The market writes off lirilumab

On the face of it Innate Pharma’s 40% share price crash today might look like an overreaction. The failure of lirilumab to add efficacy to Opdivo in head and neck cancer, whose treatment the Bristol-Myers Squibb drug has already revolutionised, perhaps should not have come as a surprise.

Unless, of course, there are reasons to believe that the entire lirilumab programme, Innate’s lead asset, is now dead. And unfortunately for the French company – numerous ongoing lirilumab studies notwithstanding – mechanistic reasons seem to have emerged suggesting that the doomsday scenario is now in play.

Judging by comments made by Innate’s management on a call after market close yesterday the issue has to do with the way that lirilumab hits its target, the NK cell checkpoint Kir. It is the inactivation of Kir, in a manner analogous to PD-(L)1 and T cells, that releases the brake on NK cells and could enable them to target relevant tumour cell antigens.

However, it now appears that while lirilumab does trigger an effect on Kir, once this interaction becomes permanent it hinders the maturing of the NK cells concerned. This mechanism is not atypical of the human immune system, which tends to work by subtle interactions rather than just being turned on or off.

If it is impossible for the NK cells to reach their full antitumour potential in the presence of lirilumab this would appear to be curtains for Innate’s lead asset. Intermittent administration could be one answer, wrote Oddo analysts, but this could hit efficacy further.

As such, the market reaction might not be all that irrational; Innate’s 40% decline is equivalent to the loss of around €190m ($225m) of market cap, and according to sellside consensus calculated by EvaluatePharma lirilumab’s NPV before the setback was worth $375m to Innate.

Too much to ask for?

Were it not for the mechanistic revelation, lirilumab’s failure might be easier to shrug off. After all, Opdivo is the only checkpoint inhibitor to demonstrate a survival benefit in head and neck cancer, courtesy of its Checkmate-141 study, so adding anything on top of this was a lot to ask for.

Moreover, this cancer has been particularly difficult for other immuno-oncology agents: Keytruda, already marketed under accelerated approval, managed to fail its confirmatory Keynote-040 trial, while Astrazeneca briefly had to halt the Kestrel and Eagle studies of Imfinzi plus tremelimumab because of risk of bleeding.

Still, after the failure of lirilumab’s monotherapy study, Effikir, there had been hope that its potential lay in combinations (Effikir fail sets up an Innate dream scenario, February 6, 2017). And the reasons given for yesterday’s failure do not explain why lirilumab plus Opdivo generated promising remission data in a head and neck cancer study at last year’s SITC meeting.

It will not go unnoticed that a new lirilumab plus Opdivo head and neck cancer trial went up on Clinicaltrials.gov last week, sponsored by Dana-Farber; another study, a combo with Opdivo and Incyte’s IDO inhibitor, epacadostat, which includes head and neck cancer patients, was put up on the registry just three days ago.

These will presumably now be reviewed in light of yesterday’s failure, and Bristol will surely take a look at its lirilumab deal with Innate.

The asset remains in development in seven active clinical trials. If these can all now be written off Innate’s fate lies in its next most-advanced project, the Astrazeneca-partnered Anti-NKG2A MAb monalizumab.

With Innate now valued not far off its €196m third-quarter cash balance this could be a decent entry point for bold investors, though the assumption would have to be that the unfortunate precedent of Kir does not extend to other mechanisms of activating and deactivating NK cells.

To contact the writer of this story email Jacob Plieth in London at [email protected] or follow @JacobPlieth on Twitter