iTeos Therapeutics, Inc. (NASDAQ:ITOS) is a clinical-stage biopharmaceutical company pioneering the discovery and development of a new generation of immuno-oncology therapeutics. The company's innovative pipeline targets novel, validated immuno-oncology pathways, including the TIGIT/CD226 pathway and the adenosine pathway, with the goal of restoring the immune response against cancer.

Business Overview

iTeos Therapeutics was founded in 2011 and is headquartered in Watertown, Massachusetts, with additional operations in Belgium. The company's lead antibody product candidate, belrestotug, is an antagonist of TIGIT, an immune checkpoint with multiple mechanisms of action. Belrestotug was selected for its high affinity for TIGIT, potency, and potential to engage the Fc gamma receptor (FcγR) to activate dendritic cells, natural killer cells, and macrophages, promoting cytokine release, antigen presentation, and antibody-dependent cellular cytotoxicity (ADCC) activity.

In 2020, iTeos initiated an open-label Phase 1/2a clinical trial of belrestotug in adult cancer patients with advanced solid tumors. In April 2021, the company reported preliminary safety, pharmacokinetic, engagement, and pharmacodynamic data, indicating target engagement and early evidence of clinical activity as a single agent.

In June 2021, iTeos entered into a Collaboration and License Agreement with GlaxoSmithKline (GSK) for the global development of belrestotug. Under the agreement, GSK made an upfront payment of $625.0 million to iTeos and agreed to share responsibility and costs for the global development of belrestotug. iTeos and GSK are jointly developing belrestotug, including in combination with other GSK oncology assets, and will jointly commercialize and equally split profits in the United States, while GSK will have exclusive rights to commercialize belrestotug outside the U.S. and iTeos will be eligible for tiered double-digit royalty payments.

In partnership with GSK, iTeos is enrolling patients with first-line non-small cell lung cancer (NSCLC) in a randomized Phase 2 platform study assessing the doublet of GSK's anti-PD-1 (Jemperli (dostarlimab-gxly)) with belrestotug and in combination with GSK's investigational anti-CD96 antibody, nelistotug. Interim assessment of this study exceeded pre-defined efficacy criteria for clinically relevant activity with clinically meaningful tumor reduction and showed an acceptable safety profile in line with the TIGIT:PD-1 class.

In addition, iTeos is enrolling patients in a randomized Phase 2 platform study assessing the belrestotug and dostarlimab doublet and a triplet with GSK's anti-CD96 antibody in first-line, PD-L1 positive advanced or metastatic head and neck squamous cell carcinoma (HNSCC). The company has also completed enrollment of the first portion of the Phase 2 expansion part of the TIG-006 trial assessing the doublet of dostarlimab with belrestotug in patients with first-line HNSCC, though iTeos and GSK have agreed to not continue beyond stage 1 recruitment in these open-label cohorts in order to focus on the randomized, controlled GALAXIES H&N-202 platform study.

iTeos is also advancing inupadenant, a next-generation adenosine A2A receptor antagonist, and EOS-984, a potentially first-in-class small molecule targeting the adenosine pathway, into proof-of-concept trials in several indications. The single-agent dose-escalation and expansion portions of the Phase 1/2a clinical trial of inupadenant have demonstrated durable monotherapy antitumor activity in some patients with advanced solid tumors and a safety profile consistent with previously reported results. The company has also completed enrollment of the dose escalation portion of an ongoing two-part Phase 2 trial evaluating inupadenant in combination with platinum-doublet chemotherapy compared to standard platinum-doublet chemotherapy in post-IO metastatic NSCLC.

Financials

For the full year 2023, iTeos reported annual net income of -$112,642,000, annual revenue of $12,595,000, annual operating cash flow of -$103,756,000, and annual free cash flow of -$106,722,000.

For the first quarter of 2024, the company reported a net loss of $38,216,000, with no revenue recognized during the quarter as the remainder of revenue related to the GSK collaboration was recognized in the first quarter of 2023. Research and development expenses increased by $8.9 million to $34.5 million, primarily due to increased payroll and related costs, professional fees and expenses, stock-based compensation, clinical expenses, and other R&D expenses. General and administrative expenses increased by $0.8 million to $12.7 million, driven by higher professional fees and expenses, payroll and related costs, stock-based compensation, and other general and administrative expenses.

As of March 31, 2024, iTeos had $146.6 million in cash and cash equivalents and $435.1 million in available-for-sale securities. The company also had $13.0 million in receivables related to cash proceeds for matured investments. iTeos believes its existing cash, cash equivalents, and available-for-sale securities will enable it to fund its operating expenses and capital expenditure requirements through 2026.

Risks and Challenges

iTeos faces several risks and challenges in the development and commercialization of its product candidates. The company must complete successful preclinical studies and clinical trials to demonstrate the safety and efficacy of its product candidates before it can begin the commercialization process. Challenges in enrolling patients in clinical trials, managing the supply and regulatory status of third-party drugs used in combination trials, and potential delays in regulatory approvals could all impact the company's development timelines.

iTeos also faces significant competition from other biopharmaceutical and biotechnology companies, academic institutions, government agencies, and other research organizations, which may result in others discovering, developing, or commercializing products more quickly or marketing them more successfully. Negative developments in the field of immuno-oncology or in the TIGIT or adenosine pathway could also adversely affect the company's business.

Additionally, iTeos is highly dependent on its key personnel and its ability to attract and retain qualified employees. The company also relies on third parties to conduct its clinical trials and manufacture its product candidates, which introduces additional risks related to the performance and regulatory compliance of these third parties.

Outlook

iTeos Therapeutics is a promising immuno-oncology company with a diverse pipeline of novel therapies targeting validated pathways. The company's collaboration with GSK for the global development of belrestotug provides significant financial resources and expertise to advance this lead program. The interim results from the ongoing Phase 2 studies of belrestotug in combination with GSK's assets have been encouraging, and the company's other programs, inupadenant and EOS-984, also hold promise.

Conclusion

While iTeos faces the typical risks and challenges associated with clinical-stage biotechnology companies, the company's strong scientific foundation, experienced management team, and robust financial position position it well to continue advancing its pipeline and potentially bring important new cancer treatments to patients. Investors should closely monitor the company's progress in its ongoing and future clinical trials, as well as any updates on the GSK collaboration, to assess the long-term potential of iTeos Therapeutics.