Innate Pharma : Financial Report (PDF)

INNATE PHARMA SA

HALF-YEAR FINANCIAL REPORT

JUNE 30, 2022

INNATE PHARMA S.A.

French société anonyme governed by an Executive Board and a Supervisory Boardé

with a share capital of 3,995,355.70 euros composed of

79,893,019 ordinary shares, and 14,095 preferred shares with a nominal value of 0.05 euros each

Registered office: 117, Avenue de Luminy, F-13009 Marseille, France

Registered with the Company and Trade Register of Marseille under number 424 365 336

The following interim condensed consolidated financial statements have been approved by the

Executive Board of the Company on September 14, 2022, and have been subject to a limited review by

our Statutory Auditors. They have been examined by the Supervisory Board of the Company on

September 14, 2022.

SUMMARY
INNATE PHARMA AT A GLANCE.............................................................................................................	3
HALF-YEARMANAGEMENT REVIEW......................................................................................................	5
A.	Revenue and other income.....................................................................................................	6
B.	Operating expenses.................................................................................................................	9
C.	Net financial income (loss).....................................................................................................	11
D.	Net income (loss) from discontinued operations...................................................................	12
E.	Balance sheet items.................................................................................................................	13
F.	Cash-flowitems.......................................................................................................................	14
G.	Key events since January 1, 2022...........................................................................................	15
H.	Nota.........................................................................................................................................	15

1. Main risks and uncertainties for the remaining six months of the fiscal

year..........................................................................................................................................	16
J. Related party transactions......................................................................................................	16

INTERIM CONDENSED CONSOLIDATED FINANCIAL	STATEMENTS AS OF JUNE 30,
2022...........................................................................................................................	17

1. Interim Condensed Consolidated Statements of Financial Position (amounts in thousands

of euro)....................................................................................................................................

17

1. Interim Condensed Consolidated Statements of Income (Loss) (amounts in thousands of

euro, except share and per share amounts)...........................................................................

18

1. Interim Condensed Consolidated Statements of Comprehensive Income (Loss) (amounts

in thousands of euro)..............................................................................................................

19

1. Interim Condensed Consolidated Statements of Cash Flows (amounts in thousands of

euro)........................................................................................................................................

20

1. Interim Consolidated Statements of Changes in Shareholders' Equity (amounts in

thousands of euro, except share data)....................................................................................	22
F. Interim Condensed Notes to the Consolidated Financial
Statements..............................................................................................................................	23
STATUTORY AUDITORS' REVIEW REPORT ON THE HALF-YEARLY FINANCIAL
INFORMATION.......................................................................................................................................	46
DECLARATION BY THE PERSON RESPONSIBLE FOR THIS HALF-YEAR FINANCIAL
REPORT..................................................................................................................................................	47

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INNATE PHARMA AT A GLANCE

Innate Pharma SA (the "Company" and, with its subsidiary, referred to as the "Group"), is a global, clinical-stageoncology-focused biotech company dedicated to improving treatment and clinical outcomes for patients through therapeutic antibodies that harness the immune system to fight cancer. Company's broad pipeline of antibodies includes several potentially first-in-class clinical and preclinical candidates in cancers with high unmet medical need.

The Company has extensive experience in research and development in immuno-oncology, having been pioneers in the understanding of natural killer cell, or NK cell, biology, and later expanding its expertise in the tumor microenvironment, tumor antigens and antibody engineering fields. The Company has built, internally and through its business development strategy, a broad and diversified portfolio including an approved product, four clinical product candidates and a robust preclinical pipeline. The Company has entered into collaborations with leaders in the biopharmaceutical industry, such as AstraZeneca and Sanofi, to leverage their development capabilities and expertise for some of its candidates. The Company believe 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.

Since its creation, the Company has suffered losses due to its research and development ("R&D") activities. The first half of 2022 generated a net income of 6,303 thousand euros. As of June 30, 2022, shareholders' equity amounted to 116,333 thousand euros. Subject to receiving new milestone payments related to its collaboration agreements, the Company expects to incur additional losses until, if necessary, it can generate significant revenues 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 product 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 activity of the Company is not subject to seasonal effects.

As of June 30, 2022, the Company had one wholly owned subsidiary: Innate Pharma, Inc., incorporated under the laws of Delaware in 2009.

Innate Pharma is based in Marseille, France and listed on Euronext in Paris and Nasdaq in US, and had 213 employees as of June 30, 2022.

Learn more about Innate Pharma at www.innate-pharma.com.

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HALF-YEAR MANAGEMENT REVIEW

The key elements of Innate Pharma's financial results for the first half of 2022 are as follows:

• Cash, cash equivalents and financial assets (current and non-current) amounting to €158.2m (million euros) as of June 30, 2022 (€159.7m as of December 31, 2021). At the same date, the financial liabilities amounted to €43.4m, including €12.5m of non-current liabilities (€44.3m as of December 31, 2021, including €13.5m of non-current financial liabilities).
• Revenue and other income from continuing operations amounting to €45.6m (€14.7m for the first half of 2021). This amount mainly results from collaboration and licensing revenue (€41.3m) and from research tax credit (€4.3m). Revenue from collaboration and licensing agreements mainly result from the agreements with AstraZeneca/Medimmune and Sanofi.
• Operating expenses from continuing operations amounting to €37.1m (€33.9m first half of 2021), of which 67.3% are related to research and development. Research and development expenses from continuing operations amount to €25.0m compared to €21.2m for the first half of 2021 and increase by €3.7m, mainly explained by (i) a €0.7m increase in direct R&D expenses relating to lacutamab clinical program and non- clinical programs, notably IPH65, partially offset by the decrease in others clinical programs expenses; (ii) a €1.7m increase in personnel expenses mainly explained by the increase in share-based payments and (iii) the increase in other R&D expenses explained by the provision relating to the payment to be made to Orega Biotech SAS upon receipt of the $5.0 million milestone payment from AstraZeneca under the IPH5201 collaboration and agreement following the amendment signed on June 1, 2022. General and administrative expenses from continuing operations amounting to €12.1m (€12.6m for the first half of 2021), decreasing by €0.5m. This decrease results mainly from downsizing of the finance organization and exceptional non recurring costs that occured in 2021.
• A loss on the Lumoxiti discontinued operations amounting to €0.1m (€6.2m for the first half of 2021). As a reminder, the Company recorded, as of June 30, 2021, a provision for charges relating to the payment of €5.2 million ($6.2 million) to AstraZeneca under the Lumoxiti transition and termination agreement effective as of June 30, 2021. Pursuant to the April 2022 underlied agreement, the amount of €5.9 million ($6.2 million) was paid by the Company.
• A net income for the first half of 2022 amounting to €6.4m (compared to net loss of €17.5m for the first half of 2021).

Note on change of accounting standards during the period

Application of the following amended standards is mandatory for the first time for the financial period beginning on January 1, 2022 and, as such, they have been adopted by the Company:

• Amendments to IAS 16: Property, Plant and Equipment
• Amendments to IAS 37 : Provisions, Contingent Liabilities and Contingent Assets

Those amended standards have no impact on the interim condensed consolidated financial statements.

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