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United States securities and exchange commission logo
July 13, 2022
Matthew Gall
Chief Financial Officer
iTeos Therapeutics, Inc.
321 Arsenal St
Watertown , MA
Re: iTeos Therapeutics,
Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2021
Filed March 23,
2022
File No. 001-39401
Dear Mr. Gall:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2021
Consolidated Financial Statements
Note 5. License and Collaboration Agreements
GlaxoSmithKline (GSK), page F-20
1. Here you state that the
co-development in Phases 2 and 3 and the co-commercialization
efforts of the GSK
Collaboration Agreement represent joint operating activities and
thus are accounted for
in accordance with ASC 808, Collaborative Arrangements. You
also state at F-21 that
the completion of the Phase 1 clinical study related to EOS-448 is
one of the four
material promises to be accounted for under ASC 606, Revenue from
Contracts with
Customers. Please respond to the following comments related to the GSK
agreement:
Matthew Gall
FirstName LastNameMatthew Gall
iTeos Therapeutics, Inc.
Comapany
July NameiTeos Therapeutics, Inc.
13, 2022
July 13,
Page 2 2022 Page 2
FirstName LastName
We note that Section 3.1.3 of the GSK Collaboration and License
Agreement as filed
in exhibit 10.13 refers to a narrowly defined Phase 1 definition
under "iTeos Phase 1
Clinical Study". Please clarify what the iTeos Phase 1 Clinical
Study entails and if
there is a Phase 1 clinical study that is outside the "iTeos
Phase 1 Clinical Study". In
addition, clarify whether Phase 2 and 3 is equivalent in scope to
the "Global
Development Plan".
You also state on page 1 that "In partnership with GSK, iTeos
has dosed the first
patients in a clinical trial assessing the doublet of GSK s
anti-PD-1 (dostarlimab)
with EOS-448." and that "We and GSK also are initiating Phase 1b
trials with novel
triplets, including dostarlimab with EOS-448 and inupadenant as
well as EOS-448
with dostarlimab and GSK s anti-CD96 antibody, GSK 608." For
each of the
clinical trials discussed here please explain to us (1) whether
they fall under the scope
of "iTeos Phase 1 Clinical Study" or the "Global Development
Plan", (2) which party
is responsible for performing the work and which party is
responsible for the related
costs and expenses, and (3) timing and the status of the trial as
of December 31, 2021
and March 31, 2022.
Explain to us why the entire $625.0 million upfront payment was
allocated to the
components accounted for under ASC 606 and why some of the amount
was not
required to be allocated to the other material components of the
agreement. In this
regard, clarify why you believe the Phase 2 and 3 goods and
services are distinct
from the Phase 1 goods and services under ASC 808-10-15-5B.
You state on page F-20 under "Collaboration" that GSK is not a
customer in the
context of the Phase 2 and 3 and co-commercialization activities
whereas you state on
page F-21 under "Revenue Recognition" that GSK is a customer.
Please clarify on
page F-21 in what context GSK is a customer.
For all the items above, please revise your future filings where
necessary.
Note 9. Income Taxes, page F-27
2. Here and at page 67, you disclose that you recorded a $17.0 million
liability as of
December 31, 2021, related to an uncertain tax position regarding your
allocation of
revenue between Belgium and the U.S. Also as disclosed on pages 14 and
23 of the Form
10-Q for the fiscal quarter ended March 31, 2022, you recorded an
additional $22.3
million liability as of March 31, 2022. Please tell us and disclose in
more detail in future
filings the reason for the significant increase in the liability, the
uncertainties, as well as its
potential impact, if recognized, to your effective tax rate. Refer to
ASC 740-10-50-
15. Please also ensure your response specifically addresses whether
the change is the
result of correcting an error under ASC 250, Accounting Changes and
Error
Corrections.
Matthew Gall
iTeos Therapeutics, Inc.
July 13, 2022
Page 3
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Li Xiao at (202) 551 - 4391 or Mary Mast at (202) 551-
3613 with any
questions.
FirstName LastNameMatthew Gall Sincerely,
Comapany NameiTeos Therapeutics, Inc.
Division of
Corporation Finance
July 13, 2022 Page 3 Office of Life
Sciences
FirstName LastName