Business Overview and History
iTeos Therapeutics, Inc. is a clinical-stage biopharmaceutical company at the forefront of developing a new generation of immuno-oncology therapeutics. With a focus on harnessing the power of the immune system to combat cancer, iTeos has built an impressive pipeline of product candidates targeting novel, validated pathways in the field of immuno-oncology.
iTeos Therapeutics, Inc. was founded in August 2011 as a spin-off of Ludwig Cancer Research, with its original headquarters in Charleroi, Belgium. The company's mission from the outset has been to pioneer the discovery and development of innovative cancer immunotherapies to improve clinical outcomes for patients.
In its early years, iTeos focused on building expertise in tumor immunology, immunosuppressive pathways, pharmacology, and translational medicine. The company developed robust discovery capabilities to create both small molecule and antibody product candidates with optimized profiles targeting validated immuno-oncology pathways.
A significant milestone in iTeos' development came in 2017 when the company entered into a collaboration agreement with Adimab, LLC. This partnership enabled iTeos to enhance its research and development efforts in the discovery and optimization of new antibodies against immuno-oncology targets. This collaboration proved fruitful, leading to the development of iTeos' lead antibody product candidate, belrestotug, an antagonist of the TIGIT immune checkpoint.
In 2019, iTeos expanded its corporate structure by incorporating a wholly-owned subsidiary called iTeos Securities Corporation in Massachusetts. This was followed in 2021 by the incorporation of another wholly-owned subsidiary, iTeos BE, LLC, in Delaware.
The company's most significant strategic move to date occurred in 2021 when its wholly-owned subsidiary iTeos Belgium S.A. executed a Collaboration and License Agreement with GlaxoSmithKline (GSK). This landmark deal granted GSK an exclusive license to develop, manufacture, and commercialize belrestotug outside of the United States, while the two companies agreed to jointly develop and commercialize the product in the U.S. The agreement came with a substantial $625 million upfront payment to iTeos, providing a significant financial boost to the company's operations.
Throughout its history, iTeos has navigated the typical challenges faced by clinical-stage biopharmaceutical companies, including successfully completing preclinical studies and clinical trials, obtaining regulatory approvals, and establishing manufacturing and commercial capabilities. The company has also had to navigate the complex intellectual property landscape and forge strategic partnerships to advance its pipeline.
The company's lead 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), a key regulator of the immune response. In 2020, iTeos initiated an open-label Phase 1/2a clinical trial of belrestotug in adult cancer patients with advanced solid tumors, which demonstrated promising safety, pharmacokinetic, and early signs of clinical activity.
In June 2021, iTeos entered into a collaboration agreement with GlaxoSmithKline (GSK) for the global development of belrestotug. Under the terms of the agreement, GSK obtained an exclusive license outside the United States, while iTeos and GSK will jointly develop and commercialize belrestotug in the U.S. on a profit-sharing basis. This strategic partnership has allowed iTeos to leverage GSK's expertise and resources to accelerate the development of belrestotug.
iTeos is also advancing its next-generation adenosine A2A receptor antagonist, inupadenant, which is designed to overcome the specific adenosine-mediated immunosuppression found in the tumor microenvironment. The company is evaluating inupadenant in an ongoing open-label, multi-arm Phase 1/2a clinical trial in adult cancer patients with advanced solid tumors. The single-agent dose-escalation and expansion portions of this trial have demonstrated durable monotherapy antitumor activity and a favorable safety profile.
Most recently, iTeos has initiated a Phase 1 clinical trial for its novel small molecule, EOS-984, which targets a new mechanism in the adenosine pathway by inhibiting the equilibrative nucleoside transporter 1 (ENT1). This first-in-class approach has the potential to fully reverse adenosine-induced immune suppression, both as a monotherapy and in combination with other cancer therapies.
Financial Snapshot
As of September 30, 2024, iTeos reported a strong balance sheet with $123.7 million in cash and cash equivalents and $525.2 million in available-for-sale securities, providing the company with ample runway to continue advancing its pipeline. The company's net loss for the nine months ended September 30, 2024, was $90.7 million, with research and development expenses of $107.9 million and general and administrative expenses of $37.3 million.
iTeos' collaboration with GSK has also provided a significant financial boost, with the company recognizing $35.0 million in license and collaboration revenue during the first nine months of 2024. This revenue was primarily related to the achievement of a development milestone for the initiation of the Phase 3 GALAXIES-301 trial evaluating the combination of belrestotug and GSK's anti-PD-1 agent, dostarlimab, in first-line non-small cell lung cancer (NSCLC).
For the full fiscal year 2023, iTeos reported revenue of $12.60 million, a net loss of $112.64 million, operating cash flow of -$103.76 million, and free cash flow of -$106.72 million. The company's financial position remains strong, with management believing that the current cash reserves will enable iTeos to fund its operating expenses and capital expenditure requirements through 2027.
Operational Highlights and Milestones
In September 2024, iTeos announced positive interim data from the GALAXIES Lung-201 trial, which demonstrated clinically meaningful objective response rates across the dostarlimab plus belrestotug dosing cohorts in first-line PD-L1 high NSCLC patients. The safety profile of the combination was also found to be broadly consistent with the known safety profile of checkpoint inhibitor combination therapies.
Additionally, iTeos and GSK continue to explore two novel triplet combinations in selected advanced solid tumors, with belrestotug being evaluated in combination with dostarlimab and GSK's investigational anti-CD96 antibody, as well as with dostarlimab and GSK's anti-PVRIG antibody.
On the regulatory front, the European Medicines Agency (EMA) has granted clearance to advance the belrestotug 400mg plus dostarlimab combination as the recommended Phase 3 dose and to activate GALAXIES Lung-301 clinical sites in the European Union. This is a significant milestone that aligns with the companies' efforts to bring this promising combination to patients globally.
In the third quarter of 2024, iTeos also completed the enrollment of the monotherapy dose escalation portion of the EOS-984 Phase 1 trial and initiated dosing of the EOS-984 plus pembrolizumab combination cohort. EOS-984 represents a potentially first-in-class small molecule focused on a new mechanism in the adenosine pathway, targeting the equilibrative nucleoside transporter 1 (ENT1).
Risks and Challenges
As a clinical-stage biotechnology company, iTeos faces the inherent risks associated with drug development, including the potential for delays or failures in clinical trials, regulatory hurdles, and the ability to successfully manufacture and commercialize its product candidates. The company's reliance on collaborations, such as the one with GSK, also introduces risks related to the alignment of interests and the successful execution of these partnerships.
Additionally, the highly competitive nature of the immuno-oncology landscape and the potential for new therapies or technological advancements to disrupt the market present ongoing challenges for iTeos. The company must also navigate the complex regulatory environment and continue to invest in its research and development efforts to maintain a robust and diversified pipeline.
Financials
iTeos Therapeutics reported a strong financial position as of September 30, 2024. The company's balance sheet showed $123.7 million in cash and cash equivalents, along with $525.2 million in available-for-sale securities. This substantial cash reserve provides iTeos with a significant runway to continue advancing its pipeline and fund ongoing clinical trials.
For the nine months ended September 30, 2024, iTeos reported a net loss of $90.7 million. The company's research and development expenses for this period were $107.9 million, reflecting its continued investment in advancing its product candidates through clinical trials. General and administrative expenses for the same period were $37.3 million.
The collaboration with GSK has been a significant source of revenue for iTeos. During the first nine months of 2024, the company recognized $35.0 million in license and collaboration revenue, primarily related to the achievement of a development milestone for the initiation of the Phase 3 GALAXIES-301 trial.
For the most recent quarter ended September 30, 2024, iTeos reported no revenue, a net loss of $45.36 million, operating cash flow of -$37.35 million, and free cash flow of -$37.45 million. The company's research and development expenses for this quarter were $36.69 million, demonstrating its continued commitment to advancing its clinical-stage programs.
iTeos does not break out performance by geographic markets, as it appears to currently only operate in the United States.
Liquidity
iTeos Therapeutics maintains a strong liquidity position, with a total of $648.9 million in cash, cash equivalents, and available-for-sale securities as of September 30, 2024. This robust cash position provides the company with significant financial flexibility to fund its ongoing research and development activities, clinical trials, and operational expenses.
The company's collaboration agreement with GSK, which included a substantial upfront payment of $625 million in 2021, has significantly bolstered iTeos' liquidity. This strategic partnership not only provides financial resources but also potential future milestone payments and royalties, further strengthening the company's long-term liquidity outlook.
iTeos' current liquidity position is expected to fund its operations and capital expenditure requirements well into the future, allowing the company to advance its pipeline and pursue its strategic objectives without immediate funding concerns.
Key liquidity metrics for iTeos include:
- Debt/Equity Ratio: 0.008751100219727335 - Current Ratio: 14.800755147498235 - Quick Ratio: 14.800755147498235
These ratios indicate a strong liquidity position and a very low level of debt relative to equity, suggesting that iTeos has a solid financial foundation to support its ongoing operations and future growth initiatives.
Conclusion
iTeos Therapeutics is a promising biotech company at the forefront of the immuno-oncology field. With a strong pipeline of product candidates targeting novel, validated pathways and strategic collaborations that have the potential to accelerate development, iTeos is well-positioned to make a significant impact in the fight against cancer. As the company continues to achieve key milestones and navigate the challenges inherent to the industry, it remains an intriguing investment opportunity for those seeking exposure to the dynamic and rapidly evolving world of cancer immunotherapy.
The company's focus on developing innovative cancer immunotherapy products, including its lead candidate belrestotug in collaboration with GSK, and its other clinical-stage programs inupadenant and EOS-984, demonstrates its commitment to addressing unmet medical needs in oncology. While iTeos is incurring significant research and development expenses as it advances its pipeline, resulting in net losses, its strong cash position and strategic partnerships provide a solid foundation for future growth and development activities.
As iTeos Therapeutics continues to progress its clinical trials and potentially moves closer to commercialization of its product candidates, investors and industry observers will be closely watching for further clinical data, regulatory milestones, and potential partnership opportunities that could drive the company's future success in the competitive immuno-oncology landscape.