valuation based on multiples for unlisted securities.
h)
Intangible assets
Research and development (R&D) expenses
In accordance with IAS 38 Intangible assets, or IAS 38, expenses on research activities are recognized as an expense in the period in which it is
incurred.
An internally generated intangible asset arising from the Company’s development activities is recognized only if all of the following conditions
are met:
•
•
•
•
Technically feasible to complete the intangible asset so that it will be available for use or sale;
The Company has the intention to complete the intangible assets and use or sell it;
The Company has the ability to use or sell the intangible assets;
The intangible asset will generate probable future economic benefits, or indicate the existence of a market;
• Adequate technical, financial and other resources to complete the development are available; and
•
The Company is able to measure reliably the expenditure attributable to the intangible asset during its development.
Because of the risks and uncertainties related to regulatory approval, the R&D process and the availability of technical, financial and human
resources necessary to complete the development Phases of the product candidates, the six criteria for capitalization are usually considered not to
have been met until the product candidate has obtained marketing approval from the regulatory authorities. Consequently, internally generated
development expenses arising before marketing approval has been obtained, mainly the cost of clinical trials, are generally expensed as incurred
within Research and development expenses.
However, some clinical trials, for example those undertaken to obtain a geographical extension for a molecule that has already obtained
marketing approval in a major market, may in certain circumstances meet the six capitalization criteria under IAS 38, in which case the related
expenses are recognized as an intangible asset. These related costs are capitalized when they are incurred and amortized on a straight line basis
over their useful lives beginning when marketing approval is obtained.
Licenses
Payments for separately acquired research and development are capitalized within “Other intangible assets” provided that they meet the
definition of an intangible asset: a resource that is (i) controlled by the
F-24
Group, (ii) expected to provide future economic benefits for the Group and (iii) identifiable (i.e. it is either separable or arises from contractual
or legal rights).
In accordance with paragraph 25 of IAS 38 standard, the first recognition criterion, relating to the likelihood of future economic benefits
generated by the intangible asset, is presumed to be achieved for research and development activities when they are acquired separately.
In this context, amounts paid to third parties in the form of initial payments or milestone payments relating to product candidates that have not
yet obtained a regulatory approval are recognized as intangible assets. These rights are amortized on a straight-line basis:
(i) after obtaining the regulatory approval, over their useful life; or
(ii) after entering in an out-license collaboration agreement with a third-party partner, over their estimated useful life. This estimated
useful life takes into consideration the period of protection of the out-licensed exclusivity rights and the anticipated period over which
the Company will receive the economic benefits of the asset.
Unamortized rights (before marketing authorization) are subject to impairment tests in accordance with the method defined in Note 6.
When intangible assets acquired separately are acquired through variable or conditional payments, these payments are recognized as an increase
of the carrying amount of the intangible asset when they become due. Royalties due by the Company related to acquired licenses are recognized
as operating expenses when the Company recognizes sales subject to royalties.
Estimate of the useful life of the acquired licenses: intangible assets are amortized on a straight line basis over their anticipated useful life. The
estimated useful life is the period over which the asset provides future economic benefits. It is estimated by management and is regularly revised
by taking into consideration the period of development over which it expects to receive economic benefits such as collaboration revenues,
royalties, product of sales, etc. However, given the uncertainty surrounding the duration of the R&D activities for the programs in development
and their likelihood to generate future economic benefits to the Company, the estimated useful life of the rights related to these programs is
rarely longer than the actual development Phase of the product candidate. When a program is in commercialization Phases, the useful life takes
into account the protection of the exclusivity rights and the anticipated period of commercialization without taking into account any extension or
additional patents. The prospective amendment of the amortization plan of the monalizumab intangible asset, which is modified according to the
estimate ending date of the Phase 2 clinical trial is described in Note 6.
Other intangible assets
Other intangible assets consist of acquired software. Costs related to the acquisition of software licenses are recognized as assets based on the
costs incurred to acquire and set up the related software. Software is amortized using the straight-line method over a period of one to three years
depending on the anticipated period of use.
i)
Property and equipment
Property and equipment are carried at acquisition cost. Major renewals and improvements are capitalized while repairs and maintenance are
expensed as incurred.
Property and equipment are depreciated over their estimated useful lives using the straight-line depreciation method. Leasehold improvements
are depreciated over the life of the improvement or the remaining lease term, whichever is shorter.
F-25
The headquarters of the Company was split into several components (e.g., foundations, structure, electricity, heating and ventilation systems)
which are depreciated over different useful lives according to the anticipated useful life of these elements.
Depreciation periods are as follows:
Buildings and improvements on buildings
Installations
Technical installations and equipment
Equipment and office furniture
Computers and IT equipment
20
5
to
to
40 years
20 years
8 years
5 years
3 years
j)
Impairment of intangible assets, property, and equipment
The Group assesses at the end of each reporting period whether there is an indication that intangible assets, property and equipment may be
impaired. If any indication exists, the Group estimates the recoverable amount of the related asset.
Whether or not there is any indication of impairment, intangible assets not yet available for use are tested for impairment annually by comparing
their carrying amount with their recoverable amount.
Pursuant to IAS 36—Impairment of Assets, criteria for assessing indication of loss in value may notably include performance levels lower than
forecast, a significant change in market data and/or the regulatory environment, the asset development strategy approved by management, or
obsolescence or physical damage of the asset not included in the amortization/depreciation schedule. The recognition of an impairment loss
alters the amortizable/depreciable amount and potentially, the amortization/depreciation schedule of the relevant asset.
Impairment losses on intangible assets, property and equipment shall be reversed subsequently if the impairment loss no longer exists or has
decreased. In such case, the recoverable amount of the asset is to be determined again so that the reversal can be quantified. The asset value after
reversal of the impairment loss may not exceed the carrying amount net of depreciation/amortization that would have been recognized if no
impairment loss had been recognized in prior periods.
The Group does not have any intangible assets with an indefinite useful life. However, as explained in Note 2.h, the Group recognized intangible
assets in progress, which will be amortized once marketing authorization is received or when out licensing has been agreed.
k)
Employee benefits
Long-term pension benefits
Company employees are entitled to pension benefits required by French law:
•
•
Pension benefit, paid by the Company upon retirement (i.e. defined benefit plan); and
Pension payments from social security entities, financed by contributions from businesses and employees (i.e. defined contribution
plan”).
In addition, the Company has implemented an additional, non-mandatory, pension plan (“Article 83”), initially for the benefit of executives only.
This plan was extended to the non-executive employees starting on January 1, 2014. This plan meets the definition of defined contribution plan
and is financed
F-26
through a contribution that corresponds to 2.2% of the employee’s annual wage, with the Company paying 1.4% and the employee paying 0.8%.
For the defined benefit plan, the costs of the pension benefit are estimated using the “projected unit credit” method. According to this method,
the pension cost is accounted for in the consolidated statement of income (loss), so that it is distributed uniformly over the term of the services of
the employees. The pension benefit commitments are valued using the actual present value of estimated future payments, adopting the rate of
interest of long-term bonds in the private sector (i.e. Euro zone AA or higher rated corporate bonds + 10 years). The difference between the
amount of the provision at the beginning of a period and at the close of that period is recognized in the consolidated statement of income (loss)
for the portion representing the costs of services rendered and the net interest costs, and through other comprehensive income for the portion
representing the actuarial gains and losses. The Company’s commitments under the defined benefit plan are not covered by any plan assets.
Payments made by the Company for defined contribution plans are accounted for as expenses in the consolidated statement of income (loss) in
the period in which they are incurred.
Other long-term benefits
The Company pays seniority bonuses to employees reaching 10, 15 and 20 years of seniority. These bonuses represent long-term employee
benefits. Under IAS 19R “Employee benefits”, they are recording as a defined benefit obligation in the consolidated statement of financial
position, but their remeasurements is not recognized in the consolidated statement of other comprehensive income (loss).
Other short-term benefits
An accrued expense is recorded for the amount the Company expects to pay its eligible employees in relation to services rendered during the
reporting period (actual legal or implicit obligation to make to these payments on a short-term basis).
l)
Leases
The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognizes a right-of-use asset and a
corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a
lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and
telephones). For these leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by
using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. Lease payments
included in the measurement of the lease liability comprise:
•
•
•
•
fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
F-27
•
payment of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is included in the financial liabilities in the consolidated statement of financial position and is subsequently measured by
increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount
to reflect the lease payments made.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated
depreciation and impairment losses.
Whenever the Company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the
underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured under IAS 37. To the
extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to
produce inventories.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of
the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use
asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are included in the property and equipment line item in the consolidated statement of financial position.
The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss.
m)
Provisions and contingent liabilities
In the course of its business, the Company could be exposed to certain risks and litigations, notably in relation to contractual arrangements.
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that the
Company is subject to a release of outflow representatives of economic benefits to settle the obligation and a reliable estimate of the amount of
the obligation can be made. Management of the Company estimates the probability and the expected amount of a cash outflow associated with
risks, together with the other information to be provided on possible liabilities. Where the Company expects a provision to be reimbursed, for
example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is certain.
In addition, the Company may assess a potential obligation towards a third party resulting from events the existence of which will only be
confirmed by the occurrence, or not, of one or more events. uncertain futures which are not totally under the control of the Company; or an
obligation to a third party for which it is not probable or certain that it will result in an outflow of resources without at least equivalent
consideration expected from the latter. These elements are mentioned in note 18 of the group's consolidated financial statements as contingent
liabilities.
n)
Capital
Ordinary shares are classified in shareholders’ equity. Costs associated with the issuance of new shares are directly accounted for in
shareholders’ equity in diminution of issuance premium.
F-28
The Company’s own shares bought in the context of a brokering/liquidity agreement are presented as a reduction in shareholders’ equity until
their cancellation, their reissuance or their disposal.
o)
Share-based compensation
Since its inception, the Company has established several plans for compensation paid in equity instruments in the form of free shares
(“Attributions gratuites d’actions,” or “AGA”), free preferred shares convertible into ordinary shares (“Attributions gratuites d’actions de
préférence convertibles en actions ordinaires,” or “AGAP”), free performance shares (“Attributions gratuites d’actions de performance,” or
“AGA Perf”), share subscription warrants (“Bons de souscription d’actions,” or “BSA”), redeemable share subscription warrants (“Bons de
Souscription et/ou d’Acquisition d’Actions Remboursables,” or “BSAAR”), granted to its employees, executives, members of the Executive
Board and scientific consultants.
Pursuant to IFRS 2—Share-based Payment, these awards are measured at their fair value on the date of grant. The fair value is calculated with
the most relevant formula regarding the conditions and the settlement of each plan.
For share-based compensation granted to employees, executives, members of the Executive Board and scientific consultants, the Company uses
the Black-Scholes and Monte Carlo approach pricing models to determine the fair value of the share-based compensation. For scientific
consultants providing similar services, as the Company cannot estimate reliably the fair value of the goods or services received, it measures the
value of share-based compensation and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments
granted also using the Black-Scholes option pricing model. The fair value of free shares included in the model is determined using the value of
the shares at the time of their distribution.
In calculating the fair value of share-based compensation, the Company also considers the vesting period and the employee turnover weighted
average probability as described in Note 11. Other assumptions used are also detailed in Note 11.
The Company recognizes the fair value of these awards as a share-based compensation expense over the period in which the related services are
received with a corresponding increase in shareholders’ equity. Share-based compensation is recognized using the straight-line method. The
share compensation expense is based on awards ultimately expected to vest and is reduced by expected forfeitures.
p)
Revenue
Revenue from collaboration and license agreements
To date, the Company’s revenue results primarily from payments received in relation to research, collaboration and licensing agreements signed
with pharmaceutical companies. These contracts generally provide for components such as:
•
•
non-refundable upfront payments upon signature;
payments for the exercise of the option to acquire licenses of drug candidates;
• milestones payments triggered following stages of development (scientific results obtained by the Company or by the partner,
obtaining regulatory marketing approvals);
payments related to the Company’s R&D activities;
payments triggered by the start of the commercialization of products resulting from development work or by crossing cumulative
thresholds of product sales, as well as the allocation of royalties on future sales of products or a sharing of profits on sales.
•
•
F-29
Under collaboration and license agreements, the Company may promise its partners licenses on intellectual property, as well as research and
development services. According to IFRS 15, the Company has to determine if the promises included in the contract are distinct (therefore
recognized separately as revenue) or if they have to be combined as a single performance obligation.We conclude that the license is not distinct
from the research and development services when the research and development services involve the Company's own expertise, so that the
customer cannot benefit from the license alone or in combination with services provided by third parties, or when the intellectual property is at
such a stage of development that the research and development work significantly modifies the initial purpose of the license.
When promises in a collaboration and license agreement are considered as a single performance obligation, the Company has to determine if the
combined performance obligation is satisfied over time or at point in time. If the combined performance obligation is satisfied over time, revenue
recognition is based on the percentage of completion of the costs to be incurred. Non-refundable initial payments are deferred and recognized as
revenue during the period the Company is engaged to deliver services to the customer on the basis of the corresponding costs.
When promises in a collaboration and license agreement are considered as separate performance obligations, revenue is allocated to each
obligation proportionally to its transaction price, which corresponds to a price each performance obligation would have been sold in the context
of a separate transaction.
In accordance with IFRS 15, variable considerations cannot be included in the estimated transaction price as long as it not highly probable that
the related revenue will not reversed in the future. According to the level of uncertainty relating to the results of preclinical and clinical trials and
the decisions relating to the regulatory approvals, variable considerations depending on these events are excluded from the transaction price as
long as the trigger event is not highly probable. When the trigger event occurs, the corresponding milestone is added to the transaction price.
Such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and net income (loss) in the period of adjustment.
Revenues based on royalties, completion of commercialization steps or co-sharing profit from sales are recognized when the corresponding sales
of products are carried out by the partner.
When a collaboration contract grants a partner an option to acquire a licensed intellectual property (“IP”), the Company determines the date of
the transfer of control over the licensed IP. Depending on the Company analysis, revenue related to the option fee will be recognized (i) when
control over the licensed IP transfers (payment related to the exercise of the option being therefore considered as a variable consideration), or,
(ii) deferred until the exercise of the option or its expiration period.
When an agreement only promises development services, the Company will recognize the related revenue when the costs are incurred.
Up-front and milestones payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue
recognition to a future period until the Company performs its obligations under these arrangements. Amounts due by the Company in relation to
cost-sharing are recorded as collaboration liability. Amounts payable to the Company are recorded as accounts receivable when the Company’s
right to consideration is unconditional.
See Note 13 for accounting description of significant agreements.
F-30
q)
Government financing for research expenditures
Research tax credit
The research tax credit (Crédit d’Impôt Recherche) (the “Research Tax Credit” or “CIR”) is granted by the French tax authorities in order to
encourage Companies to conduct technical and scientific research. Companies that can justify that these expenses meet the required criteria
receive a tax credit that can be used to offset with the income tax due for the same fiscal year. Any excess is a receivable to the French state,
which can be used to pay the income tax that would be due for the 3 following fiscal years. At the end of this period, the receivable is refundable
by the French State. Companies that meet the definition of SME according to European Union criteria are eligible for early reimbursement of
their CIR. The reimbursements are made under the European Community tax rules for small and medium sized enterprises (“SME”) in
compliance with the applicable regulations in effect.
With the Company no longer qualifying as a SME, the Company decided to sell the receivable relating to the 2023 CIR to a bank. As there is no
specific guidance under IFRS for the transfer of this type of assets, an analysis under IFRS 9 was made by analogy. Because the company
transferred to the bank its contractual right to receive the cash flows from the asset as well as substantially all the risks and rewards of ownership
of that asset, the asset - the 2023 tax credit receivable - was derecognized.
The Research Tax Credit receivable has been historically considered as part of the working capital. Consequently, the cash flows received from
the tax authorities in 2023 (€13 million), as well as the cash flow received from the bank in 2024 (€8.6 million), are classified as Net cash
generated from / (used in) operating activities.
The CIR is presented under other income, in “government financing for research expenditures” line item in the consolidated statements of
income (loss) as it meets the definition of government grant as defined in IAS 20 Accounting for government grants and disclosure of
government assistance.
Subsidies
Government grants are recognized when there is a reasonable assurance that:
•
•
The Company will comply with the conditions attached to the grants; and that
The grants will be received.
A government grant that becomes receivable as compensation for expenses or losses already incurred, or for the purpose of providing immediate
financial support to the Company with no future related costs, is recognized as other income of the period in which it becomes receivable.
Government grants to subsidize capital expenditures are presented in the statement of financial position as deferred income and are recognized as
income on a straight line basis over the useful life of those assets that have been financed through the grants.
A non-repayable loan from the government is treated as a government grant when there is a reasonable assurance that the Company will meet the
terms for non-repayment of the loan. When there is no such assurance, the loan is recorded as a liability under borrowings.
r)
Income tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. Main temporary differences are generally associated with the depreciation of property and
equipment, provisions for pension benefits and tax losses carried forward and also with the deferred tax liabilities /
F-31
assets generated by the application of IFRS 15. Currently enacted tax rates are used in the determination of deferred income tax.
Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary
differences can be utilized. Due to Company’s early stage of development, it is not probable that future taxable profit will be available against
which the unused tax losses can be utilized. As Innate Pharma's deferred tax assets and liabilities relate to the same tax authority (France), the
same taxable entity, and the same fiscal recovery period, in the application of IAS12, the entity offset deferred taxes assets and deferred tax
liabilities in the statement of financial position.
s)
Earnings (loss) per share
In accordance with IAS 33 Earnings per share, basic income (loss) per share is calculated by dividing the income (loss) attributable to equity
holders of the Group by the weighted average number of outstanding shares for the period.
Diluted income (loss) per share is measured by dividing the income (loss) attributable to holders of equity and dilutive instruments by the
weighted average number of outstanding shares and dilutive instruments for the period.
If in the calculation of diluted income (loss) per share, instruments giving deferred rights to capital such as warrants generates an antidilutive
effect, then these instruments are not taken into account.
t)
Other comprehensive income
Items of income and expenses for the period that are recognized directly in equity are presented under “other comprehensive income.” The items
mainly include :
•
Foreign currency translation gain (loss); and
• Actuarial gains and (losses) related to defined benefit obligations.
u)
Segment information
For internal reporting purposes, and in order to comply with IFRS 8 Operating segments, the Company performed an analysis of operating
segments. Following this analysis, the Company considers that it operates within a single operating segment being the R&D of pharmaceutical
products in order to market them in the future. All R&D activities of the Company are located in France. Key decision makers (the Leadership
Team of the Company) monitor the Company’s performance based on the cash consumption of its activities. For these reasons, the Management
of the Group considers it not appropriate to set up separate business segments in its internal reporting.
In addition, Lumoxiti sales were historically considered insignificant in relation to the consolidated financial statements taken as a whole and are
now included in the income statement under "net income from discontinued operations" following the signature of the termination and transition
contract with AstraZeneca in 2021 (see Notes 1.a, 2.v and 17).
v)
Non-current assets held for sale and discontinued operations
A discontinued operation is a component of an entity that either has been disposed of, or that is classified as held for sale. It must either:
represent a major separate line of business or geographical area of operations; be part of a single coordinated disposal plan; or be a subsidiary
acquired exclusively with a view to resale. Intercompany transactions between continuing and discontinued operations are eliminated against
discontinuing operations. Non-current assets and disposal groups are classified as assets held for sale if their carrying amount is to be recovered
principally through a sale transaction rather than through
F-32
continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for
immediate sale in its present condition. They are stated at the lower of carrying amount and fair value less costs to sell with any resulting
impairment recognized. Assets related to discontinued operations and assets of disposal group held for sale are not depreciated. The prior-year
consolidated balance sheet is not restated.
Further to the decision to terminate the Lumoxiti Agreement and termination notice sent in December 2020, a termination and transition
agreement was discussed and executed, effective as of June 30, 2021 terminating the Lumoxiti Agreement as well as Lumoxiti related
agreements (including the supply agreement, the quality agreement and other related agreements) and transferring of the U.S. marketing
authorization and distribution rights of Lumoxiti back to AstraZeneca. Consecutively, the activities related to Lumoxiti are presented as a
discontinued operation for all period presented.
Consequently, in accordance with IFRS5 "non-current assets held for sale and discontinued operations", the Lumoxiti operations are presented in
the consolidated statement of income (loss) and the notes to the consolidated financial statements as a discontinued operation for the 2021
financial year. As a reminder, the 2019 and 2020 comparatives have been restated compared to previous publications (where applicable), in
accordance with the same standard.
The Company does not have any non-current assets held for sale to be presented in the consolidated financial statement.
w)
Critical accounting estimates and assumptions
The preparation of the consolidated financial statements under IFRS requires management to make estimates, assumptions and judgments that
affect the reported amounts of assets, liabilities, income and expenses during the reporting period. The Company bases estimates and
assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. The
Company’s actual results may differ from these estimates under different assumptions or conditions.
These estimates and judgments involve mainly:
•
•
the accounting for collaboration and licensing agreements: the revenue results primarily from payments based on several
components (e.g., upfront payments, milestone payments) received in relation to research, collaboration and licensing agreements
signed with pharmaceutical or other companies. When the Company is committed to perform R&D services, revenue is spread over
the period the Company is engaged to deliver these services, more particularly on the basis of the Company’s inputs to the satisfaction
of a performance obligation relative to the total expected inputs to the satisfaction of that performance obligation. Milestone payments
are dependent upon the achievement of certain scientific, regulatory, or commercial milestones. These variable payments are
recognized when the triggering event has occurred, there are no further contingencies or services to be provided with respect to that
event, and the counterparty has no right to refund of the payment. The changes in estimate regarding the completion of the works and
the variable consideration relating to the contracts signed with customers are described in Note 13. As of December 31, 2023, given
the significant progress of the work to be performed (98.1%) and the level of budget consumption, the impact of accounting estimates
is no longer a determining factor in the calculation of revenue related to the monalizumab agreement.
the estimate of the recoverable amount of the acquired and under progress licenses: impairment tests are performed on a yearly
basis for the intangible assets which are not amortized (such as intangible assets in progress). Amortizable intangible assets are tested
for
F-33
impairment when there is an indicator of impairment. Impairment tests involve comparing the recoverable amount of the licenses to
their net book value. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. If the
carrying amount of any asset is below its recoverable amount, an impairment loss is recognized to reduce the carrying amount to the
recoverable amount. The main assumptions used for the impairment test include (a) the amount of cash flows that are set on the basis
of the development and commercialization plans and budgets approved by Management, (b) assumptions related to the achievement of
the clinical trials and the launch of the commercialization, (c) the discount rate, (d) assumptions on risk related to the development and
(e) for the commercialization, selling price and volume of sales, Any change in these assumptions could lead to the recognition of an
impairment charge that could have a significant impact on the Company’s consolidated financial statements. As of December 31, 2022,
given the Company's decision in December 2022 to discontinue the development of avdoralimab in the indication of bullous
pemphigoid supporting the recoverable amount of the asset as of December 31, 2021 and June 30, 2022, the rights related to the
intangible asset have been fully impaired for the net carrying amount of the intangible asset, of €41,000 thousand, without using the
historical assumptions described above (see note 6). As a result, the Company considers that there are no longer any critical estimates
in line with intangible assets in 2022. Without any new event to be considered since then, there are therefore no longer any critical
assumptions that could call into question the recoverable amount of the asset.
3)
Management of financial risks and fair value
The principal financial instruments held by the Company are cash, cash equivalents and marketable securities. The purpose of holding these
instruments is to finance the ongoing business activities of the Company. It is not the Company’s policy to invest in financial instruments for
speculative purposes. The Company does not utilize derivatives.
The principal risks to which the Company is exposed are liquidity risk, foreign currency exchange risk, interest rate risk and credit risk.
Liquidity risk
The Company’s cash management is performed by the Finance department, in charge of monitoring the day-to-day financing and the short-term
forecast and enabling the Company to face its financial commitments by maintaining an amount of available cash consistent with the maturities
of its liabilities. As of December 31, 2024, cash, cash equivalents and short-term investments were €80,770 thousand, which represents more
than a year of cash consumption.
The company's assets are fairly split between top-rated banks (S&P A+ rating).
The main characteristics of the financial instruments owned by the Company (including liquidity) are presented in Note 4.
Foreign currency exchange risk
The Company is exposed to foreign exchange risk inherent in certain subcontracting activities relating to its operations in the United States,
which have been invoiced in U.S. dollars. The Company does not currently have recurring revenues in euros, dollars or in any other currency.
The revenue denominated in U.S. dollars has represented approximately 92%, 29% and 52% of revenue in the years ended December 31, 2022,
2023 and 2024, respectively. Payments in U.S dollars represented approximately 50%, 43%, and 35% of the payments in the years ended
December 31, 2022, 2023 and
F-34
2024, respectively. In order to cover this risk, the Company kept in U.S. dollars a part of the consideration received from AstraZeneca in June
2015, January 2019 and December 2020. The Company entirely kept the U.S dollars portion of the proceeds received from our Global Offering
in October 2019.
The Company’s foreign exchange policy does not include the use of hedging instruments in its current operations.
Interest rate risk
The Company has very low exposure to interest rate risk. Such exposure primarily involves money market funds and time deposit accounts.
Changes in interest rates have a direct impact on the rate of return on these investments and the cash flows generated. The Company has no
credit facilities. The repayment flows of the borrowings subscribed in 2017 and the two State Guaranteed Loans obtained in 2021 and extended
in 2022, are not subject to interest rate risk.
Credit risk
The credit risk related to the Company’s cash equivalents, short-term investments and non-current financial assets is not significant in light of the
quality of the issuers. The Company deemed that none of the instruments in its portfolio are exposed to credit risk.
Fair value
The fair value of financial instruments traded on an active market is based on the market rate as of December 31, 2024. The market prices used
for the financial assets owned by the Company are the bid prices in effect on the market as of the valuation date.
4) Cash, cash equivalents and financial assets
(in thousands of euro)
Cash and cash equivalents
Short-term investments
Cash and cash equivalents and short-term investments
Non-current financial assets
Total cash, cash equivalents and financial assets
2022
December 31
2023
2024
84,225
17,260
101,485
35,119
136,604
70,605
21,851
92,456
9,796
102,252
66,396
14,374
80,770
10,281
91,051
Cash and cash equivalents are mainly composed of current bank accounts, interest-bearing accounts, fixed-term accounts and mutual funds units
(with short-term maturities) held with various banking institutions.
Other non-current financial assets generally include a guarantee of capital at the maturity date (which is always longer than one year). These
instruments are defined by the Company as financial assets at fair value through profit or loss and classified as non-current due to their maturity.
As of December 31, 2022, 2023 and 2024 the amount of cash, cash equivalents and financials assets denominated in U.S. dollars amounted
respectively to €34,735 thousand , €20,798 thousand and €16,529 thousand
F-35
The variation of short-term investments and non-current financial assets for the periods presented, are the following:
(in thousands of
euro)
December 31,
2021
Additions(1)
Deductions (2)
Variance of fair
value through
the consolidated
statement of
income (loss)
Variance of
accrued
interests
Foreign
currency
effect
December 31,
2022
Short-term
investments
Non-current
financial assets
Total
16,080
39,878
55,958
—
—
—
—
268
(3,000)
(3,000)
(1,640)
(1,372)
—
(118)
(118)
912
—
912
17,260
35,119
52,379
(in thousands of euro) December 31, 2022
Additions(1)
Deductions (2)
Variance of fair
value through the
consolidated
statement of
income (loss)
Variance of
accrued interests
Foreign
currency effect
December 31,
2023
Short-term
investments
Non-current financial
assets
Total
17,260
35,119
52,379
3,950
—
3,950
—
(26,718)
(26,718)
1,010
582
1,592
174
817
991
(544)
—
(544)
21,851
9,796
31,647
(in thousands of euro) December 31, 2023
Additions(1)
Deductions (2)
Variance of fair
value through the
consolidated
statement of
income (loss)
Variance of
accrued interests
Foreign
currency effect
December 31,
2024
Short-term
investments
Non-current financial
assets
Total
21,851
9,796
31,647
—
—
—
(9,329)
(261)
(9,590)
850
485
1,335
119
261
380
884
—
884
14,375
10,281
24,656
(1) The additions correspond to both acquisitions and reclassifications of financial assets according to their maturity at the closing date.
(2) The deductions correspond to both disposals and reclassifications of financial assets according to their maturity at the closing date.
F-36
5) Trade receivables and others
Trade receivables and others are analyzed as follows:
(in thousands of euro)
Other receivables
Research tax credit
(1)
Other tax credits
Prepaid expenses
(2)
VAT refund
Trade account receivables
(3)
Prepayments made to suppliers (4)
Receivables and others - current
Prepayments made to suppliers (4)
Research tax credit
(2)
Prepaid expenses
(1)
Receivables and others - non-current
Trade receivables and others
Year ended December 31,
2023
104
29,755
360
5,693
1,037
15,233
3,374
55,557
—
9,800
754
10,554
66,111
2022
61
25,904
361
4,672
1,614
3,080
2,652
38,345
—
13,018
1,081
14,099
52,445
2024
89
—
24
2,820
880
650
509
4,972
1,362
7,464
502
9,328
14,300
(1) In accordance with the principles described in Note 2.q, the research tax credit (Crédit d’Impôt Recherche or “CIR”) is recognized as other operating income in the year to which the eligible
research expenditure relates. The amount of CIR recognized as current receivables as of December 31, 2023 comprises the research tax credit for the 2019 and 2020 tax years, for which the
three years period has expired as of December 31, 2023. The CIR for 2019 was reimbursed in February 2024 for an amount of €16,737 thousands. Repayment of the 2020 CIR was reimbursed
in July 2024 in the amount of €12,755 thousand euros. As a reminder, the Company has already benefited from the reimbursement of the CIR for the 2021 tax year during 2022 for an amount
of €10,302 thousand euros and of the CIR for the 2022 tax year during 2023 for an amount of €9,167 thousand euros. These amounts were received by the Company on November 16, 2022 and
July 21, 2023 respectively. As the CIR 2023 was subject to a financing arrangement 95% of its nominal value was cashed in December 2024. The accounting analysis concluded to the
derecognition of the CIR 2023 receivables as per described in the Accounting policy. The 5% withheld by the financing organization will be released at the end of the 3-year period, i.e. on
December 31, 2027, provided that the amount is not challenged by the tax authorities. The amount of €490 thousand has therefore been reclassified under non-current financial assets (see note
4).The amount of €7,464 thousand recognized in non-current receivables corresponds to the CIR for the 2024 tax year following the fact that the Company no longer met the eligibility criteria
for the SME status as of December 31, 2024. Thus, the CIR for the 2024 represented a non-current receivable which will in principle be offset against the French corporate income tax due by
the Company with respect to the three following years, or refunded if necessary upon expiry of such a period.
(2) As of December 31 2024, December 31, 2023, and December 31, 2022 the prepaid expenses includes amounts of €754 thousand, €1,005 thousand and €1,256 thousand, respectively, relating to
the guarantee fees in line with the two State Guaranteed Loans from Société Générale and BNP Paribas. Following the extension of these two loans repayment for an additional period, the full
amount of the guarantee fee over the additional five-year period has been recognized as an operating expense in 2022. As of December 31, 2023, an adjustment is made through the prepaid
accounts to reflect the fact that the expenses are related to the fiscal year (see note 9).
(3) As of December 31, 2024, the amount breaks mainly down as receivables from AstraZeeca for an amount of 644k€ As of December 31, 2023, the amount is mainly comprised of invoice of
€15,000 thousand issued in December 2023 following the exercise of the license option by Sanofi. This amount was collected by the Company in January 2024.As a reminder, as of December
31, 2022, the amount is entirely comprised of the receivables from AstraZeneca for an amount of €1,775 thousand and €1,303 thousand in line with the performance of research and
development services under the monalizumab and IPH5201 collaboration agreements, respectively.
(4) At 31 December 2024, advances had been paid to suppliers. These advances will be deducted from subsequent payments in accordance with the terms of the contracts.
Trade receivables and others have payment terms of less than one year. No valuation allowance was recognized on trade receivables and others
as the credit risk of each of debtors was considered as not significant.
F-37
6)
Intangible assets
Intangible assets can be broken down as follows:
(in thousands of euro)
January 1, 2022
Acquisitions
Additional considerations (1)
Disposals
Depreciation (2)
Impairment (3)
Transfers
December 31, 2022
(in thousands of euro)
January 1, 2023
Acquisitions
Additional considerations (1)
Disposals
Depreciation (2)
Impairment (3)
Transfers
December 31, 2023
(in thousands of euro)
January 1, 2024
Acquisitions
Additional considerations (1)
Disposals
Depreciation (2)
Transfers
December 31, 2024
Purchased licenses Other intangible assets
3,161
—
587
—
(2,195)
—
—
1,553
29
—
—
(29)
—
—
—
In progress
41,000
—
—
—
—
(41,000)
—
—
Purchased licenses Other intangible assets
In progress
1,553
—
2,000
—
(3,140)
—
—
416
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Purchased licenses Other intangible assets
In progress
416
—
—
—
(416)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total
44,192
—
587
—
(2,224)
(41,000)
—
1,556
Total
1,556
—
2,000
—
(3,140)
—
—
416
Total
416
—
—
—
(416)
—
—
(1) As of December 31, 2022, this amount corresponds to the additional payment made to Orega Biotech in October 2022 for the rights relating to IPH5201, following the amendment to the
collaboration and license option agreement IPH5201 concluded with AstraZeneca in October 2018 and the announcement by the Company on June 3, 2022, of the progression of IPH5201
towards a Phase 2 study in lung
F-38
cancers of which the Company will be a sponsor. As of December 31, 2023, this amount corresponds to the additional payment made to Orega Biotech in July 2023 for the rights relating to
IPH5201 following the first patient dosed in the Phase 2 MATISSE clinical trial in June 2023, in accordance to the agreement signed in 2019. This additional payment is fully amortized as of
December 31,2023.
(2) As of December 31, 2022, this amount included the amortization of rights relating to monalizumab (€1,604 thousand) and IPH5201 (€587 thousand). As of December 31, 2023, this amount
includes the amortization of rights relating to monalizumab (€1,138 thousand) and IPH5201 (€2,000 thousand). As of December 31, 2024, this amount includes the amortization of rights
relating to monalizumab (€416 thousand) .
(3) Following the Company's decision in December 2022 to stop the development of avdoralimab in bullous pemphigoid ("BP") indication in inflammation, only indication supporting the
recoverable amount of the asset as of December 31, 2021 (as well that as of June 30, 2022), the rights relating to the intangible asset have been fully impaired for their net book value on the
date of the decision, i.e. €41,000 thousand (see below "Avdoralimab (IPH5401) (anti-C5aR) rights acquired from Novo Nordisk A/S')
Monalizumab rights under the 2014 monalizumab (NKG2A) Novo Nordisk agreement
At the agreement inception, acquired rights were recorded as intangible asset for an amount of €7,000 thousand. The Company recorded an
additional consideration of €6,325 thousand in 2015 and a final consideration of $15,000 thousand (€13,050 thousand) due in 2018 (see
Note 1.1.a).
Since their acquisition by the Company, monalizumab rights are amortized on a straight-line basis over the anticipated residual duration of the
Phase 2 trials. At 31 December 2024, the Company has estimated that the rights associated with monalizumab will be fully amortized. This
timing takes into account both the completion of certain clinical trials and changes in the estimated end dates for certain cohorts.
The net book values of the monalizumab rights were €0 thousand and €416 thousand as of December 31, 2024 and December 31, 2023,
respectively.
IPH5201 (Anti-CD39) rights acquired from Orega Biotech; Sub-licensing revenues to be paid to Orega Biotech
On January 4, 2016, the Company and Orega Biotech entered into an exclusive licensing agreement by which Orega Biotech granted the
Company full worldwide rights to its program of first-in-class anti-CD39 checkpoint inhibitors. The undisclosed upfront payment paid by the
Company to Orega Biotech has been recognized as an intangible asset in the consolidated financial statements for the year ended December 31,
2016. Criteria relating to the first development milestone were reached in December 2016. Consequently, the amount of this milestone was
recognized as an intangible asset in addition to the initial payment, for a total of €1.8 million as of December 31, 2023. In June 2019, the
Company also paid Orega Biotech €7.0 million in relation to the anti-CD39 program. Under this agreement, the Company also paid in April and
June 2020, respectively €2.5 and €0.2 million to Orega Biotech following the first Phase 1 dosing relating to IPH5201.
This asset was amortized on a straight-line basis since November 1, 2018 (corresponding to the effective beginning date of the collaboration)
until the date the Company expected to fulfill its commitment (end of fiscal year 2020). As a reminder, these collaboration commitments have all
been fulfilled. Thus, the rights relating to IPH5201 are fully amortized since December 31, 2020.
Orega Biotech claimed joint ownership of certain patents relating to IPH5201, which the Company disputed. The Company and Orega Biotech
resolved these claims in an arbitration proceeding, which ended in a decision rendered by the arbitral tribunal in December 2021. As a result of
this decision, the Company will be required to pay a low-teen percentage to Orega Biotech on a going forward basis of sub-licensing revenues
received by the Company pursuant to its agreement with AstraZeneca regarding IPH5201 Following this arbitral decision, the Company paid in
January 2022 an additional amount of 0.4 million euros to Orega Biotech.
The Company announced on June 3, 2022 the progress of IPH5201 towards a study of Phase 2 in lung cancer, of which the Company will be a
sponsor. In accordance with the amendment signed on June 1,
F-39
2022, the Company was eligible for a milestone payment of $5 million by AstraZeneca, received in August 2022 by the Company. In October
2022, the Company paid an additional €0.6 million to Orega Biotech.
On June 26, 2023, the Company announced the treatment of the first patient in the Phase 2 MATISSE trial, conducted in collaboration with
AstraZeneca and evaluating IPH5201 in early-stage lung cancer. As a consequence, the Company made an additional payment of €2.0 million to
Orega Biotech in July 2023, in accordance with the agreement signed in 2019.
Pursuant to the arbitral decision mentioned above and the potential milestone payments to which the Company may be due under the 2018 AZ
Option Agreement, the Company may also be obligated to pay Orega Biotech up to €47 million upon the achievement of development and
regulatory milestones.
Avdoralimab (IPH5401) (anti-C5aR) rights acquired from Novo Nordisk A/S
At the agreement inception, an upfront payment of €40 million for acquired rights were recorded as intangible asset. As part of this agreement,
an additional amount of €1.0 million was paid in October 2020 to Novo Nordisk A / S following the launch of the first avdoralimab Phase 2 trial.
As avdoralimab is still in clinical trial, the acquired rights are classified as intangible asset in progress. They were subject to annual impairment
test. No impairment were recorded since inception.
According to the agreement, the Company will pay additional payments according to the reach of specific steps. As of December 31, 2024,
according to the uncertainty of these potential future payments, no liability was recognized.
Development costs incurred by the Company are recognized as research and development expenses.
During 2022 fourth quarter, the Company was informed by the sponsor of the Phase 2 clinical trial evaluating avdoralimab in inflammation in
bullous pemphigoid ("BP") indication of its decision to discontinue said trial. Consequently, the Company decided in December 2022 to stop the
development of avdoralimab in bullous pemphigoid ("BP") indication in inflammation, only indication supporting the recoverable amount of the
asset as of December 31, 2021 (as well that as of June 30, 2022).
Following that decision, the Company applied IAS 36 "Impairment of assets" and assessed that there was an indication of impairment
sufficiently significant to result in the full impairment of the intangible asset. This depreciation was recognized with regard to the estimate of the
recoverable value of avdoralimab's intangible assets, based on expected future cash flows, as of December 2022, date of the decision. Thus, on
decision date to stop the development of avdoralimab in bullous pemphigoid ("BP") indication in inflammation, avdoralimab rights were fully
written down to their net book value, i.e €41,000 thousand.
7) Property and equipment
(in thousands of euro)
January 1, 2022
Acquisitions
Disposals
Transfers
Depreciation
December 31, 2022
Land and buildings
Laboratory equipment and
other
In progress
Total
5,187
535
(11)
—
(1,413)
4,298
6
—
(6)
—
—
10,174
555
(17)
—
(2,172)
8,542
4,981
20
—
—
(759)
4,242
F-40
(in thousands of euro)
January 1, 2023
Of which right of use assets
Acquisitions
Of which right of use assets
Disposals
Of which right of use assets
Depreciation
Of which right of use assets
Transfers
Of which right of use assets
Foreign exchange variation
Of which right of use assets
December 31, 2023
Of which right of use assets
(in thousands of euro)
January 1, 2024
Of which right of use assets
Acquisitions
Of which right of use assets
Disposals
Of which right of use assets
Depreciation
Of which right of use assets
Transfers
Of which right of use assets
Foreign exchange variation
Of which right of use assets
December 31, 2024
Of which right of use assets
Land and buildings
Laboratory equipment and
other
In progress
Total
4,242
2,710
101
31
(516)
(513)
(860)
(541)
(10)
(10)
—
—
2,958
1,675
4,298
1,718
250
80
(92)
(14)
(1,089)
(410)
10
—
—
—
3,377
1,374
Land and buildings
Laboratory equipment and
other
In progress
3,377
1,374
370
37
-19
(18)
-1,027
(272)
159
—
1
—
2,861
1,121
2,958
1,675
21
—
0
—
-549
(420)
-159
—
14
14
2,285
1,269
F-41
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0
—
0
—
0
—
0
—
0
—
—
—
8,542
4,427
352
110
(608)
(527)
(1,948)
(951)
—
(10)
—
—
6,322
3,049
6,322
3,049
392
37
-19
(18)
-1,576
(693)
0
—
15
14
5,133
2,390
Total
8) Trade payables and others
This line item is analyzed as follows:
(in thousands of euro)
Suppliers (excluding payables related to capital expenditures)
Tax and employee-related payables
Other payables (1)
Trade payables and others excluding payables related to capital expenditures
Payables related to capital expenditures
Payables and others
2022
December 31,
2023
2024
13,656
5,978
1,260
20,894
17
20,911
8,561
7,021
1,436
17,018
—
17,018
7,923
6,962
1,122
16,007
—
16,007
(1) As of December 31, 2022, 2023 and 2024, this amount mainly includes the liability relating to the payment of the guarantee fees on the two State Guaranteed Loans obtained from Société
Générale and BNP Paribas in 2021. The cost of the guarantee is spread out until the end of the repayment of said loans, i.e., December 31, 2027 (see note 9).
The book value of trade payables and others is considered to be a reasonable approximation of their fair value.
9) Financial liabilities
This line item was broken down per maturity and is analyzed as follows:
In thousand euros
BPI PTZI IPH41
BPI Refundable advance - FORCE
Lease liabilities – Building "Le Virage"
(3)
Lease liabilities – Premises Innate Inc
Lease liabilities – Laboratory equipment
Lease liabilities – Vehicles
Lease liabilities - Printers
Loans – Equipment
Loans – Building (2)
Total
December 31, 2021
Proceeds from
borrowing
Non cash effects :
proceeds from lease
liabilities and other
Repayments of
borrowings and lease
liabilities
December 31, 2022
—
—
—
15
—
12
—
—
—
42
—
—
(522)
(61)
(177)
(32)
(8)
(55)
(1,187)
(2,042)
—
—
1,353
345
287
33
27
154
11,338
42,251
—
—
1,875
391
464
53
35
209
12,525
44,251
—
—
—
—
—
—
—
—
—
—
F-42
In thousand euros
State guaranteed loan Société Générale
(1)
State guaranteed loan BNP Paribas (1)
State guaranteed loans - accrued interest
Property transaction (down-payment)
Lease liabilities – Building "Le Virage"
(3)
Lease liabilities – Premises Innate Inc
Lease liabilities – Laboratory equipment
Lease liabilities – Vehicles
Lease liabilities - Printers
Loans – Equipment
Loans – Building (2)
Total
December 31, 2022
Proceeds from
borrowing
Non cash effects :
proceeds from lease
liabilities and other
Repayments of
borrowings and lease
liabilities
December 31, 2023
—
—
(1)
—
(685)
—
—
80
—
—
17
(589)
—
—
—
—
(293)
(99)
(178)
(31)
(9)
(55)
(1,108)
(1,773)
20,000
8,700
14
—
375
246
109
85
18
99
10,247
39,893
20,000
8,700
15
—
1,353
345
287
33
27
154
11,338
42,251
—
—
—
—
—
—
—
—
—
—
—
—
F-43
In thousand euros
State guaranteed loan Société Générale
(1)
State guaranteed loan BNP Paribas (1)
State guaranteed loans - accrued interest
Lease liabilities – Building "Le Virage"
(3)
Lease liabilities – Premises Innate Inc
Lease liabilities – Laboratory equipment
Lease liabilities – Vehicles
Lease liabilities - Printers
Loans – Equipment
Loans – Building (2)
Total
December 31, 2023
Proceeds from
borrowing
Non cash effects :
proceeds from lease
liabilities and other
Repayments of
borrowings and lease
liabilities
December 31, 2024
20,000
8,700
14
375
246
109
85
18
99
10,247
39,893
—
—
—
—
—
—
—
—
—
—
—
9
3
(14)
—
15
—
19
—
—
—
31
(4,884)
(2,144)
—
(244)
(97)
(109)
(32)
(9)
(56)
(1,353)
(8,928)
15,125
6,558
—
131
164
—
71
9
43
8,894
30,995
(1) On January 5, 2022, the Company announced that it had obtained €28.7 million in non-dilutive financing in the form of two State Guaranteed
Loans from Société Générale (€20.0 million) and BNP Paribas (€8.7 million). The Company received the funds related to these two loans on
December 27 and 30, 2021 respectively. Both loans have an initial maturity of one year with an option to extend to five years from August 2022.
They are 90% guaranteed by the French government as part of the package of measures put in place by the French government to support
companies during the COVID-19 pandemic. In August 2022, the Company has requested the extension of these two loans repayment for an
additional period of five years starting in 2022 and including a one-year grace period. Consequently, the Company has obtained agreements from
Société Générale and BNP Paribas. The effective interest rates applied to these contracts during the additional period are 1.56% and 0.95% for
Société Générale and BNP Paribas loans, respectively, excluding insurance and guarantee fees, with an amortization exemption for the entire
year 2023. During this grace period, the Company will only be liable for the payment of interest and the guarantee fees, with amortization of the
two loans starting in 2024 over a period of four years. The state guarantee fees amounts to €877 thousand and €379 thousand for Société
Générale and BNP Paribas loans respectively.
(2) On July 3, 2017, the Company borrowed from the Bank “Société Générale” in order to finance the construction of its future headquarters.
This loan amounting to a maximum of €15,200 thousand will be raised during the period of the construction in order to pay the supplier
payments as they become due. As of December 31, 2018 and 2019, the loan was raised at an amount of €14,826 thousand.
The loan release period was limited to August 30, 2019. On August 30, 2019, the Company drew down the remaining portion of the
€15,200 thousand loan granted, for an amount of €13,900 thousand. The reimbursement of the capital has begun in August 30, 2019 and will
proceed until August 30, 2031 (12 years). Given the development of its portfolio and in particular the refocusing of its activities on research
F-44
and development, the Company has for the time being suspended the project to build its new head office on the land acquired in Luminy. In the
meantime, the loan will be used to finance several structuring projects (improvement of the information system, development of a commercial
platform, development of additional premises rented, etc.). As of December 31, 2024, the remaining capital of the loan amounted to €8,894
thousand. The Company authorized collateral over financial “Société Générale” instruments amounting to €15,200 thousand. The security
interest on the pledge financial instruments will be released in accordance with the following schedule: €4,200 thousand in July 2024,
€5,000 thousand in August 2027 and €6,000 thousand in August 2031. The amount of €4.2 million was actually received in July 2024.
This loan bears a fixed interest rate of 2.01% . It is subject to a covenant based on the assumption that the total cash, cash equivalents and current
and non-current financial assets are at least equal to principal as of financial year end.
(3) On March 13, 2023, the Company signed an amendment to the lease for the "Le Virage" building, reducing the surface area of the leased
premises. The effective date of the lease amendment is March 15, 2023. As a result, and in accordance with IFRS 16, the impact on the
consolidated balance sheet at the effective date of the lease amendment is as follows: write-off of a right of use (asset) of €0.5 million and a lease
liability of €0.7 million.
The table below shows the schedule for the contractual flows (principal only) as of December 31, 2022, 2023 and 2024 respectively :
In thousand euros
Current financial liabilities
State guaranteed loan Société Générale
State guaranteed loan BNP Paribas
State guaranteed loans - accrued interest
Lease finance obligations – Rent Le Virage
Lease liabilities – Premises Innate Inc
Lease finance obligations – Laboratory equipment
Lease liabilities – Vehicles
Lease liabilities - Printers
Loans - Equipment
Loans - Building
Total – Current financial liabilities
In thousand euros
Non-Current financial liabilities
State guaranteed loan Société Générale
State guaranteed loan BNP Paribas
Lease finance obligations – Building Le Virage
Lease liabilities – Premises Innate Inc
Lease finance obligations – Laboratory equipment
Lease finance obligations – Vehicles
Lease liabilities - Printers
Loans - Equipment
Loans - Building
Total – Non-Current financial liabilities
Year ended December 31,
2022
2023
2024
—
—
15
532
90
177
16
9
55
1,210
2,102
4,884
2,144
14
244
92
109
31
9
56
1,353
8,936
Year ended December 31,
2022
2023
2024
20,000
8,700
820
255
110
17
18
99
10,128
40,149
15,116
6,556
131
154
—
56
9
43
8,895
30,957
4,969
2,167
—
131
102
—
29
9
42
1,260
8,709
10,156
4,391
—
62
—
42
—
—
7,635
22,286
F-45
The table below shows the schedule for the contractual flows (being principal and interest payments):
(in thousands of euro)
State guaranteed loan Société Générale
State guaranteed loan BNP Paribas
Lease finance obligations – Rent Le Virage
Lease liabilities – Premises Innate Inc.
Lease liabilities – Vehicles
Lease liabilities - Printers
Loans – Equipment
Loan – Building
Total
10) Employee benefits
Defined benefit obligations
(in thousands of euro)
Allowance for retirement defined benefit
Allowance for seniority awards
Total Defined benefit obligations
2025
2026
2027
2028
2029
>2029
Total
5,167
2,222
133
104
32
9
43
1,427
9,137
5,167
2,221
5,167
2,220
—
62
24
—
—
—
—
16
—
—
—
—
—
—
4
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,427
8,901
1,427
8,829
1,308
1,312
1,427
1,427
2,496
2,496
Year ended December 31,
2022
2023
2024
2,184
366
2,550
2,064
377
2,441
15,502
6,662
133
166
76
9
43
9,510
32,102
2,369
361
2,730
French law requires payment of a lump sum retirement indemnity to employees based on years of service, the rights guaranteed by the collective
agreements and annual compensation at retirement. Benefits do not vest prior to retirement. The Company pays for this defined benefit plan. It is
calculated as the present value of estimated future benefits to be paid, applying the projected unit credit method whereby each period of service
is seen as giving rise to an additional unit of benefit entitlement, each unit being measured separately to build up the final. As a reminder, in
April 2021, the IFRIC ( or "IFRS Interpretations Committee") sent a proposal to the IAS Board (International Accounting Standards Board) to
change the way in which the liabilities for certain defined benefit plans are calculated. The IAS Board endorsed this position in June 2021. The
impacts of this change in valuation method are taken into account since 2021.
In addition, the impact of the 2023 pension reform (including the raising of the retirement age) has been recognized as a plan amendment within
the meaning of IAS 19, recognized in the income statement and balance sheet with no material impact as of December 31, 2023.
On March 24, 2016, the Company entered into an internal labor agreement with the employees representatives whereby the Company is
committed to paying a seniority award after 15 years and 20 years of employment. This award is paid on the anniversary date. A similar award
existed for employees having a seniority of 10 years but was not booked due to its insignificant amount. As such, in 2016 the Company recorded
a provision for seniority awards and a corresponding charge included in “Personnel costs other than share-based payments” (see Note 14) other
than payments in shares. These awards meet the definition of other long-term benefits under IAS 19. This provision is determined by an external
actuary firm based on the assumptions disclosed hereafter and amounts to €361 thousand as of December 31, 2024 (€377 thousand as of
December 31, 2023).
F-46
The main actuarial assumptions used to evaluate retirement benefits are the following:
Economic assumptions
Discount rate (iBoxx Corporate AA) for retirement
Annual rate of increase in wages
Demographical assumptions
Type of retirement
Annual mobility rate
Rate of contributions
Rate of wages costs
Age at retirement
Employees borned before 1st January 1968
- Executives
- Non executives
Employees borned after 1st January 1968
- Executives
- Non executives
Mortality table
Annual turnover by tranche of age
16-24 years
25-29 years
30-34 years
35-39 years
40-44 years
45-49 years
+50 years
Changes in the projected benefit obligation for the periods presented were as follows (in thousands of euro):
December 31, 2021
IAS19 Restatement related to the change in calculation method - IFRIC
(1)
Service cost
Payments (benefits and contributions paid by the employer)
Actuarial loss
As of December 31, 2022
Service cost
Payments (benefits and contributions paid by the employer)
Actuarial gain
As of December 31, 2023
Service cost
F-47
Year ended December 31,
2022
2023
2024
3.75 %
4.00 %
3.20 %
2.50 %
3.20 %
2.50 %
At the initiative of the
employee
At the initiative of the
employee
At the initiative of the
employee
4.3 %
47.07 %
23.46 %
64 years
62 years
64 years
62 years
5.2 %
48.01 %
24.32 %
64 years
62 years
65 years
64 years
5.7 %
49.29 %
22.62 %
64 years
62 years
65 years
64 years
TH-TF 00-02
All personnel
TH-TF 00-02
All personnel
TH-TF 00-02
All personnel
12.0 %
10.0 %
7.0 %
5.0 %
3.0 %
1.5 %
0 %
15.0 %
14.0 %
10.0 %
6.0 %
4.0 %
2.0 %
0 %
20.0 %
16.0 %
12.0 %
8.0 %
4.0 %
2.0 %
0 %
2,976
—
427
(62)
(790)
2,550
312
(27)
(394)
2,441
353
Payments (benefits and contributions paid by the employer)
Actuarial loss
As of December 31, 2024
(29)
(36)
2,730
(1) In its April 2021 Update, the IFRS IC published a final agenda decision clarifying how to calculate the obligation relating to certain defined
benefit plans under which the retirement benefit is (i) contingent on the employee being employed by the entity at the time of retirement; (ii)
capped at a specified number of years of service; and (iii) linked to the employee's length of service at the date of retirement. In that decision, the
IFRS IC took the view that the obligation should be recognized only over the years of service preceding the date of retirement in respect of
which the employee generates entitlement to the benefit. The application of this decision has led to a change in accounting method, the effects of
which should be taken into account retrospectively in accordance with IAS 8. However, as the Company considers the impact of this change of
method on defined benefit obligation and the income statement to be insignificant, these impacts have not been restated for years prior to January
1, 2021. The effects of this change of method are therefore taken into account retrospectively as of January 1, 2021 in respect of 2020's and prior
years defined benefit obligation. The adjustment at that date corresponds to a reduction in the 2020 commitments in the amount of
€1,054 thousand. This reversal has been offset against previous reserves and retained earnings.
There is no asset covering the defined benefit obligations.
An increase/decrease of +/- 25 basis point of the discount rate would result in a decrease/increase of the total benefit obligation of €65 thousand.
The actuarial assumptions used for the provision for length-of-service awards are as follows:
• Discount rate: 3.00
• Annual rate of salary increase: 2.50
• Rate of employer contributions: 49.29
•
Employee contributions: 22.62
• Retirement age: 64 for executives, 62 for non-executives
• Mortality table: TH-TF 00-02
• Annual mobility rate: 5.70% on average
The amounts recognized as an expense linked to defined contributions plans amounted to €1,432 thousand, €1,283 thousand and €1,251
thousand in the years ended December 31, 2022, 2023 and 2024, respectively.
11) Share capital and share based payments
a)
Share capital
The Company manages its capital to ensure that the Company will be able to continue as a going concern while maximizing the return to
shareholders through the optimization of the debt and equity balance.
The Company has never declared or paid any dividends on its ordinary shares. The Company does not anticipate paying cash dividends on its
equity securities in the foreseeable future and intend to retain all available funds and any future earnings for use in the operation and expansion
of its business, given our state of development.
F-48
As of December 31, 2024, the Company’s share capital amounted to €4,192,221 divided into (i) 83,830,336 ordinary shares, each with a nominal
value of €0.05, (ii) 6,494 “2016” free preferred shares, each with a nominal value of €0.05 and (iii) 7,581 “2017” free preferred shares, each with
a nominal value of €0.05, respectively fully paid up.
Share capital does not include BSAs, BSAAR,AGAs and AGAPs that have been granted to certain investors or natural persons, both employees
and non-employees of the Company, but not yet exercised.
In October 21, 2019 and December 30, 2019, the retention period for the “2016 free preferred shares” has ended. The number of ordinary shares
to which the conversion of one preferred share entitle has been determined according to the fulfillment of the performance criteria. Holders of
“2016” preferred shares” are entitled to vote at our shareholders’ meetings, to dividends and to preferential subscription rights, on the basis of the
number of ordinary shares to which they are entitled if they convert their preferred shares.
In April 3, 2021, the retention period for the "2017 free preferred shares" has ended. The number of ordinary shares to which the conversion of
one preferred share entitle has been determined according to the fulfillment of the performance criteria. According to these same performance
criteria, the Executive Board of April 7, 2021 noted that the "2017 preferred shares" did not give right to any ordinary shares. The “2017
preferred shares” will not be redeemed by the Company and will remain incorporated into the capital, unless subsequently decided by the
Executive Board. As the conversion is void, the "2017 preferred shares" no longer give the right to vote at our general meetings, nor to receive
dividends.
The table below presents the historical changes in the share capital of the Company as of December 31, 2022, 2023 and 2024, respectively:
F-49
Date
Nature of the Transactions
Share Capital
Share premium Common shares Preferred shares
Nominal value
Number of
January 1, 2022
3,977,836
375,219,667
79,542,627
14,095
February 14, 2022
February 14, 2022
February 14, 2022
April 22, 2022
July 13, 2022
July 25, 2022
Capital increase by issuance of common
shares (exercise of share warrants)
Capital increase by issuance of common
shares
Capital increase by issuance of common
shares (definitive acquisition of free shares )
Capital increase by issuance of common
shares (definitive acquisition of free shares )
Capital increase by issuance of common
shares (definitive acquisition of free shares )
Capital increase by issuance of common
shares (exercise of share warrants)
December 16, 2022
Subsciption of share warrants
November 7, 2022
Capital increase by issuance of common
shares (conversion of preferred shares in
common shares)
38
2,316
6,948
1,250
681
6,287
—
1,493
750
187,596
46,320
(6,948)
138,960
(1,250)
25,000
(681)
13,614
(6,287)
9,995
125,748
—
15,953
(15,953)
319,050
—
—
—
—
—
—
—
—
December 31, 2022
4,011,308
379,636,745
80,212,069
14,095
€0.05
€0.05
€0.05
€0.05
€0.05
€0.05
0.05
€—
€0.05
€0.05
F-50
Date
Nature of the Transactions
Share Capital
Share premium Common shares Preferred shares
Nominal value
Number of
January 1, 2023
4,011,308
379,636,745
80,212,069
14,095
April 14, 2023
April 14, 2023
April 14, 2023
July 6, 2023
September 18, 2023
October 3, 2023
Capital increase by issuance of common
shares (exercise of share warrants)
Capital increase by issuance of common
shares
Capital increase by issuance of common
shares (definitive acquisition of free shares )
Capital increase by issuance of common
shares (exercise of share warrants)
Capital increase by issuance of common
shares (conversion of preferred shares in
common shares)
Capital increase by issuance of common
shares (definitive acquisition of free shares )
December 15, 2023
Subsciption of share warrants
December 31, 2023
December 31, 2023
Capital increase by issuance of common
shares (definitive acquisition of free shares )
Share based payments
December 31, 2023
728
3,015
8,165
3,321
28,955
168,840
14,550
60,300
(8,165)
163,293
142,991
66,410
33
(33)
650
6,403
—
10,762
(6,403)
47,120
128,061
—
(10,762)
215,230
—
4,255,748
—
—
—
—
—
(5)
—
—
—
—
€0.05
€0.05
€0.05
€0.05
€0.05
€0.05
€0.05
€—
€0.05
4,043,733
384,255,036
80,860,563
14,090
€0.05
F-51
Share Capital
Share premium Common shares Preferred shares
Nominal value
Number of
Date
June 10, 2024
June 10, 2024
July 5, 2024
December 5, 2024
December 5, 2024
December 31, 2024
December 31, 2024
Nature of the Transactions
Balance as of January 1, 2024
Capital increase by issuance of common
shares
Capital increase by issuance of common
shares (definitive acquisition of free shares )
Capital increase by issuance of common
shares (conversion of preferred shares in
common shares)
Capital increase by issuance of common
shares
Share issuance costs
Capital increase by issuance of common
shares (definitive acquisition of free shares )
Share based payments
4,043,733
384,255,036
80,860,563
14,090
1,905
3,437
91,440
(3,437)
38,100
68,744
97
(97)
1,950
91,645
2,767,677
1,832,899
—
51,404
(24,150)
(51,404)
—
1,028,080
—
3,944,383
—
—
—
(15)
—
—
—
—
Balance as of December 31, 2024
4,192,221
390,979,449
83,830,336
14,075
€0.05
€0.05
€0.05
€0.05
€0.05
€—
€0.05
—
€0.05
Holding by the Company of its own shares
The Company held 18,575 of its own shares as of December 31, 2024.
b)
Share based payments
The Company has issued BSAs, BSAARs, stock options, AGAs and AGAPs as follows as of December 31, 2022, 2023 and 2024, respectively: :
Date
Types
Number of
warrants issued as
of 12/31/2022
Number of
warrants void as of
12/31/2022
Number of
warrants exercised
as of 12/31/2022
Number of
warrants
outstanding as of
12/31/2022
Maximum number
of shares to be
issued as of
12/31/2022
Exercise price per
share (in €)
Sept. 9, 2011
May 27, 2013
July 1, 2015
October 21, 2016
October 21, 2016
October 21, 2016
BSAAR 2011
BSAAR 2012
BSAAR 2015
AGAP Management 2016-1
AGAP Employees 2016-1
AGA Management 2016-1
650,000
146,050
1,050,382
2,000
2,486
50,000
625,000
86,700
1,940
250
167
50,000
—
59,350
—
59,350
1,045,722
1,045,722
1,200
2,068
—
156,000
268,840
—
€2.04
€2.04
€7.20
€—
€—
€—
25,000
—
2,720
550
251
—
F-52
December 30, 2016
December 30, 2016
April 3, 2018
April 3, 2018
April 3, 2018
July 3, 2018
November 20, 2018
November 20, 2018
AGAP Management 2016-2
AGA Management 2016-2
AGAP Employees 2017-1
AGAP Management 2017-1
AGA Employees 2017
AGA Bonus 2018-1
AGAP Perf Employees
2018-1
AGAP Perf Management
2018-1
January 14, 2019
AGA Employees 2018
April 29, 2019
July 3, 2019
November 4, 2019
November 4, 2019
July 13, 2020
August 5, 2020
August 5, 2020
AGA New Members 2017-1
AGA Bonus 2019-1
AGAP 2019 Employees
2019
AGAP 2019 Management
2019
AGA Bonus 2020-1 & 2
AGA Perf Employees 2020-
1
AGA Perf Management
2020-1
July 22, 2021
AGA Bonus 2021-1
October 1, 2021
October 1, 2021
February 12, 2022
October 3, 2022
December 12, 2022
December 12, 2022
July 21, 2020
July 29, 2011
July 17, 2013
July 16, 2014
April 27, 2015
July 1, 2015
September 20, 2017
December 16, 2022
AGA Perf Employees 2021-
1
AGA Perf Management
2021-1
AGA "Plan Epargne
Entreprise" 2022
AGA Bonus 2022-1
AGA Perf Employees 2022-
1
AGA Perf Management
2022-1
Stock Options 2020-1
BSA 2011-2
BSA 2013
BSA 2014
BSA 2015-1
BSA 2015-2
BSA 2017
BSA 2022-1
3,000
250,000
5,725
2,400
114,500
67,028
327,500
—
—
5,725
2,400
4,000
469
224,375
—
250,000
—
—
110,500
66,559
103,125
260,000
150,000
110,000
90,650
25,000
57,376
5,000
—
—
85,650
25,000
57,376
546,700
375,150
171,550
355,000
79,861
766,650
710,000
125,748
1,066,600
610,000
138,960
128,061
1,371,500
550,000
102,000
225,000
237,500
150,000
70,000
14,200
37,000
40,000
207,500
17,885
286,306
60,000
—
95,600
90,000
—
—
—
—
102,000
25,000
—
—
—
—
—
31,740
3,000
333,000
€—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
480,344
480,344
650,000
650,000
147,500
61,976
—
—
125,748
—
—
—
—
971,000
971,000
520,000
520,000
138,960
—
—
—
—
—
—
200,000
191,140
75,000
—
—
—
—
128,061
128,061
1,371,500
1,371,500
550,000
550,000
—
—
46,360
75,000
70,000
14,200
37,000
8,260
—
—
46,360
75,000
70,000
14,200
37,000
8,260
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
€—
€—
€—
€—
€—
€—
€—
€1.77
€2.36
€8.65
€9.59
€14.05
€11.00
€2.31
Total as of December 31
2022
10,428,877
1,711,671
2,684,141
6,033,065
6,784,637
Date
Types
Number of
warrants issued as
of 12/31/2023
Number of
warrants void as of
12/31/2023
Number of
warrants exercised
as of 12/31/2023
Number of warrants
outstanding as of
12/31/2023
Maximum number
of shares to be
issued as of
12/31/2023
Exercise price per
share (in €)
Sept. 9, 2011
May 27, 2013
BSAAR 2011
BSAAR 2012
650,000
146,050
25,000
12,250
625,000
133,800
—
—
—
—
€2.04
€2.04
F-53
BSAAR 2015
1,050,382
2,720
July 1, 2015
October 21, 2016
October 21, 2016
October 21, 2016
December 30, 2016
December 30, 2016
April 3, 2018
April 3, 2018
April 3, 2018
July 3, 2018
November 20, 2018
November 20, 2018
AGAP Management 2016-1
AGAP Employees 2016-1
AGA Management 2016-1
AGAP Management 2016-2
AGA Management 2016-2
AGAP Employees 2017-1
AGAP Management 2017-1
AGA Employees 2017
AGA Bonus 2018-1
AGAP Perf Employees
2018-1
AGAP Perf Management
2018-1
January 14, 2019
AGA Employees 2018
April 29, 2019
July 3, 2019
November 4, 2019
November 4, 2019
July 13, 2020
August 5, 2020
August 5, 2020
July 22, 2021
October 1, 2021
October 1, 2021
February 12, 2022
October 3, 2022
December 12, 2022
December 12, 2022
April 14, 2023
AGA New Members 2017-1
AGA Bonus 2019-1
AGAP 2019 Employees
2019
AGAP 2019 Management
2019
AGA Bonus 2020-1 & 2
AGA Perf Employees 2020-
1
AGA Perf Management
2020-1
AGA Bonus 2021-1
AGA Perf Employees 2021-
1
AGA Perf Management
2021-1
AGA "Plan Epargne
Entreprise" 2022
AGA Bonus 2022-1
AGA Perf Employees 2022-
1
AGA Perf Management
2022-1
AGA "Plan Epargne
Entreprise" 2023
November 2, 2023
AGA New Members 2023-1
December 21, 2023
December 21, 2023
July 21, 2020
AGA Perf Employees 2023-
1
AGA Perf Management
2023-1
Stock Options 2020-1
2,000
2,486
50,000
3,000
250,000
5,725
2,400
114,500
67,028
327,500
550
251
—
—
—
5,725
2,400
4,000
469
224,375
1,940
250
172
50,000
—
250,000
—
—
110,500
66,559
103,125
260,000
150,000
110,000
90,650
25,000
57,376
5,000
—
—
85,650
25,000
57,376
546,700
375,150
171,550
147,500
61,976
85,230
130,000
125,748
—
—
138,960
128,061
—
—
163,293
—
—
—
—
355,000
79,861
766,650
710,000
125,748
207,500
17,885
681,420
580,000
—
1,066,600
247,300
610,000
130,000
138,960
128,061
—
—
1,371,500
198,000
550,000
163,293
25,000
1,403,500
750,000
102,000
—
—
—
4,500
—
102,000
F-54
1,045,722
1,045,722
1,200
2,063
—
3,000
156,000
268,190
—
333,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
819,300
819,300
480,000
480,000
—
—
—
—
1,173,500
1,173,500
550,000
550,000
—
25,000
—
25,000
1,399,000
1,399,000
750,000
750,000
—
—
€7.20
€—
€—
€—
€—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
€—
€—
€—
€—
€—
€—
€—
€—
July 29, 2011
July 17, 2013
July 16, 2014
April 27, 2015
July 1, 2015
September 20, 2017
December 16, 2022
December 15, 2023
BSA 2011-2
BSA 2013
BSA 2014
BSA 2015-1
BSA 2015-2
BSA 2017
BSA 2022-1
BSA 2023-1
225,000
237,500
150,000
70,000
14,200
37,000
40,000
50,000
25,000
12,500
—
—
—
—
31,740
12,000
200,000
225,000
75,000
—
—
—
—
—
—
—
75,000
70,000
14,200
37,000
8,260
38,000
—
—
75,000
70,000
14,200
37,000
8,260
38,000
€1.77
€2.36
€8.65
€9.59
€14.05
€11.00
€2.31
€2.26
Total as of December 31
2023
12,820,670
3,057,735
3,271,690
6,491,245
7,242,172
Date
Types
Number of
warrants issued as
of 12/31/2024
Number of
warrants void as of
12/31/2024
Number of
warrants exercised
as of 12/31/2024
Number of
warrants
outstanding as of
12/31/2024
Maximum number
of shares to be
issued as of
12/31/2024
Exercise price per
share (in €)
Sept. 9, 2011
May 27, 2013
July 1, 2015
October 21, 2016
October 21, 2016
October 21, 2016
December 30, 2016
December 30, 2016
April 3, 2018
April 3, 2018
April 3, 2018
July 3, 2018
November 20, 2018
November 20, 2018
BSAAR 2011
BSAAR 2012
BSAAR 2015
AGAP Management 2016-1
AGAP Employees 2016-1
AGA Management 2016-1
AGAP Management 2016-2
AGA Management 2016-2
AGAP Employees 2017-1
AGAP Management 2017-1
AGA Employees 2017
AGA Bonus 2018-1
AGAP Perf Employees
2018-1
AGAP Perf Management
2018-1
January 14, 2019
AGA Employees 2018
April 29, 2019
July 3, 2019
November 4, 2019
November 4, 2019
July 13, 2020
August 5, 2020
AGA New Members 2017-1
AGA Bonus 2019-1
AGAP 2019 Employees
2019
AGAP 2019 Management
2019
AGA Bonus 2020-1 & 2
AGA Perf Employees 2020-
1
650,000
146,050
1,050,382
2,000
2,486
50,000
3,000
250,000
5,725
2,400
114,500
67,028
327,500
25,000
12,250
2,720
550
251
—
—
—
5,725
2,400
4,000
469
224,375
625,000
133,800
1,940
250
187
50,000
—
250,000
—
—
110,500
66,559
103,125
260,000
150,000
110,000
90,650
25,000
57,376
5,000
—
—
85,650
25,000
57,376
546,700
375,150
171,550
355,000
79,861
766,650
207,500
17,885
681,420
147,500
61,976
85,230
—
—
1,045,722
1,200
2,048
—
3,000
—
—
1,045,722
156,000
266,240
—
333,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
€2.04
€2.04
€7.20
€—
€—
€—
€—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
F-55
August 5, 2020
July 22, 2021
October 1, 2021
October 1, 2021
February 12, 2022
October 3, 2022
December 12, 2022
December 12, 2022
April 14, 2023
AGA Perf Management
2020-1
AGA Bonus 2021-1
AGA Perf Employees 2021-
1
AGA Perf Management
2021-1
AGA "Plan Epargne
Entreprise" 2022
AGA Bonus 2022-1
AGA Perf Employees 2022-
1
AGA Perf Management
2022-1
AGA "Plan Epargne
Entreprise" 2023
November 2, 2023
AGA New Members 2023-1
December 21, 2023
December 21, 2023
AGA Perf Employees 2023-
1
AGA Perf Management
2023-1
February 15, 2024
AGA New Members 2024-1
June 10, 2024
August 1, 2024
AGA "Plan Epargne
Entreprise" 2024
AGA Perf Management
2024-1
November 13, 2024
AGA employees 2024-1
November 13, 2024
November 13, 2024
AGA Perf Employees 2024-
1
AGA Perf Management
2024-2
November 13, 2024
AGA Management 2024-1
July 21, 2020
September 11, 2024
Stock Options 2020-1
Stock Options 2024-1
July 29, 2011
July 17, 2013
July 16, 2014
April 27, 2015
July 1, 2015
September 20, 2017
December 16, 2022
December 15, 2023
BSA 2011-2
BSA 2013
BSA 2014
BSA 2015-1
BSA 2015-2
BSA 2017
BSA 2022-1
BSA 2023-1
710,000
125,748
580,000
—
1,066,600
454,520
130,000
125,748
612,080
610,000
194,000
416,000
138,960
128,061
—
—
1,371,500
299,000
550,000
163,293
25,000
—
—
—
1,403,500
129,750
750,000
25,000
68,744
150,000
370,560
1,162,900
975,000
200,000
102,000
100,000
225,000
237,500
150,000
70,000
14,200
37,000
40,000
50,000
—
—
—
—
1,800
—
—
—
102,000
—
25,000
12,500
75,000
—
—
—
31,740
12,000
138,960
128,061
—
—
163,293
—
—
—
—
68,744
—
—
—
—
—
—
—
200,000
225,000
75,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,072,500
1,072,500
550,000
550,000
—
25,000
—
25,000
1,273,750
1,273,750
750,000
25,000
—
150,000
368,760
750,000
25,000
—
150,000
368,760
1,162,900
1,162,900
975,000
200,000
—
100,000
—
—
—
70,000
14,200
37,000
8,260
38,000
975,000
200,000
—
100,000
—
—
—
70,000
14,200
37,000
8,260
38,000
Balance as of December 31,
2024
15,872,874
3,632,005
4,368,529
7,872,340
8,621,332
—
—
—
—
—
€—
€—
€—
€—
€—
€—
€—
€—
€—
€—
€—
€—
€—
€—
€—
€2.18
€1.77
€2.36
€8.65
€9.59
€14.05
€11.00
€2.31
€2.26
F-56
AGA
Details of AGA
Date of grant (Board of
Directors)
Vesting period (years)
Non transferability
period
Number of free shares
granted
Share entitlement per
free share
Grant date share fair
value
Expected dividends
Performance conditions
Expected turnover
(yearly basis)
Volatility
Fair value per AGA
AGAP Management
2016-1
AGAP Employees 2016-
1
AGA Management
2016-1
AGA Employees 2016-1
AGAP Management
2016-2
October 21, 2016
October 21, 2016
October 21, 2016
October 21, 2016
October 21, 2016
1 year
1 year
2 years after the
vesting period end
2 years after the
vesting period end
2,000
2,486
(1)
130
(1)
130
3 years
None
50,000
1
1 year
1 year
2 years after the
vesting period end
2 years after the
vesting period end
99,932
1
€10.87
€10.87
€10.87
€10.87
None
Yes
5 %
40 %
€911
None
Yes
5 %
40 %
€911
None
None
—
—
€10.55
None
None
5 %
—
€10.55
3,000
111
€12.73
None
Yes
9 %
40 %
€956
In October 21, 2019 and December 30, 2019, the retention period for the “2016 free preferred shares” has ended. The number of ordinary shares
to which the conversion of one preferred share entitle has been determined according to the fulfilment of the performance criteria. Holders of
“2016” preferred shares” are entitled to vote at our shareholders’ meetings, to dividends and to preferential subscription rights, on the basis of the
number of ordinary shares to which they are entitled if they convert their preferred shares.
AGA Management
2016-2
AGA Employees 2016-2
AGA Bonus 2017
AGA Employee 2017
AGAP Employees 2017-
1
Date of grant (Board of Directors)
December 30, 2016
December 30, 2016
September 20, 2017
April 3, 2018
April 3, 2018
Vesting period (years)
Non transferability period
Number of free shares granted
3 years
None
250,000
1 year
1 year
1 year
1 year
2 years after the
vesting period end
1 year after the vesting
period end
1 year after the vesting
period end
2 years after the
vesting period end
149,943
114,500
28,556
5,725
F-57
Share entitlement per free share
Grant date share fair value
Expected dividends
Performance conditions
Expected turnover (yearly basis)
Volatility
Fair value per AGA
1
€12.73
None
None
—
—
€14.61
1
€12.73
None
None
5 %
—
€10.55
1
€5.52
None
Yes
4
55
€5.83
1
€10.90
None
None
— %
— %
€10.30
100
€5.52
None
Yes
5 %
55 %
€90
Date of grant (Board of
Directors)
Vesting period (years)
Non transferability period
Number of free shares granted
Share entitlement per free share
Grant date share fair value
Expected dividends
Performance conditions
Expected turnover (yearly basis)
Volatility
Fair value per AGA
AGAP Management
2017
AGA Bonus 2018
AGA Perf Employees
2018
AGA Perf Management
2018
AGA New Members
2017-1
April 3, 2018
July 3, 2018
November 20, 2018
November 20, 2018
April 29, 2019
1 year
1 year
2 years after the vesting
period end
1 year after the
vesting period end
2,400
100
€5.52
None
Yes
11 %
55 %
€90
67,028
1
€5.06
None
Yes
—
—
€4.69
3 years
None
327,500
1
€8.00
None
Yes
4 %
45 %
3 years
None
260,000
1
€8.00
None
Yes
10 %
45 %
3 years
None
25,000
1
€5.74
None
No
10 %
—
€3.81
€3.81
€5.74
AGA Employees 2018
AGA Bonus 2019-1
AGA Perf Employees
2019
AGA Perf Management
2019
AGA Bonus 2020
Date of grant (Board of Directors)
January 14, 2019
July 3, 2019
November 4, 2019
November 4, 2019
July 13, 2020
Vesting period (years)
1 year
1 year
Non transferability period
1 year after the vesting
period end
1 year after the vesting
period end
Number of free shares granted
90,650
57,376
3 years
None
546,700
3 years
None
355,000
1 year
1 year after the vesting
period end
79,861
F-58
Share entitlement per free share
Grant date share fair value
Expected dividends
Performance conditions
Expected turnover (yearly basis)
Volatility
Fair value per AGA
1
€7.31
None
No
4.03 %
N/A
€7.31
1
€5.90
None
No
—
—
€5.72
1
€3.13
None
Yes
10 %
45 %
1
€3.13
None
Yes
10 %
45 %
€3.13
€3.13
1
€6.40
None
No
— %
— %
€6.40
Date of grant (Board of
Directors)
Vesting period (years)
Non transferability period
Number of free shares granted
Share entitlement per free share
Grant date share fair value
Expected dividends
Performance conditions
Expected turnover (yearly basis)
Volatility
Fair value per AGA
AGA Perf Employees
2020-1
AGA Perf Management
2020-1
AGA Bonus 2021-1
AGA Perf Employees
2021-1
AGA Perf Management
2021-1
August 5, 2020
August 5, 2020
July 22, 2021
October 1, 2021
October 1, 2021
1 year
1 year
125,748
1
€3.43
None
No
—
—
€3.43
3.5 years
None
1,066,600
1
€1.76
None
Yes
13.32
50.00
€1.76
3.5 years
None
610,000
1
€1.76
None
Yes
13.32
50.00
€1.76
3.5 years
None
769,202
1
€2.94
None
Yes
10.00 %
45.00 %
€2.94
3.5 years
None
710,000
1
€2.94
None
Yes
10.00
45.00
€2.94
F-59
Date of grant (Board of
Directors)
Vesting period (years)
Non transferability period
Number of free shares granted
Share entitlement per free share
Grant date share fair value
Expected dividends
Performance conditions
Expected turnover (yearly basis)
Volatility
Fair value per AGA
Date of grant (Board of
Directors)
Vesting period (years)
Non transferability period
Number of free shares granted
Share entitlement per free share
Grant date share fair value
Expected dividends
Performance conditions
Expected turnover (yearly basis)
Volatility
Fair value per AGA
AGA "Plan Epargne
Entreprise" 2022
AGA Bonus 2022-1
AGA Perf Employees
2022-1
AGA Perf Management
2022-1
February 14, 2022
October 3, 2022
December 12, 2022
December 12, 2022
None
None
138,960
1
€4.10
None
No
— %
— %
€4.10
1 year
None
128,061
1
€3.89
None
No
—
—
€3.89
3.1 years
None
1,371,500
1
€1.39
None
Yes
10.50
50.00
€1.39
3.1 years
None
550,000
1
€1.39
None
Yes
10.50
50.00
€1.39
AGA "Plan Epargne
Entreprise" 2023
AGA New Members
2023-1
AGA Perf Employees
2023-1
AGA Perf Management
2023-1
April 14, 2023
November 2, 2023
December 21, 2023
December 21, 2023
3.0 years
None
1,403,500
1
€1.60
None
Yes
11.20 %
50.00 %
€1.60
3.0 years
None
750,000
1
€1.60
None
Yes
11.20 %
50.00 %
€1.60
None
None
163,293
1
€2.85
None
No
—
—
€2.85
3 years
None
25,000
1
€2.23
None
No
—
—
€2.23
F-60
AGA New Members
2024-1
AGA "Plan Epargne
Entreprise" 2024
AGA Perf
Management 2024-1
AGA employees
2024-1
13 November 2024
Date of grant (Board of Directors)
15 February 2024
10 June 2024
Vesting period (years)
Non transferability period
Number of free shares granted
Share entitlement per free share
3.0 years
None
25,000
1
None
None
68,744
1
1 August 2024
2.0 years
None
150,000
1
Grant date share fair value
€
2.31 €
2.45 €
2.01 €
Expected dividends
Performance conditions
Expected turnover (yearly basis)
Volatility
Fair value per AGA
0
No
—
—
0
No
—
—
0
Yes
—
—
€
2.31 €
2.45 €
2.01 €
Date of grant (Board of Directors)
13 November 2024
13 November 2024
13 November 2024
AGA Perf
Employees 2024-1
AGA Perf
Management 2024-2
AGA Management
2024-1
3.0 years
None
370,560
1
1.62
0
No
—
—
1.62
Grant date share fair value
€
1.87
Vesting period (years)
Non transferability period
Number of free shares granted
Share entitlement per free share
Expected dividends
Performance conditions
Expected turnover (yearly basis)
Volatility
Fair value per AGA
3.0 years
None
200,000
1
1.62
0
No
—
—
1.62
3.0 years
None
1,162,900
1
0
€
Yes
10 %
50 %
3.0 years
None
975,000
1.87
1
0
€
Yes
10 %
50 %
€
1.87
€
1.87
€
F-61
Change in Number of AGAs Outstanding
Number of AGAs
Balance at beginning of period
Granted during the period
Forfeited during the period
Exercised during the period
Expired during the period
Balance at end of period
Year ended December 31,
2022
2023
2024
3,678,354
2,188,521
(567,330)
(622,372)
—
4,677,173
4,677,173
2,341,793
(1,309,314)
(506,589)
—
5,203,063
5,203,063
2,952,204
(499,270)
(1,096,839)
—
6,559,158
F-62
Breakdown of the Closing Balance
Number of AGAs
AGAP Management 2016-1
AGAP Employees 2016-1
AGAP 2016-2
AGA New Members 2017-1
AGA Perf Employees 2019-1
AGA Perf Management 2019-1
AGA Bonus 2020-1
AGA Perf Employees 2020-1
AGA Perf Management 2020-1
AGA Bonus 2021-1
AGA Perf Employees 2021-1
AGA Perf Management 2021-1
AGA Bonus 2022-1
AGA Perf Employees 2022-1
AGA Perf Management 2022-1
AGA New Members 2023-1
AGA Perf Employees 2023-1
AGA Perf Management 2023-1
AGA New Members 2024-1
AGA "Plan Epargne Entreprise" 2024
AGA Perf Management 2024-1
AGA employees 2024-1
AGA Perf Employees 2024-1
AGA Perf Management 2024-1
AGA Management 2024-1
TOTAL
Year ended December 31,
2022
Outstanding
2023
Outstanding
2024
Outstanding
1,200
2,068
3,000
—
—
—
—
480,344
650,000
—
971,000
520,000
128,061
1,371,500
550,000
—
—
—
—
—
—
—
—
—
—
1,200
2,063
3,000
—
—
—
—
—
—
—
819,300
480,000
—
1,173,500
550,000
25,000
1,399,000
750,000
—
—
—
—
—
—
—
4,677,173
5,203,063
1,200
2,048
3,000
—
—
—
—
—
—
—
—
—
—
1,072,500
550,000
25,000
1,273,750
750,000
25,000
—
150,000
368,760
1,162,900
975,000
200,000
6,559,158
The fair value of granted free shares is based on the closing price of the Company’s share at grant date, reduced when necessary by an estimated
turn-over rate. This estimated fair value is recognized as operating expenses on a straight-line basis over the vesting period.
Free performance shares 2019 (AGA Perf Employees 2019-1 / AGA Perf Management 2019)
Free performance shares granted in 2019 are subject to share price conditions and a vesting kicker triggered by the performance of an internal
condition, which is Lumoxiti's market penetration rate in the United States.
The fair value of these free performance shares is based on a third-party valuation report. The valuation method used to estimate the fair value of
these free performance shares is presented below:
•
Estimation of the expectation of gain associated with internal and share price conditions, made on the basis of a CAPM model of the
share price using a Monte Carlo approach;
• Adjustment of the estimation by applying expected turnover rates.
F-63
On November 7, 2022, the Executive Board determined the achievement of the performance conditions and the final vesting of the 2019 free
performance shares as of November 4, 2022. The underlying performance conditions were thus achieved at 50%. Consequently, on November 7,
2022, the Executive Board carried out the definitive acquisition of 171,550 free performance shares under the "AGA Perf Management 2019-1"
plans.
Expenses were €(181) thousand for the financial years ended December 31, 2022. Income relating to the 2022 financial year is explained by the
review of the performance conditions during the 2022 financial year with regard to the definitive achievement of the vesting. These instruments
were definitively acquired during the 2022 financial year. Consequently, no expense relating to these plans was recognized during the financial
year ended December 31,2023.
Free performance shares 2020 (AGA Perf Employees 2020-1 / AGA Perf Management 2020)
Free performance shares granted in 2020 are subject to share price conditions and two vesting kickers triggered by the performance of internal
conditions, which are :
• A commercial break-even point for Lumoxiti in the U.S. reached at the end of fiscal year 2023 (this criterion will not be met given the
return of the commercial rights notified to AstraZeneca in December 2020).
• Revenue from collaborative and licensing agreements accrued between the attribution and definitive acquisition date (excluding payment
by AstraZeneca for the first patient in Phase 3 for monalizumab), reaching $100 million.
The fair value of these free performance shares is based on a third-party valuation report. The valuation method used to estimate the fair value of
these free performance shares is presented below:
•
Estimation of the expectation of gain associated with internal and share price conditions, made on the basis of a CAPM model of the
share price using a Monte Carlo approach;
• Adjustment of the estimation by applying expected turnover rates.
On January 2, 2024, the Executive Board determined the achievement of the performance conditions and the final vesting of the 2020 free
performance shares as of December 31, 2023. The underlying performance conditions were thus achieved at 20%. Consequently, on December
31, 2023, the Executive Board carried out the definitive acquisition of 85,230 free performance shares under the "AGA Perf Employees 2020-1"
plans and 130,000 free performance shares under the "AGA Perf Management 2020-1" plans.
Expenses were €1,738 thousand and €1,436 thousand for the financial year ended December 31, 2022 and 2023, respectively. These instruments
were definitively acquired during the 2023 financial year. Consequently, no expense relating to these plans was recognized during the financial
year ended December 31,2024.
Free performance shares 2021 (AGA Perf Employees 2021-1 / AGA Perf Management 2021-1)
Free performance shares granted in 2021 are subject to share price conditions and two vesting kickers triggered by the performance of internal
conditions, which are :
• An interim analysis demonstrates a predefined threshold of clinical activity in the INTERLINK-1 study (phase 3 study evaluating
monalizumab in combination with cetuximab in patients with squamous cell carcinoma of the head and neck and previously treated with
chemotherapy).
F-64
• Obtaining positive Phase 2 results for a product in the Company's portfolio.
•
The start of a first clinical trial for a product in the Company's portfolio
The fair value of these free performance shares is based on a third-party valuation report. The valuation method used to estimate the fair value of
these free performance shares is presented below:
•
Estimation of the expectation of gain associated with internal and share price conditions, made on the basis of a CAPM model of the
share price using a Monte Carlo approach;
• Adjustment of the estimation by applying expected turnover rates.
Expenses were €1,577 thousand, €1,161 thousand and €1,162 thousand for the financial years ended December 31, 2022, 2023 and 2024,
respectively.
Free performance shares 2022 (AGA Perf Employees 2022-1 / AGA Perf Management 2022-1)
Free performance shares granted in 2022 are subject to share market capitalization and three vesting kickers triggered by the performance of
internal conditions, which are :
•
•
•
The filing and approval of a BLA (Biologic License Application) application filed with the Food and Drug Administration ("FDA") in
the United States or the European Medicine Agency ("EMEA") in Europe for one of the Company's products.
The start of a first clinical trial for a product from the Company's portfolio.
The conclusion of a collaboration or license agreement.
The fair value of these free performance shares is based on a third-party valuation report. The valuation method used to estimate the fair value of
these free performance shares is presented below:
•
Estimation of the expectation of gain associated with internal and share price conditions, made on the basis of a CAPM model of the
share price using a Monte Carlo approach;
• Adjustment of the estimation by applying expected turnover rates.
Expenses were €46 thousand, €1,157 thousand and €888 thousand for the financial year ended December 31, 2022, 2023 and 2024, respectively.
AGA Bonus 2022-1
AGA Bonus 2022 were granted to the Executive members Committee who opted for these compensation plans. For each recipient, the number of
shares definitely acquired is equal to the cash equivalent of 50% of the annual variable compensation increased by a 50% premium. In the event
of an over-performance (i.e. achieved target above 100%), the surplus is paid in cash.
Expenses were €499 thousand for the financial year ended December 31, 2022. These instruments were definitely acquired during the 2023
financial year. No expense relating to this plan was recognized during the financial year ended December 31, 2023.
AGA New-members 2023-1
Expenses were €3 thousand and €19 thousand for the financial year ended December 31, 2023 and 2024, respectively.
F-65
Free performance shares 2023 (AGA Perf Employees 2023-1 / AGA Perf Management 2023-1)
Free performance shares granted in 2023 are subject to the Company's market capitalization and three internal performance internal conditions
and a bonus condition, which are :
•
•
•
•
The start of a first clinical trial involving a product in the Company's portfolio or the "proof of concept" of a new therapeutic approach
involving a product in the Company's portfolio;
the conclusion of a collaboration or licensing agreement or the receipt of income from collaboration and licensing agreements totalling
€50 million ;
the implementation of six environmental or social actions by the Company's employees;
obtaining marketing authorization for a product in the Company's portfolio (bonus condition).
The fair value of these free performance shares is based on a third-party valuation report. The valuation method used to estimate the fair value
of these free performance shares is presented below:
•
Estimation of the expectation of gain associated with internal and share price conditions, made on the basis of a CAPM model of the
share price using a Monte Carlo approach;
• Adjustment of the estimation by applying expected turnover rates.
Expenses were €33 thousand and €1,226 thousand for the financial year ended December 31,2023 and 2024, respectively.
AGA New-members 2024-1
Expense was €17 thousand for the financial year ended December 31, 2024.
Free performance shares 2024 (AGA Perf Management 2024-1)
These free performance shares granted in 2024 are subject to two internal conditions, which are :
•
Selection and presentation to the Supervisory Board of candidates for the position of Chairman of the Executive Board or Chairman of
the Board of Directors (depending on the Company's organization) (“Performance Condition 1”); and/or ;
• Recruitment of a new executive for the position of Chairman of the Executive Board or Chairman of the Board of Directors (depending
on the Company's organization) (“Performance Condition 2”).
Expense was €302 thousand for the financial year ended December 31, 2024.
Other free shares
Expenses were €32 thousand for the financial year ended December 31, 2024.
Free performance shares 2024 (AGA Perf Employees 2024-1 / AGA Perf Management 2024-2)
Free performance shares granted in 2024 are subject to the Company's market capitalization and three internal performance internal conditions
and a bonus condition, which are :
•
•
The start of a first clinical trial involving a product in the Company's portfolio or the "proof of concept" of a new therapeutic approach
involving a product in the Company's portfolio;
the conclusion of a collaboration or licensing agreement or the receipt of income from collaboration and licensing agreements totalling
€50 million ;
F-66
•
•
a 25% increase in the number of employees already using "soft mobility" means of transport mobility;
obtaining marketing authorization for a product in the Company's portfolio (bonus condition).
The fair value of these free performance shares is based on a third-party valuation report. The valuation method used to estimate the fair value
of these free performance shares is presented below:
•
Estimation of the expectation of gain associated with internal and share price conditions, made on the basis of a CAPM model of the
share price using a Monte Carlo approach;
• Adjustment of the estimation by applying expected turnover rates.
Expenses were €119 thousand for the financial year ended December 31, 2024.
BSA
Until 2017, the Company issued BSAs to members of the Supervisory Board and certain consultants. Following the AMF's position dated June 5,
2018, the Company has decided not to issue any further BSAs other than at market conditions to Supervisory Board members.
Details of BSA
Date of grant (Board of directors)
July 17, 2013
July 16, 2014
April 27, 2015
July 1, 2015
September 20, 2017
BSA 2013
BSA 2014
BSA 2015-1
BSA 2015-2
BSA 2017
Vesting period (years)
Plan expiration date
Number of BSA granted
Share entitlement per BSA
Exercise price
Valuation method used
Grant date share fair value
Expected volatility
Average life of BSA
Risk-free interest rate
Expected dividends
Performance conditions
Fair value per BSA
2 years
2 years
2 years
2 years
2 years
July 17, 2023
July 16, 2024
April 26, 2025
June 30, 2025
September 20, 2027
237,500
1
€2.36
150,000
1
€8.65
70,000
1
€9.59
14,200
1
€14.05
37,000
1
€11.00
Black & Scholes
Black & Scholes
Black & Scholes
Black & Scholes
Black & Scholes
€13.65
54.08 %
5.5 years
0.25 %
None
None
€6.59
€13.64
47.83 %
5.5 years
0.25 %
None
None
€4.73
€10.41
61.74 %
6 years
0.20 %
None
None
€0.57
€2.45
31.83 %
5.5 years
2.42 %
None
None
€0.87
€6.85
46.72 %
5.5 years
1.00 %
None
None
€2.51
F-67
Date of grant (Board of directors)
December 16, 2022
December 15, 2023
BSA 2022-1
BSA 2023-1
Vesting period (years)
Plan expiration date
Number of BSA granted
Share entitlement per BSA
Exercise price
Valuation method used
Grant date share fair value
Expected volatility
Average life of BSA
Risk-free interest rate
Expected dividends
Performance conditions
Fair value per BSA
2 years
2 years
October 3, 2032
October 19, 2033
40,000
1
€2.31
50,000
1
€2.26
Black & Scholes
Black & Scholes
€1.31
50.00 %
5.5 years
2.40 %
None
None
€1.21
€1.24
45.00 %
5.5 years
2.50 %
None
None
€1.24
Change in Number of BSA Outstanding
Number of BSA
Balance at beginning of period
Granted during the period
Forfeited during the period
Exercised during the period
Balance at end of period
Breakdown of the Closing Balance
Year ended December 31,
2022
2023
2024
242,560
40,000
(31,740)
—
250,820
250,820
50,000
(24,500)
(33,860)
242,460
242,460
—
(75,000)
—
167,460
Number of BSA
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
2022
Year ended December 31,
2023
2024
BSA 2011-2
BSA 2013
BSA 2014
BSA 2015-1
BSA 2015-2
BSA 2017
BSA 2022-1
BSA 2023-1
TOTAL
—
46,360
75,000
70,000
14,200
37,000
8,260
—
46,360
75,000
70,000
14,200
37,000
8,260
—
—
—
75,000
70,000
14,200
37,000
8,260
38,000
—
—
75,000
70,000
14,200
37,000
8,260
38,000
—
—
—
70,000
14,200
37,000
8,260
38,000
—
—
—
70,000
14,200
37,000
8,260
38,000
250,820
250,820
242,460
204,460
167,460
167,460
F-68
BSAAR
BSAAR are securities whose subscription price and exercise price are fixed at their fair value as determined by an expert. The BSAAR
subscription therefore represents an investment on the part of the beneficiary. At the end of the exercise period, if they have not been exercised,
the BSAAR becomes void. The Company benefits from a clause called «forcing» making it possible to encourage holders to exercise their
redeemable equity warrants when the market price exceeds the exercise price and reaches a threshold defined in the BSAAR issuance agreement.
The Company may, then, subject to a time period for notifying holders that will permit them to exercise the BSAAR, decide to reimburse the
warrants not exercised at a unit price equal to the BSAAR acquisition price paid by its holder.
Details of BSAAR
BSAAR. The methodology used to estimate the fair value of the BSAAR is similar to the one used to estimate the fair value of the BSA, except
for the following:
Expected Term. Unlike the BSA, the Company does not have sufficient historical experience for the BSAAR. Consequently, the expected term
used for the valuation of the fair value is the legal maturity of the instrument (10 years).
No share-based payment compensation expense was recognized relating to the BSAAR since the amount paid by the beneficiaries is equal to the
fair value.
Date of grant (Board of directors)
Beneficiaries
Vesting period (years)
Plan expiration date
Number of BSAAR granted
Share entitlement per BSAAR
Exercise price
Valuation method used
Grant date share fair value
Expected volatility
Average life of BSAAR
Risk-free interest rate
Expected dividends
Performance conditions
Fair value per BSA
Change in Number of BSAAR Outstanding
Number of BSAAR
Balance at beginning of period
Granted during the period
Forfeited during the period
Exercised during the period
BSAAR 2015
July 1, 2015
Employees and corporate
officers
2 years
June 30, 2025
1,050,382
1
€7.20
Black & Scholes
€13.77
41 %
10 years
1.22 %
None
No
€1.15
Year ended December 31,
2022
2023
2024
1,105,822
—
—
(750)
1,105,072
—
(12,250)
(47,100)
1,045,722
—
—
—
F-69
Expired during the period
Balance at end of period
Breakdown of the Closing Balance
—
1,105,072
—
1,045,722
—
1,045,722
2022
Year ended December 31,
2023
2024
Number of BSAAR
BSAAR 2011
BSAAR 2012
BSAAR 2015
TOTAL
Outstanding
Exercisable
Outstanding
Exercisable
Outstanding
Exercisable
—
59,350
1,045,722
1,105,072
—
59,350
1,045,722
1,105,072
—
—
1,045,722
1,045,722
—
—
1,045,722
1,045,722
—
—
1,045,722
1,045,722
—
—
1,045,722
1,045,722
Breakdown of expenses per financial year
The share-based compensation expenses are broken down as follows (in thousands of euro):
(in thousands of euro)
AGAP Employee 2019 / AGAP Management 2019
AGAP Employee 2020 / AGAP Management 2020
Stock Options 2020
AGA Bonus 2021-1
AGAP Employee 2021 / AGAP Management 2021
AGA "Plan Epargne Entreprise" 2022
AGA Bonus 2022-1
AGAP Employee 2022 / AGAP Management 2022
AGA New Members 2023-1 Management
AGAP Employee 2023/ AGAP Management 2023
AGA "Plan Epargne Entreprise" 2023
AGA Perf Management 2024-1
AGAP Employee 2024/ AGAP Management 2024
AGA "Plan Epargne Entreprise" 2024
AGA New Members 2024 - 1 Management
Stock-option 2024
Other free shares
Share based compensation
Year ended December 31,
2022
2023
2024
(181)
1,738
—
—
1,577
570
499
46
—
—
—
—
—
—
—
1,436
—
—
1,161
—
—
1,157
3
33
465
—
—
—
—
—
—
—
—
—
—
1,162
—
—
888
19
1,226
—
302
119
168
17
12
32
4,249
4,256
3,944
F-70
12) Financial instruments recognized in the statement of financial position and related effect on the income statement
The following tables show the carrying amounts and fair values of financial assets and financial liabilities. The tables do not include fair value
information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair
value.
As of December 31, 2022 (in thousands of euro)
Book value on the statement
of financial position
Fair value through profit and
loss
(1)
Receivables
Fair value
Financial assets
Non-current financial assets
Trade receivables and others
Short-term investments
Cash and cash equivalents
Total financial assets
As of December 31, 2022 (in thousands of euro)
Financial liabilities
Financial liabilities—non-current portion
Financial liabilities—current portion
Trade payables and others
Total financial liabilities
35,119
52,445
17,260
84,225
189,049
35,119
—
17,260
84,225
136,604
52,445
—
—
52,445
35,119
52,445
17,260
84,225
189,049
Book value on the statement
of financial position
Fair value through profit and
loss
(1)
Debt at amortized
cost
(3)
Fair value
40,149
2,102
20,911
63,160
—
—
—
—
40,149
2,102
20,911
63,160
40,149
2,102
20,911
63,160
As of December 31, 2023 (in thousands of euro)
Book value on the statement
of financial position
Fair value through profit and
loss
(1)
Receivables
Fair value
Financial assets
Non-current financial assets
Trade receivables and others
Short-term investments
Cash and cash equivalents
Total financial assets
As of December 31, 2023 (in thousands of euro)
Financial liabilities
Financial liabilities—non-current portion
Financial liabilities—current portion
Trade payables and others
Total financial liabilities
9,796
66,111
21,851
70,605
168,363
9,796
—
21,851
70,605
102,252
—
66,111
—
—
66,111
9,796
66,111
21,851
70,605
168,363
Book value on the statement
of financial position
Fair value through profit and
loss
(1)
Debt at amortized
cost
(3)
Fair value
—
—
—
—
30,957
8,936
17,018
56,909
30,957
8,936
17,018
56,909
30,957
8,936
17,018
56,911
F-71
As of December 31, 2024 (in thousands of euro)
Book value on the statement
of financial position
Fair value through profit and
loss
(1)
Receivables
Fair value
Financial assets
Non-current financial assets
Trade receivables and others
Short-term investments
Cash and cash equivalents
Total financial assets
As of December 31, 2024 (in thousands of euro)
Financial liabilities
Financial liabilities—non-current portion
Financial liabilities—current portion
Trade payables and others
Total financial liabilities
10,281
14,300
14,374
66,396
105,351
10,281
—
14,374
66,396
91,051
—
14,300
—
—
14,300
10,281
14,300
14,374
66,396
105,351
Book value on the statement
of financial position
Fair value through profit and
loss
(1)
Debt at amortized
cost
(3)
Fair value
22,286
8,709
16,007
47,002
—
—
—
—
22,286
8,709
16,007
47,002
22,286
8,709
16,007
47,002
(1) The fair value of financial assets classified as fair value through profit and loss corresponds to the market value of the assets, which are primarily determined using level 2 measurements.
(2) The fair value of financial assets classified as fair value through comprehensive income corresponds to the market value of the assets, which are primarily determined using level 1
measurements.
(3) The book amount of financial assets and liabilities measured at amortized cost was deemed to be a reasonable estimation of fair value.
In accordance with the amendments to IFRS 7, financial instruments are presented in three categories based on a hierarchy of methods used to
determine fair value:
Level 1: fair value determined based on quoted prices in active markets for assets or liabilities;
Level 2: fair value determined on the observable database for the asset or liability concerned either directly or indirectly;
Level 3: fair value determined on the basis of evaluation techniques based in whole or in part on unobservable data.
13) Revenue and government financing for research expenditures
13.1) Revenue from collaboration and licensing agreements
F-72
The Company’s revenue from collaboration and licensing agreements amounts to €49,580, €51,901 and €12,622 for the fiscal year ended
December 31, 2022, 2023 and 2024, respectively.
(in thousands of euro)
Proceeds from collaboration and licensing agreements
of which monalizumab agreement - AstraZeneca
of which IPH5201 agreement - AstraZeneca
of which preclinical molecules agreement - AstraZeneca
of which Sanofi agreement 2016
of which Sanofi agreement 2022 - ANKET IPH62 - Recognition of license initial
payment and income related to the completion of work in line with the joint research
program
of which Sanofi agreement 2022 - ANKET IPH67 -Recognition of license initial
payment and income related to the option exercise
of which Takeda agreement 2023
of which other agreements
Invoicing of research and development costs (IPH5201)
Exchange gains (loss) on collaboration agreements
Others
Revenue from collaboration and licensing agreements
Year ended December 31,
2022
(1)
2023
2024
48,806
22,376
4,677
17,400
4,000
—
—
—
353
1,391
(627)
10
49,580
50,725
9,499
—
—
2,000
18,873
15,800
4,553
—
1,165
—
11
51,901
10,505
4,404
—
—
4,000
401
1,700
—
—
2,060
—
56
12,622
a)
Revenue recognition related to monalizumab AstraZeneca agreements and amendments
The Company identified the following promises under the monalizumab AstraZeneca agreements and amendments: (1) a non-exclusive license
related to monalizumab restricted to two applications, with an option for an exclusive license related to monalizumab including all applications,
(2) the performance of certain initial studies related to Phases 1/2 trials, and participation in certain studies of Phases 1/2 trials and Phase 3
clinical trials through a co-financing.
The Company considered the license has a standalone functionality and is capable of being distinct. However the Company determined that the
license is not distinct from the performance of initial studies and participation in Phase 3 clinical trials because they increased the utility of the
licensed IP. Thus, the licensed IP, the performance of initial studies and participation in Phase 3 clinical trials are combined into a single
performance obligation.
This performance obligation was considered as satisfied over time as AstraZeneca controls the licensed IP which is being enhanced during the
agreement. The revenue is recognized over time, based on the input method (costs incurred). As a result, the Company recognizes the price of the
transaction as a revenue on the basis of the progress of studies that the Company has undertaken to carry out under the agreement. Progression is
assessed following to actual costs incurred relative to the total budgeted costs to fulfill the obligation.
F-73
The transaction price was initially estimated to the initial payment of $250.0 million, less the amounts that the Company expected to pay to
AstraZeneca for co-financing Phase 1/2 clinical studies. The additional payment of $100.0 million triggered by AstraZeneca’s exercise of the
exclusivity option was treated as a change in the price estimate of the transaction. In addition, the amendment of the contract, which modified the
scope and budget of the studies to be carried out by the Company as well as the arrangements for sharing the cost of the other studies, led to a
revision of the degree of progress and the price of the transaction. Thus, the exercise of the option and the amendment of the contract resulted in
the recognition of a favourable cumulative adjustment of €38.3 million in revenue for the year ended December 31, 2019.
The additional payment of $50.0 million triggered by the dosing of the first patient in the Phase 3 trial evaluating monalizumab was treated in
full as a collaboration commitment ("collaboration liability" in the consolidated balance sheet) in view to the commitment linked to the contract
for the Phase 1/2 (co-financing) and Phase 3 studies (amendment signed in September 2020). Consequently, this additional payment has no
impact on the transaction price.
In addition to these amounts, AstraZeneca made an additional payment of $50.0 million (€47.7 million) in June 2022 and triggered by the
treatment of the first patient in a second Phase 3 trial “PACIFIC-9” evaluating monalizumab in April 2022. This additional payment has been
treated as an increase of the collaboration commitment ("collaboration liabilities" in the consolidated statements of financial position) for an
amount of $36.0 million (€34.3 million) in connection to the Phase 3 study co-funding commitment made by the Company and notified to
AstraZeneca in July 2019. The remaining amount of $14.0 million (€13.4 million) has been treated as an increase of the transaction price,
recognized in the income statement in line with the progress of the Phase 1/2 studies.
The subsequent milestones and potential royalty payments are excluded from the transaction price due to the uncertainties of clinical trials
results.
The Company used the most likely amount to determine variable consideration. Variable consideration for cost-sharing payments related to
certain studies of Phases 1/2 trials and Phase 3 clinical trials when applicable are included in the transaction price.
As a reminder, the expected payments to AstraZeneca are classified as collaboration liability in the consolidated statement of financial position.
Quarterly invoices received from AstraZeneca reduce the collaboration liability and have no impact on the consolidated statement of income.
Change in monalizumab deferred revenue (in thousands of euro):
As of December 31, 2021
Increase in deffered revenu resulting from the milestone relating to the dosage of the first patient in the Phase 3 trial PACIFIC-9-
(€50m)
Revenue for the 2022 financial year
Transfer from collaboration liabilities
As of December 31, 2022
Revenue for the 2023 financial year
Transfer from collaboration liabilities
As of December 31, 2023
Revenue for the 2024 financial year
Transfer from collaboration liabilities
As of December 31, 2024
F-74
20,159
47,687
(22,376)
(30,989)
14,481
(9,499)
173
5,156
(4,404)
(536)
215
(1) As a reminder, the increase in deferred revenue relating to monalizumab agreement between December 31, 2021 and December 31, 2022 is
explained by the additional payment of €47,687 thousand ($50,000 thousand) made by AstraZeneca in June 2022 and triggered by the launch of
the “PACIFIC-9” Phase 3 trial on April 28, 2022. This increase has led to a simultaneous increase in collaboration commitment ("collaboration
liability"- see below) of €34,335 thousand ($36,000 thousand) in accordance with the Company’s July 2019 option concerning the co-financing
of Phase 3 trials in the field of collaboration.
Change in monalizumab collaboration liablities (in thousands of euro):
As of December 31, 2021 (1)
Additions (2)
Repayment cost to AZ
As of December 31, 2022 (3)
Additions
Repayment cost to AZ
As of December 31, 2023 (4)
Additions
Repayment cost to AZ
As of December 31, 2024 (5)
40,415
37,564
(14,768)
63,211
—
(10,534)
52,677
—
(4,106)
48,571
(1) Of which €7,418 thousand of current portion and €32,997 thousands of non-current portion.
(2) The increase in collaboration liabilities relating to monalizumab agreement between December 31, 2021 and December 31, 2022 mainly results from (i) a €34,335 thousand ($36,000 thousand)
increase in collaboration commitments in connection with the launch of the “PACIFIC-9” Phase 3 trial on April 28, 2022, and (ii) a €2,145 thousand net increase in the collaboration
commitments in connection with exchange rate fluctuations over the period.
(3) Of which €10,223 of current portion and €52,988 of non-current portion.
(4) Of which €7,647 thousand of current portion and €45,030 thousand of non-current portion.
(5) Of which €7,443 thousand of current portion and €41,128 thousand of non-current portion.
b)
Revenue recognition related to IPH5201 AstraZeneca collaboration and option agreement
Revenue related to IPH5201 for the year ended December 31, 2024 is nil as for the year ended December 31, 2023, compared to revenue of
€4,677 thousand as of December 31, 2022 which resulted from the entire recognition in revenue of the $5.0 million (€4.7 million) milestone
payment received from AstraZeneca following the signature on June 1, 2022 of an amendment to the initial contract signed in October 2018.
This amendment sets the terms of the collaboration following AstraZeneca’s decision to advance IPH5201 to a Phase 2 study. The Company will
conduct the study. Both parties will share the external cost related to the study and incurred by the Company and AstraZeneca will provide
products necessary to conduct the clinical trial. Under this agreement, an amount of 2,060 thousand euros was re-invoiced in financial year 2024
(1,165 thousand euros in financial year 2023).
c)
Revenue recognition related to collaboration and license agreement signed with Sanofi in 2016
Revenues under the collaboration and license agreement signed with Sanofi in 2016 amounted to €4,000 thousand for the year ended December
31, 2024 as compared to €2,000 thousand for the year ended December 31, 2023 and €4,000 thousand for the year ended December 31, 2022. As
a reminder, the revenue recognized in 2022 resulted from Sanofi's decision to advance IPH6401/SAR'514 towards regulatory preclinical studies
for a new investigational drug. This decision triggered a milestone payment
F-75
of €3.0 million fully recognized in revenue. This amount was received by the Company on September 9, 2022. In June 2023, the first patient was
dosed in a Sanofi-sponsored Phase 1/2 clinical trial evaluating IPH6401/SAR'514 in relapsed or refractory Multiple Myeloma. As provided by
the licensing agreement signed in 2016, Sanofi made a milestone payment of €2.0 million, fully recognized in revenue since June 2023. This
amount was received by the Company on July 21, 2023. In 2024, the company announced the treatment of the first patient in the dose-extension
portion of the clinical trial evaluating SAR443579/IPH6101, materializing the progression of the clinical trial developed by Sanofi towards phase
2 in various blood cancers. The decision triggered a milestone payment to Innate of 4 million euros recognized in income at June 30, 2024 and
collected on May 17, 2024.
d) Revenue recognition related to Sanofi research collaboration and licensing agreement (2022)
On January 25, 2023, the Company announced the expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements
Act of 1976 and the effectiveness of the licensing agreement as of January 24, 2023. Consequently, under the terms of such agreement, the
Company received an upfront payment of €25,000 thousand in March 2023, including €18,500 thousand for the exclusive license,
€1,500 thousand for the research work and €5,000 thousand for the two additional targets options. On December 19, 2023, the Company
announced that Sanofi had exercised an option for a one of the two preclinical molecules. This option exercise also resulted in a milestone
payment of €15,000 thousand, including €13,300 thousand in respect of the exclusive license, which was fully recognized in income as of
December 31, 2023, and €1,700 thousand in respect of research work to be carried out by the Company. The Company considers that the licenses
granted constitute a right to use the intellectual property granted exclusively to Sanofi from the effective date of the agreement. As such, all
upfront payments relating to the licenses granted have been recognized in the income statement during financial year 2023, representing an
amount of €31,800 thousand, including €18,500 thousand relating to the B7-H3 license and €13,300 thousand following the option exercised.
Income from research work is recognized in the income statement using the percentage-of-completion method.
Following Sanofi's announcement in October 2024 that it would return the rights to the second option to terminate the research collaboration,
revenue of 1,700 thousand euros was recognized in full in the income statement at December 31, 2024. Income relating to research work on the
1st license amounted to 400 thousand euros in financial year 2024.
Change in deferred revenue relating to the 2022 research collaboration and licensing agreement :
As of December 31, 2022
Additions
Deductions
As of December 31, 2023
Additions
Deductions
As of December 31, 2024
—
8,200
(2,874)
5,327
—
(2,101)
3,226
F-76
e) Revenue recognition related to Takeda licensing agreement (2023)
On April 3, 2023, the Company announced that it has entered into an exclusive license agreement with Takeda under which Innate granted
Takeda exclusive worldwide rights to research and develop antibody drug conjugates (ADC) using a panel of selected Innate antibodies against
an undisclosed target, with a primary focus in Celiac disease. Takeda would be responsible for the future development, manufacture and
commercialization of any potential products developed using the licensed antibodies. As such, the Company considered that the license granted
was a right to use the intellectual property, which was granted fully and perpetually to Takeda. The agreement did not stipulate that Innate's
activities will significantly affect the intellectual property granted during the life of the agreement. Consequently, the $5.0 million (or €4.6
million) initial payment, received by the Company in May 2023, was fully recognized in revenue since June 30, 2023. This amount was received
by the Company in May 2023.
On July 25, 2024, the Company received a letter from Takeda terminating the exclusive license agreement signed on March 31, 2023.
Termination was effective at the end of a 90 days notice period, i.e. on October 24, 2024.
f) Schedule of variance of deferred revenue
The main variance of the global deferred revenue is presented in the following schedule:
(in thousands of euro)
December 31, 2021
Recognition in P&L
Proceeds
Monalizumab
Preclinical molecules
Others
Total
20,159
17,400
353
37,913
(22,376)
(17,400)
(353)
(40,129)
47,687
—
—
47,687
(1) Of which €6,560 thousand of current deferred revenue and €7,921 thousand of non-current deferred revenue.
Transfer from
collaboration
liabilities
(30,989)
—
—
December 31, 2022
14,481
—
—
(1)
(30,989)
14,481
(in thousands of euro)
December 31, 2022
Recognition in P&L
Proceeds
Monalizumab
Sanofi options
Sanofi services
Others
Total
14,481
—
—
—
14,481
(9,499)
(2,500)
(374)
—
(12,373)
—
5,000
3,200
—
8,200
(2) Of which €5,865 thousand of current deferred revenue and €4,618 thousand of non-current deferred revenue.
Transfer from
collaboration
liabilities
December 31, 2023
173
—
—
—
173
5,155
2,500
2,826
—
10,483
(2)
F-77
(in thousands of euro)
December 31, 2023
Recognition in P&L
Proceeds and other
increase
Transfer from
collaboration
liabilities
December 31, 2024
Monalizumab
Sanofi options
Sanofi services
Total
5,155
2,500
2,826
10,483
(4,404)
(2,100)
(6,504)
—
—
(536)
—
—
(536)
215
2,500
726
(3)
3,441
(3) Of which €616 thousand of current deferred revenue and €2,825 thousand of non-current deferred revenue.
13.2) Government financing for research expenditures
The Company receives grants from the European Commission and the French government and state organizations in several different forms:
•
Investment and operating grants; and
• Research Tax Credits.
The total amount for government financing for research expenditures recorded as other income in the income statement can be analyzed as
follows:
(in thousands of euro)
Research Tax Credit(1)
Grant and other tax credit (2)
Government financing for research expenditures
Year ended December 31,
2022
2023
2024
7,925
110
8,035
9,729
—
9,729
7,463
25
7,488
(1) As of December 31, 2024, the amount is composed of the research tax credit calculated and recognized for the 2024 financial year for an
amount of €7,463 thousand.As of December 31, 2023, the amount is mainly composed of the research tax credit calculated and recognized for
the 2023 financial year for an amount of €9,800 thousand. As a reminder, as of December 31, 2022, the amount was mainly composed of (i) the
research tax credit calculated and recognized for the 2022 financial year for an amount of €9,167 thousand from which is subtracted (ii) a
provision amounting to €1,270 thousand following the tax inspection carried out in 2022 by the French tax authorities and relating to the 2019
and 2020 financial years as well as to the research tax credit and the accuracy of its calculation for the 2018 to 2020 financial years. This
provision was recognized as a deduction from the 2022 research tax credit, based on estimated amounts and adjustments not disputed by the
Company. On March 3, 2023, the Company received from the tax authorities the rectification proposal, confirming the amount of the provision
recognized on the amounts of the rectifications not disputed by the Company.
F-78
14) Operating expenses
Leasing and maintenance
(200)
(1,798)
(in thousands of euro)
Subcontracting costs
(1)
Cost of supplies and
consumable materials
Personnel expenses other
than share-based
compensation
Share-based compensation
Personnel expenses
Non-scientific advisory and
consulting
(2)
Travel expenses and
meeting attendance
Marketing, communication
and public relations
Scientific advisory and
(3)
consulting
Other purchases and
external expenses
Depreciation and
amortization
Intellectual property
expenses
Other income and
(expenses), net
Impairment of intangible
assets
(4)
Total net operating
expenses
Year ended December 31,
2022
(1)
R&D
G&A
Impairment
Total
R&D
2023
G&A
Total
R&D
2024
G&A
Total
(24,432)
—
(24,432)
(27,568)
—
(27,568)
(25,535)
—
(25,535)
(3,051)
(531)
(3,582)
(2,611)
(244)
(2,855)
(2,764)
(292)
(3,056)
(14,329)
(8,025)
(22,354)
(14,834)
(6,874)
(21,708)
(15,063)
(7,085)
(22,148)
(2,044)
(2,204)
(16,373)
(10,229)
(1,441)
(4,244)
(466)
(252)
(130)
(530)
(4,249)
(26,603)
(5,685)
(1,998)
(718)
(660)
(2,288)
(17,121)
(1,968)
(8,842)
(4,256)
(25,964)
(2,473)
(17,536)
(732)
(879)
(380)
(52)
(2,906)
(3,638)
(1,047)
(1,926)
(268)
(316)
(648)
(368)
(229)
(864)
(468)
(44)
(1,471)
(8,556)
(3,377)
(1,319)
(308)
(309)
(3,944)
(26,092)
(3,606)
(2,183)
(776)
(353)
(1,263)
—
(1,263)
(1,220)
—
(1,220)
(2,039)
—
(2,039)
(91)
(2,557)
(2,648)
(28)
(2,636)
(2,664)
(13)
(2,776)
(2,789)
(2,928)
(1,496)
(4,424)
(3,891)
(1,202)
(5,093)
(1,075)
(996)
(296)
(1,292)
(1,292)
(203)
(1,495)
(1,113)
(913)
(239)
(1,988)
(1,352)
(292)
(503)
(795)
(248)
(623)
(872)
(300)
(1,627)
(1,927)
—
—
(41,000)
(41,000)
—
—
—
(51,663)
(22,436)
(41,000)
(115,099)
(56,022)
(18,288)
(74,310)
(51,980)
(19,716)
(71,696)
(1) The Company subcontracts a significant part of its preclinical (pharmaceutical development, tolerance studies and other model experiments, etc.) and clinical operations (coordination of trials,
hospital costs, etc.) to third parties. Associated costs are recorded in subcontracting on the basis of the level of completion of the clinical trials.
F-79
(2) Non-scientific advisory and consulting are services performed to support the selling, general and administration activities of the Company, such as legal, accounting and audit fees as well as
business development support.
(3) Scientific advisory and consulting expenses relate to consulting services performed by third parties to support the research and development activities of the Company.
(4) Following the Company's decision in December 2022 to stop the development of avdoralimab in bullous pemphigoid ("BP") indication in inflammation, only indication supporting the
recoverable amount of the asset as of December 31, 2021 (as well as of June 30, 2022), the rights relating to the intangible asset have been fully impaired for their net book value on the date of
the decision, i.e. €41,000 thousand (see note 6)
(in thousands of euro)
Audit fees
Non-audit fees
Total
2022
2023
Year ended December 31,
Deloitte &
Associés
Total
Deloitte &
Associés
Total
Deloitte &
Associés
855
248
1,103
855
248
1,103
725
213
938
725
213
938
523
208
731
2024
PwC
Total
998
308
1,306
475
100
575
* Non-audit fees: these fees correspond to services performed by the auditors related to the production of certification in the context of the declaration of expenses for the obtention of grants; to
the verification report of social and environmental information, special reports within the framework of operations on the Company’s capital
Personnel expenses other than share-based compensation
The line item amounted to €22,354 thousand, €21,708 thousand and €22,148 thousand for the years ended December 31, 2022, 2023 and 2024
respectively. These items do not include personnel expenses relating to the Lumoxiti discontinued operation (see note 17). The Company had
175 full time equivalent employees as of December 31, 2023, compared to 177 full time equivalent employees as of December 31, 2024.
Depreciation and amortization
The line item is mainly composed of the amortization of the monalizumab, IPH5201 intangible assets (see Note 6).
Cost of supplies and consumable materials
Cost of supplies and consumable materials consists mainly of the cost of procurement of the Company’s drug substance and/or drug product that
is manufactured by third-parties. This line item amounts to €3,582 thousand €2,855 thousand and €3,056 thousand for the years ended December
31, 2022, 2023 and 2024, respectively.
F-80
15) Net financial income (loss)
Net financial income (loss) can be analyzed as follows:
(in thousands of euro)
Interests and gains on financial assets
Unrealized gains on financials assets
Foreign exchange gains
Other financial income
Financial income
Foreign exchange losses
Unrealized losses on financial assets
Interest on financial liabilities
Other financial expenses
Financial expenses
Net financial income (loss)
Year ended December 31,
2022
2023
2024
546
418
3,810
—
4,775
(2,983)
(2,050)
(288)
—
(5,321)
(546)
3,177
1,648
2,109
—
6,934
(1,195)
—
(640)
—
(1,835)
5,099
2,437
1,983
1,658
6,079
(3,409)
(566)
(3,975)
2,104
For the financial years ended December 31, 2023 and 2024, the foreign exchange gains and losses mainly result from the variance of the
exchange rate between the Euro and the U.S. dollar on U.S. dollars denominated collaboration liabilities, and cash and cash equivalent and
financial assets accounts.
Unrealized losses on financial assets relate to unquoted instruments, the fair value of which is determined using level 2 measurements.
16) Income Tax
Due to the Company’s early stage of development, it is not probable that future taxable profit will be available against which the unused tax
losses can be utilized. As a consequence, net deferred tax assets are not recognized.
Management revised comparative balance sheets to offset deferred tax assets and liabilities in application of IAS12.74 for a total amount of €9.0
million, and €8.6 million as of 2023 and 2022 respectively. These amounts were determined to be immaterial to the prior periods. As of
December 31, 2024, the balances offset amounted to €9.4 million.
Summary of related offset deferred tax :
(in thousands of euro)
Deferred tax assets / Tax losses carryforwards
Deferred tax assets / Provision for defined benefit obligation
Deferred tax assets / Others
Deferred Tax assets
Deferred tax liabilities / Deferred revenue
Deferred tax liabilities / Lease contract (IFRS 16 application)
Deferred tax assets / Tax amortization
Deferred tax liabilities / Other
Deferred Tax liabilities
Year ended December 31,
2022
2023
2024
7,476
922
170
8,568
7,636
651
281
—
8,568
8,344
610
52
9,006
8,233
553
220
—
9,006
8,699
682
34
9,415
8,754
500
154
7
9,415
As of December 31, 2024, the accumulated tax losses carryforwards of Innate Pharma SA were €536,759 thousand with no expiration date
(€466,153 and €483,570 thousand as of December 31, 2022 and 2023).
F-81
At December 31, 2023, the amount of losses carried forward by Innate Pharma S.A. at December 31, 2022 has been adjusted downwards by
€277.0 thousand to take account of the impact of the tax audit.
As of December 31, 2024, the accumulated tax losses carryforwards of Innate Pharma Inc. was €16,427 thousand, or $17,066 thousand, (€14,198
thousand, or $16,446 thousand and €15,181 thousand, or $16,775 thousand as of December 31, 2022 and 2023, respectively), with a 20-year
period expiration.
Accordingly, net deferred tax assets not recognized are :
(in thousands of euro)
Deferred tax assets / Tax losses carryforwards - France
Deferred tax assets / Tax losses carry forwards - US
Deferred Tax assets / Tax losses carryforwards
Tax rate reconciliation
(in thousands of euro)
Net income (loss) before tax
Statutory tax rate
Income tax benefit / (expense) calculated at statutory tax rate
Increase / (decrease) in income tax benefit / (expenses) arising from:
Differences in tax rates
Research tax credit
Provision for defined benefit obligations
Share-based compensation
Revenue from collaboration agreements
Non-recognition of deferred tax assets related to tax losses and temporary
differences
Carry-back
Impact linked to intra-group merger operations
Impact linked to the exercise of a real estate leasing option
Others differences
Income tax benefit / (expense) (a)
Effective tax rate
Deferred tax income / (loss) (b)
Income tax benefit / (expense) (a) + (b)
17)
Discontinued Operations
Year ended December 31,
2022
2023
2024
109,062
2,770
111,832
112,549
2,773
115,321
125,491
2,781
128,272
Year ended December 31,
2022
2023
2024
(58,103)
25.00 %
14,526
—
1,971
106
(1,062)
2,210
(18,290)
—
—
—
539
—
0 %
—
—
(7,570)
25.00 %
1,891
—
2,457
27
(1,064)
1,095
(4,501)
—
—
—
94
—
0 %
—
—
(49,471)
25.00 %
12,368
1,872
(72)
(986)
(296)
(13,340)
454
—
0 %
—
—
As a reminder, a termination and transition agreement was negotiated and executed, effective as of June 30, 2021 further to the Company's
decision to return the rights of Lumoxiti back to AstraZeneca. Consecutively, activities related to Lumoxiti are presented as discontinued
operations since October 1, 2021. As part of the termination and transition agreement, Innate and AstraZeneca agreed to share
F-82
manufacturing costs, and Innate had to pay $6.2 million on April 30, 2022. This amount was paid by the Company as part of the agreement in
April 2022 for an amount of €5.9 million ($6.2 million).
The net income from discontinued operations related to Lumoxiti as of December 31, 2023 as well as of December 31, 2024 are nil compared to
a net loss of €0.13 million as of December 31, 2022 corresponding to residual costs associated with the transfer of activities to AstraZeneca. This
transfer has now been completed.
a) Financial Performance
Revenue and other income
Revenue from collaboration and licensing agreements
Sales
Total revenue and other income
Operating expenses
Research and development expenses
Selling, general and administrative expenses
Impairment of intangible assets
Total operating expenses
Net income (loss) from distribution agreements
Operating income (loss)
Financial income
Financial expenses
Net financial income (loss)
Net income (loss) before tax
Income tax expense
Net income (loss) from discontinued operations
Year ended December 31,
2022
2023
2024
194
22
216
—
(346)
—
(346)
—
(131)
—
—
—
(131)
—
(131)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
F-83
b) Cash-Flows
Net cash generated from / (used in) operating activities (1)
Net cash generated from / (used in) investing activities
Net cash generated from / (used in) financing activities
Net cash flows from discontinued operations
Year ended December 31,
2022
2023
2024
(5,097)
—
—
(5,097)
—
—
—
—
—
—
—
—
18)
Commitments, contingencies and litigations
Commitments
The Company has identified the following off-balance sheet commitments as of December 31, 2024:
•
non-cancellable purchase commitments as of December 31, 2024 for a total of €7,687 thousands thousand with various suppliers notably
contract research organizations (CRO) or contract manufacturing organizations (CMO). These commitments are comprised of non-
cancellable purchase orders for the supply of various services in relation with preclinical work for an amount of €2,750 thousands and
clinical work for an amount of €4,938 thousands. The execution and billing of these has not yet started as of December 31, 2024;
• On July 3, 2017, Innate Pharma borrowed from the bank Société Générale in order to finance the construction of its future headquarters.
As security for the loan, Innate pledged collateral in the form of financial instruments held at Société Générale amounting to
€15.2 million. The security interest on the pledged financial instruments will be released in accordance with the following schedule:
€4,200 thousand in July 2024, €5,000 thousand in August 2027 and €6,000 thousand in August 2031. Furthermore, under the loan,
Innate is subject to a covenant that its total cash, cash equivalents and current and non-current financial assets as of each fiscal year end
will be at least equal to the amount of outstanding principal under the loan. As of December 31, 2024, the remaining capital of this loan
amounted to €8,894 thousand. As expected,€4,200 thousand was released on July 2024. The Company was in compliance with this
covenant as of December 31, 2024;
•
The Company has entered into indemnification agreements with its directors & officers (the « Beneficiaries »), under which (1)
Company will provide to the Beneficiaries the benefit of one or more director and officer (“D&O”) insurance policies and (2) if not
indemnifiable under the D&O insurance policy, the Beneficiary shall be compensated for any indemnifiable claim by the Company to
the fullest extent permitted by law.
Licensing and collaboration agreements
Commitments related the Company’s licensing and collaboration agreements are disclosed in Note 1.1 and 6.
F-84
Contingencies and litigations
The Company is exposed to contingent liabilities relating to legal actions before the labor court or intellectual property issues happening in the
ordinary course of its activities. Each pre-litigation, known litigation or procedure in ordinary course the Company is involved in was analyzed at
the closing date after consultation of advisors.
Provisions
Provisions amounted to €1,740 thousand, €774 thousand and €481 thousand as of December 31, 2022, 2023 and 2024, respectively.
As of December 31,2024, they mainly consist of provision for employer contribution in respect of the grants of employee equity instruments for
an amount of €394 thousand (€566 thousand in 2023)
As a reminder, as of December 31, 2022, they mainly consist of (i) a provision amounting to €1,270 thousand following the tax inspection
carried out in 2022 by the French tax authorities and relating to the 2019 and 2020 financial years as well as to the research tax credit and the
accuracy of its calculation for the 2018 to 2018 financial years 2020. This provision was based on estimated amounts and adjustments not
disputed by the Company. On March 3, 2023, the Company received from the tax authorities the rectification proposal, confirming the amount of
the provision recognized on the amounts of the rectifications not disputed by the Company, and (ii) provisions for employee departures and
provision for charges relating and the employer contribution in respect of the grants of employee equity instruments.
In accordance with IFRS 2, when a Company decides to provide its employees with shares bought back on the market, a provision has to be
recognized upon the decision to allocate free shares that are spread over the vesting period when the plan conditions actions for employees when
they join the Company at the end of the plan.
19) Related party transactions
Members of the Executive Board and Leadership Team
For each of the periods presented, the following compensation was granted to the members of the Leadership Team of the Company and were
recognized as expense:
(in thousands of euro)
Personnel expenses and other short-term employee benefits
Extra pension benefits
Share-based compensation
Advisory fees
Executive Committee members compensation
Year ended December 31,
2022
2023
2024
2,176
43
1,989
661
4,869
2,856
33
2,081
471
5,441
3,835
166
2,302
—
6,303
As of December 31, 2024, four of the members of the Executive Committee were also members of the Managing Board, compared with two in
2023.
Hervé Brailly, Chairman of the Supervisory Board in 2023, was Chairman of the Executive Board from 1 January 2024 until he was replaced by
Jonathan Dickinson on 1 November 2024.
Calculation of share-based compensation is detailed in Note 11.b.
F-85
Members of the Supervisory Board
The Company recognized a provision of €310 thousand for attendance fees (jetons de presence) relating to the year ended December 31, 2024
which should be paid in 2025. This amount includes the compensation for the Chairman of the Supervisory Board. The company recognized a
provision of €348 thousand and €353 thousand as of December 31, 2022 and 2023, respectively.
Related parties
Novo Nordisk A/S is a shareholder and has entered into three licensing agreements with the Company for the drug candidates lirilumab,
monalizumab and avdoralimab. Under the terms of the agreements, the Company will pay milestones and royalties on sales of these drug
candidates.
At 31 December 2024, 2023 and 2022, respectively, the Company had no recognised debt to Novo Nordisk A/S.
AstraZeneca is a shareholder and is related to the Company through several collaboration and option licensing or license agreements for different
drug candidates (monalizumab, avdoralimab, IPH5201). The payments between the two companies as well as the liabilities and receivables as of
31 December 2024 are as follows:
(in thousands of euros)
Collection (AstraZeneca towards the Company) / Receivables
Payments (the Company towards AstraZeneca) / Liabilities
Total
Subsidiaries
As of December 31, 2024
Payments
Assets/Liabilities
2,637
(8,687)
(6,050)
721
(1,932)
(1,211)
The business relationships between the Company and its subsidiary Innate Pharma Inc are governed by intra-group agreements, conducted at
standard conditions on an arm’s length basis.
20)
Income (loss) per share
Basic income (loss) per share
Basic income (loss) per share is calculated by dividing the net income (loss) attributable to equity holders of the Company by the weighted
average number of ordinary shares in circulation during the corresponding period.
(in thousands of euro, except for data share)
Net income (loss)
Weighted average number of ordinary shares in circulation
Basic income (loss) per share (€ per share)
Year ended December 31.
2022
2023
2024
(58,103)
79,639,826
(0.73)
(7,570)
80,453,282
(0.09)
(49,471)
81,051,798
(0.61)
The instruments that entitle their holders to a portion of the share capital on a deferred basis (BSAs, BSAAR, AGAs and AGAPs) are considered
to be anti-dilutive (2,265,301 instruments in 2022, 5,145,914 instruments in 2023 and 5,959,104 instruments in 2024). These instruments are
presented in detail in Note 11.
F-86
Diluted income (loss) per share
Diluted income (loss) per share is calculated by dividing the net income (loss) attributable to equity holders of the Company by the weighted
average number of ordinary shares in circulation during the corresponding period, increased by all dilutive potential ordinary shares.
(in thousands of euro, except for data share)
Net income (loss)
Weighted average number of ordinary shares in circulation
Adjustment for share instruments
Diluted income (loss) per share (€ per share)
21) Events after the reporting date
Year ended December 31,
2022
2023
2024
(58,103)
79,639,826
—
(0.73)
(7,570)
80,453,282
—
(0.09)
(49,471)
81,051,798
—
(0.61)
• On January 27, 2025, the Company announced the first patient was dosed in its Phase 1 study (NCT06781983), investigating the safety and
tolerability of IPH4502, an innovative Antibody-Drug Conjugate (ADC), in patients with advanced solid tumors known to express Nectin-4.
The Phase 1, open-label, multi-center study, includes a Part 1 Dose Escalation and a Part 2 Dose Optimization, and will assess the safety,
tolerability, and preliminary efficacy of IPH4502 as a single agent in advanced solid tumors known to express Nectin-4, including but not
limited to urothelial carcinoma, non-small cell lung, breast, ovarian, gastric, esophageal, and colorectal cancers. The study plans to enroll
approximately 105 patients.
• On February 3, 2025, Mr. Arvind Sood resigned from his position as member of the Executive Board and left the Company February 27,
2025 and until that date he has remained EVP, President US Operations. The position of Vice President, President of U.S. Operations is not
contemplated to be filled at this time.
• On February 17, 2025, the Company announced that the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy
Designation (BTD) to lacutamab, an anti-KIR3DL2 cytotoxicity-inducing antibody, for the treatment of adult patients with relapsed or
refractory (r/r) Sézary syndrome (SS) after at least 2 prior systemic therapies including mogamulizumab.
• On March 26, 2025, the Company announced that it plans to ask to the next General Meeting to be held on May 22, 2025 to transform into a
société anonyme with a Board of Directors ("conseil d'administration"). This transformation is part of a strategic move to simplify and align
Innate's corporate governance with international standards. If the General Meeting approves this change, it will be asked to appoint as
members to the Board of Directors: Irina Staatz-Granzer, Pascale Boissel, Sally Bennett, Véronique Chabernaud, Bpifrance (represented by
Olivier Martinez), Jonathan Dickinson, and two new members to the Board of Directors, Marty J. Duvall and Christian Itin. If the General
Meeting of the shareholders approves this change in governance and the proposed composition of the Board, the Board of Directors is
expected to appoint Irina Staatz-Granzer as Chairwoman and Jonathan Dickinson as Chief Executive Officer at its first meeting after the
General Meeting. If the General Meeting does not approve the change of governance, it will be asked to renew the current members of the
Supervisory Board whose terms of office are due to expire - with the exception of Gilles Brisson and Jean-Yves Blay - and to appoint two
new members, Marty J. Duvall and Christian Itin. The composition of the Executive Board would remain unchanged, as Jonathan
F-87
Dickinson would remain Chairman and Yannis Morel and Sonia Quaratino would remain members (Arvind Sood resigned from his position
on the Executive Board in February 2025).
• On April 23, 2025, the Company announced review of their January 2016 Research Collaboration and License Agreement (the “2016
Agreement”) with Sanofi:
◦
◦
◦
as previously disclosed and in alignment with its current strategic priorities, Sanofi will opt to pursue the development of
SAR’514/IPH6401 (BCMA ANKET®) in autoimmune indications;
in alignment with both company's current strategic priorities, Sanofi and Innate agreed to terminate the 2016 Agreement as it relates
to SAR’579/IPH6101 (CD123 ANKET); Innate will regain its rights on SAR’579/IPH6101 (CD123 ANKET);
as part of these discussions, Sanofi and Innate agreed to a potential investment by Sanofi of up to €15,000,000 in new shares of
Innate. .
◦ On April 24, 2025, the Company announced that, given the satisfactory market conditions, Sanofi has agreed to subscribe to 8,345,387 new
ordinary shares of Innate, at a price of €1.7974 per share, representing a total capital increase of €14,999,998.59 (€417,269.35 in nominal
amount and €14,582,729.24 of issue premium). As a result, the Company’s share capital was increased to €4,609,489.90, divided into
92,175,723 ordinary shares, 6,494 2016 preferred shares, and 7,581 2017 preferred shares. The tables below set out the Company’s
shareholding, based on the information available to Innate as of the date of this report, before and after the closing of the capital increase:
Before closing
Shareholder
Novo Nordisk A/S
Medimmune Limited
Bpifrance Participations
Members of the Executive Board, Supervisory
Board and Leadership Team
Treasury shares
Public
Total
After closing
Shareholder
Novo Nordisk A/S
Sanofi-Aventis Participations
Medimmune Limited
Bpifrance Participations
Members of the Executive Board, Supervisory
Board and Leadership Team
Treasury shares
Public
Total
Nb of Shares[1]
%
Nb of voting rights[2]
9,817,546
7,485,500
6,389,406
846,944
18,575
59,286,440
83,844,411
11.71%
8.93%
7.62%
1.01%
0.02%
70.71%
100.00%
9,817,546
7,485,500
6,389,406
911,444
0
59,995,085
84,598,981
*
Nb of Shares[1]
%
Nb of voting rights[2]
9,817,546
8,345,387
7,485,500
6,389,406
846,944
18,575
59,286,440
92,189,798
10.65%
9.05%
8.12%
6.93%
0.92%
0.02%
64.31%
100.00%
9,817,546
8,345,387
7,485,500
6,389,406
911,444
0
59,995,085
92,944,368
%
11.60%
8.85%
7.55%
1.08%
—%
70.92%
100.00%
%
10.56%
8.98%
8.05%
6.87%
0.98%
—%
64.55%
100.00%
[1] Ordinary shares includes ordinary shares plus ordinary shares pursuant to the 2016 and 2017 free preference shares.
F-88
F-89
117 avenue de Luminy 13009 Marseille - France
www.innate-pharma.com
TRANSLATION FOR INFORMATION PURPOSES
INNATE PHARMA SA
A corporation with executive board and supervisory board with a share capital of EUR 4,609,489.90
Registered Office : 117, avenue de Luminy, 13009 Marseille
424 365 336 Registry of Trade and Companies of Marseille
ARTICLES OF ASSOCIATION (BY-LAWS)
Amended by the Executive Board of April 25, 2025
TRANSLATION FOR INFORMATION PURPOSES
TITLE I
FORM – NAME – REGISTERED OFFICE – OBJECT - DURATION
ARTICLE 1 - Form
The Company was incorporated in the form of a Simplified Share Company governed by applicable statutory provisions and by these articles of
association.
The Company was transformed into a Corporation with a Executive Board and a Supervisory Board by a decision of the Mixed Meeting of
Shareholders of 13 June 2005. It is governed by the statutory and regulatory provisions in force and by these articles of association.
ARTICLE 2 – Corporate Name
The name of the Company is INNATE PHARMA.
On any instruments or documents issued by the Company, the name of the Company must be immediately preceded or followed by the words
“Corporation with Executive Board and Supervisory Board” and a statement of the share capital.
ARTICLE 3 - Registered Office
The registered office is at 117, avenue de Luminy, 13009 Marseille.
It may be transferred within the same administrative department or to a neighbouring administrative department by a decision of the Supervisory
Board subject to ratification by the Ordinary Meeting of Shareholders.
ARTICLE 4 - Purpose
The purpose of the Company is, directly or indirectly, in France and abroad, to:
•
•
carry out, on its own behalf or on behalf of third parties, any research, development, studies and development of manufacturing or marketing
procedures for pharmaceutical products;
register or grant any patent or licence directly or indirectly connected with its activity; and
• more generally, carry out any transactions of any kind whatsoever including economic, legal, financial, civil or commercial transactions which
may be directly or indirectly related to the corporate purposes or to any similar, related or complementary objects.
ARTICLE 5 - Duration
Unless it is extended or wound up early, the Company shall have a duration of 99 years which starts from the day of its registration at the
Registry of Trade and Companies.
Decisions to extend the duration of the Company or to wind it up early shall be taken collectively by the shareholders.
2
TRANSLATION FOR INFORMATION PURPOSES
TITLE II
CONTRIBUTION - SHARE CAPITAL – FORM OF SHARES - RIGHTS AND OBLIGATIONS ATTACHED TO SHARES
ARTICLE 6 – Share Capital
The share capital is set at €4,609,489.90 (four million six hundred nine thousand four hundred eighty-nine euros and ninety cents). It is divided
into 92,175,723 (ninety-two million one hundred seventy-five thousand seven hundred twenty-three) ordinary shares with a nominal value of
€0.05 (zero point zero five) each, 6,494 (six thousand four hundred ninety-four) preference shares with a nominal value of €0.05 (zero point zero
five) each (hereinafter referred to as the "2016 Preference Shares"), and 7,581 (seven thousand five hundred eighty-one) preference shares with
a nominal value of €0.05 (zero point zero five) each (hereinafter the "2017 Preference Shares"), all of which are fully subscribed and paid up in
cash in their full amount.
ARTICLE 7 – Modifications of the Share Capital
I. The share capital may be increased by either the issue of new shares or an increase of the nominal value of existing shares.
New shares are paid up either in cash, by a contribution in kind, by set-off against due and payable receivables, by incorporation of profit,
reserves or issue premiums into the share capital, as a result of a merger or demerger, or further to the exercise of a right attached to securities
entitling their holder to capital, including, as the case may be, the payment of the corresponding amounts.
New shares are issued at either their nominal amount or at such amount increased by an issue premium.
A share capital increase can only be decided by an Extraordinary Meeting of Shareholders, following a report by the Executive Board containing
the information required by law.
An Extraordinary Meeting of Shareholders may, however, delegate such competence to the Executive Board pursuant to the conditions provided
by law. Within the limit of the powers so granted by an Extraordinary Meeting of Shareholders, the Executive Board shall have the powers
required to increase the share capital in one or several steps, to determine the terms and conditions thereof, to officially acknowledge the
completion thereof and to make the corresponding amendments to the articles of association.
If a share capital increase is decided by a Meeting of Shareholders, it may delegate all the powers required for the completion of the operation to
the Executive Board.
If the Executive Board is acting by virtue of a delegation of power or competence, it shall prepare a supplementary report to the Ordinary
Meeting of Shareholders held following the meeting of the Executive Board at which such action is taken.
If the share capital is increased by the incorporation of profits, reserves or issue premiums, the Extraordinary Meeting of Shareholders shall
deliberate pursuant to the conditions of quorum and majority required for Ordinary Meeting of Shareholders. In such case, the Meeting of
Shareholders may decide that rights constituting fractional shares shall be neither negotiable nor transferable and that the corresponding
securities should be sold. The proceeds of sale shall be allocated to the holders in proportion to their rights.
An increase in share capital by increasing the nominal amount of shares may only be decided by a unanimous decision of the shareholders,
unless it is the result of an incorporation of profits, reserves or issue premiums into the share capital.
Shareholders have a preferential right of subscription, in proportion to their shareholdings, to shares issued by way of cash contribution in order
to increase the share capital. Shares acquired pursuant to the exercise of this right shall be of the same category as that of the share from which
the aforesaid right arises. This also applies to shares resulting from the acquisition of securities other than shares.
Shareholders may dispose of all or part of their subscription rights during the subscription period. Such rights are negotiable if they are detached
from shares which are themselves negotiable. If this is not the case, then such subscription rights may be disposed of on the same terms as the
shares themselves.
Shareholders may waive their preferential right on an individual basis.
3
TRANSLATION FOR INFORMATION PURPOSES
The Extraordinary Meeting of Shareholders which decides to increase the share capital may cancel the preferential right to subscription pursuant
to the conditions and within the limits set by law, and shall make such decision following the issuance of reports of the Executive Board and the
Statutory Auditors, in accordance with the conditions determined by the law and regulations in force.
Shares which have not been subscribed for on an irreducible basis may be allocated to shareholders who may have subscribed on a reducible
basis for a greater number of shares than that to which they could have subscribed on a preferential basis, in proportion to their subscription
rights, and in any event, within the limit of their request, if the Extraordinary Meeting of Shareholders, or, in the case of delegation, the Executive
Board, expressly so decides.
If the subscriptions have not, in any respect whatsoever, covered the entire share capital increase, the Executive Board may exercise any one or
more of the options provided below, in the order it sees fit:
(i) limit the share capital increase to the amount of the subscriptions on the dual condition that such subscriptions cover at least three quarters
of the amount of the originally determined increase, and that such option has not been expressly prohibited by the Extraordinary Meeting
of Shareholders at the time of issue;
(ii) allocate the remaining shares unless the Extraordinary Meeting of Shareholders has decided otherwise; and
(iii) opening the subscription to the public if this has been expressly authorised by the Extraordinary Meeting of Shareholders.
If the subscriptions have not covered the entire share capital increase, or three quarters of this increase in the case of (i) above, after such
options have been exercised, the share capital increase shall not be carried out.
However, the Executive Board may in any case automatically limit the share capital increase to the amount covered by subscriptions, if
unsubscribed shares represent less than 3% of the share capital increase.
In the case of a share capital increase with or without a preferential right of subscription, the Extraordinary Meeting of Shareholders may provide
that the number of shares may be increased within thirty days of the closure of subscriptions by up to 15% of, and at the same price as for, the
original issue.
If the share capital increase produces fractional shares, shareholders with insufficient subscription or allocation rights shall be required
personally to acquire or dispose of the subscription rights necessary to obtain delivery of a whole number of new shares.
II. An Extraordinary Meeting of Shareholders (or, in the case of delegation, the Executive Board) may also (subject to the rights of creditors if
relevant) authorise or decide upon a reduction of share capital for any reason and by any procedure whatsoever. A reduction in share capital
may not, in any event, derogate from the principle of equality between shareholders.
The reduction of share capital to an amount below the legal minimum can only be decided subject to the condition precedent of a share capital
increase to at least the statutory minimum, unless the Company is transformed into a company having a different corporate form. In the event
that the foregoing principle is not complied with, any interested party may ask the courts to dissolve the Company, provided however that the
dissolution of the Company cannot be ordered if, as of the date on which the court rules on the merits, the situation has been rectified.
Subject to the legal and regulatory provisions in force, the Company may not either subscribe to or purchase its own shares. However, if an
Extraordinary Meeting of Shareholders has decided on a reduction of share capital for reasons other than due to losses, it can authorise the
Executive Board to purchase a fixed number of shares in order to cancel them.
ARTICLE 8 – Paying Up Shares
At least one quarter of the nominal value of shares subscribed for cash must be paid up on subscription together with the full amount of the issue
premium, if relevant.
The remainder must be paid up in one or more instalments, upon calls made by the Executive Board, within five years of the day on which the
share capital increase was completed.
4
TRANSLATION FOR INFORMATION PURPOSES
Subscribers will be informed of calls for funds by registered letter with confirmation of receipt sent at least fifteen days prior to the date set for
each payment.
If a shareholder does not pay the amounts due with respect to the shares for which he has subscribed, on the dates determined by the Executive
Board, interest will automatically accrue on such amounts in favour of the Company at the statutory rate defined in Article L. 313-2 of the
Monetary and Financial Code, as of the expiry of the month following the date on which they fall due and without the need for a court petition or
formal notice. Moreover, when due payments in respect of shares have not been made within thirty days of formal notice sent to the defaulting
shareholder, such shares will no longer entitle the holder to admission to shareholders’ meeting and the right to vote in shareholders’ meetings,
and shall be deducted for the calculation of the quorum. The right to dividends and the preferential right of subscription to share capital increases
attached to these shares shall be suspended. These rights shall be regained on payment of the principal and interest due in respect of the
amounts due. A shareholder can then request the payment of dividends that are not time-barred and exercise his preferential right of
subscription if the exercise period for such right has not expired.
The share capital must be fully paid up prior to any issue of additional shares to be paid up in cash.
ARTICLE 9 – Form of Shares – Administration of the Share Accounts
Ordinary shares are either in registered form or, if allowed by law, in bearer form, at the shareholder’s discretion. Fully paid-up 2016 Preference
Shares are in registered form. Fully paid-up 2017 Preference Shares are in registered form.
Ordinary shares, 2016 Preference Shares and 2017 Preference Shares are registered in individual accounts opened by the Company or any
authorised intermediary, in the name of each shareholder and kept according to the conditions and procedures provided by legal and regulatory
provisions.
The Company is authorised to rely on statutory provisions, in particular Article L. 228-2 of the Commercial Code, with respect to the identification
of the holders of bearer shares and for such purpose it may at any time request the central depositary who administers the share account, to
provide the information referred to in Article L. 228-2 of the Commercial Code, in exchange for payment. The Company is therefore, in particular,
entitled at any time to request the name and year of birth, or concerning a legal person, the corporate name and year of incorporation, the
nationality and the post address and, if applicable, email address of holders of securities which give the right to vote in Meeting of Shareholders,
either immediately or in the future, as well as the number of shares held by each of them and, as the case may be, any restrictions which may
apply to the shares.
ARTICLE 10 - Transfer of Shares
Registered shares may be transferred by transfer from one account to another.
Ordinary shares paid up in cash are freely transferable as from the completion of the share capital increase. Ordinary shares received in
exchange for contribution in kind are freely transferable as from the completion of the share capital increase, i.e. on the date of the Meeting of
Shareholders or meeting of the Executive Board, acting under delegation, which approved the contribution, in the case of an in-kind contribution
during the life of the company.
Title to ordinary shares is transferred by registration in the buyer’s account, on the date and in accordance with the conditions provided by
applicable law and, as the case may be, regulations.
Ordinary shares are freely transferable subject to legislative provisions. 2016 Preference Shares and 2017 Preference Shares are transferable
under the conditions set forth in Article 12 of these by-laws.
ARTICLE 11 – Crossing of Thresholds
Any natural person or legal entity referred to under Articles L. 233-7, L. 233-9 and L. 223-10 of the Commercial Code who gains possession,
directly or indirectly, alone or in concert, of a number of shares which represent a portion of the share capital or voting rights of the Company
equal to or greater than 1% or a multiple of such percentage, must inform the Company of the total number of shares, voting rights and
securities granting an interest in capital or voting rights which it owns immediately or would own in the future, by registered mail with confirmation
of receipt sent to the registered office of the Company within five trading days starting from the date that the aforesaid threshold(s) were crossed.
5
TRANSLATION FOR INFORMATION PURPOSES
The obligation of information provided above also applies in the same conditions when the aforesaid thresholds are crossed downwards.
Shares or voting rights in excess of the portion which should have been declared but which have not been declared pursuant to the aforesaid
conditions, are stripped of their rights to vote at shareholders’ meetings for any meeting held within two years following the date of the
regularisation of the declaration in accordance with Article L. 233-14 of the Commercial Code, if failure to make the declaration has been
observed and if one or more shareholders holding an interest of at least 5% of the share capital of the Company make such request, recorded in
the minutes of the Meeting of Shareholders.
The foregoing obligations to declare apply in addition to the threshold crossing declarations provided by legal or regulatory provisions in force.
ARTICLE 12 - Rights and Obligations attached to Shares
The share capital of the Company is divided between ordinary shares, 2016 Preference Shares and 2017 Preference Shares.
I. Rights attached to ordinary shares, 2016 Preference Shares and 2017 Preference Shares
Without prejudice to the rights attached to 2016 Preference Shares and 2017 Preference Shares, each ordinary share entitles to a portion of the
corporate profits and assets in proportion to the portion of share capital that it represents.
In addition, each ordinary share gives the right to vote and be represented at General Meetings of Shareholders pursuant to the conditions
provided by law and in these articles of association. Ordinary shares, 2016 Preference Shares and 2017 Preference Shares (including shares of
the Company that might be allocated for free in the framework of a capital increase through the incorporation of reserves, issue premiums or
profits) do not grant a double voting right pursuant to Article L. 22-10-46 of the French Commercial Code.
Shareholders holding ordinary shares, 2016 Preference Shares and 2017 Preference Shares are only liable up to the nominal amount of the
shares which they hold and any request for funds beyond that amount is prohibited.
Ownership of ordinary shares, 2016 Preference Shares and 2017 Preference Shares automatically implies agreement to be bound by the
Company’s by-laws and the decisions of the General Meeting of Shareholders.
The heirs, creditors, successors or other representatives of the shareholder holding ordinary shares, 2016 Preference Shares or 2017
Preference Shares cannot request seals to be placed on the Company’s assets and securities or request their distribution or sale by public
auction, or to interfere with its management. In order to exercise their rights, they should rely on company records and the decisions of the
General Meeting of Shareholders.
Whenever it is necessary to hold several ordinary shares, 2016 Preference Shares or 2017 Preference Shares in order to exercise a right of any
kind, in the case of an exchange, regrouping or allocation of securities, or further to a share capital increase or decrease, merger or other
corporate transaction, holders of single shares or of less than the number of shares so required will only be able to exercise such right if they
themselves collect and, as the case may be, purchase or sell, the required number of securities.
However, the Company may, in the case of an exchange of securities further to a merger or demerger, a share capital reduction, the regrouping
or division and mandatory conversion of bearer into registered shares, or the distribution of securities deducted from reserves or in connection
with a share capital reduction, or the distribution or allocation of free shares, pursuant to a decision of the Executive Board, sell any securities in
respect of which the persons entitled thereto have not requested delivery subject to having carried out the publicity formalities provided by
regulations at least two years beforehand.
As from the date of such sale, the prior securities or rights to distribution or allocation shall be cancelled as and when required, and their holders
shall only be entitled to the allocation of the net proceeds of sale of unclaimed securities.
II. 2016 Preference Shares
A. Rights attached to 2016 Preference Shares
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2016 Preference Shares and the rights of holders thereof are governed by the applicable provisions of the French Commercial Code, in
particular Articles 228-11 et seq. thereof.
The maximum number of 2016 Preference Shares that may be allocated is 7,500 shares.
Only the 2016 Preference Shares convertible into ordinary shares pursuant to the terms and conditions specified below benefit from a dividend
and are entitled to the reserves, applicable only from the date at which they become convertible. The 2016 Preference Shares that have become
convertible will bear rights as from the first day of the financial year preceding the financial year during which they become convertible. The
amount of the dividend (and, if applicable, of the portion of the reserves) to which each 2016 Preference Shares entitles is equal to the amount
due in respect of an ordinary share, multiplied by the number of ordinary share that can be received from the conversion of each 2016
Preference Shares.
2016 Preference Shares give no preferential subscription right to any capital increase or any operation granting a right on ordinary shares.
In the event of an operation taking place before the 2016 Preference Shares are converted pursuant to paragraph II.B below, the conversion
ratio will be adjusted pursuant to the provisions of Article L. 228-99, Paragraph 2, 3° and Paragraph 5 of the French Commercial Code.
With regards to the ownership of corporate assets, a 2016 Preference Shares gives right to a portion of the liquidation surplus in proportion to
the portion of share capital that it represents.
Only the 2016 Preference Shares convertible into ordinary shares pursuant to the terms and conditions specified below grant the right to vote in
the ordinary and extraordinary general meetings of holders of ordinary shares, applicable only from the date at which they become convertible.
The number of voting rights granted by each 2016 Preference Share is equal to the number of ordinary shares that can be received from the
conversion of each 2016 Preference Share.
2016 Preference Shares grant the right to vote in the special meetings of holders of 2016 Preference Shares. Holders of 2016 Preference
Shares are grouped into a special meeting for any proposed modification of the rights attached to 2016 Preference Shares. In addition, pursuant
to the provisions of Article L. 228-17 of the French Commercial Code, any proposed merger or demerger of the Company in which 2016
Preference Shares cannot be exchanged for shares with equivalent particular rights will be subject to the approval of any relevant special
meeting.
Special meetings can only make valid decisions if the holders of 2016 Preference Shares that are present or represented hold at least, when
convened for the first time, one third, and when convened for the second time, one fifth of the 2016 Preference Shares carrying the right to vote.
If the capital is modified or adjusted, the rights of holders of 2016 Preference Shares are adjusted so that their rights may be maintained
pursuant to Article L. 228-99 of the French Commercial Code. The other rights attached to 2016 Preference Shares are specified in the next
paragraph.
B. Conversion of 2016 Preference Shares into ordinary shares
The issuance of 2016 Preference Shares may only be decided in the framework of an allocation of free shares in favour of the employees and/or
executive officers of the Company, pursuant to the provisions of Articles L. 225-97-1 and L. 22-10-59 and seq. of the French Commercial Code.
2016 Preference Shares will be definitively acquired by the beneficiaries after an acquisition period of one year from their allocation by the
Executive Board and subject to the beneficiary’s presence in the Company or its consolidated subsidiaries as an employee, executive officer or
member of an executive or supervisory body or, if applicable, of the equivalent thereof in foreign law. The “Acquisition Date” is defined as the
end of the acquisition period of the Preference Shares.
However, in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth by Article L. 341-4
of the French Social Security Code (or the equivalent thereof in an applicable foreign law), the 2016 Preference Shares will be allocated
definitively prior to the Acquisition Date.
The 2016 Preference Shares become convertible in ordinary shares, either new or existing at the Company’s option, after the above-mentioned
one-year vesting period from their allocation by the Executive Board, followed by a two-year retention period from the definitive allocation (the
“Retention Period”), under the conditions set forth in Paragraphs 2 to 10 below. The “Expiry Date of the Retention Period” is defined as the
end of the Retention Period.
However, in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth by Article L. 341-4
of the French Social Security Code (or the equivalent
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thereof in an applicable foreign law), the 2016 Preference Shares will be allocated definitively prior to the Acquisition Date.
1. As from the first anniversary date of the Acquisition Date, 2016 Preference Shares will be freely transferable to a credit institution in the
framework of a pledge agreement.
Pursuant to the provisions set forth in the Article L. 225-197-1 I., Paragraph 6 of the French Commercial Code, the 2016 Preference Shares
will be freely transferable in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth
by Article L. 341-4 of the French Social Security Code, regardless of whether such invalidity occurs before or after the Acquisition Date.
2. 2016 Preference Shares may only be converted for a conversion period of six years and six months from the Expiry Date of the Retention
Period (the “Conversion Period”).
3. During the Conversion Period, each holder of 2016 Preference Shares will have the right to convert each of his 2016 Preference Shares in
ordinary shares, either new or existing (at the Company’s option). The number of ordinary shares to which the conversion of one 2016
Preference Share will entitle will be equal to the sum of (i) a number of ordinary shares determined according to the fulfilment of an internal
condition (the “Internal Condition”) and a market condition as defined below ((the “Market Condition”) (together the “Performance
Criteria”).
The fulfilment of the Performance Criteria will give the right to convert each 2016 Preference Share in a maximum of 200 ordinary shares,
i.e. a maximum of 100 ordinary shares under the Internal Condition and a maximum of 100 ordinary shares under the Market Condition.
It is specified that this conversion ratio thus determined will be adjusted in order to take into account the shares to be issued to preserve the
rights of holders of securities or other rights giving access to the share capital and holders of 2016 Preference Shares under legal and
statutory requirements and Paragraph II. above.
4. The Internal Condition in order to calculate the number of 2016 Preference Shares that can be converted will be determined as a function of
the highest of the following two alternative criteria:
a) The first criterion is a function of the consolidated collected turnover of the Company relating to a present or future partnership or
licensing agreement, cumulated over the period from 1 July 2016 to 30 June 2019 (the “Cash Revenues”):
(i)
(ii)
(iii)
If the Turnover is strictly inferior to 50 million euros, the conversion ratio under the Internal Condition will be equal to 0;
If the Turnover is superior or equal to 50 million euros and inferior to 150 million euros, the conversion ratio under the
Price Condition will be equal to :
[(Turnover-50)/100]×100
If the Cash Revenues are equal or superior to 150 million Euros, the conversion ratio under the Internal Condition will be
equal to 100;
b) The second criterion is a function of the maturity of the portfolio of drug candidates developed by the Company during the three years
before the Expiry Date of the Retention Period. “Drug candidates developed by the Company” mean Lirilumab, Monalizumab and
IPH4102. For each of these products:
(iv)
(v)
(vi)
In the event of the authorization by the competent regulatory authority the United States or in Europe for the Company or
one of its partners to carry out a Phase III trial or a clinical trial with a view to register a product, the conversion ratio
under the Internal Condition will be equal to 50;
In the event of the authorization by the competent regulatory authority in the United States or in Europe for the Company
or one of its partners to carry out two Phases III trials or clinical trials with a view to register two products and/or two
different indications for one product, the conversion ratio under the Internal Condition will be equal to 75;
In the event of an acceptance from the European Medicines Agency (EMA) in Europe or the Food and Drug
Administration (FDA) in the United States to
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examine a filing by the Company or one of its partners of a marketing authorization request, the conversion ratio under
the Internal Condition will be equal to 100.
5. The Market Condition in order to calculate the conversion ratio of 2016 Preference Shares into ordinary shares will be determined depending
on the stock market price of the Innate Pharma share:
The terms “Initial Price” mean the average closing price of the Innate Pharma share on Euronext Paris for the sixty trading days prior to the
Allocation Date by the Executive Board.
The terms “Final Price” mean the highest average closing price of the Innate Pharma share on Euronext Paris over a period of sixty
consecutive days calculated at any time during the three years prior to the Expiry Date of the Retention Period.
The terms “High Price” means the Initial Price multiplied by two.
a)
If the Final Price is strictly inferior to the Initial Price, the conversion ratio under the Market Condition will be equal to 0;
b)
If the Final Price is between (i) a value equal or superior to the Initial Price and (ii) a value inferior to the High Price, the conversion ratio
under the Market Condition will be equal to:
[(Final Price / Initial Price) –1/ ] x 100
c)
If the Final Price is equal or superior to the High Price, the conversion ratio under the Market Condition will be equal to 100.
6. The right to convert 2016 Preference Shares into ordinary shares, as well as the right to vote in the general meetings of ordinary shares
holders and the right to the dividend and to a portion of the reserves attached to 2016 Preference Shares that have become convertible
pursuant to Paragraph II. above, are subject to the condition of the beneficiary’s presence in the Company or its consolidated subsidiaries as
an employee, an executive officer or a member of an executive or supervisory body or, if applicable, of the equivalent thereof in foreign law
as at the Expiry Date of the Retention Period. In the event that such condition ceases to be fulfilled, the Company may proceed at any
moment to the redemption of 2016 Preference Shares in the conditions set forth in Paragraph 8. below. It is specified that the provisions of
this paragraph do not apply if the presence of the beneficiary in the Company or its consolidated subsidiaries ceases due to death, invalidity
or retirement.
7. The fulfilment of the Performance Criteria will be recorded in a meeting of the Executive Board as soon as practicable after the Expiry Date
of the Retention Period.
8. 2016 Preference Shares that cannot be converted into ordinary shares depending on the extent to which the Performance Criteria are
fulfilled or if the presence condition as at the Expiry Date of the Retention Period is not fulfilled, and 2016 Preference Shares that can be but
will not have been converted at the end of the Conversion Period, may be bought at any time by the Company (which is under no obligation
to do so) at their nominal value.
9. At the end of the Conversion Period, the Company will have the possibility to proceed, pursuant to applicable legal and regulatory
provisions, to the cancellation of 2016 Preference Shares that will have not been converted, including those that it will have bought. The
share capital will then be reduced accordingly, and creditors will have the right to oppose such reduction in the conditions set forth in Article
L. 225-205 of the French Commercial Code.
10. New ordinary shares resulting from the conversion of 2016 Preference Shares will be assimilated to existing ordinary shares, will bear rights
as from the first day of the financial year preceding the financial year during which they become convertible, and will grant to their holders,
starting from their delivery, all the rights attached to ordinary shares. They will be subject to a request for listing on the regulated market of
Euronext Paris on the same listing line as ordinary shares.
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By way of derogation to the above, the allocation of 2016 Preference Shares can take place after the date of their allocation by the Executive
Board and prior to the Acquisition Date, in the event of invalidity of the beneficiary corresponding to classification in the second or third
categories set forth by Article L. 341-4 of the French Social Security Code, at the beneficiary’s request.
The Executive Board will record the conversion into ordinary shares of the 2016 Preference Shares for which the conversion fulfils the conditions
set forth above, as well as the number of ordinary shares resulting from the conversions of 2016 Preference Shares that have taken place, and
will modify the by-laws accordingly, in particular with regards to the breakdown of shares by category. This competence may be delegated to the
Chairman of the Executive Board under the conditions set forth by law.
If the conversion of 2016 Preference Shares into ordinary shares results in a capital increase, such increase will be fully paid up at issue through
the incorporation of reserves, profits or issue premiums for the corresponding amount.
Shareholders will be informed of the conversions having taken place by the reports of the Executive Board and Statutory Auditors pursuant to
Article R. 228-18 of the French Commercial Code. These supplementary reports will be made available to the shareholders at the Company’s
registered office as from the date on which each meeting is convened.
III. 2017 Preference Shares
A. Rights attached to 2017 Preference Shares
2017 Preference Shares and the rights of holders thereof are governed by the applicable provisions of the French Commercial Code, in
particular Articles 228-11 et seq. thereof.
The maximum number of 2017 Preference Shares that may be allocated is 12,500 shares.
From their definitive acquisition until the date at which they become convertible, the 2017 Preference Shares grant the right to vote in the
ordinary and extraordinary general meetings of holders of ordinary shares on the basis of one voting right per 2017 Preference Share. As from
the date on which they become convertible, the number of voting rights to which each 2017 Preferred Share entitles the holder becomes equal to
the number of ordinary shares to which the conversion of each 2017 Preferred Share entitles the holder.
2017 Preference Shares grant the right to vote in the special meetings of holders of 2017 Preference Shares. Holders of 2017 Preference
Shares are grouped into a special meeting for any proposed modification of the rights attached to 2017 Preference Shares. In addition, pursuant
to the provisions of Article L. 228-17 of the French Commercial Code, any proposed merger or demerger of the Company in which 2017
Preference Shares cannot be exchanged for shares with equivalent particular rights will be subject to the approval of any relevant special
meeting.
Special meetings can only make valid decisions if the holders of 2017 Preference Shares that are present or represented hold at least, when
convened for the first time, one third, and when convened for the second time, one fifth of the 2017 Preference Shares carrying the right to vote.
From their definitive acquisition until the date at which they become convertible, the 2017 Preference Shares benefit from a dividend and are
entitled to the reserves. The amount of the dividend (and, if applicable, of the portion of the reserves) to which each 2017 Preference Shares
entitles is equal to the amount due in respect of an ordinary share. To this end, the 2017 Preference Shares will bear rights as from the first day
of the financial year preceding the financial year during which they are definitively acquired. As from the date at which they become convertible,
the amount of the dividend (and, if applicable, of the portion of the reserves) to which each 2017 Preference Shares entitles is equal to the
amount due in respect of an ordinary share, multiplied by the number of ordinary share that can be received from the conversion of each 2017
Preference Shares.
With regards to the ownership of corporate assets, a 2017 Preference Shares gives right to a portion of the liquidation surplus in proportion to
the portion of share capital that it represents.
2017 Preference Shares give preferential subscription rights to any capital increase or any operation granting a right on ordinary shares, on the
basis of one preferential subscription right per 2017 Preferred Share.
In the event of a capital depreciation or reduction, a change in the distribution of profits, an allocation of free shares, or the incorporation into the
capital of reserves, profits or share premiums, distribution of reserves or any issue of capital securities or securities giving the right to the
allocation of capital securities with a subscription right reserved for shareholders before the 2017 Preferred Shares are
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convertible under the conditions provided below, the conversion ratio will be adjusted to take into account this operation pursuant to the
provisions of Article L. 228-99, Paragraph 2, 3° and Paragraph 5 of the French Commercial Code.
B. Conversion of 2017 Preference Shares into ordinary shares
The issuance of 2017 Preference Shares may only be decided in the framework of an allocation of free shares in favour of the employees and/or
executive officers of the Company, pursuant to the provisions of Articles L. 225-97-1 and L. 22-10-59 and seq. of the French Commercial Code.
2017 Preference Shares will be definitively acquired by the beneficiaries after an acquisition period of one year from their allocation by the
Executive Board and subject to the beneficiary’s presence in the Company or its consolidated subsidiaries as an employee, executive officer or
member of an executive or supervisory body or, if applicable, of the equivalent thereof in foreign law. The “Acquisition Date” is defined as the
end of the acquisition period of the 2017 Preference Shares.
However, in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth by Article L. 341-4
of the French Social Security Code (or the equivalent thereof in an applicable foreign law), the 2017 Preference Shares will be allocated
definitively prior to the Acquisition Date. In the event of the death of the beneficiary, in accordance with the provisions of Article L. 225-197-3 of
the French Commercial Code, the heirs or successors of the beneficiary may, if they so wish, request the definitive allocation of the 2017
Preferred Shares to them within six months of the date of death. In the event of retirement, the beneficiaries will retain their right to the definitive
allocation of the 2017 Preferred Shares although they are no longer bound by an employment contract.
1.
The 2017 Preference Shares become convertible in ordinary shares, either new or existing at the Company’s option, after the above-
mentioned one-year vesting period from their allocation by the Executive Board, followed by a two-year retention period from the definitive
allocation (the “Retention Period”), under the conditions set forth in Paragraphs 2 to 13 below. The “Expiry Date of the Retention Period” is
defined as the end of the Retention Period.
As an exception to the above, in the event of a public tender or exchange offer, the final results of which are announced no later than the Expiry
Date of the Retention Period as defined above, the 2017 Preferred Shares will become convertible no later than (i) the first anniversary of the
Definitive Allocation (if such an offer occurs before such anniversary and in such a way that the Retention Period lasts at least one year), or (ii)
the date of announcement of the final results of such an offer (if such an offer occurs after the anniversary) (the "Amended Expiry Date of the
Retention Period").
2.
framework of a pledge agreement.
As from the first anniversary date of the Acquisition Date, 2017 Preference Shares will be freely transferable to a credit institution in the
Pursuant to the provisions set forth in the Article L. 225-197-1 I., Paragraph 6 of the French Commercial Code, the 2017 Preference Shares will
be freely transferable in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth by
Article L. 341-4 of the French Social Security Code, regardless of whether such invalidity occurs before or after the Acquisition Date.
In the event of the beneficiary's death, whether during the vesting period or the Retention Period, his heirs will no longer be required to comply
with this non-transferability commitment, so that the 2017 Preferred Shares for which they have requested the definitive allocation will freely
become transferable.
2017 Preference Shares may only be converted for a conversion period of six years and six months from the Expiry Date of the
3.
Retention Period (the “Conversion Period”), provided however that in the event of a public tender or exchange offer whose final results are
announced no later than the Expiry Date of the Retention Period, the Conversion Period shall commence from the Amended Expiry Date of the
Retention Period for such a period that, together with the Retention Period, it represents a total duration of eight years and six months from the
Acquisition Date.
4.
During the Conversion Period, each holder of 2017 Preference Shares will have the right to convert each of his 2017 Preference Shares
in ordinary shares, either new or existing (at the Company’s option). The number of ordinary shares to which the conversion of one 2017
Preference Share will entitle will be equal to a number of ordinary shares determined according to the fulfilment of a market condition as defined
below (the “Market Condition”).
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5.
on the relative performance of the Innate pharma share.
The Market Condition in order to calculate the conversion ratio of 2017 Preference Shares into ordinary shares will be determined based
The term “Initial Price” means the average closing price of the Innate Pharma share on Euronext Paris for the sixty trading days prior to the date
of the General Meeting.
The term “Final Price” means (i) the highest average closing price of the Innate Pharma share on Euronext Paris over a period of sixty
consecutive days, calculated at any time during the twelve months prior to the Expiry Date of the Retention Period, or (ii) in the event of a public
tender or exchange offer whose final results are announced no later than the Expiry Date of the Retention Period, the price at which this public
tender offer is made (or, in the case of a public exchange offer only, the price by transparency by applying the exchange ratio to the closing price
of the bidder's share on the day before the Amended Expiry Date of the Retention Period).
a) If the Final Price is inferior or equal to the Initial Price, the conversion ratio will be equal to 0;
b) If the Final Price is comprised between the Initial Price and € 30, the conversion ratio will be equal to:
100 x [(Final Price – Initial Price) / (30 – Initial Price)], rounded up to the nearest whole number
c) If the Final Price is equal or superior to € 30, the conversion ratio will be equal to 100.
However, if between the date of the General Meeting and the Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry
Date of the Retention Period), one of the Reference Indexes (as defined below) were to experience a Significant Variation (as defined below),
then the Executive Board will have the possibility to adjust the Initial Price and/or the Final Price to neutralize the exogenous impact of such a
Significant Variation. The Executive Board shall, in this case, appoint a recognized independent expert to assist the Executive Board in the
determination of such adjustments.
The term “Reference Indexes” means the following stock market indexes: SBF 120, CAC 40, Next Biotech and NBI (NASDAQ Biotechnology
Index). If one of these indexes were to be no longer available, the Executive Board can choose a replacement index.
The term “Significant Variation” means one or the other of the following events for the relevant index:
-
-
the average of the closing value for the index over the sixty consecutive trading days prior to the Expiry Date of the Retention Period (or, as
the case may be, the Amended Expiry Date of the Retention Period) is inferior or equal to 90% of the average of the closing value for the
index over the sixty consecutive trading days prior to the General Meeting ;
the average of the closing value for the index over a sixty consecutive trading days period at any time between the date of the General
Meeting and the Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention Period), is inferior or
equal to 80% of the average of the closing value for the index over another sixty consecutive trading days period at any time between the
date of the General Meeting and the Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention
Period).
6.
The right to convert 2017 Preference Shares into ordinary shares, as well as the right to vote in the general meetings of ordinary shares
holders and the right to the dividend and to a portion of the reserves attached to 2017 Preference Shares that have become convertible pursuant
to Paragraph III A. above, are subject to the condition of the beneficiary’s presence in the Company or its consolidated subsidiaries as an
employee, an executive officer or a member of an executive or supervisory body or, if applicable, of the equivalent thereof in foreign law as at the
Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention Period). In the event that such condition
ceases to be fulfilled, the Company may proceed at any moment to the redemption of 2017 Preference Shares in the conditions set forth in
Paragraph 8. below. It is specified that the provisions of this paragraph do not apply if the presence of the beneficiary in the Company or its
consolidated subsidiaries ceases due to death, invalidity or retirement.
7.
of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention Period).
The fulfilment of the Market Condition will be recorded in a meeting of the Executive Board as soon as practicable after the Expiry Date
8.
2017 Preference Shares that cannot be converted into ordinary shares depending on the extent to which the Market Condition is fulfilled
or if the presence condition as at the Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention
Period) is
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not fulfilled, and 2017 Preference Shares that can be but will not have been converted at the end of the Conversion Period, may be bought at
any time by the Company (which is under no obligation to do so) at their nominal value.
9.
At the end of the Conversion Period, the Company will have the possibility to proceed, pursuant to applicable legal and regulatory
provisions, to the cancellation of 2017 Preference Shares that will have not been converted, including those that it will have bought. The share
capital will then be reduced accordingly, and creditors will have the right to oppose such reduction in the conditions set forth in Article L. 225-205
of the French Commercial Code.
10.
New ordinary shares resulting from the conversion of 2017 Preference Shares will be assimilated to existing ordinary shares, will bear
rights as from the first day of the financial year preceding the financial year during which they will be converted, and will grant to their holders,
starting from their delivery, all the rights attached to ordinary shares. They will be subject to a request for listing on the regulated market of
Euronext Paris on the same listing line as ordinary shares.
By way of derogation to the above, the allocation of 2017 Preference Shares can take place after the date of their allocation by the Executive
Board and prior to the Acquisition Date, in the event of invalidity of the beneficiary corresponding to classification in the second or third
categories set forth by Article L. 341-4 of the French Social Security Code, at the beneficiary’s request.
11.
The Executive Board will record the conversion into ordinary shares of the 2017 Preference Shares for which the conversion fulfils the
conditions set forth above, as well as the number of ordinary shares resulting from the conversions of 2017 Preference Shares that have taken
place, and will modify the by-laws accordingly, in particular with regards to the breakdown of shares by category. This competence may be
delegated to the Chairman of the Executive Board under the conditions set forth by law.
12.
through the incorporation of reserves, profits or issue premiums for the corresponding amount.
If the conversion of 2017 Preference Shares into ordinary shares results in a capital increase, such increase will be fully paid up at issue
13.
Shareholders will be informed of the conversions having taken place by the reports of the Executive Board and Statutory Auditors
pursuant to Article R. 228-18 of the French Commercial Code. These supplementary reports will be made available to the shareholders at the
Company’s registered office as from the date on which each general meeting is convened.
ARTICLE 13 – Usufruct / Bare Ownership
The shares are not divisible with respect to the Company.
Co-owners of shares must arrange to be represented vis-a-vis the Company by one of them only, who will be considered as the sole holder, or
by a sole agent. In the case of disagreement, a sole agent may be appointed by the courts at the request of the most diligent co-owner.
Unless the Company has been notified of an agreement to the contrary, usufruct shareholders validly represent bare owners vis-à-vis the
Company. The right to vote is held by the usufruct shareholder in Ordinary Meeting of Shareholders and by the bare owner in Extraordinary
Meeting of Shareholders.
Unless otherwise agreed by the parties, where shares are encumbered by a usufruct interest, the preferential right to subscription attached
thereto is held by the bare owner.
TITLE III
COMPANY MANAGEMENT AND SUPERVISION
ARTICLE 14 – Management Structure
The Company is managed by an Executive Board which exercises its duties under the supervision of a Supervisory Board.
ARTICLE 15 – Composition of the Executive Board
I. The Executive Board consists of at least two members and five members at most.
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II. Members of the Executive Board are appointed by the Supervisory Board.
The members of the Supervisory Board appoint one of the members of the Executive Board as Chairman of the Executive Board for the duration
of his term of office as a member of the Executive Board. The Chairman of the Executive may be dismissed by the Supervisory Board.
Members of the Executive Board must be natural persons, failing which the appointment shall be null and void. They may be chosen from non-
shareholders. They may be French nationals or of foreign nationality.
Members of the Executive Board may be dismissed by the Supervisory Board of the Meeting of Shareholders. They may resign at any time.
Each member of the Executive Board shall be less than seventy years of age. If during their term of office this age limit is reached, the duties of
the member concerned shall end at the Ordinary General Meeting following their birthday.
If a member of the Executive Board has entered into an employment contract with the Company, his dismissal, resignation or the expiry of his
term of office as a member of the Executive Board will not cause such contract to be terminated.
The Executive Board is appointed for a term of three years. If a post is vacant, the Supervisory Board must make an appointment to fill the post
within two months.
However, the terms of office of the members of the Executive Board who were duly appointed for six years by the Supervisory Board of 13 June
2005, pursuant to the provisions of the articles of association which were then applicable, shall continue to the end of their initial term and be
renewed at the annual meeting of shareholders called to decide on the accounts of the financial year closing 31 December 2010.
The replacement is appointed for the remaining term until the renewal of the Executive Board. Members of the Executive Board may be
reappointed.
The procedure for and amount of the remuneration of each of the members of the Executive Board is set out in the instrument appointing them.
III. No member of the Executive Board may be a member of the Supervisory Board, the Sole Chief Executive Officer or the Chairman of the
Executive Board of more than one other corporation whose registered office is in metropolitan France.
Executive Board membership may only be combined with another corporate office in another company in accordance with the statutory and
regulatory restrictions in force.
IV. The Executive Board meets as often as necessary in the interests of the Company and at least once a quarter, convened by its Chairman
or an Executive Board member delegated to such effect, at the place decided by the person convening the meeting.
In order for deliberations to be valid, the three-quarters of the members of the Executive Board must be physically present. However, members
of the Executive Board who attend Executive Board meetings by video-conference or any other means of telecommunication in compliance with
the statutory and regulatory provisions applicable to corporations with a Board of Directors management structure, are deemed to be present.
Any member of the Executive Board may be represented by another member of the Executive Board at the meetings of the Executive Board or
take part in an Executive Board meeting by video-conference or any other means of telecommunication as referred to above. Each member of
the Executive Board may receive only one proxy.
Decisions are made by a majority of those present and represented. Each member has one vote. In case of equality of expressed votes either in
favour or against a decision (abstention are not took into account), the Chairman of the Executive Board has a casting vote.
At each meeting, the Executive Board may appoint a secretary who may be chosen from outside the members of the Executive Board.
V. The deliberations of the Executive Board are recorded in minutes placed or bound in a special registry.
The records are signed by the Chairman and by a member of the Executive Board who is present at the meeting, or by two of the members
present.
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When the Executive Board has to provide evidence of its deliberations, copies of extracts of the minutes to be submitted in evidence shall be
certified by the Chairman or by a member of the Executive Board delegated for this purpose. Following dissolution of the Company, they are
certified by one of the liquidators or the sole liquidator.
ARTICLE 16 - Powers of the Executive Board
I. The Executive Board has the widest of powers to act in all circumstances in the name of the Company. It exercises its powers within the
scope of the corporate purposes, subject to the powers which are expressly granted by law to the Supervisory Board and the Meeting of
Shareholders, and, as the case may be, within the limit of the restrictions on powers decided by the Supervisory Board.
In its relations with third parties, the Company is bound by the actions of the Executive Board even where these are outside of the scope of the
corporate purposes, unless it proves that the third party was aware that the actions exceeded such purposes or if it could not have failed to be
aware of this in view of the circumstances; publication of the articles of association not in itself constituting sufficient evidence thereof.
The Chairman of the Executive Board, or, as the case may be, the Chief Executive Officer, , represents the Company in its relations with third
parties. The Supervisory Board may grant the same authority to represent the Company to one or more other Executive Board members, who in
that case will be referred to as managing directors. The Chairman of the Executive Board and the managing director (s), if any, may designate
any agent which they choose to exercise specific powers.
II. The Executive Board presents a report to the Supervisory Board at least once every quarter.
The Executive Board presents the annual financial statements to the Supervisory Board within three months of the end of each financial year, for
the purposes of verification and supervision.
It must also provide the Supervisory Board with the management report which it will present to the Annual Meeting of Shareholders.
III. The Chairman of the Executive Board represents the Company in its relations with third parties.
IV. Members of the Executive Board may allocate corporate management tasks among themselves, with the approval of the Supervisory
Board. However, such distribution may not, under any circumstances, cause the Executive Board to lose its collegial nature with respect to the
management of the Company.
ARTICLE 17 – Composition of the Supervisory Board
I. The Executive Board is supervised by a Supervisory Board composed of a minimum of three members and a maximum of eighteen
members, subject to the exceptions provided by law in such respect in the event of a merger.
Members of the Supervisory Board are appointed from among natural persons or legal entities that are shareholders by the Ordinary Meeting of
Shareholders, which may dismiss them at any time. However, in the case of a merger or demerger, an Extraordinary Meeting of Shareholders
may appoint the members of the Supervisory Board.
No member of the Supervisory Board may be a member of the Executive Board.
The number of the members of the Supervisory Board who have reached seventy (70) years of age may not be greater than one third of the
members of the Supervisory Board in office. Where such limitation concerning the age of members of the Supervisory Board is exceeded, the
most elderly member of the Supervisory Board is deemed to have automatically resigned.
II. The duration of the terms of office of the members of the Supervisory Board is two years. It expires at the close of the Meeting of
Shareholders called to decide on the financial statements for the preceding year and which is held during the year in which their appointment
expires.
Members of the Supervisory Board may be reappointed.
They may be dismissed at any time by an Ordinary Meeting of Shareholders.
III. Members of the Supervisory Board may be natural persons or legal entities. Legal entities must, at the time of their appointment, designate
a permanent representative who will be subject to the
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same conditions and obligations and who will incur the same liabilities provided by law as if he were a member of the Council in his own name,
without prejudice to the joint and several liability of the legal entity he represents.
If a legal entity dismisses its representative, it must appoint a replacement at the same time. This rule also applies in the case of the death,
resignation or long-term prevention of the permanent representative from exercising his duties.
A natural person who accepts an appointment and exercises as a member of the Supervisory Board thereby has the obligation to confirm at any
time on oath, that he satisfies the limitation required by law with respect to the combining the post of member of the Supervisory Board and
member of the Executive Board of corporations.
IV. Appointments which are made by the Supervisory Board in accordance with the foregoing are subject to ratification by the next following
Ordinary Meeting of Shareholders. If such appointments are not ratified, the deliberations made and actions previously carried out by the
Supervisory Board nevertheless remain valid.
If the number of the members of the Council becomes less than the statutory minimum, the Executive Board must immediately convene an
Ordinary Meeting of Shareholders to appoint members to complete the Council.
A member of the Supervisory Board appointed to replace another member shall only remain in office for the remaining term of office of his
predecessor.
V. Each member of the Supervisory Board must own one share in the Company.
If a member of the Supervisory Board does not own the required number of shares on the date of his appointment or if, during his term of office
he ceases to own such number, he shall be deemed to have automatically resigned if he has not rectified this situation within six months.
ARTICLE 18 – Chairman and Vice-Chairman of the Supervisory Board
The Supervisory Board appoints, from among its natural person members, a Chairman and a Vice-Chairman, who are responsible for convening
the Council and chairing the proceedings of the Council.
The Chairman of Supervisory Board also prepares a report presented during the annual Ordinary Meeting of Shareholders in compliance with
the conditions provided by Articles L. 225-68 paragraph 6 and L. 22-10-20 of the Commercial Code, providing details of the conditions in which
the work of the Supervisory Board was prepared and organised, and describing the internal supervision procedures implemented by the
Company, which is attached to the Executive Board' report.
The Chairman and Vice-Chairman exercise their duties during their term of office as members of the Supervisory Board. They may be re-
elected.
The Council may also appoint a secretary who may be selected from outside the members of the Council and determine the duration of his term
of office.
ARTICLE 19 – Deliberations of the Supervisory Board
I. The Supervisory Board meets as often as necessary in the interests of the Company and at least once every quarter to review the Executive
Board' report. The meeting is convened by its Chairman or Vice-Chairman either at the registered office or at any place indicated in the notice of
meeting. A member of the Executive Board, or at least one third of the members of the Supervisory Board, may submit a reasoned request for a
Council meeting to the Chairman of the Supervisory Board by registered mail. The Chairman must convene a Council meeting not later than
fifteen days from receipt of such request. If the meeting has not been convened within this time period, the persons who made the request may
convene the meeting themselves, indicating the agenda of the meeting.
The Supervisory Board cannot deliberate validly unless at least half its members are present.
Members of the Supervisory Board may participate and vote at Council meetings by video-conference or other means of telecommunication in
accordance with the statutory and regulatory provisions applicable thereto. However, voting by video-conference is not allowed for decisions
concerning the verification and supervisions of annual financial statements. Voting by video-conference is allowed for decisions concerning the
verification and supervisions of half-yearly or quarterly financial statements.
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In accordance with Article L. 225-82 of the French Commercial Code, the decisions falling within the scope of the Council’s own powers provided
by the second paragraph of Article L.225-65, the second paragraph of Article L.225-68, Article L. 225-78 and the III of Article L.225-103 of the
French Commercial Code as well as the decisions relating to the transfer the registered office in the same department may be adopted by
written consultation of the Council’s members.
Any member of the Supervisory Board may be represented by another member of the Supervisory Board at Supervisory Board deliberations.
Each member of the Supervisory Board may receive only one proxy.
Decisions are made by a majority of those present or represented, and each member has one vote.
In the event of a tie, the Chairman has the tiebreaking vote.
Evidence of the number of members of the Supervisory Board in office and their appointment may be validly provided with respect to third
parties on the simple basis of the statement in the minutes of each meeting of the names of the members that are in attendance, represented or
absent.
II. The deliberations of the Supervisory Board are recorded in minutes kept in a special register.
Such minutes are signed by the Chairman of the meeting and by at least one member of the Supervisory Board. If the Chairman of the meeting
is unable to do so, the minutes are signed by at least two members of the Supervisory Board.
Copies or extracts of such minutes are validly certified by the Chairman of Vice-Chairman of the Supervisory Board, a member of the Executive
Board or an agent duly appointed for the purpose thereof.
After the Company is wound up, copies or extracts shall be certified by one of the liquidators of by the sole liquidator.
ARTICLE 20 – Powers of the Supervisory Board
I. The Supervisory Board exercises constant supervision of the management of the Company by the Executive Board.
II. The Supervisory Board may carry out verifications or supervision which it considers suitable at any time during the year, and may request
documents to be provided to it which it considers useful for the carrying out of its duties.
It receives a report from the Executive Board at least once every quarter.
The Executive Board presents the annual financial statements and a written management report to the Supervisory Board within three months of
the end of each financial year, for the purposes of verification and supervision.
The Supervisory Board presents the Ordinary Annual Meeting of Shareholders with its comments on the report of the Executive Board and the
financial statements for the year.
The Supervisory Board also exercises the attributions expressly granted to it by statute.
The Supervisory Board may appoint one or more of its members as special agents for one or more determined purposes.
The Supervisory Board may create committees in charge of reviewing issues on which it or its Chairman wish an opinion.
Upon delegation of the Shareholder’s Extraordinary Meeting, the Supervisory Board makes the necessary changes to the Articles of Association
to bring them into compliance with the legal and regulatory provisions, subject to the approval of such changes by the next Shareholders’
Extraordinary Meeting.
ARTICLE 21 – Remuneration of Members of the Supervisory Board
I. The Meeting of Shareholders may allocate a fixed annual amount in directors' fees to members of the Supervisory Board in remuneration for
their duties. The Supervisory Board may distribute such remuneration among its members as it sees fit.
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II. The Supervisory Board may also allocate exceptional remuneration for missions entrusted to its members. In such case, the remuneration is
subject to the provisions of Article 22 hereafter.
III. Members of the Supervisory Board may not receive any other fixed or exceptional remuneration other than those referred to in paragraphs I
and II above.
ARTICLE 22 – Regulated Agreements
I. Any agreement entered into between the Company and any of the members of the Executive Board or Supervisory Board, a shareholder
with more than 10% of the voting rights or, in the case of a corporate shareholder, the company controlling it within the meaning of Article L. 233-
3 of the Commercial Code with more than 10% of the voting rights, is subject to the prior approval of the Supervisory Board.
The same rule applies to agreements in which one of the persons referred to in the previous paragraph has an indirect interest or for which it has
dealt with the Company through an intermediary.
Agreements between the Company and an enterprise are also subject to prior approval if one of the members of the Executive Board or the
Supervisory Board of the Company is the owner, a partner with unlimited liability, a manager, director, director general, member of the Executive
Board or Supervisory Board of such enterprise, or more generally is in charge of managing such enterprise.
The prior approval of the Supervisory Board is substantiated by justifying of the interest of entering the agreement for the Company, in particular
by specifying the financial conditions that apply thereto.
The preceding provisions do not apply to agreements entered into in the ordinary course of business and under normal conditions, nor to
agreements entered into between two companies, one of which holds, directly or indirectly, the entire share capital of the other company,
excluding if applicable the minimum number of shares necessary to comply with the requirements of Article 1832 of the French Civil Code or
Articles L. 225-1, L. 22-10-2 and L. 226-1 of the French Commercial Code.
The member of the Executive Board or Supervisory Board concerned must inform the Supervisory Board as soon as be becomes aware of an
agreement subject to approval. If he is a member of the Supervisory Board, he cannot take part in the vote of approval.
The Chairman of the Supervisory Board must inform the statutory auditor of all authorised agreements to and submit them for approval to the
Meeting of Shareholders.
II. The statutory auditors present a special report on such agreements to the Meeting of Shareholders which will decide on these agreements.
The person concerned cannot take part in the vote and the shares he holds are not included in the calculation of the quorum or the majority.
The agreements entered into and authorized in previous years and which have continued during the last year shall be reviewed annually by our
Supervisory Board and must be reported to our statutory auditors for the purpose of establishing their report.
ARTICLE 23 – Panel of Observers
An Ordinary Meeting of Shareholders may appoint one or more observers at its discretion, who may be natural persons or legal entities, and
may be shareholders or non-shareholders, for a term of office expiring at the shareholders meeting convened to decide on the financial
statements for the preceding financial year after the first anniversary date of their appointment. This appointment may be renewed an unlimited
number of times.
Observers that are legal entities are represented by their legal representatives or by any natural person duly authorised for this purpose.
Observers are convened to and take part in all the meetings of the Supervisory Board and have a consultative vote, according to the same
methods as those that apply to members of the Supervisory Board. They are entitled to the same information and communication as members of
the Supervisory Board and are bound by the same obligations of confidentiality and discretion.
ARTICLE 24 - Obligation of Confidentiality and Liability
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I. Members of the Executive Board and the Supervisory Board, as well as any person convened to attend the meetings of these bodies, are
bound by complete discretion with respect to confidential information and provided as such by the Chairman of the Executive Board or as the
case may be, the Supervisory Board.
II. Members of the Executive Board and the Supervisory Board are liable towards the Company or third parties, in accordance with their
respective attributions, for breaches of statutory provisions governing limited liability companies, breaches of these articles of association and
faults committed in the exercise of their duties, subject to the conditions and the sanctions provided by the legislation in force.
TITLE IV
STATUTORY AUDITORS
ARTICLE 25 - Statutory Auditors
One or more statutory auditors perform an audit of the Company, in the accordance with statutory requirements.
The Statutory Auditors are appointed by the Ordinary Meeting of Shareholders on proposal by the Supervisory Board, for six financial years.
They may always be re-appointed. They may be dismissed by the aforesaid Meeting of Shareholders in the event that they commit a fault or are
prevented from carrying out their duties.
If the Meeting of Shareholders does not appoint the Statutory Auditor(s) or if one or more appointed Statutory Auditors are prevented or refuse to
carry out their duties, they, or their replacement(s), are appointed by an order of the Commercial Court with jurisdiction over the area in which the
Company is based on petition of any interested person, with the Executive Board duly convened.
The Statutory Auditor appointed by the Meeting of Shareholders to replace another shall only remain in office for the remaining term of office of
his predecessor. If the Meeting of Shareholders appoints several Statutory Auditors, they may act together or separately but they must draft a
joint report.
One or more shareholder(s) with a shareholding of at least 5% may apply to the courts to dismiss one or more of the Statutory Auditors
appointed by the Meeting of Shareholders and request the appointment of one or more Statutory Auditors who will exercise their duties instead
of them. If their request is granted, the Statutory Auditors so appointed shall exercise their duties until the Statutory Auditors appointed by the
Meeting of Shareholders take up their posts.
The Statutory Auditors certify that the annual financial statements are in due form and give a true and fair view of the result of the operations of
the preceding financial year, and of the financial situation and assets and liabilities of the Company at the end of that financial year.
Their permanent role, without exercising any interference with management, is to verify the company's worth and financial documents and to
ensure that its accounting is in compliance with the rules in force. They also verify that the information contained in Executive Board
management report and in the documents provided to shareholders on the financial situation and annual accounts is fair and consistent with the
annual accounts. The Statutory Auditors ensure that equality among shareholders has been complied with.
The Statutory Auditors may, at any time during the year, carry out any verification or supervision they consider suitable and collect any
information from third parties who have carried out assignments on behalf of the Company.
The Statutory Auditors prepare a report for the Meeting of Shareholders on the performance of their assignment. The Statutory Auditors attach a
report to the aforesaid report, presenting their comments on the report referred to in Article L. 225-68 paragraph 6 of the Commercial Code with
respect to internal supervision procedures relating to the preparation and treatment of accounting and financial information. They also prepare a
special report on the agreements referred to in Article 22 of these Articles of Association.
The Statutory Auditors are invited to attend the Executive Board meeting at which the financial statements for the preceding financial year are
approved, as well as to all Meeting of Shareholders. They may convene a Meeting of Shareholders under the conditions provided by statute.
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TITLE V
SHAREHOLDERS’ MEETINGS
A –Provisions Applying
to all Meetings of Shareholders
ARTICLE 26 - Meetings
A duly constituted Meeting of Shareholders represents all the shareholders.
Its deliberations effected in accordance with the law and the articles of association are binding on all the shareholders, even those who were
absent, dissenting or without legal standing.
There are three kinds of meeting, depending on the purpose of the proposed resolutions:
- Ordinary Meeting of Shareholders,
- Extraordinary Meeting of Shareholders,
- Special Meeting of Shareholders of holders of a specific category of share.
ARTICLE 27 – Convening Meetings
Shareholders’ Meetings are convened by the Executive Board, or failing that, the Supervisory Board. They may also be convened by the
Statutory Auditor(s) or by an agent appointed by the court in accordance with the procedures and conditions provided by statute.
During liquidation, Shareholders’ Meetings are convened by the liquidator.
Shareholders’ Meetings are held at the registered office, in any other place of the same department indicated in the convocation notice or in
Paris.
Notice of the meeting is published in the Bulletin des Annonces Légales Obligatoires (BALO) (Mandatory Legal Notice Bulletin) at least thirty-five
days prior to which a meeting is held. In addition to the information relating to the Company, it also, in particular, sets out the agenda of the
Meeting and the draft text of the resolutions which will be proposed. Subject to particular legal requirements, requests for the inclusion of draft
resolutions on the agenda must be sent at the latest on the publication date of the notice of the meeting and up to twenty-five days prior to the
Shareholders’ Meeting; this deadline is twenty days from the publication date of the notice when the notice is published more than forty-five days
prior to the Shareholders’ Meeting.
Subject to particular legal requirements, invitations to meetings are made at least fifteen days prior to the date of the meeting by a notice
published in both the legal notice journal of the administrative department in which the registered office is located and in the Bulletin des
Annonces Légales Obligatoires (BALO).
However, holders of registered shares having held shares for at least one month as at the date of the last of the published notices must be
convened individually by ordinary letter (or by registered letter if they have requested this and advanced the costs) sent to their last known
address. Such notice may also be sent by electronic communication instead of such postal dispatch, to any shareholder who has so requested
beforehand by registered mail return receipt requested, in accordance with statutory and regulatory requirements, indicating his email address.
Such shareholder may send a request to the Company at any time by registered letter with acknowledgement of receipt for the aforementioned
method of telecommunication to be replaced by postal dispatch in the future.
The invitation should contain the following information:
-
-
-
-
the identity of the Company;
the date, time and place of the meeting;
the nature of the meeting; and
the agenda of the meeting.
It must also state the conditions in which shareholders may vote by correspondence and the place and conditions pursuant to which they may
procure forms for voting by correspondence.
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The invitation may be sent, as the case may be, together with proxy form and a correspondence voting form, pursuant to the conditions set out in
Article 30. I of these Articles of Association, or with a correspondence voting form only, pursuant to the conditions set out in Article 30. II of these
Articles of Association.
If a Shareholders’ Meeting has not been able to deliberate due to the required quorum not being reached, a second Shareholders’ Meeting is
convened with at least ten days’ advance notice, in the same manner as the first meeting. The invitation notice or letters for such second
Shareholders’ Meeting state the date and agenda of the first meeting.
ARTICLE 28 - Agenda
The agenda of a Meeting of Shareholders is decided by the person convening the meeting.
One or more shareholders representing at least the percentage of share capital determined by statute and acting pursuant to statutory conditions
and within statutory time periods, may request items or draft resolutions to be included on the agenda of the Meeting by registered mail with
confirmation of receipt.
The Meeting of Shareholders cannot deliberate on an issue which has not been included on the agenda and such agenda cannot be modified on
second convocation of a Meeting of Shareholders. The Meeting of Shareholders may, however, in any circumstances, dismiss one or several
members of the Supervisory Board and effect their replacement.
ARTICLE 29 – Participation of Shareholders in Meeting of Shareholders
All shareholders are entitled to attend Shareholders’ Meetings and take part in deliberations:
(i) either personally; or
(ii) by giving a proxy to another shareholder or to his spouse; or
(iii) by sending a blank proxy to the Company; or
(iv) by voting by correspondence; or
(v) by videoconference or by another means of telecommunication in accordance with the applicable statutory and regulatory provisions.
Participation in shareholders’ meetings in any manner is dependent on the registration or inscription of shares under the conditions and within
the deadlines set in the current regulations.
The final date for the return of correspondence voting forms is determined by the Executive Board and indicated in the notice of the meeting
published in the Bulletin des Annonces Légales et Obligatoires (BALO). This date cannot be prior to three days before the Shareholders’
Meetings.
If a shareholder is present at a Shareholders’ Meeting, any prior vote by correspondence will have no effect for the purposes of the aforesaid
Shareholders’ Meeting.
If both a proxy form and a correspondence voting form are returned, the proxy form will be taken into account, subject to the votes expressed in
the correspondence voting form.
ARTICLE 30 – Representation of Shareholders
I. Any shareholder may be represented at Meeting of Shareholders by another shareholder, his spouse, his partner in a civil union or any other
natural or legal person of his choice through a proxy form sent to the shareholder by the Company:
- either at his request, sent to the Company by any means. This request must have been received at the registered office at least five days
prior to the Meeting of Shareholders; or
- at the initiative of the Company.
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The following must be attached to any proxy form sent to shareholders by the Company, for each Meeting of Shareholders:
- the agenda of the Meeting;
- the draft resolutions presented by the Executive Board and, as the case may be, by shareholders pursuant to statutory conditions;
- a brief summary of the Company’s situation during the preceding financial year together with a table indicating the results of the Company
over the past five financial years, presented in accordance with regulatory provisions;
- a form requesting the documents to be sent as provided by the regulations in force; and
- a form for correspondence voting.
A proxy given by a shareholder is only valid for one Meeting of Shareholders or for Meetings of Shareholders convened successively with the
same agenda. A proxy may also be given for two Meeting of Shareholders, one Ordinary and the other Extraordinary, which are held on the
same day or within fifteen days.
II. Any shareholder may vote by correspondence through a voting form sent to him by the Company:
- at his request, sent to the Company by registered mail with confirmation of receipt. This request must have been received at the registered
office at least six days prior to the Meeting of Shareholders; or
- at the initiative of the Company; or
- in an appendix to the proxy form in the conditions set out in Article 30. I above.
The following must be attached to any correspondence voting form sent to shareholders by the Company:
- the draft resolutions proposed together with a summary of the reasons and an indication of the author of the resolutions;
- a form for sending the documents as provided by the regulations in force; and
- a brief summary of the Company’s situation during the preceding financial year together with a table indicating the results of the Company
over the past five financial years, presented in accordance with regulatory provisions, in the case of an Ordinary Meeting of Shareholders
deciding on the accounts.
A correspondence voting form sent by a shareholder is only valid for one Meeting of Shareholders or for Meeting of Shareholders convened
successively with the same agenda.
ARTICLE 31 – Attendance Register
An attendance register is kept for each Meeting of Shareholders containing the information required by law.
This attendance register, duly signed by the shareholders that are present, the agents and shareholders participating by video-conference or by
another means of telecommunication in compliance with statutory and regulatory requirements, and to which are attached the powers of attorney
granted to each agent and, as the case may be, the correspondence voting forms, is certified by the secretariat of the Meeting of Shareholders.
Meeting of Shareholders are chaired by the Chairman of the Supervisory Board, the Vice-Chairman or a member of the Supervisory Board
delegated for such purpose by the aforesaid Council. Failing that, the Meeting of Shareholders elects its Chairman itself.
The two shareholders present with the greatest number of votes both on in their own right and as agents, and who accept such assignment,
shall act as vote tellers.
The secretariat composed as such appoints a Secretary, who may be selected from outside of the shareholders.
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ARTICLE 32 – Quorum
In Ordinary and Extraordinary Meeting of Shareholders, the quorum is calculated on the basis of all the shares making up the share capital and,
in Special Meeting of Shareholders, all the shares of the relevant category, less shares stripped of their voting rights pursuant to statutory
provisions.
The voting rights attached to shares are proportional to the portion of share capital which they represent. Each share entitling its holder to an
interest in the capital or to beneficial enjoyment carries one vote.
In the case of a vote by correspondence, only completed forms received by the Company at least three days prior the Meeting of Shareholders
shall be taken into account for the calculation of the quorum.
Forms which do not indicate which way to vote, or which indicate an abstention, are considered as negative votes.
ARTICLE 33 - Minutes
The deliberations of the Meeting of Shareholders are recorded in minutes drafted in a special register held at the registered office and signed by
the members of the secretariat.
Copies or extracts of such minutes are certified either by the Chairman of Vice-Chairman of the Supervisory Board or by a member of the
Executive Board or by the Secretary of the Meeting. If the Company is wound up, they may be validly certified by the liquidator(s).
ARTICLE 34 – Communication of Documents
Any shareholder is entitled to receive, and the Executive Board is bound to send or provide him with the documents he requires to come to an
informed decision and have an informed judgement on the management and running of the Company.
The nature of these documents and the conditions in which they are sent or provided to shareholders are determined by regulations in force.
In exercising its right to receive documents, each shareholder or his agent may be assisted by a court-registered expert.
The exercise of the right to receive documents includes the right to make copies, except with respect to inventories.
B – Provisions Specific to
Ordinary Meetings of Shareholders
ARTICLE 35 – Ordinary Meeting of Shareholders
An Ordinary Meeting of Shareholders may make any decision other than one which directly or indirectly modifies the Articles of Association.
Ordinary Meetings of Shareholders are held at least once a year, within six months of the end of each financial year, to decide on the financial
statements for such financial year, subject to the extension of such period by an order of the President of the Commercial Court on petition from
the Executive Board.
They are called on an extraordinary basis every time it may be in interests of the Company to do so.
When convened for the first time, Ordinary Meetings of Shareholders can only make valid decisions if the shareholders that are present,
represented or voting by correspondence hold at least one fifth of the shares carrying the right to vote.
When convened for the second time, there is no quorum requirement if the original agenda has not been modified.
Ordinary Meetings of Shareholders make decisions on the basis of the majority of the votes of the shareholders that are present, represented or
voting by correspondence.
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C - Provisions Specific to
Extraordinary Meetings of Shareholders
ARTICLE 36 – Extraordinary Meetings of Shareholders
An amendment to any provision of the Articles of Association and, in particular, the transformation of the Company into another form of company
may only be decided by an Extraordinary Meeting of Shareholders. An Extraordinary Meeting of Shareholders cannot, however, increase the
undertakings of shareholders, subject to operations as a result of regrouping shares in a due and proper manner.
When convened for the first time, Extraordinary Meeting of Shareholders can only make valid decisions if the shareholders that are present,
represented or voting by correspondence hold at least a quarter of the shares carrying the right to vote, and when convened for the second time,
one fifth of the shares carrying the right to vote. If the latter quorum is not obtained, the second Meeting may be adjourned for a maximum of two
months from the date at which it was convened.
An Extraordinary Meeting of Shareholders makes decisions on the basis of a majority of two-thirds of the votes held by shareholders that are
present, represented or voting by correspondence or participating in the Meeting by video-conference or another method of telecommunication
in accordance with statutory and regulatory provisions.
By statutory derogation from the preceding provisions, if the share capital is increased by the incorporation of profits, reserves or issue
premiums, the Extraordinary Meeting of Shareholders may make decisions at the quorum and majority required for Ordinary Meeting of
Shareholders.
Moreover, where an Extraordinary Meeting of Shareholders is convened to deliberate on the approval of a contribution in kind or the grant of a
specific benefit, the shares of the contributing party or beneficiary shall not be taken into account in calculating the majority. The contributing
party or beneficiary cannot vote either in his own right or as an agent.
D - Provisions Specific to
Special Meetings of Holders of a Category of Shares
ARTICLE 37 – Special Meeting
If there are several categories of shares, the rights attached to shares of any such category cannot be modified in any way without having been
duly voted upon by an Extraordinary Meeting of Shareholders open to all shareholders and also having been voted upon by a Special Meeting
open only to holders of the relevant category of shares.
When convened for the first time, Special Meetings of Shareholders can only make valid decisions if the shareholders that are present,
represented, voting by correspondence or taking part in the Meeting by video-conference or any other means of telecommunication in
accordance with statutory or regulatory provisions, hold at least a third of the shares carrying the right to vote, and when convened for the
second time, one fifth of the shares carrying the right to vote and for which a modification of the attached rights is being proposed. Failing that,
the second meeting may be adjourned by a maximum of two months from the date at which it was convened.
Special Meetings of Shareholders make decisions at a two-thirds majority of the votes of shareholders that are present or represented.
TITLE VI
FINANCIAL YEAR – ANNUAL FINANCIAL STATEMENTS
APPROPRIATION AND DISTRIBUTION OF PROFITS
ARTICLE 38 – Financial Year
The financial year begins on 1 January of each year and ends on 31 December.
st
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ARTICLE 39 - Accounts
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TRANSLATION FOR INFORMATION PURPOSES
Accounts of corporate operations are kept in due form in accordance with the law and usual business practice.
At the end of each financial year, the Executive Board shall draw up an inventory of the various assets and liabilities as at such date. It shall also
prepare the balance sheet describing the assets and liabilities, the income statement summarising the income and charges for the financial year
and the notes to the financial statements which complete and comment on the information provided in the balance sheet and income statement.
The Executive Board shall present such documents to the Supervisory Board within three months of the end of the financial year, for the
purposes of verification and supervision.
It shall prepare the management report on the situation of the Company during the preceding financial year.
All such documents shall be made available to the Statutory Auditors pursuant to the conditions specified by law.
ARTICLE 40 – Appropriation of Profits
The income statement which summarises the income and charges for the financial year, after depreciation and provisions have been deducted,
indicates the profit or loss of the financial year by setting forth the difference between these two amounts.
Five per cent. of the year's profit less previous losses, as the case may be, is allocated to the statutory reserve. Such allocation shall no longer
be necessary once the aforesaid reserve reaches one tenth of the share capital, but will become necessary again if for any reason whatsoever
the reserve falls below one tenth.
Distributable earnings consist of the net income of the financial year, less previous losses and amounts added to the reserve in accordance with
the law or the Articles of Association, plus retained earnings.
Moreover, the Meeting of Shareholders may decide to distribute amounts deducted from the reserves which are available to it, expressly
indicating the reserves from which the withdrawals are to be made. However, dividend is paid out in priority from the distributable income of the
financial year.
Except in the case of a reduction in share capital, no distribution may be made to shareholders if shareholders’ equity is, or would become as a
result of such distribution, less than the share capital plus the reserves which the law or the Articles of Incorporation do not allow to be
distributed.
After the financial statements have been approved and the existence of distributable income has been acknowledged, the Meeting of
Shareholders shall determine the part to be allocated to shareholders as dividends, in proportion to the number of shares held by each.
However, after the allocation of the amounts required by law to the reserve, the Meeting of Shareholders may decide to allocate all or part of the
distributable income to a retained earnings account or to any general or special reserve account.
Any losses are deducted from profits from previous years until such losses are extinguished or they are carried over.
The Executive Board may decide to distribute interim dividends prior to the approval of the financial statements of the financial year, pursuant to
the conditions determined or authorised by law. The amount of such instalments cannot exceed the amount of earnings as defined by law.
ARTICLE 41 - Dividends
I. The procedure for the payment of dividends is determined by the Meeting of Shareholders or, failing that, by the Executive Board. However,
payment must be made within a maximum of nine months after the end of the financial year, unless such period is extended by court decision.
Shareholders may not be required to reimburse any amount of dividends unless the distribution of dividends was in violation of law.
Claims for dividends made more than five years after they have been made available for payment shall time-barred.
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TRANSLATION FOR INFORMATION PURPOSES
II. The Meeting of Shareholders convened to approve the financial statements for the financial year may grant shareholders the option of
dividends or interim dividends being paid in cash or in shares issued by Company, in whole or in part, in accordance with the conditions set out
or authorised by law.
TITLE VII
SHAREHOLDERS’ EQUITY FALLING BELOW ONE-HALF OF THE SHARE CAPITAL
ARTICLE 42 – Early Winding Up
If the Company's shareholders' equity falls below one-half of the share capital as a result of losses recorded in the financial statements, the
Executive Board must convene an Extraordinary Meeting of Shareholders within four months of the approval of the financial statements which
recorded such loss to decide whether to wind up the Company.
If it is not decided to wind up the Company, the share capital must be reduced by an amount equal to the recorded losses, within a period
determined by law, if shareholders’ equity has not reached at least one-half the amount of the share capital again within such period.
In either case, the decision of the Meeting of Shareholders shall be published according to regulatory conditions.
The reduction of share capital to an amount below the statutory minimum can only be decided subject to the condition precedent of a share
capital increase to at least the statutory minimum.
If the provisions of one or more of the foregoing paragraphs are not complied with, any interested party may apply to the courts for the Company
to be wound up. This rule also applies if the shareholders are unable to deliberate validly.
However, the court may not wind up the Company if on the day of issue of a judgment on the substance of the matter the situation has been
rectified.
TITLE VIII
WINDING-UP – LIQUIDATION
ARTICLE 43 – Winding Up
The Company shall be wound up on expiry of the term determined in the Articles of association, unless this is extended, or pursuant to a
decision of an Extraordinary Meeting of Shareholders.
The Company may also be wound up at the request of any interested party, where the number of shareholders has dropped to under seven for
more than one year. In such case, the court may grant the Company a maximum of six months in which to rectify the situation. It cannot wind up
the Company if on the day it issued judgment on the substance of the matter, the situation has been rectified.
The Company shall be in liquidation as from the date on which it is wound up, for any reason whatsoever.
Winding up will cause the terms of office of members of the Executive Board to terminate. The Supervisory Board and Statutory Auditors shall
continue to operate.
Meeting of Shareholders shall retain the same powers as during the life of the company.
The Meeting of Shareholders which decides to wind up the company shall determine the procedure for liquidation and appoint one or more
liquidators and determine their powers. The liquidator(s) shall exercise their duties in accordance with the law in force.
The Company shall continue to have legal personality for the purposes of and until the completion of its liquidation. However, its corporate name
should be followed by the words "Company in liquidation" as well as the name(s) of the liquidator(s) on any instruments or documents issued by
the Company to third parties.
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TRANSLATION FOR INFORMATION PURPOSES
Shares remain negotiable until the completion of liquidation.
After liabilities have been cleared, the net proceeds of liquidation are applied to the full repayment of paid up non-depreciated shares.
Any surplus shall be distributed among the shareholders in proportion to the number of shares held by each of them.
TITLE IX
DISPUTES
ARTCLE 44 - Disputes
Any dispute which may arise during the life or liquidation of the Company, either between shareholders and the Company or between the
shareholders themselves, concerning corporate matters, shall be resolved in accordance with the law and submitted to the jurisdiction of the
competent courts at the registered office.
To this effect, in the case of a dispute, any shareholder is bound to designate an address for service of process within the area of jurisdiction of
the court of the Company's registered office, any writs or notifications shall be validly issued to that address.
If an address for service of process is not designated, writs or notifications shall be validly issued to the Public Prosecutor of the Court of First
Instance in the area of the registered office.
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DESCRIPTION OF SECURITIES
REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT
Introduction
Exhibit 2.3
As of December 31, 2024, Innate Pharma (“Innate,” “we,” “us,” “Company,” and “our”) had the following series of securities registered
pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Title of Each Class
Trading Symbol
Name of each exchange on which registered
American Depositary Shares, each representing one
ordinary share, par value €0.05 per share
Ordinary shares, par value €0.05 per share*
IPHA
*
NASDAQ Global Select Market
NASDAQ Global Select Market*
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*Not for trading, but only in connection with the registration of American Depositary Shares representing such ordinary shares.
We have one class of shares, which trade on Compartment B of the regulated market of Euronext Paris under the symbol “IPH”. American
Depositary Shares (“ADSs”), each representing one ordinary share, par value €0.05 per share of Innate, have been available in the United States
through an American Depositary Receipt (“ADR”) program established pursuant to a Deposit Agreement, dated as of October 21, 2019, as may
be amended and supplemented from time to time, between Innate, Citibank, N.A. (“Citibank”), as depositary, and the holders and beneficial
owners of ADSs (the “deposit agreement”). Our ADSs trade on the NASDAQ Global Select Market, or NASDAQ under the symbol “IPHA” and
are evidenced by American Depositary Receipts, or ADRs, which are issued by Citibank.
This exhibit contains a description of the rights of (i) the holders of ordinary shares and (ii) ADS holders. Shares underlying the ADSs are held
by Citibank, the depositary, and holders of ADSs will not be treated as holders of the shares. The following summaries are not intended to be
exhaustive and, in the case of our ordinary shares, such summary is subject to, and qualified in its entirety by, our bylaws (statuts), an English
translation of which has been filed as an exhibit to Innate’s annual report on Form 20-F for which this exhibit is provided and by French law and
in the case of our ADSs, such summary is subject to, and qualified in its entirety by the terms of the deposit agreement. Such summaries do not
address all of the provisions of the bylaws or French law or of the deposit agreement, and do not purport to be complete.
Capitalized terms not otherwise defined in this exhibit have the meanings given to them in Innate’s annual report on Form 20-F for which this
exhibit is provided.
1
General
Description of Share capital
The following description of our share capital summarizes certain provisions of our bylaws. Such summaries do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all of the provisions of our bylaws, a copy of which has been filed as an exhibit
attached to Innate’s annual report on Form 20-F of which this exhibit forms a part.
As of December 31, 2024, our outstanding share capital consisted of a total of 83,830,336 ordinary shares with a nominal value of €0.05 per
share and 14,075 preferred shares (6,494 “2016” free preferred shares and 7,581 “2017” free preferred shares) with a nominal value of €0.05 per
share. As of December 31, 2024, we had the following equity warrants, redeemable share subscription warrants, and free shares and convertible
preferred shares outstanding:
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•
•
•
•
167,460 ordinary shares issuable upon the exercise of share warrants (BSA) outstanding at a weighted average exercise price of € 7,84
per ordinary share;
1,045,722 ordinary shares issuable upon the exercise of redeemable share warrants (BSAAR) outstanding at an exercise price of € 7.20
per ordinary share;
787,220 ordinary shares issuable upon conversion of 6,494 free preferred shares (AGAP 2016);
618,760 ordinary shares issuable upon the vesting of 618,760 free shares (AGA);
100,000 ordinary shares issuable upon the exercise of stock options (Stock Options) outstanding at a weighted average exercise price of
€2.18 per ordinary share;
1,622,500 ordinary shares issuable upon definitive acquisition of 1,622,500 free performance shares 2022 (AGA de Performance 2022),
assuming all performance and presence conditions are met;
2,023,750 ordinary shares issuable upon definitive acquisition of 2,023,750 free performance shares 2023 (AGA de Performance 2023),
assuming all performance and presence conditions are met; and
2,287,900 ordinary shares issuable upon definitive acquisition of 2,287,900 free performance shares 2024 (AGA de Performance 2024),
assuming all performance and presence conditions are met.
Under French law, our bylaws set forth only our issued and outstanding share capital as of the date of the bylaws. Our fully diluted share capital
represents all issued and outstanding ordinary shares, as well as all potential ordinary shares which may be issued upon exercise of outstanding
equity warrants and redeemable share subscription warrants and following the vesting of free shares, as approved by our shareholders and
granted by our Executive Board.
As of December 31, 2024, our share capital as set forth in our bylaws is €4,192,220.55. An increase of our share capital may only be approved
by an extraordinary meeting of shareholders or as delegated to the Executive Board by an extraordinary meeting of shareholders.
2
Shareholder Authorizations Regarding Share Capital
At a combined general meeting of shareholders held on May 23, 2024, our Executive Board received, in particular, the following authorizations
from shareholders:
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•
delegation of authority to the Executive Board for the purpose of issuing ordinary shares and/or of securities giving access to the share
capital of Innate, without shareholders’ preferential subscription rights, through a public offering;
delegation of authority to the Executive Board for the purpose of issuing, without shareholders’ preferential subscription rights, ordinary
shares of Innate and/or securities giving access to the share capital of Innate, through a “private placement” offering referred to in 1° of
Article L.411-2 of the French Monetary and Financial Code;
delegation of authority to determine the issuance price, up to the limit of 10% of the share capital per annum, of the ordinary shares
and/or of securities giving access to the share capital of Innate, in the event of the suppression of shareholders’ preferential subscription
rights;
delegation of authority to the Executive Board for the purpose of issuing of ordinary shares and /or of securities giving access to the
share capital of Innate, without shareholders’ preferential subscription rights and reserved for certain categories of investors;
delegation of authority to the Executive Board for the purpose of issuing ordinary shares and/or securities giving access to the share
capital of Innate, as compensation for contributions in kind comprised of equity securities or securities giving access to the share capital;
• Authorization granted to the Executive Board to allocate stock options for the benefit of employees, executive officers, employed
members of the Executive Committee, employed senior executives and/or corporate officers of Innate or its subsidiaries;
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authorization granted to the Executive Board to allocate existing or new free shares on the basis of performance criteria for the benefit of
executive officers, employed members of the Executive Committee, employed senior executives and/or corporate officers of Innate or its
subsidiaries;
authorization granted to the Executive Board to allocate existing or new free shares on the basis of performance criteria for the benefit of
employees of Innate or its subsidiaries;
authorization granted to the Executive Board to allocate existing or new free shares for the benefit of executive officers, employed
members of the Executive Committee, employed senior executives and/or corporate officers of Innate or its subsidiaries;
delegation of authority to the Executive Board for the purpose of issuing ordinary shares and/or securities giving access to the share
capital of Innate for the benefit of the members of a Company savings plan;
delegation of authority to the Executive Board for the purpose of issuing autonomous share subscription warrants reserved for
Supervisory Board members; and
delegation of power to the Executive Board for the purpose of cancelling all or part of the treasury shares of Innate, acquired pursuant to
the authorization to repurchase shares.
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The following authorizations granted to our Executive Board by the combined general meeting of shareholders held on May 12, 2023 are still
outstanding:
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delegation of authority to the Executive Board for the purpose of issuing ordinary shares and/or securities giving access to the share
capital of Innate, with shareholders’ preferential subscription rights;
authorization granted to the Executive Board to increase by 15% the number of securities to be issued in the event of a share capital with
or without shareholders’ preferential subscription rights;
delegation of authority to the Executive Board for the purpose of issuing ordinary shares and/or securities giving access to the share
capital of Innate, in the event of a public exchange offer initiated by Innate; and
authorization granted to the Executive Board to allocate existing or new free shares for the benefit of employees of Innate or its
subsidiaries;
Rights, preferences and restrictions attaching to ordinary shares
Rights and Obligations Attached to Ordinary Shares (Articles 12 and 41 of the Bylaws)
Each of our ordinary shares gives the right to a share of the profits and assets in proportion to the amount of capital it represents. It also gives the
right to vote and be represented in the General Meeting of shareholders under the conditions set forth by the law and the bylaws.
If we are liquidated, any assets remaining after payment of the debts, liquidation expenses and all of the remaining obligations will first be used
to repay in full the par value of our ordinary shares. Any surplus will be distributed pro rata among shareholders in proportion to the number of
ordinary shares respectively held by them, taking into account, where applicable, of the rights attached to ordinary shares of different classes.
Shareholders are liable for corporate liabilities only up to the par value of the ordinary shares they hold; they are not liable to further capital
calls.
Shareholders’ rights may be modified as allowed by French law. Only the extraordinary shareholders’ meeting is authorized to amend any and all
provisions of our bylaws. It may not, however, increase shareholder commitments without the prior approval of each shareholder.
Voting Rights (Article 12 of the Bylaws)
The voting rights attached to the ordinary shares are in proportion to the amount of capital they represent and each share gives the right to one
vote. There is no double voting right attached to the ordinary shares. The ownership of a share implies, ipso facto, the acceptance of our bylaws
and any decision of our shareholders.
Under French law, treasury shares or ordinary shares held by entities controlled by us are not entitled to voting rights and do not count for
quorum purposes.
4
There is no limitation on voting rights in our bylaws nor limit the right of non-residents of France or non-French persons to own or, where
applicable, to vote our securities.
Under French law, the holders of warrants of the same class (i.e., warrants that were issued at the same time and with the same rights), including
founders’ warrants, are entitled to vote as a separate class at a general meeting of that class of warrant holders under certain circumstances,
principally in connection with any proposed modification of the terms and conditions of the class of warrants or any proposed issuance of
preferred shares or any modification of the rights of any outstanding class or series of preferred shares.
Dividends (Article 41 of the Bylaws)
We may only distribute dividends out of our distributable profits, plus any amounts held in our reserves that the shareholders decide to make
available for distribution, other than those reserves that are specifically required by law. The conditions for payment of dividends in cash shall be
set at the shareholders’ meeting or, as the case may be, by the Executive Board.
“Distributable Profits” consist of our statutory net profit in each fiscal year, calculated in accordance with accounting standards applicable in
France, as increased or reduced by any profit or loss carried forward from prior years, less any contributions to the reserve accounts. Pursuant to
French law, we must allocate at least 5% of our statutory net profit for each year to our legal reserve fund before dividends may be paid with
respect to that year. Such allocation is compulsory until the amount in the legal reserve is equal to 10% of the aggregate par value of our issued
and outstanding share capital.
Dividends are distributed to shareholders pro rata according to their respective holdings of ordinary shares or preferred shares, as the case may
be. In the case of interim dividends, distributions are made to shareholders on the date set by our Executive Board during the meeting in which
the distribution of interim dividends is approved. The actual dividend payment date is decided by the shareholders at an ordinary general
shareholders’ meeting or by our Executive Board in the absence of such a decision by the shareholders. Shareholders that own ordinary shares on
the actual payment date are entitled to the dividend.
Pursuant to French law, dividends must be paid within a maximum of nine months after the close of the relevant fiscal year, unless extended by
court order. Dividends not claimed within five years after the payment date shall be deemed to expire and revert to the French state.
Shareholders may be granted an option to receive dividends in cash or in ordinary shares, in accordance with legal conditions.
Change in Share Capital (Article 7 of the Bylaws)
Any change to the capital or the rights attached to the ordinary shares is subject to legal provisions, as our bylaws do not set forth any particular
requirements.
5
Increase in Share Capital
Pursuant to French law, our share capital may be increased only with shareholders’ approval at an extraordinary general shareholders’ meeting
following the recommendation of our Executive Board. The shareholders may delegate to our Executive Board either the authority (délégation
de compétence) or the power (délégation de pouvoir) to carry out any increase in share capital.
Increases in our share capital may be effected by:
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issuing additional shares;
increasing the nominal value of existing shares;
creating a new class of equity securities (preferred shares); and
exercising the rights attached to securities giving access to the share capital.
Increases in share capital by issuing additional securities may be effected through one or a combination of the following issuances:
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in consideration for cash;
in consideration for assets contributed in kind;
through an exchange offer or merger;
by conversion of previously issued debt instruments;
by exercise of the rights attached to securities giving access to the share capital;
by capitalization of profits, reserves or share premium; and
subject to certain conditions, by way of offset against debt incurred by us.
Decisions to increase the share capital through the capitalization of reserves, profits and/or share premium require shareholders’ approval at an
extraordinary general shareholders’ meeting, acting under the quorum and majority requirements applicable to ordinary shareholders’ meetings.
Increases effected by an increase in the nominal value of shares require unanimous approval of the shareholders, unless effected by capitalization
of reserves, profits or share premium. All other capital increases require shareholders’ approval at an extraordinary general shareholders’ meeting
acting under the regular quorum and majority requirements for such meetings.
Reduction in Share Capital
Pursuant to French law, any reduction in our share capital requires shareholders’ approval at an extraordinary general shareholders’ meeting
following the recommendation of our Executive Board. The share capital may be reduced either by decreasing the nominal value of the
outstanding shares or by reducing the number of outstanding shares (including by the repurchase and cancellation of shares). Holders of each
class of shares must be treated equally unless each affected shareholder agrees otherwise, depending on the contemplated operations.
6
Preferential Subscription Rights
According to French law, if we issue additional securities for cash, current shareholders will have preferential subscription rights to these
securities on a pro rata basis. Preferential subscription rights entitle the individual or entity that holds them to subscribe pro rata based on the
number of shares held by them to the issuance of any securities increasing, or that may result in an increase of, our share capital by means of a
cash payment or a set-off of cash debts. Pursuant to French law, the preferential subscription rights are transferable during a period equivalent to
the subscription period relating to a particular offering but starting two business days prior to the opening of the subscription period and ending
two business days prior to the closing of the subscription period.
The preferential subscription rights with respect to any particular offering may be waived at an extraordinary general meeting by a two-thirds
vote of our shareholders or individually by each shareholder.
Our Executive Board and our independent statutory auditors are required by French law to present reports to the shareholders’ meeting that
specifically address any proposal to waive the preferential subscription rights.
Form, Holding and Transfer of Shares (Articles 9 and 10 of the Bylaws)
Form of Shares
The ordinary shares are nominative or bearer, if the legislation so permits, according to the shareholder’s choice. The Free Preferred Shares
(AGAP) are nominative.
Further, in accordance with applicable laws, we may request at any time from the central depository responsible for holding our Shares, the
information referred to in Article L. 228-2 of the French Commercial Code. Thus, we are, in particular and at any time, entitled to request the
name and year of birth or, in the case of a legal entity, the name and the year of incorporation, nationality and address of holders of securities
conferring immediate or long-term voting rights at its shareholders’ meeting and the amount of securities owned by each of them and, where
applicable, the restrictions that the securities could be affected by.
Holding of Shares
In accordance with French law concerning the “dematerialization” of securities, the ownership rights of shareholders are represented by book
entries instead of share certificates. Shares issued are registered in individual accounts opened by us or any authorized intermediary, in the name
of each shareholder and kept according to the terms and conditions laid down by the legal and regulatory provisions.
7
Ownership of Shares by Non-French Persons
See “Description of Share Capital-Rights, preferences and restrictions attaching to ordinary shares-Limitations Affecting Shareholders of a
French company.”
Assignment and Transfer of Shares
Shares are freely negotiable, subject to applicable legal and regulatory provisions. French law notably provides for standstill obligations and
prohibition of insider trading.
Repurchase and Redemption of Ordinary Shares
Under French law, we may acquire our own ordinary shares. Such acquisition may be challenged on the ground of market abuse regulations.
However, Market Abuse Regulation (EU) No. 596/2014 of April 16, 2014, as amended, and its related delegated regulations, or MAR, provides
for safe harbor exemptions when the acquisition is made (i) under a buy-back program to be authorized by the shareholders in accordance with
the provisions of Article L. 22-10-62 of the French Commercial Code and with the General Regulation of the French Financial Markets
Authority, or AMF and (ii) for the following purposes:
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to decrease our share capital, provided that such a decision is not driven by losses and that a purchase offer is made to all shareholders on
a pro rata basis, with the approval of the shareholders at an extraordinary general meeting; in this case, the ordinary shares repurchased
must be cancelled within one month from their repurchase date;
to meet obligations arising from debt securities that are exchangeable into equity instruments; or
to meet our obligations arising from share option programs, or other allocations of ordinary shares, to our employees or to our managers
or the employees or managers of our affiliate. In this case the shares repurchased must be distributed within 12 months from their
repurchase, after which they must be cancelled.
In addition, we benefit from a simple exemption when the acquisition is made under a liquidity contract complying with the General Regulation
of, and market practices accepted by, the AMF.
All other purposes, and especially share buy-backs made for external growth operations in pursuance of Article L. 22-10-62 of the French
Commercial Code, while not forbidden, must be pursued in strict compliance of market manipulation and insider dealing rules.
Under MAR and in accordance with the General Regulation of the AMF, we shall report to the AMF, no later than by the end of the seventh daily
market session following the date of the execution of the transaction, all the transactions relating to the buy-back program. In addition, we shall
provide to the AMF, on a monthly basis, and to the public on a biannual basis, a summary report of the transactions made under a liquidity
contract.
In any case, no such repurchase of ordinary shares may result in us holding, directly or through a person acting on our behalf, more than (i) 10%
of our issued share capital, or (ii) 5% of our issued
8
share capital in case of repurchase of shares to be used in payment or in exchange in the context of a merger, division or transfer of assets.
Ordinary shares repurchased by us continue to be deemed “issued” under French law but are not entitled to dividends and/or voting rights so
long as we hold them directly or indirectly, and we may not exercise the preemptive rights attached to them.
Sinking Fund Provisions
Our bylaws do not provide for any sinking fund provisions.
Our Bylaws and French Corporate Law Contain Provisions that May Delay or Discourage a Takeover Attempt
Provisions contained in our bylaws and French corporate law could make it more difficult for a third-party to acquire us, even if doing so might
be beneficial to our shareholders. In addition, provisions of our bylaws impose various procedural and other requirements, which could make it
more difficult for shareholders to effect certain corporate actions. These provisions include the following:
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under French law, the owner of 90% of the share capital or voting rights of a public company listed on a regulated market in a Member
State of the European Union or in a state party to the European Economic Area, or EEA, Agreement, including from the main French
stock exchange, has the right to force out minority shareholders following a tender offer made to all shareholders;
under French law, a non-resident of France as well as any French entity controlled by non-residents of France may have to file a
declaration for statistical purposes with the Bank of France (Banque de France) within 20 working days following the date of certain
direct foreign investments in us, including any purchase of our ADSs. In particular, such filings are required in connection with
investments exceeding €15,000,000 that lead to the acquisition of at least 10% of our share capital or voting rights or cross such 10%
threshold. See “Description of Share Capital-Rights, preferences and restrictions attaching to ordinary shares-Limitations Affecting
Shareholders of a French company;”
under French law, certain investments in a French company relating to certain strategic industries by individuals or entities not residents
in a Member State of the EU are subject to prior authorization of the Ministry of Economy. See “Description of Share Capital-Rights,
preferences and restrictions attaching to ordinary shares-Limitations Affecting Shareholders of a French company;’’
a merger (i.e., in a French law context, a share for share exchange following which our Company would be dissolved into the acquiring
entity and our shareholders would become shareholders of the acquiring entity) of our Company into a company incorporated in the
European Union would require the approval of our Executive Board as well as a two-thirds majority of the votes cast by the shareholders
present, represented by proxy or voting by mail at the relevant meeting;
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a merger of our Company into a company incorporated outside of the European Union would require 100% of our shareholders to
approve it;
under French law, a cash merger is treated as a share purchase and would require the consent of each participating shareholder;
our shareholders may grant in the future our Executive Board broad authorizations to increase our share capital or to issue additional
ordinary shares or other securities (for example, warrants) to our shareholders, the public or qualified investors, including as a possible
defense following the launching of a tender offer for our ordinary shares;
our shareholders have preferential subscription rights on a pro rata basis on the issuance by us of any additional securities for cash or a
set-off of cash debts, which rights may only be waived by the extraordinary general meeting (by a two-thirds majority vote) of our
shareholders or on an individual basis by each shareholder;
our Supervisory Board appoints the members of the Executive Board and shall fill any vacancy within two months;
our Supervisory Board has the right to appoint members of the Supervisory Board to fill a vacancy created by the resignation or death of
a member of the Supervisory Board for the remaining duration of such member’s term of office, and subject to the approval by the
shareholders of such appointment at the next shareholders’ meeting, which prevents shareholders from having the sole right to fill
vacancies on our Supervisory Board;
our Executive Board can be convened by the chairman of the Executive Board or other members of the Executive Board delegated for
this purpose;
our Supervisory Board can be convened by the chairman or the vice-chairman of the Supervisory Board. A member of the Executive
Board or one-third of the members of the Supervisory Board may send a written request to the chairman to convene the Supervisory
Board. If the chairman does not convene the Supervisory Board 15 days following the receipt of such request, the authors of the request
may themselves convene the Supervisory Board;
our Supervisory Board meetings can only be regularly held if at least half of its members is present (or deemed present in case of use of
videoconference or any other telecommunication means);
approval of at least a majority of the votes cast by shareholders present, represented by a proxy, or voting by mail at the relevant
ordinary shareholders’ general meeting is required to remove members of the Executive Board and/or members of the Supervisory Board
with or without cause;
the crossing of certain ownership thresholds has to be disclosed and can impose certain obligations; see the section of this exhibit titled
“Description of Share Capital-Rights, preferences and restrictions attaching to ordinary shares-Crossing the Threshold Set in the
Bylaws;”
advance notice is required for nominations to the Supervisory Board or for proposing matters to be acted upon at a shareholders’
meeting, except that a vote to remove and replace a member of the Supervisory Board can be proposed at any shareholders’ meeting
without notice;
10
•
•
transfers of shares shall comply with applicable insider trading rules and regulations, and in particular with MAR; and
pursuant to French law, our bylaws, including the sections relating to the number of members of the Executive and Supervisory Boards,
and election and removal of members of the Executive and Supervisory Boards from office may only be modified by a resolution
adopted by two-thirds of the votes of our shareholders present, represented by a proxy or voting by mail at the meeting.
Shareholder Identification (Article 9 of the Bylaws)
Ordinary Shares may be registered or bearer ordinary shares, at the option of the shareholder, subject to the applicable legal requirements.
To identify the holders of bearer ordinary shares, we are authorized to ask in accordance with current legal and regulatory requirements, the
central depositary that maintains the records of the issue of these ordinary shares, in exchange for a fee, for the holders’ name or business name,
year of birth or year of incorporation, address and nationality, e-mail address, number of securities held giving immediate or future access to the
capital and any restrictions to which the securities are subject.
Modification of the Bylaws (Article 36 of the Bylaws)
Our bylaws may only be amended by approval at an extraordinary shareholders’ meeting. Our bylaws may not, however, be amended to increase
shareholder commitments without the approval of each shareholder. Decisions are made by a two-thirds majority of the votes cast by the
shareholders present, represented by proxy, or voting by mail.
Crossing the Threshold Set in the Bylaws (Article 11 of the Bylaws)
Without prejudice to the legal or regulatory stipulations, any natural person or legal entity who goes above or below, directly or indirectly, acting
alone or in concert (de concert), a percentage of the share capital or voting rights equal to or higher than 1% or a multiple of this percentage,
must inform us of the total number of ordinary shares, voting rights and securities giving access to capital or voting rights that it, he or she owns
immediately or eventually, within five trading days of the date on which such ownership threshold is crossed.
If shareholders fail to comply with these obligations, shares or voting rights exceeding the fraction that should have been declared are deprived
of voting rights at General Meetings of Shareholders for any meeting that would be held until the expiry of a period of two years from the date of
regularization of the notification in accordance with Article L. 233-14 of the French Commercial Code, if the failure to declare has been
determined and one or several shareholders holding at least 5% of the capital make a request thereof, as recorded in the minutes of the General
Meeting.
These requirements are without prejudice to the threshold crossing declarations provided for under French law in Articles L. 233-7, L. 233-9 and
L. 233-10 of the French Commercial Code, which impose a declaration to us and to the AMF upon crossing of the following thresholds in share
capital
11
or voting rights no later than the fourth trading day following the crossing: 5%, 10%, 15%, 20%, 25%, 30%, 33.33%, 50%, 66.66%, 90% and
95%.
This obligation also applies when crossing each of the above-mentioned thresholds in a downward direction.
In addition, any shareholder crossing, alone or acting in concert, the 10%, 15%, 20% or 25% thresholds shall file a declaration with the AMF
pursuant to which it shall expose its intention for the following six months, including notably whether it intends to continue acquiring shares of
the Company or to acquire control over the Company and its intended strategy for the Company. Further, and subject to certain exemptions, any
shareholder crossing, alone or acting in concert, the 30% threshold shall file a mandatory public tender offer with the AMF. Also, any
shareholder holding directly or indirectly a number between 30% and 50% of the capital or voting rights and who, in less than 12 consecutive
months, increases their holding of capital or voting rights by at least 1% of the Company’s capital or voting rights, shall file a mandatory public
tender offer.
Differences in Corporate Law
We are a société anonyme à directoire et conseil de surveillance, or S.A., incorporated under the laws of France. The laws applicable to
French sociétés anonymes differ from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain
material differences between the provisions of the French Commercial Code applicable to us and the Delaware General Corporation Law, the
law under which many public companies in the United States are incorporated, relating to shareholders’ rights and protections. This summary is
not intended to be a complete discussion of the respective rights. For a more complete discuss, please refer to the Delaware General Corporation
Law, French law (including, in particular the French Commercial Code) and our bylaws.
FRANCE
DELAWARE
12
Under Delaware law, a corporation must have at least
one director and the number of directors shall be fixed by
or
the certificate of
incorporation or, if the certificate is silent, in the bylaws.
the manner provided
in
in
Under Delaware law, a corporation may prescribe
its certificate of
qualifications for directors under
incorporation or bylaws. Under Delaware law, only
individuals may be members of a corporation’s board.
Number of the members of
the Executive Board and of
the Supervisory Board
Members of the Executive
Board and of the
Supervisory Board
Qualifications
Under French law, a société anonyme à directoire et
conseil de surveillance (i) must have at least 2 (or 1
when its share capital is below an amount to be set by
decree of the French Government) and may have up to 5
(or 7 when the Company is listed on a regulated market)
Executive Board members and (ii) must have at least
three but no more than 18 Supervisory Board members.
In addition, the composition of the Executive Board
endeavors to seek a balanced representation of women
and men. The number of members of the Executive
Board and of the Supervisory Board is fixed by or in the
manner provided in the bylaws. The number of members
of the Supervisory Board of each gender may not be less
than 40% when the Company is listed on a regulated
market or when the Company meets certain criteria of
turnover and number of employees, if not listed on a
regulated market. As an exception, for a supervisory
board having up to 8 members, the difference between
each gender may not exceed 2. Any appointment made in
violation of this limit that is not remedied will be null
and void as well as the deliberations taken by the
Supervisory Board member irregularly appointed. The
members of the Supervisory Board are appointed at the
shareholders’ general meetings.
Under French
law, a corporation may prescribe
qualifications for the members of the Executive Board
and of the Supervisory Board under its bylaws. In
addition, under French law, members of a supervisory
board of a corporation may be legal entities (with the
exception of the chairman of the Supervisory Board), and
such legal entities may designate an individual to
represent them and to act on their behalf at meetings of
the supervisory board. However, only individuals may be
appointed members of the Executive Board.
13
Removal of members of the
Executive Board and of the
Supervisory Board
Vacancies on the Executive
Board and on the
Supervisory Board
Annual General Meeting
Under French law, the members of the Executive Board
and of the Supervisory Board may be removed from
office, with or without cause and without notice, at any
shareholders’ meeting, by a simple majority vote of the
shareholders present and voting at the meeting in person
or by proxy. In addition, the members of the Executive
Board may be removed by the Supervisory Board if
provided in the bylaws. Our bylaws provide this
possibility. If the removal of members of the Executive
Board is decided without just cause, it may give rise to
damages
Under French law, vacancies on the Executive Board
resulting from death or a resignation have to be filled by
the Supervisory Board within two months, unless the
Supervisory Board decides to amend the number of
Executive Board members. Vacancies on the Supervisory
Board resulting from death or a resignation, may be filled
temporarily by
the
Supervisory Board (provided
the number of
members remaining in office is at least three) pending
ratification by the shareholders by the next shareholders’
meeting.
Under French law, the annual general meeting of
shareholders shall be held at such place, on such date and
at such time as decided each year by the Executive Board
and notified to the shareholders in the convening notice
of the annual meeting, within six months after the close
of the relevant fiscal year unless such period is extended
by court order.
remaining members of
that
the
Under Delaware law, directors may be removed from
office, with or without cause, by a majority stockholder
vote, though in the case of a corporation whose board is
classified, unless otherwise provided in the certificate of
incorporation, stockholders may effect such removal only
for cause.
Under Delaware law, vacancies on a corporation’s board
of directors, including those caused by an increase in the
number of directors, unless otherwise provided in the
certificate of incorporation, may be filled by stockholders
or by a majority of the remaining directors.
Under Delaware law, the annual meeting of stockholders
shall be held at such place, on such date and at such time
as may be provided by the certificate of incorporation or
by the bylaws, or by the board of directors if neither the
certificate of incorporation or the bylaws so provide,
provided that the Court of Chancery may order an annual
meeting upon the application of a director or stockholder
if a corporation has not held a meeting within 30 days of
a date designated for the meeting or within 13 months
after the latest of the company’s organization, the last
annual meeting or the last action by written consent to
elect directors.
14
law,
Under Delaware
the
stockholders may be called by the board of directors or
by such person or persons as may be authorized by the
certificate of incorporation or by the bylaws.
special meetings of
General Meeting
Under French law, general meetings of the shareholders
may be called by the Executive Board or, failing that, by
the statutory auditors, or by a court appointed agent
(mandataire ad hoc) or
in certain
circumstances, or by the majority shareholder in capital
or voting rights following a public tender offer or
exchange offer or the transfer of a controlling block on
the date decided by the Executive Board or the relevant
person. General meetings of the shareholders may also be
called by the Supervisory Board.
liquidator
15
Under Delaware law, unless otherwise provided in the
certificate of incorporation or bylaws, written notice of
any meeting of the stockholders must be given to each
stockholder entitled to vote at the meeting not less than
10 nor more than 60 days before the date of the meeting
and shall specify the place, date, hour, means of remote
communication, if any, by which stockholders and proxy
holders may be deemed to be present in person and vote,
the record date for voting if it is different from the record
date determining notice and, in the case of a special
meeting, purpose or purposes for which the meeting is
called.
Notice of General Meetings A first convening notice is published in the French
Bulletin of Mandatory Legal Notices (BALO) at least 35
days prior to a meeting and made available on the
website of the Company at least 21 days prior to the
meeting. Subject to special legal provisions, the meeting
notice is sent out at least 15 days prior to the date of the
meeting, by means of a notice inserted both in a legal
announcement bulletin (journal d’annonces légales) of
the registered office department and in the BALO.
Further, the holders of registered shares for at least a
month at the time of the latest of the insertions of the
notice of meeting shall be summoned individually, by
regular letter (or by registered letter if they request it and
include an advance of expenses) sent to their last known
address. This notice to registered shareholders may also
be
of
telecommunication, in lieu of any such mailing, to any
shareholder requesting it beforehand by registered letter
with acknowledgment of receipt in accordance with legal
and regulatory requirements, specifying his e-mail
address. When
the shareholders’ meeting cannot
deliberate due to lack of required quorum, the second
meeting must be called at least ten calendar days in
advance in the same manner as used for the first notice.
The convening notice shall specify the name of the
Company, its legal form, share capital, registered office
address, registration number with the French Registry of
Commerce and Companies (registre du commerce et
des sociétés), the place, date, hour and agenda of the
meeting and its nature (ordinary and/or extraordinary
meeting). The convening notice must also indicate the
conditions under which the shareholders may vote by
correspondence and the places and conditions in which
they can obtain voting forms by mail
transmitted
electronic
means
by
16
Proxy
Shareholder Action by
written consent
Each shareholder has the right to attend the meetings
and participate in the discussions (i) personally, or (ii) by
granting proxy to another shareholder, his/her spouse,
his/her partner with whom he/she has entered into a civil
union or to any natural or legal person of his/her choice;
or (iii) by sending a proxy to the Company without
indication of the beneficiary (in which case, such proxy
shall be cast in favor of the resolutions supported by the
Executive Board and against all other resolutions), or (iv)
by voting by correspondence, or (v) by video conference
or another means of telecommunication in accordance
with applicable laws that allow identification, it being
specified that a general meeting of shareholders may not
be
of
telecommunications. The proxy is only valid for a single
meeting, for
two meetings (an ordinary and an
extraordinary meeting convened for the same day or
within 15 days) or for successive meetings convened
with the same agenda.
Under French law, shareholders’ action by written
consent is not permitted in a société anonyme.
exclusively
through
means
held
Under Delaware law, at any meeting of stockholders, a
stockholder may designate another person to act for such
stockholder by proxy, but no such proxy shall be voted or
acted upon after three years from its date, unless the
proxy provides for a longer period.
Under Delaware law, a corporation’s certificate of
incorporation (1) may permit stockholders to act by
is signed by all
if such action
written consent
stockholders, (2) may permit stockholders to act by
written consent signed by stockholders having the
minimum number of votes that would be necessary to
take such action at a meeting or (3) may prohibit actions
by written consent.
17
Preemptive Rights
Sources of Dividends
Under French law, in case of issuance of additional
ordinary shares or other securities for cash or set-off
against cash debts, the existing shareholders have
preferential subscription rights to these securities on a
pro rata basis unless such rights are waived by a two-
thirds majority of the votes cast by the shareholders
present at
the extraordinary meeting deciding or
authorizing the capital increase, voting in person or
represented by proxy or voting by mail. In case such
rights are not waived by the extraordinary general
individually either
meeting, each shareholder may
exercise, assign or not exercise
its preferential
subscription rights. Preferential subscription rights may
only be exercised during the subscription period. In
accordance with French law, the exercise period shall not
be less than five trading days. Preferential subscription
rights are transferable during a period equivalent to the
subscription period but starting two business days prior
to the opening of the subscription period and ending two
business days prior to the closing of the subscription
period.
Under French law, dividends may only be paid by a
French société anonyme out of “distributable profits,”
plus any distributable
reserves and “distributable
premium” that the shareholders decide to make available
for distribution, other than those reserves that are
specifically required by law. “Distributable profits”
consist of the unconsolidated net profits of the relevant
corporation for each fiscal year, as increased or reduced
by any profit or loss carried forward from prior years.
“Distributable premium” refers to the contribution paid
by the shareholders in addition to the par value of their
ordinary
the
their
shareholders decide to make available for distribution.
in case of a share capital reduction, no
Except
distribution can be made to the shareholders when the net
equity is, or would become, lower than the amount of the
share capital plus
the reserves which cannot be
distributed in accordance with the law or the bylaws.
subscription
shares
that
for
Under Delaware law, unless otherwise provided in a
corporation’s certificate of incorporation, a stockholder
does not, by operation of law, possess preemptive rights
to subscribe to additional issuances of the corporation’s
stock.
Under Delaware law, subject to any restrictions under a
corporation’s certificate of incorporation, dividends may
be paid by a Delaware corporation either out of (1)
surplus as defined in and computed in accordance with
Delaware law or (2) in case there is no such surplus, out
of its net profits for the fiscal year in which the dividend
is declared and/or the preceding fiscal year, except when
the capital is diminished by depreciation in the value of
its property, or by losses, or otherwise, to an amount less
than the aggregate amount of capital represented by
issued and outstanding stock having a preference on the
distribution of assets.
18
Repurchase of Shares
Under French law, a corporation may acquire its own
ordinary shares. Such acquisition may be challenged on
the ground of market abuse regulations. However, MAR
provides for safe harbor exemptions when the acquisition
is made for the following purposes:
Under Delaware law, a corporation may generally
redeem or repurchase shares of its stock unless the
capital of the corporation is impaired or such redemption
the
impair
or
corporation.
repurchase would
the capital of
•
•
•
in
this case,
to decrease its share capital, provided that such a
decision is not driven by losses and that a
purchase offer is made to all shareholders on a
the
the approval of
pro rata basis, with
the extraordinary general
shareholders at
meeting;
the ordinary shares
repurchased must be cancelled within one month
from their repurchase date;
to meet obligations arising from debt securities
that are exchangeable into equity instruments; or
to meet obligations arising from share option
programs, or other allocations of ordinary shares,
to its employees or to its managers or the
employees or managers of its affiliate. In this
case the shares repurchased must be distributed
within 12 months from their repurchase, after
which they must be cancelled.
A simple exemption is provided when the acquisition is
made under a liquidity contract in the context of a buy-
back program to be authorized by the shareholders in
accordance with the provisions of Article L. 22-10-62 of
the French Commercial Code and in accordance with the
General Regulation of the AMF.
All other purposes, and especially share buy-backs made
for external growth operations in pursuance of Article L.
22-10-62 of the French Commercial Code, while not
forbidden, must be pursued in strict compliance of
market manipulation and insider dealing rules. Under the
MAR and in accordance with the General Regulation of
the AMF, a corporation shall report to the AMF, no later
than by the end of the seventh daily market session
following the date of the execution of the transaction, all
the transactions relating to the buy-back program. By
exception, a corporation shall provide to the AMF, on a
monthly basis, and to the public on a biannual basis, a
summary report of the transactions made under a
liquidity contract. No such repurchase of ordinary shares
may result in the Company holding, directly or through a
person acting on its behalf, more than 10% of its issued
share capital.
19
Under Delaware law, a corporation’s certificate of
incorporation may include a provision eliminating or
limiting the personal liability of a director or officer to
the corporation or its stockholders for monetary damages
arising from a breach of fiduciary duty as a director or
officer. However, no provision can eliminate the liability
of:
•
•
•
•
•
a director or officer for any breach of the
director’s or officer’s duty of loyalty to the
corporation or its stockholders;
a director or officer for acts or omissions not in
good faith or that involve intentional misconduct
or a knowing violation of law;
a director for intentional or negligent payment of
unlawful dividends or stock purchases or
redemptions;
a director or officer for any transaction from
which the director or officer derives an improper
personal benefit; or
an officer in any action by or in the right of the
corporation.
Delaware law provides that, unless otherwise provided
in the certificate of incorporation, each stockholder is
entitled to one vote for each share of capital stock held
by such stockholder.
Liability
executive
of
officers or Members of the
Executive Board and of the
Supervisory Board
Under French
include any
provisions limiting the liability of members of the
Executive Board or the Supervisory Board.
law, bylaws may not
Voting Rights
French law provides that, unless otherwise provided in
the bylaws, each shareholder is entitled to one vote for
each share of capital stock held by such shareholder.
Double voting rights are automatically granted to the
shares held in registered form for more than two years,
unless provided otherwise in the bylaws. Our bylaws
provide that double voting rights are not applicable to
our shareholders.
20
Shareholder Vote on
Certain Transactions
Generally, under French law, completion of a merger,
dissolution, sale, lease or exchange of all or substantially
all of a corporation’s assets requires:
•
•
the
cast by
the approval of the Executive Board; and
the approval by a two-thirds majority of the
votes
shareholders present,
represented by proxy or voting by mail at the
relevant meeting or, in the case of a merger that
will result in an increase of the shareholders’
commitments or with a non-European Union
company, approval of all shareholders of the
corporation (by exception, the extraordinary
general meeting of the acquiring company may
delegate to the Executive Board authority to
decide a merger-absorption or to determine the
terms and conditions of the merger plan).
21
Generally, under Delaware law, unless the certificate of
incorporation provides for the vote of a larger portion of
the stock or under other certain circumstances,
completion of a merger, consolidation, sale, lease or
exchange of all or substantially all of a corporation’s
assets or dissolution requires:
•
•
the approval of the board of directors; and
the approval by the vote of the holders of a
majority of the outstanding stock or, if the
certificate of incorporation provides for more or
less than one vote per share, a majority of the
votes of the outstanding stock of a corporation
entitled to vote on the matter.
Dissent or Dissenters’
Appraisal Rights
French law does not provide for any such right but
provides that a merger is subject, depending on the
circumstances of the merger, to either the shareholders’
approval by a two-thirds majority vote, or unanimous
decisions of the shareholders, as stated above.
Under Delaware law, a holder of shares of any class or
series has the right, in specified circumstances, to dissent
from a merger or consolidation by demanding payment in
cash for the stockholder’s shares equal to the fair value of
those shares, as determined by the Delaware Chancery
Court in an action timely brought by the corporation or a
dissenting stockholder. Unless otherwise provided in the
certificate of incorporation, Delaware law grants these
the case of mergers or
appraisal rights only
consolidations and not in the case of a sale or transfer of
assets or a purchase of assets for stock.
Further, no appraisal rights are available for shares of
any class or series that is listed on a national securities
exchange or held of record by more than 2,000
stockholders, unless the agreement of a merger or
consolidation requires the holders to accept for their
shares anything other than:
in
•
•
•
•
shares of stock of the surviving corporation;
shares of stock of another corporation that are
either listed on a national securities exchange or
held of record by more than 2,000 stockholders;
cash in lieu of fractional shares of the stock
described in the two preceding bullet points; or
any combination of the above.
In addition, appraisal rights are not available to holders
of shares of the surviving corporation in specified
mergers that do not require the vote of the stockholders
of the surviving corporation.
22
Standard of Conduct for
members of the Executive
Board and of the
Supervisory Board
Shareholder Suits
initiate a
legal action
French law does not contain specific provisions setting
forth the standard of conduct of a member of the
Executive Board and of
the Supervisory Board.
However, members of the Executive Board and of the
Supervisory Board have a duty of loyalty, a duty to act
without self-interest, on a well informed basis and they
cannot make any decision against a corporation’s
corporate interest (intérêt social). In addition, members
of the Executive Board shall take into account social and
environmental issues arising out of the Company’s
activity.
French law provides that a shareholder, or a group of
to seek
shareholders, may
indemnification from the Executive Board (but not from
the Supervisory Board) of a corporation
the
corporation’s interest if it fails to bring such legal action
itself. If so, any damages awarded by the court are paid
to the corporation and any legal fees relating to such
action are borne by the relevant shareholder or the group
of shareholders.
The plaintiff must remain a shareholder through the
duration of the legal action.
There is no other case where shareholders may initiate a
derivative action to enforce a right of a corporation.
A shareholder may alternatively or cumulatively bring
individual legal action against the members of the
Executive Board only, provided he has suffered distinct
damages from those suffered by the corporation. In this
case, any damages awarded by the court are paid to the
relevant shareholder.
in
Delaware law does not contain specific provisions
setting forth the standard of conduct of a director. The
scope of the fiduciary duties of directors is generally
determined by the courts of the State of Delaware. In
general, directors have a duty to act without self-interest,
on a well-informed basis and
they
reasonably believe to be in the best interest of the
stockholders.
in a manner
Under Delaware law, a stockholder may initiate a
derivative action to enforce a right of a corporation if the
corporation fails to enforce the right itself. The complaint
must:
•
state that the plaintiff was a stockholder at the
time of the transaction of which the plaintiff
complains or that the plaintiff’s shares thereafter
devolved on the plaintiff by operation of law;
and allege with particularity the efforts made by
the plaintiff to obtain the action the plaintiff
desires from the directors and the reasons for the
plaintiff’s failure to obtain the action; or
state the reasons for not making the effort.
Additionally, the plaintiff must remain a stockholder
through the duration of the derivative suit. The action
will not be dismissed or compromised without the
approval of the Delaware Court of Chancery.
•
23
Amendment of Certificate
of Incorporation
Under French law, corporations are not required to file a
certificate of incorporation with the French Registry of
Commerce and Companies (registre du commerce et
des sociétés) and only have bylaws (statuts) as
organizational documents.
Amendment of Bylaws
amendments
Under French law, only the extraordinary shareholders’
meeting is authorized to adopt or amend the bylaws. The
Supervisory Board can amend the bylaws to comply with
mandatory legal provisions, subject to the ratification of
extraordinary
such
shareholders’ meeting. The Supervisory Board
is
authorized to amend the bylaws as a result of a decision
to relocate the Company’s registered office in France,
subject to ratification by the next ordinary shareholders’
meeting.
next
the
by
Under Delaware law, generally a corporation may
amend its certificate of incorporation if:
•
•
its board of directors has adopted a resolution
the amendment proposed and
setting forth
declared its advisability; and
the amendment is adopted by the affirmative
votes of a majority (or greater percentage as may
be specified by the corporation) of the voting
power of the outstanding shares entitled to vote
on the amendment and a majority (or greater
the
percentage as may be specified by
corporation) of
the
the voting power of
outstanding shares of each class or series of
stock, if any, entitled to vote on the amendment
as a class or series.
Under Delaware law, the stockholders entitled to vote
have the power to adopt, amend or repeal bylaws. A
corporation may also confer,
its certificate of
incorporation, that power upon the board of directors.
in
Limitations affecting shareholders of a French company
Ownership of ADSs or Shares by Non-French Residents
Neither the French Commercial Code nor our bylaws presently impose any restrictions on the right of non-French residents or non-French
shareholders to own and vote shares.
However, non-French residents must file a declaration for statistical purposes with the Bank of France (Banque de France) within twenty
business days following the date of certain direct foreign investments in us, including any purchase of our ADSs. In particular such filings are
required in connection with investments exceeding €15,000,000 that lead to the acquisition of at least 10% of the share capital or voting rights or
cross such 10% threshold (Articles R. 152-1 et seq. of the French
24
Monetary and Financial Code). Violation of this filing requirement may be sanctioned by five years’ imprisonment and a fine up to twice the
amount of the relevant investment. This amount may be increased fivefold if the violation is made by a legal entity.
Moreover, the following types of investments are subject to the prior authorization of the French Minister of Economy, pursuant to Articles
L.151-1 and seq. and R. 151-1 and seq. of the French Monetary and Financial Code, as amended by the decree (décret) No. 2023-1293 dated
December 28, 2023 and the order (arrêté) dated December 28, 2023 pursuant to the French foreign investment regime, which authorization, if
granted, may be subject to certain undertakings:
•
•
•
by (a) any non-French citizen, (b) any French citizen not residing in France, within the meaning of Article 4 B of the French Code
général des impôts, (c) any non-French entity or (d) any French entity controlled by one of the aforementioned individuals or entities;
consisting of the (a) acquisition of control, within the meaning of Article L. 233-3 of the French Commercial Code, of an entity
incorporated under French law or an establishment registered in France, (b) the acquisition of all or part of a line of business of an entity
incorporated under French law, or (c) crossing, directly or indirectly, alone or in concert, the threshold of 25% of the voting rights of an
entity incorporated under French law, or (d) crossing, directly or indirectly, alone or in concert, the threshold of 10% of the voting rights
of a company incorporated under French law whose shares are admitted to trading on a regulated market; and
developing activities in certain strategic industries related to: (a) activities likely to prejudice national defense interests, participating in
the exercise of official authority or likely to prejudice public order and public security (including activities related to weapons, dual-use
goods and technologies, IT systems, cryptology, data capturing devices, gambling, toxic agents or data storage), (b) activities relating to
essential infrastructure, goods or services (including energy, water, transportation, space, telecom, public health, farm products, media or
critical raw materials), (c) research and development activities related to critical technologies (including cybersecurity, artificial
intelligence, robotics, additive manufacturing, semiconductors, quantum technologies, energy storage, biotechnology, technologies
involved in low-carbon energy production or photonics) or dual-use goods and technologies (Articles R. 151-1 et seq. of the French
Monetary and Financial Code).
The abovementioned (ii)(c) and (d) do not apply either to a natural person who is a national of a Member State of the European Union or of a
State party to the Agreement on the European Economic Area which has concluded an administrative assistance agreement with France to
combat fraud and tax evasion and who is domiciled in one of these States, or to an entity in which all the members of the control chain, within
the meaning of II of Article R. 151-1 of the same Code, are governed by the law of one of these States or are nationals of and domiciled in one of
these States.
We are subject to this regulation. As a result, investors in our ordinary shares or ADSs will have to request the prior authorization of the French
Minister of Economy before acquiring our ordinary shares or ADSs if: (i) they are (a) a non-French citizen, (b) a French citizen not residing in
France, within the meaning of Article 4 B of the FTC, (c) a non-French entity or (d) a French entity controlled by one of the aforementioned
individuals or entities; and (ii) such investor (a) acquires control of us, (b) acquires all or part of one of our business lines or (c) is a non-EU or
non-EEA investors crossing,
25
directly or indirectly, alone or in concert, both 25% and 10% thresholds of voting rights of our share capital.
This request for prior authorization must be filed with the French Minister of Economy, which has 30 business days from receipt of the
completed file to provide a first decision which may (i) indicate that the investment is not covered by the activities subject to the prior
authorization of the French Minister of Economy, (ii) unconditionally authorize the investment or (iii) indicate that further examination is
required. In the latter case, the French Minister of Economy must make a second decision within 45 business days from its first decision. In case
of lack of response from the French Minister of Economy within the above mentioned timeframe, the authorization will be deemed refused. If
the authorization is granted, it may be subject to the signature of a letter of undertaking aimed at protecting French national interests.
A fast-track procedure shall apply for any non-EU investor exceeding this 10% threshold who will have to notify the French Minister of
Economy who will then have 10 business days to decide whether or not the transaction should be subject to further examination.
If an investment requiring the prior authorization of the French Minister of Economy is completed without such authorization having been
granted, the French Minister of Economy might direct the relevant investor to (i) submit a request for authorization, (ii) have the previous
situation restored at its own expense, or (iii) amend the investment.
In the absence of such authorization, the relevant investment shall be deemed null and void.
The relevant investor might also be found criminally liable and might be sanctioned with a fine which cannot exceed the greater of: (i) twice the
amount of the relevant investment, (ii) 10% of the annual turnover before tax of the target company and (iii) € 5 million (for a company) or € 1
million (for an individual).
Failure to comply with such measures could therefore result in significant consequences on the applicable investor. Such measures could also
delay or discourage a takeover attempt, and we cannot predict whether these measures will result in a lower or more volatile market price of our
ADSs or ordinary shares.
Foreign Exchange Controls
Under current French foreign exchange regulations there are no restrictions on the amount of cash transfers that may be made to residents of
foreign countries (subject to the absence of any specific decision taken by the government otherwise). Laws and regulations concerning foreign
exchange controls do, however, require that all payments or transfers of funds made by a French resident to a non-resident such as dividend
payments be handled by an accredited intermediary. All registered banks and substantially all credit institutions in France are accredited
intermediaries. For completeness, there is a reporting obligation to custom officer for transfer of cash in banknotes and coins of EUR 10,000 or
more carried in, or out of, the European Union.
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Availability of Preferential Subscription Rights
Our shareholders will have the preferential subscription rights described under “Description of Share Capital-Rights, preferences and restrictions
attaching to ordinary shares-Changes in Share Capital-Preferential Subscription Rights.” Under French law, shareholders have preferential rights
to subscribe for cash issues of new shares or other securities giving rights to acquire additional shares on a pro rata basis. Holders of our
securities in the United States (which may be represented by ADSs) will not be able to exercise preferential subscription rights for their securities
unless a registration statement under the Securities Act is effective with respect to such rights or an exemption from the registration requirements
imposed by the Securities Act is available. We may, from time to time, issue new shares or other securities giving rights to acquire additional
shares (such as warrants) at a time when no registration statement is in effect and no Securities Act exemption is available. If so, holders of our
securities in the United States will be unable to exercise any preferential subscription rights and their interests will be diluted. We are under no
obligation to file any registration statement in connection with any issuance of new shares or other securities. We intend to evaluate at the time of
any rights offering the costs and potential liabilities associated with registering the rights, as well as the indirect benefits to us of enabling the
exercise by holders of shares in the United States and ADS holders of the subscription rights, and any other factors we consider appropriate at the
time, and then to make a decision as to whether to register the rights. We cannot assure you that we will file a registration statement.
For holders of our ordinary shares represented by ADSs, the depositary may make these rights or other distributions available to ADS holders. If
the depositary does not make the rights available to ADS holders and determines that it is impractical to sell the rights, it may allow these rights
to lapse. In that case, ADS holders will receive no value for them. The section of this exhibit titled “Description of Securities Other than Equity
Securities-American Depositary Shares-Dividends and Other Distributions” explains in detail the depositary’s responsibility in connection with a
rights offering. See also “Risk Factors—Your right as a holder of ADSs to participate in any future preferential subscription rights offering or to
elect to receive dividends in shares may be limited, which may cause dilution to your holdings.” in our most recent Annual Report on Form 20-F.
Description of Securities Other than Equity Securities
Debt Securities.
Not applicable.
Warrants and Rights.
Not applicable.
Other Securities.
Not applicable.
American Depositary Shares.
Citibank, N.A. acts as the depositary for the American Depositary Shares related to our ordinary shares. Citibank, N.A.’s depositary offices are
located at 388 Greenwich Street, New York, New York 10013. American Depositary Shares are frequently referred to as ADSs and represent
ownership interests in securities that are on deposit with the depositary. ADSs may be evidenced by certificates that are commonly known as
American Depositary Receipts, or ADRs. The depositary typically appoints a custodian to safekeep the securities on deposit. In this case, the
custodian is Citibank Europe plc, located at 1 North Wall Quay, Dublin 1, Ireland.
27
We have appointed Citibank, N.A. as depositary pursuant to the deposit agreement. A copy of the deposit agreement is on file with the SEC
under cover of a Registration Statement on Form F-6. You may obtain a copy of the deposit agreement from the SEC’s website (www.sec.gov).
Please refer to Registration Number 333-234063 when retrieving such copy.
Each ADS represents the right to receive, and to exercise the beneficial ownership interests in, one ordinary share that is on deposit with the
depositary bank and/or custodian. An ADS also represents the right to receive, and to exercise the beneficial interests in, any other property
received by the depositary bank or the custodian on behalf of the owner of the ADS but that has not been distributed to the owners of ADSs
because of legal restrictions or practical considerations. The Company and the depositary bank may agree to change the ADS-to-Share ratio by
amending the deposit agreement. This amendment may give rise to, or change, the depositary fees payable by ADS owners. The custodian, the
depositary bank and their respective nominees will hold all deposited property for the benefit of the holders and beneficial owners of such ADSs.
The deposited property does not constitute the proprietary assets of the depositary bank, the custodian or their nominees. Beneficial ownership in
the deposited property will under the terms of the deposit agreement be vested in the beneficial owners of the ADSs. The depositary bank, the
custodian and their respective nominees are the record holders of the deposited property represented by the ADSs for the benefit of the holders
and beneficial owners of the corresponding ADSs. A beneficial owner of ADSs may or may not be the holder of ADSs. Beneficial owners of
ADSs are able to receive, and to exercise beneficial ownership interests in, the deposited property only through the registered holders of the
ADSs, the registered holders of the ADSs (on behalf of the applicable ADS owners) only through the depositary bank, and the depositary bank
(on behalf of the owners of the corresponding ADSs) directly, or indirectly, through the custodian or their respective nominees, in each case upon
the terms of the deposit agreement.
If you are or become an owner of ADSs, you are or will become a party to the deposit agreement and therefore are or will be bound to its terms
and to the terms of any ADR that represents your ADSs. The deposit agreement and the ADR specify the rights and obligations as well as your
rights and obligations as owner of ADSs and those of the depositary bank. As an ADS holder you appoint the depositary bank to act on your
behalf in certain circumstances. The deposit agreement and the ADRs are governed by New York law. However, the obligations to the holders of
ordinary shares will continue to be governed by the laws of France, which may be different from the laws in the United States.
In addition, applicable laws and regulations may require you to satisfy reporting requirements and obtain regulatory approvals in certain
circumstances. You are solely responsible for complying with such reporting requirements and obtaining such approvals. Neither the depositary
bank, the custodian, Innate or any of their or the respective agents or affiliates shall be required to take any actions whatsoever on your behalf to
satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.
As an owner of ADSs, we will not treat you as one of our shareholders and you will not have direct shareholder rights. French law governs
shareholder rights. The depositary bank will hold on your behalf the shareholder rights attached to the ordinary shares underlying your ADSs. As
an owner of ADSs you will be able to exercise the shareholders rights for the ordinary shares represented by your
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ADSs through the depositary bank only to the extent contemplated in the deposit agreement. To exercise any shareholder rights not contemplated
in the deposit agreement you will, as an ADS owner, need to arrange for the cancellation of your ADSs and become a direct shareholder.
The manner in which you own the ADSs (e.g., in a brokerage account vs. as registered holder, or as holder of certificated vs. uncertificated
ADSs) may affect your rights and obligations, and the manner in which, and extent to which, the depositary bank’s services are made available
to you. As an owner of ADSs, you may hold your ADSs either by means of an ADR registered in your name, through a brokerage or safekeeping
account, or through an account established by the depositary bank in your name reflecting the registration of uncertificated ADSs directly on the
books of the depositary bank (commonly referred to as the “direct registration system” or “DRS”). The direct registration system reflects the
uncertificated (book-entry) registration of ownership of ADSs by the depositary bank. Under the direct registration system, ownership of ADSs is
evidenced by periodic statements issued by the depositary bank to the holders of the ADSs. The direct registration system includes automated
transfers between the depositary bank and The Depository Trust Company (“DTC”), the central book-entry clearing and settlement system for
equity securities in the United States. If you decide to hold your ADSs through your brokerage or safekeeping account, you must rely on the
procedures of your broker or bank to assert your rights as ADS owner. Banks and brokers typically hold securities such as the ADSs through
clearing and settlement systems such as DTC. The procedures of such clearing and settlement systems may limit your ability to exercise your
rights as an owner of ADSs. Please consult with your broker or bank if you have any questions concerning these limitations and procedures. All
ADSs held through DTC will be registered in the name of a nominee of DTC. This summary description assumes you have opted to own the
ADSs directly by means of an ADS registered in your name and, as such, we will refer to you as the “holder.” When we refer to “you,” we
assume the reader owns ADSs and will own ADSs at the relevant time.
The registration of the ordinary shares in the name of the depositary bank or the custodian shall, to the maximum extent permitted by applicable
law, vest in the depositary bank or the custodian the record ownership in the applicable ordinary shares with the beneficial ownership rights and
interests in such ordinary shares being at all times vested with the beneficial owners of the ADSs representing the ordinary shares. The
depositary bank or the custodian shall at all times be entitled to exercise the beneficial ownership rights in all deposited property, in each case
only on behalf of the holders and beneficial owners of the ADSs representing the deposited property.
Dividends and Distributions
As a holder of ADSs, you generally have the right to receive the distributions we make on the securities deposited with the custodian. Your
receipt of these distributions may be limited, however, by practical considerations and legal limitations. Holders of ADSs will receive such
distributions under the terms of the deposit agreement in proportion to the number of ADSs held as of the specified record date, after deduction
of the applicable fees, taxes and expenses.
Distributions of Cash
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Whenever we make a cash distribution for the securities on deposit with the custodian, we will deposit the funds with the custodian. Upon
receipt of confirmation of the deposit of the requisite funds, the depositary bank will arrange for the funds received in a currency other than U.S.
dollars to be converted into U.S. dollars and for the distribution of the U.S. dollars to the holders, subject to French laws and regulations.
The conversion into U.S. dollars will take place only if practicable and if the U.S. dollars are transferable to the United States. The depositary
bank will apply the same method for distributing the proceeds of the sale of any property (such as undistributed rights) held by the custodian in
respect of securities on deposit. The distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by
holders under the terms of the deposit agreement. The depositary bank will hold any cash amounts it is unable to distribute in a non-interest
bearing account for the benefit of the applicable holders and beneficial owners of ADSs until the distribution can be effected or the funds that the
depositary bank holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States.
Distributions of Shares
Whenever we make a free distribution of ordinary shares for the securities on deposit with the custodian, we will deposit the applicable number
of ordinary shares with the custodian. Upon receipt of confirmation of such deposit, the depositary bank will either distribute to holders new
ADSs representing the ordinary shares deposited or modify the ADS-to-ordinary shares ratio, in which case each ADS you hold will represent
rights and interests in the additional ordinary shares so deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold
and the proceeds of such sale will be distributed as in the case of a cash distribution.
The distribution of new ADSs or the modification of the ADS-to-ordinary shares ratio upon a distribution of ordinary shares will be made net of
the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes or
governmental charges, the depositary bank may sell all or a portion of the new ordinary shares so distributed.
No such distribution of new ADSs will be made if it would violate a law (e.g., the U.S. securities laws) or if it is not operationally practicable. If
the depositary bank does not distribute new ADSs as described above, it may sell the ordinary shares received upon the terms described in the
deposit agreement and will distribute the proceeds of the sale as in the case of a distribution of cash.
Distributions of Rights
Whenever we intend to distribute rights to subscribe for additional ordinary shares, we will give prior notice to the depositary bank and we will
assist the depositary bank in determining whether it is lawful and reasonably practicable to distribute rights to subscribe for additional ADSs to
holders.
The depositary bank will establish procedures to distribute rights to subscribe for additional ADSs to holders and to enable such holders to
exercise such rights if it is lawful and reasonably practicable to
30
make the rights available to holders of ADSs, and if we provide all of the documentation contemplated in the deposit agreement (such as
opinions to address the lawfulness of the transaction). You may have to pay fees, expenses, taxes and other governmental charges to subscribe
for the new ADSs upon the exercise of your rights. The depositary bank is not obligated to establish procedures to facilitate the distribution and
exercise by holders of rights to subscribe for new ordinary shares other than in the form of ADSs.
The depositary bank will not distribute the rights to you if:
• We do not timely request that the rights be distributed to you or we request that the rights not be distributed to you; or
• We fail to deliver satisfactory documents to the depositary bank; or
•
It is not reasonably practicable to distribute the rights.
The depositary bank will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of
such sale will be distributed to holders as in the case of a cash distribution. If the depositary bank is unable to sell the rights, it will allow the
rights to lapse.
Elective Distributions
Whenever we intend to distribute a dividend payable at the election of shareholders either in cash or in additional shares, we will give prior
notice thereof to the depositary bank and will indicate whether we wish the elective distribution to be made available to you. In such case, we
will assist the depositary bank in determining whether such distribution is lawful and reasonably practicable.
The depositary bank will make the election available to you only if it is reasonably practicable and if we have provided all of the documentation
contemplated in the deposit agreement. In such case, the depositary bank will establish procedures to enable you to elect to receive either cash or
additional ADSs, in each case as described in the deposit agreement.
If the election is not made available to you, you will receive either cash or additional ADSs, depending on what a shareholder in France would
receive upon failing to make an election, as more fully described in the deposit agreement.
Other Distributions
Whenever we intend to distribute property other than cash, ordinary shares or rights to subscribe for additional ordinary shares, we will notify
the depositary bank in advance and will indicate whether we wish such distribution to be made to you. If so, we will assist the depositary bank in
determining whether such distribution to holders is lawful and reasonably practicable.
If it is reasonably practicable to distribute such property to you and if we provide to the depositary bank all of the documentation contemplated
in the deposit agreement, the depositary bank will distribute the property to the holders in a manner it deems practicable.
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The distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit
agreement. In order to pay such taxes and governmental charges, the depositary bank may sell all or a portion of the property received.
The depositary bank will not distribute the property to you and will sell the property if:
• We do not request that the property be distributed to you or if we request that the property not be distributed to you;
• We do not deliver satisfactory documents to the depositary bank;
•
•
The depositary bank determines that all or a portion of the distribution to you is not reasonably practicable; or
The proceeds of such a sale will be distributed to holders as in the case of a cash distribution.
Redemption
Whenever we decide to redeem any of the securities on deposit with the custodian, we will notify the depositary bank in advance. If it is
practicable and if we provide all of the documentation contemplated in the deposit agreement, the depositary bank will provide notice of the
redemption to the holders.
The custodian will be instructed to surrender the shares being redeemed against payment of the applicable redemption price. The depositary bank
will convert the redemption funds received into U.S. dollars upon the terms of the deposit agreement and will establish procedures to enable
holders to receive the net proceeds from the redemption upon surrender of their ADSs to the depositary bank. You may have to pay fees,
expenses, taxes and other governmental charges upon the redemption of your ADSs. If less than all ADSs are being redeemed, the ADSs to be
retired will be selected by lot or on a pro rata basis, as the depositary bank may determine.
Changes Affecting Ordinary Shares
The ordinary shares held on deposit for your ADSs may change from time to time. For example, there may be a change in nominal or par value,
split-up, cancellation, consolidation or any other reclassification of such ordinary shares or a recapitalization, reorganization, merger,
consolidation or sale of assets of the Company.
If any such change were to occur, your ADSs would, to the extent permitted by law and the deposit agreement, represent the right to receive the
property received or exchanged in respect of the ordinary shares held on deposit. The depositary bank may in such circumstances deliver new
ADSs to you, amend the deposit agreement, the ADRs and the applicable Registration Statement(s) on Form F-6, call for the exchange of your
existing ADSs for new ADSs and take any other actions that are appropriate to reflect as to the ADSs the change affecting the Shares. If the
depositary bank may not lawfully distribute such property to you, the depositary bank may sell such property and distribute the net proceeds to
you as in the case of a cash distribution.
Issuance of ADSs upon Deposit of Ordinary Shares
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After the completion of a global offering, the ordinary shares that are being offered for sale pursuant to the prospectus supplement in such
offering will be deposited by us with the custodian. Upon receipt of confirmation of such deposit, the depositary bank will issue ADSs to the
underwriters named in the prospectus.
After the closing of the offer, the depositary bank may create ADSs on your behalf if you or your broker deposit ordinary shares with the
custodian. The depositary bank will deliver these ADSs to the person you indicate only after you pay any applicable issuance fees and any
charges and taxes payable for the transfer of the ordinary shares to the custodian. Your ability to deposit ordinary shares and receive ADSs may
be limited by U.S. and French legal considerations applicable at the time of deposit.
The issuance of ADSs may be delayed until the depositary bank or the custodian receives confirmation that all required approvals have been
given and that the ordinary shares have been duly transferred to the custodian. The depositary bank will only issue ADSs in whole numbers.
When you make a deposit of ordinary shares, you will be responsible for transferring good and valid title to the depositary bank. As such, you
will be deemed to represent and warrant that:
The ordinary shares are duly authorized, validly issued, fully paid, non-assessable and legally obtained.
•
• All preemptive (and similar) rights, if any, with respect to such ordinary shares have been validly waived or exercised.
• You are duly authorized to deposit the ordinary shares.
•
The ordinary shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse
claim, and are not, and the ADSs issuable upon such deposit will not be, “restricted securities” (as defined in the deposit agreement).
•
The ordinary shares presented for deposit have not been stripped of any rights or entitlements.
If any of the representations or warranties are incorrect in any way, we and the depositary bank may, at your cost and expense, take any and all
actions necessary to correct the consequences of the misrepresentations.
Transfer, Combination and Split Up of ADRs
As an ADR holder, you will be entitled to transfer, combine or split up your ADRs and the ADSs evidenced thereby. For transfers of ADRs, you
will have to surrender the ADRs to be transferred to the depositary bank and also must:
•
•
•
ensure that the surrendered ADR is properly endorsed or otherwise in proper form for transfer;
provide such proof of identity and genuineness of signatures as the depositary bank deems appropriate;
provide any transfer stamps required by the State of New York or the United States; and
33
•
pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms of the
deposit agreement, upon the transfer of ADRs.
To have your ADRs either combined or split up, you must surrender the ADRs in question to the depositary bank with your request to have them
combined or split up, and you must pay all applicable fees, charges and expenses payable by ADR holders, pursuant to the terms of the deposit
agreement, upon a combination or split up of ADRs.
Withdrawal of Ordinary Shares Upon Cancellation of ADSs
As a holder, you will be entitled to present your ADSs to the depositary bank for cancellation and then receive the corresponding number of
underlying ordinary shares at the custodian’s offices. Your ability to withdraw the ordinary shares held in respect of the ADSs may be limited by
U.S. and French law considerations applicable at the time of withdrawal. In order to withdraw the ordinary shares represented by your ADSs,
you will be required to pay to the depositary bank the fees for cancellation of ADSs and any charges and taxes payable upon the transfer of the
ordinary shares. You assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights
under the deposit agreement.
If you hold ADSs registered in your name, the depositary bank may ask you to provide proof of identity and genuineness of any signature and
such other documents as the depositary bank may deem appropriate before it will cancel your ADSs. The withdrawal of the ordinary shares
represented by your ADSs may be delayed until the depositary bank receives satisfactory evidence of compliance with all applicable laws and
regulations. Please keep in mind that the depositary bank will only accept ADSs for cancellation that represent a whole number of securities on
deposit.
You will have the right to withdraw the securities represented by your ADSs at any time except for:
•
Temporary delays that may arise because (i) the transfer books for the ordinary shares or ADSs are closed, or (ii) ordinary shares are
immobilized on account of a shareholders’ meeting or a payment of dividends.
• Obligations to pay fees, taxes and similar charges.
• Restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit.
The deposit agreement may not be modified to impair your right to withdraw the securities represented by your ADSs except to comply with
mandatory provisions of law.
Voting Rights
As a holder, you generally have the right under the deposit agreement to instruct the depositary bank to exercise the voting rights for the ordinary
shares represented by your ADSs. The voting rights of holders of ordinary shares are described in the section of this exhibit entitled “Description
of Share Capital-Rights, preferences and restrictions attaching to ordinary shares-Rights and Obligations Attached to Ordinary Shares-Voting
Rights (Article 12 of the Bylaws).”
34
At our request, the depositary bank will distribute to you any notice of shareholders’ meeting received from us together with information
explaining how to instruct the depositary bank to exercise the voting rights of the securities represented by ADSs. In lieu of distributing such
materials, the depositary bank may distribute to holders of ADSs instructions on how to retrieve such materials upon request.
If the depositary bank timely receives voting instructions from a holder of ADSs, it will endeavor to vote the securities (in person or by proxy)
represented by the holder’s ADSs in accordance with such voting instructions.
If the depositary receives voting instructions from a holder of ADSs that fail to specify the manner in which the depositary is to vote, the
depositary will deem such holder (unless otherwise specified in the notice distributed to holders) to have instructed the depositary to vote in
favor of all resolutions endorsed by our Executive Board. With respect to securities represented by ADSs for which no timely voting instructions
are received by the depositary from the holder, the depositary will (unless otherwise specified in the notice distributed to holders) deem such
holder to have instructed the depositary to give a discretionary proxy to a person designated by us to vote the securities. However, no such
discretionary proxy will be given by the depositary with respect to any matter to be voted upon as to which we inform the depositary that we do
not wish such proxy to be given, substantial opposition exists, or the rights of holders of securities may be materially adversely affected. Please
note that the ability of the depositary bank to carry out voting instructions may be limited by practical and legal limitations and the terms of the
securities on deposit. We cannot assure you that you will receive voting materials in time to enable you to return voting instructions to the
depositary bank in a timely manner.
Amendments and Termination
We may agree with the depositary bank to modify the deposit agreement at any time without your consent. We undertake to give holders 30
days’ prior notice of any modifications that would materially prejudice any of their substantial rights under the deposit agreement. We will not
consider to be materially prejudicial to your substantial rights any modifications or supplements that are reasonably necessary for the ADSs to be
registered under the Securities Act or to be eligible for book-entry settlement, in each case without imposing or increasing the fees and charges
you are required to pay. In addition, we may not be able to provide you with prior notice of any modifications or supplements that are required to
accommodate compliance with applicable provisions of law.
You will be bound by the modifications to the deposit agreement if you continue to hold your ADSs after the modifications to the deposit
agreement become effective. The deposit agreement cannot be amended to prevent you from withdrawing the ordinary shares represented by
your ADSs (except as permitted by law).
We have the right to direct the depositary bank to terminate the deposit agreement. Similarly, the depositary bank may in certain circumstances
on its own initiative terminate the deposit agreement. In either case, the depositary bank must give notice to the holders at least 30 days before
termination. Until termination, your rights under the deposit agreement will be unaffected.
35
After termination, the depositary bank will continue to collect distributions received (but will not distribute any such property until you request
the cancellation of your ADSs) and may sell the securities held on deposit. After the sale, the depositary bank will hold the proceeds from such
sale and any other funds then held for the holders of ADSs in a non-interest bearing account. At that point, the depositary bank will have no
further obligations to holders other than to account for the funds then held for the holders of ADSs still outstanding (after deduction of applicable
fees, taxes and expenses).
In connection with any termination of the deposit agreement, the depositary bank may make available to owners of ADSs a means to withdraw
the ordinary shares represented by ADSs and to direct the depositary of such ordinary shares into an unsponsored American depositary share
program established by the depositary bank. The ability to receive unsponsored American depositary shares upon termination of the deposit
agreement would be subject to satisfaction of certain U.S. regulatory requirements applicable to the creation of unsponsored American
depositary shares and the payment of applicable depositary fees.
Books of Depositary
The depositary bank will maintain ADS holder records at its depositary office. You may inspect such records at such office during regular
business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the ADSs and the
deposit agreement.
The depositary bank will maintain in New York facilities to record and process the issuance, cancellation, combination, split-up and transfer of
ADSs. These facilities may be closed from time to time, to the extent not prohibited by law.
Limitations on Obligations and Liabilities
The deposit agreement limits our obligations and the depositary bank’s obligations to you. Please note the following:
• We and the depositary bank are obligated only to take the actions specifically stated in the deposit agreement without negligence or bad
faith.
•
•
The depositary bank disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for
the effect of any vote, provided it acts in good faith and in accordance with the terms of the deposit agreement.
The depositary bank disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content of any
document forwarded to you on our behalf or for the accuracy of any translation of such a document, for the investment risks associated
with investing in ordinary shares, for the validity or worth of the ordinary shares, for any tax consequences that result from the
ownership of ADSs, for the credit-worthiness of any third party, for allowing any rights to lapse under the terms of the deposit
agreement, for the timeliness of any of our notices or for our failure to give notice.
• We and the depositary bank will not be obligated to perform any act that is inconsistent with the terms of the deposit agreement.
• We and the depositary bank disclaim any liability if we or the depositary bank are prevented or forbidden from or subject to any civil or
criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the deposit
36
agreement, by reason of any provision, present or future of any law or regulation, or by reason of present or future provision of any
provision of our bylaws, or any provision of or governing the securities on deposit, or by reason of any act of God or war or other
circumstances beyond our control.
• We and the depositary bank disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for in the
deposit agreement or in our bylaws or in any provisions of or governing the securities on deposit.
• We and the depositary bank further disclaim any liability for any action or inaction in reliance on the advice or information received
from legal counsel, accountants, any person presenting Shares for deposit, any holder of ADSs or authorized representatives thereof, or
any other person believed by either of us in good faith to be competent to give such advice or information.
• We and the depositary bank also disclaim liability for the inability by a holder to benefit from any distribution, offering, right or other
benefit that is made available to holders of ordinary shares but is not, under the terms of the deposit agreement, made available to you.
• We and the depositary bank may rely without any liability upon any written notice, request or other document believed to be genuine and
to have been signed or presented by the proper parties.
• We and the depositary bank also disclaim liability for any consequential or punitive damages for any breach of the terms of the deposit
agreement.
• No disclaimer of any Securities Act liability is intended by any provision of the deposit agreement.
• Nothing in the deposit agreement gives rise to a partnership or joint venture, or establishes a fiduciary relationship, among us, the
depositary bank and you as ADS holder.
• Nothing in the deposit agreement precludes Citibank (or its affiliates) from engaging in transactions in which parties adverse to us or the
ADS owners have interests, and nothing in the deposit agreement obligates Citibank to disclose those transactions, or any information
obtained in the course of those transactions, to us or to the ADS owners, or to account for any payment received as part of those
transactions.
37
AMENDMENT N°. 9
This Amendment No. 9 (the “Amendment”) is made and entered into as of July 18 2024 (“Effective Date”) between Innate Pharma SA, a corporation
existing under the laws of France (“IPH”) and Novo Nordisk A/S, a corporation existing under the laws of Denmark (“NN”) with regards to the Joint Research,
Development, Option and License Agreement dated March 28, 2006, as amended by Amendment and Supplement No.1, dated October 8, 2008, Amendment
and Supplement No. 2, dated October 8, 2008, Amendment and Supplement No. 3, dated June 26, 2009, Amendment No. 4, dated December 13, 2010,
Amendment No. 5, dated December 13, 2010, Amendment 6 dated July 1 2011, Amendment and Supplement No. 7 dated February 5, 2014 and Amendment
and Supplement No. 8 dated September 16 2016 (collectively, the “Agreement”). NN and IPH may each individually be referred to as “Party” and collectively
as “Parties”.
st
th
Whereas pursuant to the Agreement, NN and IPH agreed to work, independently, jointly and/or together with agreed-upon Third Parties, to (a) discover or
identify Drug Candidates, and (b) optimize Drug Candidates for progression to (i) Licensed Products for further development and commercialization by NN or
(ii) Niche Candidates for further development and commercialization by IPH (either alone or together with NN), in each case for all uses and purposes,
including therapeutic, prophylactic and, except as otherwise expressly therein provided, diagnostic uses;
Whereas pursuant to Amendment No.1 and with effect from Amendment No.1 Effective Date, NN classified Anti-KIR as a Niche Candidate for independent
further development and commercialization by IPH for any human therapeutic, prophylactic or diagnostic indication or application;
Whereas as a condition precedent to its entry into a license agreement with IPH pursuant to which Bristol-Myers Squibb Company (“BMS”) became an Out-
licensee under the Agreement (the “Out-licensee”), the Parties have executed Amendment No 6 on July 1 2011 clarifying certain matters with respect to the
rights and obligations of the Parties and of BMS with respect to Anti-KIR; and
st
Whereas Anti-Kir or Anti-Kir Antibodies were licensed-out by IPH to BMS under a Collaboration and License Agreement dated July 6th 2011 (the “ BMS
COLA”);
Whereas The development of lirilumab and other Anti-Kir or Anti-Kir Antibodies in a number of Phase I and II clinical trials sponsored by NN, IPH and/or
BMS ended in 2017 for lack of clinical efficacy in Phase 2 trials in several tumor types including Acute Myeloid Leukemia and Head and Neck cancer;
Whereas IPH and BMS would like to terminate their Collaboration and License Agreement and are contemplating the abandonment of all IP rights, patents,
regulatory material and more globally all information related to Anti-Kir or Anti-Kir Antibodies;
Now, therefore, the Parties, intending to be legally bound, agree as follows:
1. The terms defined in the Agreement shall have the meaning herein, unless otherwise defined herein or unless the context otherwise requires. To the
extent that the Agreement is explicitly amended by this Amendment, the terms of the Amendment will control where the terms of the Agreement are
contrary to or conflict with the following provisions. Where the Agreement is not explicitly amended by this Amendment, the terms of the Agreement
will remain in force.
2. The Parties hereby acknowledge that the BMS COLA has been terminated with BMS ceasing to be an Out-Licensee as of July 18 2024.
th
3. With effect from the Effective Date, the Parties hereby agree to partially terminate the JRDOLA with respect to Anti-Kir, Anti-Kir Product or Anti-Kir
Antibodies.
4. As a consequence all rights and obligations of the Parties are terminated with respect to Anti-Kir, Anti-Kir Product or Anti-Kir Antibodies as from the
Effective Date and each Party hereby waive any rights such Party may have on the Anti-Kir or Anti-Kir Antibodies IP rights, Anti-KIR Patents,
regulatory material and more globally all information related to Anti-Kir, Anti-Kir Product or Anti-Kir Antibodies;
5. The Anti-KIR Patents (including Shared Anti-KIR Patents) are listed in Appendix 1.
6. BMS and IPH intends to discontinue the prosecution, maintenance and defense of the Shared Anti-KIR Patents.
7. NN acknowledges BMS and IPH intention to abandon such Shared Anti-KIR Patents and hereby similarly abandon its rights to file, defend, maintain
or continue prosecution of any of such Shared Anti-KIR Patent, at its own expense.
8. NN acknowledges that University of Genoa may choose to file, defend, maintain or continue prosecution of any of such Shared Anti-KIR Patent in
which it has ownership rights.
9. Further, neither BMS nor IPH shall have any obligation to transfer back any IP right, patent or regulatory material, clinical data and more globally all
information related to Anti-Kir, Anti-Kir Product or Anti-Kir Antibodies to NN.
10. All and any remaining payment obligations, if any, with regard to Anti-Kir, Anti-Kir Product or Anti-Kir Antibodies are hereby terminated.
11. Each Party hereby waives all rights it may have under the Agreement on any Collaborative IPR, Collaboration Research Technology IPR,
Collaboration Patent or Collaboration Know-How on Anti-Kir, Anti-Kir Product or Anti-Kir Antibodies and hereby declares and warrants that it will
not continue to maintain any Collaboration Patent on Anti-Kir, Anti-Kir Product or Anti-Kir Antibodies. Any intellectual property that might have
been created jointly by the Parties and/or that is defined as Collaborative IPR, Collaboration Research Technology IPR, Collaboration Patent or
Collaboration Know-How on Anti-Kir, Anti-Kir Product or Anti-Kir Antibodies will become part of the public domain.
As a consequence, each Party may conduct research on Anti-Kir or Anti-Kir Antibodies. Any new invention or new intellectual property rights that
may arise after the Effective Date from such research activities performed individually by either party will be the property of the Party having
conducted the research with no right nor any obligation to the others.
12. Each Party hereby waives any action it may have against the other based on or related to Anti-Kir, Anti-Kir Product or Anti-Kir Antibodies rights and
obligations as provided by the JRDOLA.
13. This Amendment shall be deemed an integral part of the Agreement. Except as expressly set forth herein, all provisions of the Agreement shall remain
unchanged and in full force and effect. The Parties expressly affirm their mutual intention that this Amendment to the Agreement shall constitute a
legally binding Amendment to the Agreement.
This Amendment shall be construed and interpreted pursuant to the laws stipulated in the Agreement. All disputes arising out of or in connection with
this Amendment N°9 shall be settled by arbitration as provided by the Agreement.
IN WITNESS WHEREOF, the Parties have executed and delivered this Amendment.
On behalf of Innate Pharma SA On behalf of NovoNordisk A/S
Signature: s/ Yannis Morel Signature: s/ Karin Conde-Knape
1. Cross-reactive anti-KIR antibodies. Applicant/owner: NN, IPH, and University of Genoa (UG).
Attachment 1
Part A – Anti-KIR Patents
IPH Ref.
NN Ref.
Kirostim NN 6803
6803.204-WO
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
6803.205.EP
6803.204-BR
6803.204-CN
6803.204-IL
6803.204-JP
6803.204-IN
6803.204-CA
6803.204-KR
6803.204-ZA
6803.204-AU
6803.204-US
6803.204-RU
6803.204-NO
6803.204-MX
Application No.
Filing date
Title
Status
PCT/DK2004/00470
1-Jul-2004
EP 04738967.1
1-Jul-2004
BR PI 0412153-8
1-Jul-2004
CN 200480021897.0
1-Jul-2004
CN 2014108318900
IL 172700
1-Jul-2004
JP 2006-515738
1-Jul-2004
IN5990/DELNP/2005
1-Jul-2004
CA 2530272
1-Jul-2004
KR 2006-7000025
1-Jul-2004
ZA 2006/00792
1-Jul-2004
AU 2004253630
1-Jul-2004
US 11/324356
1-Jul-2004
12/847,090
14/789,548
RU 2005140152
1-Jul-2004
NO 20060528
1-Jul-2004
MX 2005/014074
1-Jul-2004
Compositions and methods for
regulating NK cell activity
Published as WO2005/003168
National phase entered
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Granted
Granted
Granted
Abandoned
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
2. Human anti-KIR antibodies, including Anti-KIR(1-7F9). Applicant/owner: NN, IPH, and UG.
IPH Ref.
NN Ref.
Application No.
Filing date
Title
Status
Kirostim NN 7121-
504
Idem
Idem
Idem
Idem
Idem
7121.000-DK
7121.003-US
7121.504-WO
7121.504-TW
7121.505-EP
DK PA 2005 00025
6-Jan-2005
US 60/642,808
11-Jan-2005
PCT/EP2005/053122
1-Jul-2005
TW 94122367
1-Jul-2005
EP 05758642.2
1-Jul-2005
EP 10178924.6
7121.504-AU
AU 2005259221
Human anti-KIR antibodies Expired
Idem
Idem
Idem
Idem
Idem
Expired
Published as WO2006/003179
National phase entered
Granted
Granted
Granted
Idem
Idem
Idem
Idem
Idem
Idem
Idem
7121.504-BR
7121.504-CA
7121.504-CN
7121.504-IL
7121.504-IN
7121.504-JP
7121.504-KR
1-Jul-2005
BR 2004PI12138
1-Jul-2005
CA 2601417
1-Jul-2005
CN 200580022633.1
1-Jul-2005
IL 179635
1-Jul-2005
IN7162/DELNP/2006
1-Jul-2005
JP 2007518617
1-Jul-2005
KR 10-2007-7000069
1-Jul-2005
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
7121.504-MX
7121.504-NO
7121.504-RU
7121.504-US
7121.504-ZA
MX a/2007/000210
1-Jul-2005
NO 20070585
1-Jul-2005
RU 2006144820
1-Jul-2005
US 11/630176
1-Jul-2005
US 12/244,170
US 13/347,832
US 13/936,486
ZA 2007/00736
1-Jul-2005
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
3. Treatment of viral infection. Applicant/owner: NN and IPH.
Granted
Granted
Granted
Abandoned
Granted
Granted
Granted
Granted
IPH Ref.
NN Ref.
Kirostim NN 6874
6874.000-DK
Idem
Idem
Idem
Idem
Idem
Idem
6874.003-US
6874.204-WO
6874.205-EP
6874.204-JP
6874.204-US
Application No.
Filing date
Title
Status
DK PA 2005 00027
6-Jan-2005
US 60/646,717
25-Jan-2005
PCT/EP2006/050071
6-Jan-2006
EP 06700714.6
6-Jan-2006
JP 2007-549894
6-Jan-2006
US 14/043,402
US 11/813,399
6-Jan-2006
Treatment of viral
infection
Idem
Idem
Idem
Idem
Idem
Idem
Expired
Expired
Published as WO2006/072624
National phase entered
Granted
Granted
Granted
Granted
4. Anti-KIR combination treatments. Applicant/owner: NN and IPH.
IPH Ref.
NN Ref.
Kirostim NN 6898
6898.000-DK
Idem
Idem
Idem
Idem
Idem
Idem
Idem
6898.003-US
6898.204-WO
6898.205-EP
6898.204-JP
6898.204-US
Application No.
Filing date
Title
Status
DK PA 2005 00026
6-Jan-2005
US 60/642,128
7-Jan-2005
PCT/EP2006/050072
6-Jan-2006
EP 06700713.8
6-Jan-2006
EP 16167879.2
JP 2007-549895
6-Jan-2006
JP 2014-023776
US 13/183,602
15-Jul-2011
Anti-KIR combination treatment
Expired
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Expired
Published as WO2006/072625
National phase entered
Granted
Granted
Granted
Granted
Granted
5. Non-competitive antagonist KIR-binding agents. Applicant/owner: Novo Nordisk and Innate-Pharma.
IPH Ref.
NN Ref.
Kirostim NN 6923
6923.000-DK
Idem
6923.003-US
Application No.
Filing date
DK PA 2005 00021
6-Jan-2005
US 60/642,646
10-Jan-2005
Title
Status
Agents that block KIR-KIR
interactions
Idem
Expired
Expired
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
6923.204-WO
6923.204-CN
6923.205-EP
6923.204-IN
6923.204-JP
6923.204-US
PCT/EP2006/050073
6-Jan-2006
CN 200680001919.6
6-Jan-2006
CN 201510214401.1
EP 2006701729.3
6-Jan-2006
IN 4447/DELNP/2007
6-Jan-2006
JP 2007-549896
6-Jan-2006
US 11/813402
6-Jan-2006
US 12/244,101
KIR-binding agents and methods of
use thereof
Published as WO2006/072626
National phase entered
Idem
Idem
Idem
Idem
Idem
Idem
Abandoned
Granted
Granted
Granted
Granted
Granted
Granted
Idem
Idem
US 13/745,081
US 14/665,731
Idem
Idem
Granted
Granted
6. Formulations and dosages of containing Anti-KIR antibodies. Applicant/Owner: Novo Nordisk.
IPH Ref.
NN Ref.
Application No.
Filing date
Title
Status
KIROSTIM NN 7575 7575.000-US
7575.010-US
7575.204-WO
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
US 60/879964
11-Jan-2007
US 60/911527
13-Apr-2007
PCT/EP2008/050306
11-Jan-2008
AU 2008204433
AU 2013237638
CA 2,675,291
CN 200880002001.2
CN 2015101427263
EP 08707869.7
EP 13159380.8
JP 2013-213757
US 14/606,814
US 15/849,128
Anti-KIR antibodies, formulations,
and uses thereof
Expired
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Expired
Published as WO2008/084106
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
7. Anti-NKG2A (and other receptors) mAbs for inflammatory indications. Applicant/Owner: IPH, UG and NN.
IPH Ref.
NN Ref.
LDGL-CIP
INNA-051014-WO
Idem
Idem
Idem
Idem
Idem
Idem
Idem
INNA-051014-US
INNA-051014-AU
INNA-051014-CA
INNA-051014-CN
INNA-051014-EP
INNA-051014-JP
Application No.
Filing date
Title
Status
PCT/EP2006/067399
13-Oct-2006
US 12/089,314
4-Apr-2008
AU 200630116
13-Oct-2006
CA 2,623,109
13-Oct-2006
CN 200680038141.6
13-Oct-2006
EP 06 807262.8
13-Oct-2006
EP 11150593.9
JP 2008-535041
13-Oct-2006
Compositions and
Methods for treating
Proliferative Disorders
Published as WO2007/042573
National phase entered
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Granted
Granted
Granted
Granted
Granted
Granted
Granted
8. Antibodies, antibody fragments, and derivatives thereof that cross-react with two or more inhibitory receptors (KIR2DL1 and KIR2DL2,3) present on the
cell surface of NK cells, and which potentiate NK cell cytotoxicity in mammalian subjects or in a biological sample. Applicant/owner: IPH and UG.
IPH Ref.
NN Ref.
Kirostim
INNA-030702-I-US
Application No.
Filing date
US 60/483,894
07/02/2003
Idem
Idem
Idem
INNA-030702-I-US1
INNA-030702-I-WO
US 60/545,471
02/19/2004
PCT/IB2004/002464
07/01/2004
INNA-030702-I-US3
US 10/563,045
Idem
Idem
Idem
Title
Status
Compositions and methods
for regulating NK cell
activity
Expired
Expired
Published as WO2005/003172
National phase entered
Granted
Idem
INNA-030702-I-AU
12/30/2005
US 15/876,839
AU 2004253770
07/01/2004
Idem
PAN-KIR2DL NK-
Receptor Antibodies and
their Use in Diagnostic and
Therapy
Idem
Idem
Idem
Idem
INNA-030702-I-BR
INNA-030702-I-CA
INNA-030702-I-CN
INNA-030702- I-EP
BR PI 0412138-4
07/01/2004
CA 2,530,591
07/01/2004
CN 200480024006.7
07/01/2004
EP 04 744115.9
07/01/2004
Idem
Idem
Idem
Idem
Granted
Granted
Granted
Granted
Granted
Granted
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
INNA-030702-I-HK
INNA-030702-I-IL
INNA-030702-I-IN
INNA-030702-I-JP
INNA-030702-I-KR
INNA-030702-I-MX
INNA-030702-I-NO
INNA-030702-I-RU
INNA-030702-I-ZA
EP 10178580.
HK 06108029.2
07/18/2006
IL 172613
07/01/2004
IN5904/DELNP/2005
07/01/2004
JP 2006-516606
07/01/2004
KR 10-2006-7000109
07/01/2004
MX PA/a/2005013923
07/01/2004
NO 2005 6048
07/01/2004
RU 2006102960
07/01/2004
ZA 2006/0842
07/01/2004
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
9. Use of blocking anti-NKG2A and -KIR mAbs (as well as anti-NCR mAbs) in combination with depleting mAbs, where the anti-NKG2A mAb-mediated NK
cell activation may enhance ADCC toward a target cell. Applicant/owner: IPH. Subject to Patent Assignment agreement of February 2006 between IPH and the
University of Perugia).
IPH Ref.
NN Ref.
Application No.
Filing date
Anti-KIR/
ADCC
INNA-030724-US
US 60/489,489
07/24/2003
Title
Status
Expired
Methods and compositions
for increasing the
efficiency of therapeutic
antibodies using
compounds that block the
inhibitory receptors of NK
cells
Idem
INNA-030724-WO
PCT/IB 2004/02636
07/23/2004
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
INNA-030724-US1
INNA-030724-AU
INNA-030724-BR
INNA-030724-
INNA-030724-CN
INNA-030724-EP
INNA-030724-HK
INNA-030724-IN
US 10/897,624
07/23/2004
US 12/847,090
US 14/789,548
AU 2004258747
07/23/2004
BR PI 041 2890-7
07/23/2004
CA 2,532,54
07/23/2004
CN 200480021421.
07/23/2004
CN 201110414480.2
EP 04 744267.8
07/23/2004
HK 06108031.8
07/18/2006
IN5934/DELNP/2005
07/23/2004
IN 2422/DELNP/2008
INNA-030724-IL
IL 172679
INNA-030724-JP
JP 2006-520938
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Published as
WO2005/009465
National phase entered
Granted
Granted
Granted
Granted
Granted
Granted
Abandoned
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
INNA-030724-KR
INNA-030724-MX
INNA-030724-NO
INNA-030724-RU
INNA-030724-ZA
07/23/2004
JP 2011-201631
JP 2014-181655
KR 10-2006-7001698
07/23/2004
KR 10-2012-7014089
MX PA/a/2006/000841
07/23/2004
NO 2005 6049
07/23/2004
NO 20150493
RU 2006105642
07/23/2004
ZA 2006/1584
07/23/2004
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Issued
10. Use of depleting anti-NKG2A (and other NK receptor) mAbs for the treatment of LGL and other suitable and/or related diseases including T-cell type
LDGL, autoimmune disorders, and any other immunoproliferative or malignant disorders involving NK or other NKG2A-expressing lymphocytes.
Applicant/owner: IPH and UG.
IPH Ref.
NN Ref.
Application No.
Filing date
LDGL
INNA-040430-B-US
US 60/567,329
04/30/2004
Title
Status
Compositions and
Methods for treating
Proliferative Disorders
Expired
Idem
Idem
Idem
Idem
Idem
Idem
INNA-040430-B-WO
PCT/IB2005/001494
04/29/2005
INNA-040430-B-US1
US 11/587,892 10/27/2006
INNA-040430-B-AU
AU 2005238300
04/29/2005
INNA-040430-B-EP
EP 05 739838.0 04/29/2005
INNA-040430-B-CA
INNA-040430-B-JP
CA 2,564,246
04/29/2005
JP 2007-510158
04/29/2005
Idem
Idem
Idem
Idem
Idem
Idem
1. Cross-reactive anti-KIR antibodies. Applicant/owner: NN, IPH, and University of Genoa (UG).
Part B – Shared Anti-KIR Patents
Published as WO2005/105849
National phase entered
Abandoned
Abandoned
Abandoned
Abandoned
Abandoned
IPH Ref.
NN Ref.
Kirostim NN 6803
6803.204-WO
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
6803.205.EP
6803.204-BR
6803.204-CN
6803.204-IL
6803.204-JP
6803.204-IN
6803.204-CA
6803.204-KR
6803.204-ZA
6803.204-AU
6803.204-US
6803.204-RU
6803.204-NO
6803.204-MX
Application No.
Filing date
Title
Status
PCT/DK2004/00470
1-Jul-2004
EP 04738967.1
1-Jul-2004
BR PI 0412153-8
1-Jul-2004
CN 200480021897.0
1-Jul-2004
CN 2014108318900
IL 172700
1-Jul-2004
JP 2006-515738
1-Jul-2004
IN5990/DELNP/2005
1-Jul-2004
CA 2530272
1-Jul-2004
KR 2006-7000025
1-Jul-2004
ZA 2006/00792
1-Jul-2004
AU 2004253630
1-Jul-2004
US 11/324356
1-Jul-2004
12/847,090
14/789,548
RU 2005140152
1-Jul-2004
NO 20060528
1-Jul-2004
MX 2005/014074
1-Jul-2004
Compositions and methods
for regulating NK cell
activity
Published as WO2005/003168
National phase entered
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Granted
Granted
Granted
Abandoned
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
2. Human anti-KIR antibodies, including Anti-KIR(1-7F9). Applicant/owner: NN, IPH, and UG.
IPH Ref.
NN Ref.
Application No.
Filing date
Title
Status
Kirostim NN 7121-
504
7121.000-DK
Idem
Idem
Idem
Idem
7121.003-US
7121.504-WO
7121.504-TW
7121.505-EP
DK PA 2005 00025
6-Jan-2005
US 60/642,808
11-Jan-2005
PCT/EP2005/053122
1-Jul-2005
TW 94122367
1-Jul-2005
TW 101113099
EP 05758642.2
1-Jul-2005
EP 10178924.6
Human anti-KIR antibodies Expired
Idem
Idem
Idem
Idem
Idem
Idem
Expired
Published as WO2006/003179
National phase entered
Granted
Granted
Granted
Granted
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
7121.504-AU
7121.504-BR
7121.504-CA
7121.504-CN
7121.504-IL
7121.504-IN
7121.504-JP
7121.504-KR
7121.504-MX
7121.504-NO
7121.504-RU
7121.504-US
Idem
7121.504-ZA
AU 2005259221
1-Jul-2005
BR 2004PI12138
1-Jul-2005
CA 2601417
1-Jul-2005
CN 200580022633.1
1-Jul-2005
IL 179635
1-Jul-2005
IN7162/DELNP/2006
1-Jul-2005
JP 2007518617
1-Jul-2005
JP 2012-176067
KR 10-2007-7000069
1-Jul-2005
MX a/2007/000210
1-Jul-2005
NO 20070585
1-Jul-2005
NO 20171133
RU 2006144820
1-Jul-2005
US 11/630176
1-Jul-2005
US 12/244,170
US 13/347,832
US 13/936,486
ZA 2007/00736
1-Jul-2005
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Granted
Granted
Granted
Granted
Granted
Abandoned
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
3. Treatment of viral infection. Applicant/owner: NN and IPH.
IPH Ref.
NN Ref.
Kirostim NN 6874
6874.000-DK
Idem
Idem
Idem
Idem
Idem
Idem
6874.003-US
6874.204-WO
6874.205-EP
6874.204-JP
6874.204-US
Application No.
Filing date
Title
Status
DK PA 2005 00027
6-Jan-2005
US 60/646,717
25-Jan-2005
PCT/EP2006/050071
6-Jan-2006
EP 06700714.6
6-Jan-2006
JP 2007-549894
6-Jan-2006
US 14/043,402
US 11/813,399
6-Jan-2006
Treatment of viral
infection
Idem
Idem
Idem
Idem
Idem
Idem
Expired
Expired
Published as WO2006/072624
National phase entered
Granted
Granted
Granted
Granted
4. Anti-KIR combination treatments. Applicant/owner: NN and IPH.
IPH Ref.
NN Ref.
Application No.
Filing date
Title
Status
Kirostim NN 6898
6898.000-DK
DK PA 2005 00026
6-Jan-2005
Anti-KIR combination
treatment
Expired
Idem
Idem
Idem
Idem
Idem
Idem
Idem
6898.003-US
6898.204-WO
6898.205-EP
6898.204-JP
6898.204-US
US 60/642,128
7-Jan-2005
PCT/EP2006/050072
6-Jan-2006
EP 06700713.8
6-Jan-2006
EP 16167879.2
JP 2007-549895
6-Jan-2006
JP 2014-023776
US 13/183,602
15-Jul-2011
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Expired
Published as WO2006/072625
National phase entered
Granted
Granted
Granted
Granted
Granted
5. Non-competitive antagonist KIR-binding agents. Applicant/owner: Novo Nordisk and Innate-Pharma.
IPH Ref.
NN Ref.
Kirostim NN 6923
6923.000-DK
6923.003-US
6923.204-WO
6923.204-CN
6923.205-EP
6923.204-IN
6923.204-JP
6923.204-US
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Application No.
Filing date
Title
Status
DK PA 2005 00021
6-Jan-2005
US 60/642,646
10-Jan-2005
PCT/EP2006/050073
6-Jan-2006
CN 200680001919.6
6-Jan-2006
CN 201510214401.1
EP 2006701729.3
6-Jan-2006
IN 4447/DELNP/2007
6-Jan-2006
JP 2007-549896
6-Jan-2006
US 11/813402
6-Jan-2006
US 12/244,101
US 13/745,081
US 14/665,731
Agents that block KIR-
KIR interactions
Idem
Expired
Expired
KIR-binding agents and
methods of use thereof
Published as WO2006/072626
National phase entered
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Abandoned
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
6. Formulations and dosages of containing Anti-KIR antibodies. Applicant/Owner: Novo Nordisk.
IPH Ref.
NN Ref.
KIROSTIM NN 7575 7575.000-US
7575.010-US
7575.204-WO
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Application No.
Filing date
Title
Status
US 60/879964
11-Jan-2007
US 60/911527
13-Apr-2007
PCT/EP2008/050306
11-Jan-2008
AU 2008204433
AU 2013237638
CA 2,675,291
CN 200880002001.2
CN 2015101427263
EP 08707869.7
EP 13159380.8
JP 2013-213757
US 14/606,814
US 15/849,128
Anti-KIR antibodies,
formulations, and uses
thereof
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Idem
Expired
Expired
Published as WO2008/084106
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
7. Anti-NKG2A (and other receptors) mAbs for inflammatory indications. Applicant/Owner: IPH, UG and NN.
IPH Ref.
NN Ref.
LDGL-CIP
INNA-051014-WO
Application No.
Filing date
PCT/EP2006/067399
13-Oct-2006
Title
Status
Compositions and
Methods for treating
Proliferative Disorders
Published as WO2007/042573
National phase entered
Idem
INNA-051014-US
US 12/089,314
Idem
Granted
Idem
Idem
Idem
Idem
Idem
Idem
INNA-051014-AU
INNA-051014-CA
INNA-051014-CN
INNA-051014-EP
INNA-051014-JP
4-Apr-2008
AU 200630116
13-Oct-2006
CA 2,623,109
13-Oct-2006
CN 200680038141.6
13-Oct-2006
EP 06 807262.8
13-Oct-2006
EP 11150593.9
JP 2008-535041
13-Oct-2006
Idem
Idem
Idem
Idem
Idem
Idem
Granted
Granted
Granted
Granted
Granted
Granted
MARKET ETHICS CHARTER
Relating to the confidentiality of Inside Information and the prevention of insider trading and misconduct within
the Innate Pharma Group
Updated on April 30, 2025
SUMMARY
1 OBJECTIVES OF THE CHARTER. 3
2 DEFINITIONS OF USUAL TERMS. 5
3 DEFINITION OF INSIDE INFORMATION. 6
4- DEFINITION OF THE NOTION OF INSIDER................................. 8
5- GROUP OBLIGATIONS............................................................... 9
6 OBLIGATIONS OF THE INSIDERS. 11
7 OFFENCES AND APPLICABLE INCURRED SANCTIONS .......... 14
8 OBLIGATIONS OF RETENTION AND DISCLOSURE OF TRANSACTIONS CARRIED OUT BY THE OFFICERS
........................... 15
1 OBJECTIVES OF THE CHARTER
The shares of Innate Pharma (hereinafter, together with its consolidated subsidiaries, the "Group") are listed on
the Euronext regulated market in Paris and, in the form of American Depositary Shares/Receipts (ADS), on the Nasdaq
Select Global Select Market in the United States. In this context, compliance by Group employees, executive officers
and directors (“Collaborators”) and their relatives with the rules applicable to Securities transactions (as defined below)
and to the holding of Inside Information (as defined below) is crucial for the Group.
These rules are mainly derived from (i) for France, the Regulation of the European Parliament and of the Council
No 596-2014 of 16 April 2014 on market abuse, its delegated regulations and implementing regulations (hereinafter
referred to as the "MAR Regulation"), the Monetary and Financial Code and the regulations of the Autorité des Marchés
Financiers (AMF) (hereinafter referred to as the "AMF Regulation"), and (ii) for the United States, the Securities
Exchange Act of 1934, as amended (hereinafter, the "1934 Act"), its implementing rules, as adopted by the Securities
and Exchange Commission (the “SEC”) and the case law of the US federal courts.
The purpose of this Market Ethics Charter (the "Charter") is therefore to remind you of the rules applicable to the
Collaborators in stock exchange matters and to explain to you:
– How to behave regarding the information you hold or may hold in connection with your work, mandate or mission
for the Group,
– The approach to be taken when you, your family members or other closely associated persons (as defined
herein), including legal entities, wish to acquire or sell the Group's financial instruments.
It should be noted that the Collaborators, regardless of their nationality, may be affected by these rules
and/or those of the country in which they live and/or operate. In any event, it is the responsibility of each
Collaborator to read and comply with the Charter and in particular to personally ensure compliance with the
various laws that may apply to their situation.
It is stressed that the actions of each Collaborator can have consequences on the Group's image towards its
partners and the public, and could expose the Group and/or the persons concerned to civil, criminal or administrative
sanctions.
The Charter can be consulted by any interested party on the Group's website (https://www.innate-pharma.com/).
For any additional information relating to the interpretation, use or application of the Charter, you may contact the
Vice-President, Legal & Corporate (market.ethics@innate-pharma.fr).
The Vice-President, Legal & Corporate is responsible for applying the Charter, it being specified that the ultimate
responsibility for compliance with the applicable regulations rests with each Collaborator.
Innate Pharma reserves the right to modify this Charter at any time, to reflect legislative, regulatory or
jurisprudential developments or to make other improvements. An updated copy of the Charter can be obtained at any
time from the Vice-President, Legal & Corporate.
1 DEFINITIONS OF USUAL TERMS
For
the
purposes
AMF
CEO
Charter
this
of
refers to the Autorité des marchés financiers
frequently
Charter,
used
terms
are
defined
below:
Refers to the Directeur Général
has the meaning given to it in Section 1 of this Charter
Closely Associated Persons
Means:
a) the spouse, or the partner bound by a civil solidarity pact (or
the partner considered as the equivalent of the spouse under
national law);
b) dependent children in accordance with national law;
c) a relative or ally residing in the person's home for at least one
year; and
d) a legal person, trust, or a partnership, the managerial
responsibilities of which are discharged out by a Person
Exercising Managerial Responsibilities or by one of the
persons referred to in (i), (ii) or (iii) above, which is directly or
indirectly controlled by such a person, which is set up for the
benefit of such a person, or the economic interests of which
are substantially equivalent to those of such a person.
refers to Innate Pharma and all of its consolidated subsidiaries
has the meaning given to it in Section 3 of this Charter
refers to Permanent Insiders and Occasional Insiders
refers to Regulation of the European Parliament and of the Council
No 596/2014 of 16 April 2014 on market abuse, as well as the
delegated
regulations adopted
pursuant to that Regulation
has the meaning given to it in Section 4 of this Charter
regulations and
implementing
has the meaning given to it in Section 4 of this Charter
Means:
a) a member of the Board of Directors of the Company; or
b) a senior executive of the Group who has regular access to
inside information and power to take managerial decisions
affecting the future developments and business prospects of
the Group – in practice ComEx members.
Group
Inside Information
Insider
MAR Regulation
Occasional Insider
Permanent Insider
Persons Discharging Managerial
Responsibilities
SEC
Securities
refers to the Securities and Exchange Commission
refers to:
Transaction
a) shares, ADSs, debt securities and all other securities issued
or to be issued by the Group (or, depending on the context,
another company);
b) the rights that may be detached from these various securities,
and in particular the preferential subscription or allocation
rights; and
Innate Pharma share warrants ("BSA"), redeemable Innate
Pharma share warrants ("BSAAR") and free shares granted
("AGA" and "AGAP").
c)
means in particular any acquisition or sale of Securities, whether
immediate or deferred, on or off the market, promise to acquire or
sell Securities, loan of Securities, pledge, allocation or assignment
of Securities as security, transaction carried out under a life
insurance policy, transaction on derivative products underlying
Securities, hedging or hedging transaction having the effect of
acquiring or transferring the economic risk relating to Securities,
exercise of warrants (BSA), BSAAR and sale of shares issued from
AGA and AGAP. The modification or cancellation of a stock
exchange order also constitutes a "Transaction."
1 DEFINITION OF INSIDE INFORMATION
Inside Information is defined by MAR as information of a precise nature which has not been made public,
relating, directly or indirectly, to one or more issuers, or one or more financial instruments, and which, if it were
made public, would be likely to have a significant effect on the prices of those financial instruments or on the
price of related derivative financial instruments:
–
Information is deemed to be precise and specific, i.e.: (a) it refers to a set of circumstances that exist or which
may reasonably be expected to come into existence, or an event which has occurred or which may be reasonably
expected to occur, and (ii) it enables a conclusion to be drawn as to the possible effect of that set of
circumstances or event on the prices of the relevant financial instruments or the derivative financial instruments.
It should be stressed that information does not have to be certain in order to be considered as Inside
Information. The fact that an event is only likely to occur may constitute Inside Information, even if it does not ultimately
occur.
Further, an intermediate step in a protracted process shall be deemed to be Inside Information if, by itself, it
satisfies the criteria of Inside Information as referred to above.
–
Information that has not been made public is information that has not been disclosed to the public, for
example, by means of a press release published by the Group, the Annual Financial Report, the Universal
Registration Document or the Half-Year Financial Report, a prospectus approved by the AMF or the SEC or a
financial notice published in the financial press (and, with respect to the United States, in the annual report on
Form 20-F or in a press release or any other publication filed by the Group with the SEC on Form 6-K).
Information that would only be given to a journalist during an interview or a professional conference or to a
financial analyst is not considered to be "public", even if it is taken up by that journalist or financial analysis. Such non-
public information is made public once it has been published by the Group in a press release or in one of the documents
referred to in the previous paragraph.
–
Information that could significantly influence the price of the financial instruments concerned is information
that a reasonable investor would be likely to use as part of the basis of his or her investment decisions.
Inside Information can be negative or positive.
The definition of Inside Information in US federal securities law is essentially jurisprudential, and is usually defined
as material information, which is information for which "there is a substantial likelihood that a reasonable investor would
consider it important in making an investment decision, or if a reasonable investor would view it as altering the total mix
of information available.”
For purposes of this Policy, Inside Information includes information meeting either the MAR definition or
the US securities law definition. Any Collaborator who has knowledge of Inside Information must refrain from
disclosing on his or her own initiative, even within the Group, the information itself, its existence, its nature or
its possible impact and take all necessary precautions to protect Inside Information (in particular in
discussions, meetings, note-taking, screen display, reprography, travel, etc.).
Examples of Inside Information
The following information may be considered Inside Information (non-exhaustive list):
important steps in the development of a drug candidate or a Group program (crossing a milestone, submitting a
marketing authorization application, obtaining such an application, etc.),
clinical results,
commercial results,
–
– any signing or termination of any new major or structuring license agreement, scientific, technological, industrial
–
–
collaboration, or problem on the execution of one of these agreements,
– annual, half-yearly, quarterly financial results, or results estimates,
– budgets, financial forecasts, long-term projects,
– development of technologies, products or patents,
– problems in a manufacturing process, quality assurance problems, patent problems,
–
financial transactions (securities issues, acquisitions, mergers, joint ventures, financing, etc.), including at the
drafting stage and even if they are not carried out,
– modification of strategy or investments,
–
changes in key personnel, in particular the departure of a Person Discharging Managerial Responsibilities,
litigation, regulatory issues (ANSM, EMA, FDA in particular),
liquidity problems,
report of a financial analyst who is particularly favourable or unfavourable to the Company,
–
–
–
– any other significant event having a positive or negative influence on the Company's business, any significant
item related to its risk factors.
It should be highlighted that the mere knowledge that the information, if made public, would be likely to have an
effect on share prices should be considered Inside Information, even if the person in possession of such information
does not know the precise content of the information.
1 DEFINITION OF THE NOTION OF INSIDER
An "Insider" is a person who has access to Inside Information, because he or she works within the Group
under an employment contract or corporate mandate or because he or she otherwise performs tasks giving him
or her access to such Inside Information. Insiders include:
– Persons who hold Inside Information because of their role or position in or with respect to the Group:
Persons Discharging Managerial Responsibilities, representatives of the Works Council (where applicable),
certain Collaborators, statutory auditors, collaborators of the CRO and CMO (Contract Research Organisation
and Contract Manufacturing Organisation), consultants, communication agencies, lawyers, bankers, other
external advisors, suppliers, subcontractors, etc.
– All other persons with Inside Information who know or should have known that it was Inside Information:
persons outside of the Group and to whom Inside Information has been communicated, voluntarily or by chance.
This category includes, for example, Closely Associated Persons, any other family member or relatives of persons
in the first category, and any person to whom they have communicated Inside Information.
The regulations distinguish, among the above-mentioned persons, two categories of Insiders:
– Permanent Insiders:
These are persons who, because of their functions, have permanent access to all Inside Information
concerning the Group.
Permanent Insiders can belong to two categories:
•
•
persons working within the Group: these include Persons Discharging Managerial Responsibilities, as well as any
collaborator who has or is likely to have regular access to Inside Information.
third parties who maintain regular relations with the Group giving them access to Inside Information: these include
auditors, principal consultants and the usual financial and legal advisors of the Group, its communication agency
and certain companies performing outsourced functions.
Note that not all of these persons are necessarily Permanent Insiders.
– Occasional Insiders:
These are persons within or outside the Group who have occasional access to Inside Information
about the Group, in particular because of their involvement in the preparation of a particular transaction or their
knowledge of a particular event or circumstance (for example, participation in clinical trials, a commercial agreement, a
dispute, an accident, a financial transaction).
Only the CEO or the Vice-President, Legal & Corporate may decide to include a person on the list of
Permanent Insiders or to disclose Inside Information to an Occasional Insider. However, Collaborators have the
opportunity to identify potential members of their team and third parties to be included in the list of Permanent
Insiders or Occasional Insiders and to ask the CEO or the Vice-President, Legal & Corporate to include such
identified persons on the list of Permanent or Occasional Insiders.
Any person identified as an Insider is informed in writing by the Vice-President, Legal & Corporate of his
or her inclusion on an Insider list established by the Group (see Section 5 below).
A person is no longer an Insider once the Inside Information is made public (as described herein). Whether or not
a person is considered to be an Insider may change over time depending on his/her job responsibilities.
1 GROUP OBLIGATIONS
(a) Obligation to disclose Inside Information
In order to ensure equality of investors with regard to information and to prevent insider trading, the Group
must make public, as soon as possible, by means of a press release and on its website (https://www.innate-
pharma.com/), any Inside Information likely to have a significant influence on the price of its Securities. This obligation
results from MAR Regulation and the American regulations, but the latter, in particular the Regulation Fair Disclosure,
insists on the obligation to communicate Inside Information to everyone at the same time and sanctions "selective
disclosure." In MAR, this means that Inside Information may not be communicated outside the normal course of
business, profession or functions.
The information provided must be accurate, precise and sincere.
The Group may defer the publication of Inside Information in limited circumstances and subject to certain
conditions and procedures.
Only the CEO or the Vice President Investors Relations or any person specifically authorised by them for
this purpose may communicate information to the financial market or the public generally, directly or indirectly, in any
manner whatsoever. It is therefore prohibited for any Person Discharging Managerial Responsibilities or
Collaborator, except with the prior authorization of the CEO or the person in charge of investors relations, to
make statements directly or indirectly to investors, shareholders or, more generally, to the market or the public.
a. Obligation to identify Insiders - Updating of Insider lists
The Group must establish, update and make available to the AMF a list of all persons within the Group who
have access to Inside Information or who perform tasks outside the Group that give them access to Inside Information.
The purpose of the Insider List is to protect the financial markets by allowing the Group to maintain control
over Inside Information, for listed persons to be aware of the obligations and sanctions applicable to them and for the
AMF to investigate possible market abuse more easily.
The Collaborator is informed of his inclusion on the list as an Occasional or Permanent Insider. The
Collaborator must acknowledge in writing that he or she is aware of the obligations and sanctions applicable to him or
her as a result of being included in the list of Insiders.
The list of Insiders includes the following information about each registered person:
–
the person's identity (surname, first name, date of birth), personal and professional contact information (address,
private and business telephone numbers),
– his or her role, function and the reason for placing the person on the list,
–
the start and end date and time of the person's access to Inside Information (with the exception of Permanent
Insiders).
Pursuant to Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on
the protection of individuals with regard to the processing of personal data and on the free movement of such data
(General Data Protection Regulation), each registered person has a right of access to personal information concerning
him/her with a view to its possible correction in the event of error, this right may be exercised with Innate’s designated
“Data Protection Officer” (dpo@innate-pharma.fr).
The list of Insiders shall be kept for at least five years from the date of its establishment or update. It is
confidential, except to the AMF, which can obtain it on request.
1 OBLIGATIONS OF THE INSIDERS
(a) Insider Confidentiality Obligation
Any person who holds Inside Information must refrain from disclosing it to another person, including
within the Group.
Consequently, any Insider must maintain the confidentiality of Inside Information with respect to any person,
including within the Group.
Insiders also refrain from spreading rumours, whether through the media (including the Internet) or by any
other means, that give or are likely to give false or misleading information about the Securities and/or the situation,
results or prospects of the Group.
Consequently, all Collaborators must constantly protect access to documents referring to Inside Information, in
particular by limiting the number of copies to the strict minimum, ensuring the security of exchanges and meetings
carried out in the form of conference calls or videoconferences, keeping documents in secure areas, ensuring that they
are destroyed by secure means and using code names.
Insiders are strictly prohibited from engaging in “Tipping.” Tipping is disclosing Inside Information concerning
the Group or making recommendations or expressing opinions on the basis of Inside Information as to trading in
Securities to any person or entity who might be expected to trade while in possession of that information, other than in
the necessary course of business, (including, but not limited to spouse, family members and friends or other Closely
Associated Persons, social acquaintances, investors, financial analysts, consulting firms and former Insiders). Tipping is
strictly prohibited under this Charter and this prohibition applies whether or not the person disclosing the Inside
Information receives any benefits from the use of that information by the other person or entity.
Any Collaborator, who has doubts about the content of the information he or she may communicate, in
particular during an oral intervention or written presentation, may refer the matter to the Vice-President, Legal &
Corporate (market.ethics@innate-
pharma.fr). If in doubt or awaiting a response from Vice-President, Legal & Corporate, the information in question must
not be disclosed.
The prohibition to use or disclose Inside Information is applicable throughout the year.
In addition, it is essential to immediately notify the Vice-President, Legal & Corporate if Inside
Information concerning the Group has been disclosed outside the normal procedures for disseminating
information (for example at internal or external meetings, seminars or colloquia).
(a) Obligation to refrain from trading in the Securities
The applicable laws and regulations on insider trading prohibit any Insider from using Inside Information by
acquiring or disposing of, for its own account or for the account of a third party, directly or indirectly, Innate Securities.
The use of Inside Information by cancelling or amending an order, where the order was placed before the person
concerned possessed the Inside Information, is insider dealing.
It is also prohibited to recommend, on the basis of Inside Information, that another person acquire or dispose of
Innate Securities (cancel or amend an order), or induces that person to make such an acquisition or disposal.
It is further prohibited to communicate Inside Information to any other person, except where the disclosure is
made in the normal exercise of an employment, a profession or duties, is also prohibited (“need to know basis”
exception).
It is recalled that the legal obligation to abstain applies in the event of holding Inside Information concerning all
listed securities, even those other than Group Securities, and in particular the securities of listed companies with which
the Group may come to work, if applicable. Given the repercussions that this would have for the Group, it would be a
violation of the Charter for a Collaborator to carry out a transaction on the Securities of another company on the basis of
Inside Information gathered in the course of his duties within the Group.
Generally speaking, the period between the date on which a person comes into possession of Inside
Information and the trading session following the date on which the same information is made public is necessarily a
period of abstention for that person and their Closely Associated Persons. In the event of a major event brought to the
attention of a significant number of Collaborators (examples: clinical trial results, financial transactions, licensing
agreements, etc.), Innate’s Legal Department may notify the persons concerned by email of the opening of an
abstention period. However, such information will not be systematic and the absence of notification of such an
abstention period would not in any way exempt a Collaborator who carries out an insider trading from otherwise
complying with this Charter. In addition, the existence of such a period of abstention may in itself constitute Inside
Information.
It is recalled that in case of doubt, each employee may request the views of the Vice-President, Legal &
Corporate on the possibility of trading in Group Securities. However, such views do not constitute an authorization, as
each applicant remains personally responsible for his or her acts.
It should be noted that all Closely Associated Persons, and more generally all persons who, because of
their relationships with persons holding
Inside Information, could be suspected of having exploited Inside Information provided by such Insider.
Insider status and the related above prohibitions shall continue to apply even after the person concerned has
left the Group, as long as the Inside Information held has not been made public.
Preventive abstention periods ("negative windows" or “black-out periods”)
– With due regard to the general abstention obligation described above, the Group will set abstention periods
("negative windows" or "black-out periods") during which Permanent Insiders, Persons Discharging Managerial
Responsibilities, and potentially certain Group Collaborators must refrain from buying, selling or carrying out
transactions, directly or indirectly, on their behalf or on behalf of others, on Group Securities or exercising
warrants (BSA) or redeemable (BSAAR), selling shares issued from AGA or AGAP[1], or carrying out transactions
in Securities whose underlying is a Group Security.
During these abstention periods as described below, Permanent Insiders, Persons Discharging Managerial
Responsibilities, and potentially certain Collaborators are not authorised to carry out Transactions on Group Securities
whether or not they hold Inside Information.
Abstention periods are first of all short, predictable periods during which significant and non-public
information about the Group circulates within the Group.
These periods are defined as follows:
– at least 15 days prior to the publication of quarterly financial results;
– at least 30 days before the publication of the half-year and annual financial results.
It should be noted that, in exceptional circumstances, these periods may begin earlier than the dates
indicated above, in which case the Collaborators would be informed (this information may constitute Inside Information).
In addition to the abstention periods provided for by the texts, the Company may set up additional blackout
periods introduced on an ad hoc basis prior to certain events.
Transactions are only possible again as from the trading session following the publication concerned,
provided that they are not in a negative window or that they do not hold any other Inside Information.
An e-mail is sent to involved Collaborators and Persons Discharging Managerial Responsibilities to inform
them of these periods. The financial communication calendar is also available to any interested party on the Group's
Internet and Intranet site.
Nevertheless, the absence of e-mail would in no way exempt a Collaborator from liability in the event of a
breach or violation of this Charter.
These negative windows continue to apply even after the person concerned has left the Group for as long as
he or she possesses Inside Information.
(i) Obligation to inform the Group
In order to ensure compliance with the Charter within the Group, Collaborators must implement all
measures to prevent violations of the Charter, in particular:
–
–
inform the Vice-President, Legal & Corporate, when they believe they are in possession of information that is not
yet public and which, by its nature, could constitute Inside Information, and should refrain, pending the
qualification of such information, from disclosing the information and, if so, communicate to the Vice-President,
Legal & Corporate without delay the list of persons informed;
remind those of their subordinates who are called upon to work on sensitive subjects relating to the existence and
content of the Charter;
– promptly notify the Vice-President, Legal & Corporate if Inside Information has been disclosed.
Collaborators are reminded that the implementation of these preventive measures in no way exempts them
from administrative or criminal liability in the event of an offence.
1 OFFENCES AND APPLICABLE INCURRED SANCTIONS
Persons who do not comply with the rules relating to the use and disclosure of Inside Information may be subject
to administrative sanctions imposed by the AMF and the SEC, or to criminal sanctions imposed by the judicial, French or
American federal authorities, as well as disciplinary sanctions within the Group.
French criminal and administrative sanctions
Violations of these prohibitions may result in the following criminal or administrative sanctions (L.465-1 et al. and
L.621-15 III of the Code monétaire et financier):
– a fine or financial penalty imposed by the AMF of up to €100 million or, if profits have been made, ten times the
amount, and
– up to five years' imprisonment imposed by the criminal court
Such behaviour may be punished even in the absence of profit or benefit for the perpetrator. In particular, avoiding
losses (by selling Securities before bad news is announced) will be sanctioned and the amount of loss avoided will be
taken into consideration in determining the fine or monetary penalty. The attempt is also subject to sanctions.
As a reminder, conduct punishable under criminal law and by the AMF also includes price manipulation and the
dissemination of false information (Article 12 of the MAR Regulation).
U.S. Sanctions
Insider trading may result in an enforcement action by the supervisory authorities, in criminal prosecution, or in
civil lawsuits seeking damages. Persons who have violated the U.S. rules and regulations relating to the prevention of
insider trading may be liable in the United States for civil penalties of up to three times the amount of profits made or
losses avoided through insider trading, and criminal fines of up to $5 million for individuals and $25 million for
corporations. Jail sentences can also be imposed for up to 20 years.
Disciplinary sanctions
Any violation of this Charter and these rules or the law on misdemeanours or breaches of duty by an Executive
Officer or Collaborator, or a member of their families, may result in measures up to and including dismissal of the person
concerned.
The commission of an offence or breach by an Insider is the responsibility of the person who commits it. The
Group disclaims any liability of or responsibility for any person who has committed insider trading in violation of this
Charter. As such, the Group does not intend to assume the fines to which its Collaborators may be liable.
Anyone who is in breach of the rules contained in this Charter or who becomes aware of the occurrence of such a
breach by another person must immediately inform the Compliance Officer or the Vice-President, Legal & Corporate,
who will take all appropriate measures internally and vis-à-vis the market authorities.
1 OBLIGATIONS OF RETENTION AND DISCLOSURE OF TRANSACTIONS CARRIED OUT BY THE OFFICERS
In accordance with the MAR Regulation, Persons Discharging Managerial Responsibilities and their Closely
Associated Persons must comply with specific obligations relating to the custody of their Securities and the reporting of
their Transactions.
Obligation to notify the Closely Associated Persons of their obligations
Each of the Persons Discharging Managerial Responsibilities must notify in writing their Closely Associated
Persons of their obligations under the MAR Regulation and keep a copy of this notification. They must also inform
Innate (Vice-President, Legal & Corporate) of who their Closely Associated Persons are, as Innate must
maintain a list of them.
Obligation to hold registered shares
Members of the Board and the CEO, as well as their spouses who are not separated and minor children who are
not emancipated, must hold, within the prescribed time limits, all the Securities they hold in registered form with Société
Générale Securities Services or in registered form administered with an intermediary (bank, financial institution or
investment services provider) of their choice.
The voting rights and dividend rights of shares held by any person who has not fulfilled these obligations shall be
suspended until the situation is regularised. Any vote cast or dividend payment made during the suspension is void.
Reporting obligations for Transactions in Securities
The MAR Regulation require Persons Discharging Managerial Responsibilities and their Closely Associated
Persons to communicate directly to the AMF, which makes them public, the acquisitions, sales, subscriptions or
exchanges of Group shares. These people are on a list that is regularly updated by the Group. They are required to
refrain from any Transaction as soon as they become aware of Privileged Information.
– Operations covered: all operations to buy, sell, subscribe or exchange the Group's "financial instruments", i.e.
not only shares but also other securities giving access to the capital (warrants, BSAARs, shares issued from AGA
and AGAP, etc.).
– Trigger threshold: publication is not required as long as the total cumulative amount of transactions carried out
by a data subject does not exceed €20,000 over a calendar year.
– Reporting procedures: The declaration must be submitted to the AMF no later than three business days from
the date of the Transaction.
This declaration must be sent to the AMF, by electronic means only via an extranet called Onde, which
makes it possible to complete the mandatory form, which can be accessed on the AMF website at the following address:
https://onde.amf-france.org/RemiseInformationEmetteur/Client/PTRemiseInformationEmetteur.aspx
Declarations may be transmitted to the AMF by the person required to report or by a third party on behalf of
the declarant, the identity of the applicant must be clearly indicated in the declaration form.
The AMF publishes these declarations on its website, which are also summarized in the management
report presented to the Innate Pharma Annual General Meeting and in the Group's Universal Registration Document, if
applicable.
Persons Discharging Managerial Responsibilities are also required, at the Vice-President, Legal &
Corporate’s request, to declare the number and nature of the Securities they hold, as well as any relevant information on
the holding of Securities (e. g. stripping, promise to acquire or sell, pledge, etc.).
It should be noted that these obligations are distinct from those relating to the crossing of thresholds, which
exist under French law and US federal stock market law and are applicable whether or not the shareholder is a Member
of the Management.
There are no equivalent obligations in the United States for directors and officers of foreign private issuers other
than the specific obligations applicable to shareholders holding at least 5% of the capital.
[1] Regarding the owners of shares issued from AGA or AGAP, the 30-day abstention period (at least) preceding the
annual and half-year financial results publication is provided by Article L.22-10-59 of the French Code of Commerce
Exhibit 12.1
Certification by the Principal Executive Officer pursuant to
Securities Exchange Act Rules 13a-14(a) and 15d-14(a)
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jonathan Dickinson, certify that:
1.
I have reviewed this annual report on Form 20-F of Innate Pharma S.A. (the “Company”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4. The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the Company and have:
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period
covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control
over financial reporting; and
5. The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s
internal control over financial reporting.
Date: April 30, 2025
/s/ Jonathan Dickinson
Name: Jonathan Dickinson
Title: Chief Executive Officer (Principal Executive Officer)
Exhibit 12.2
Certification by the Principal Financial Officer pursuant to
Securities Exchange Act Rules 13a-14(a) and 15d-14(a)
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Frederic Lombard, certify that:
1.
I have reviewed this annual report on Form 20-F of Innate Pharma S.A. (the “Company”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4. The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the Company and have:
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period
covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control
over financial reporting; and
5. The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s
internal control over financial reporting.
Date: April 30, 2025
/s/ Frederic Lombard
Name: Frederic Lombard
Title: Chief Financial Officer (Principal Financial Officer)
Exhibit 13.1
Certification by the Principal Executive Officer and Principal Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter
63 of Title 18 of the United States Code (18 U.S.C. §1350), Jonathan Dickinson, Chief Executive Officer of Innate Pharma S.A. (the “Company”), and Frederic
Lombard, Chief Financial Officer of the Company, each hereby certifies that, to his knowledge:
(1) The Company’s Annual Report on Form 20-F for the year ended December 31, 2024, to which this Certification is attached as Exhibit 13.1 (the
“Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 30, 2025
/s/ Jonathan Dickinson__________________________
Name: Jonathan Dickinson
Title: Chief Executive Officer (Principal Executive Officer)
/s/ Frederic Lombard____________________
Name: Frederic Lombard
Title: Chief Financial Officer (Principal Financial Officer)
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement No 333-276164 on Form F-3 and in Registration Statement Nos. 333-282031 and
333-257834 on Form S-8 of our report dated April 30, 2025 relating to the financial statements of Innate Pharma and subsidiaries, appearing in the Annual
Report on Form 20-F of Innate Pharma for the year ended December 31, 2024. We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ Deloitte & Associés
Paris La Défense, France
April 30, 2025
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 (No. 333-276164) and Forms S-8 (Nos. 333-282031 and 333-
257834) of Innate Pharma of our reports dated April 30, 2025 relating to the financial statements and the effectiveness of internal control over financial
reporting, which appear in this Form 20-F.
/s/ PricewaterhouseCoopers Audit
Neuilly-sur-Seine
April 30, 2025