iTeos Therapeutics | SEC Filing

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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to ___________________

Commission File Number: 001-39401

iTeos Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware		84-3365066
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
321 Arsenal St Watertown, MA		02472
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (339) 217 0162

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    Common stock, $0.001 par value per share

    ITOS

    Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 1, 2024 the registrant had 36,521,845 shares of common stock, $0.001 par value per share, outstanding.

Summary of the material risks associated with our business

Our business is subject to numerous risks and uncertainties that you should be aware of before making an investment decision, including those highlighted in the section entitled “Risk Factors”. These risks include, but are not limited to, the following:

•

We must complete successful preclinical studies and clinical trials to demonstrate the safety, quality and efficacy of the product candidates before we can begin the commercialization process.

•

Challenges enrolling patients in our clinical trials may delay or prevent clinical trials of our product candidates. Patient enrollment requires initiation of clinical trial sites; accordingly, delays in initiation of sites exacerbate enrollment challenges.

•

We anticipate that our future product candidates will be used in combination with third-party drugs or biologics, some of which are still in development, and we have limited or no control over the supply, regulatory status, or regulatory approval of such drugs or biologics.

•

Interim “top-line” and preliminary results from our clinical trials that we announce or publish from time to time may change as more patient data become available, and audit and verification procedures are required to validate the quality, reliability and integrity of our data and could result in material changes in the final data.

•

We may not be able to file investigational new drug (IND) applications or IND amendments to commence additional clinical trials on the timelines indicated, and, even if we are able to file, the Federal Drug Administration, or FDA, or a comparable foreign regulatory authority may not permit us to proceed.

•

We face 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 than us. If their product candidates are shown to be safer or more effective than ours, our commercial opportunity may be reduced or eliminated.

•

Negative developments in the field of immuno-oncology or in the field of TIGIT (as defined herein) or adenosine pathway therapeutics could damage public perception of our product candidates or negatively affect our business.

•

If we are unable to successfully commercialize any product candidate for which we receive regulatory approval, or experience significant delays in doing so, our business will be materially harmed.

•

The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable. If we experience delays in obtaining, required regulatory approvals, our ability to generate revenue may be materially impaired.

•

We rely on third parties to conduct our clinical trials and perform some of our research and preclinical studies. Failure by these third parties to satisfactorily carry out their contractual duties in compliance with the applicable regulatory requirements or to meet expected deadlines may adversely impact our development programs, business and prospects.

•

We may not realize the benefits of our collaborations, alliances or licensing arrangements, including our collaboration with GSK (as defined herein) for the global development of belrestotug (also known as EOS-448).

•

We rely on third parties to manufacture our product candidates, and we expect to continue to rely on third parties for the clinical as well as any future commercial supply of our product candidates and other future product candidates. The development of our current and future product candidates, and the commercialization of any approved products, could be stopped, delayed or made less profitable if any such third party fails to provide us with sufficient clinical or commercial quantities of such product candidates or products, fails to do so at acceptable quality levels or prices or fails to achieve or maintain satisfactory regulatory compliance.

•

Our limited operating history may make it difficult for you to evaluate our business and assess our future viability.

•

We will require additional financing to achieve our goals, and failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development or commercialization efforts.

•

If we are unable to obtain and maintain sufficient intellectual property protection for our current product candidates or any future product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to commercialize successfully our products may be adversely affected.

•

We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to implement successfully our business strategy.

•

Information system failures or unauthorized or inappropriate use of or access to our information systems risk disclosure of confidential or proprietary information, including personal data, and could damage our reputation, and subject us to significant financial and legal exposure.

The above summary risk factors should be read together with the full risk factors under in the heading “Risk factors” and the other information in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the related notes, as well as in other documents that we file with the Securities and Exchange Commission ("SEC"). The risks summarized above or described below are not the only risks that we face. Additional risks and uncertainties not precisely known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations and future growth prospects.

Special note regarding forward-looking statements

This Quarterly Report on Form 10-Q, including the section entitled "Risk factors" and "Management’s discussion and analysis" of financial condition and results of operations” contains express or implied forward-looking statements. These statements relate to future events or future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•

the timing, progress and success of our clinical trials, including statements regarding anticipated results of our clinical trials, the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs;

•

whether the results of our trials will be sufficient to support domestic or foreign regulatory filings or approvals for our product candidates;

•

regulatory actions with respect to our product candidates or our competitors’ products and product candidates;

•

our ability to obtain, including on an expedited basis, and maintain regulatory approval of our product candidates;

•

the outcomes of our preclinical studies;

•

our ability to enroll patients in our clinical trials at the pace that we project;

•

the costs of development of our product candidates or clinical development programs;

•

our expectations regarding the anticipated development of our pipeline of candidates;

•

the period of time over which our existing capital resources will be sufficient to fund our operating expenses and capital expenditures, and the degree to which such resources will enable us to fund our planned development of our product candidates;

•

the potential attributes and clinical benefits of our product candidates;

•

our ability to successfully establish or maintain collaborations or strategic relationships for our product candidates;

•

the expected benefits of collaborations, including potential milestones and royalty payments from GSK pursuant to the GSK Collaboration Agreement (as defined herein);

•

the rate and degree of market acceptance of our product candidates;

•

our ability to obtain orphan drug or Breakthrough Therapy designation or other accelerated approval for any of our product candidates;

•

our ability to manufacture our product candidates in conformity with the FDA requirements and to scale up manufacturing of our product candidates to commercial scale, if approved;

•

our ability to compete with companies currently producing or engaged in the clinical development of treatments for the disease indications that we pursue or treatment modalities that we develop;

•

our reliance on third parties to conduct our clinical trials;

•

our reliance on third-party contract manufacture organizations ("CMOs") to manufacture and supply our product candidates for us;

•

our ability to retain and recruit key personnel;

•

our ability to obtain and maintain intellectual property protection for our product candidates;

•

our estimates of our expenses, ongoing losses, future revenue, cash runway, capital requirements and our need for or ability to obtain additional financing;

•

our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act, or JOBS Act;

•

our future financial performance;

•

the impact of laws and regulations applicable to our industry; and

•

developments and projections relating to our competitors or our industry.

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” "will," "would," "if," or the negatives of these terms or other comparable terminology, although not all forward-looking statements contain such identifying terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect our results and financial condition. Factors that may cause actual results to differ from current expectations include, among other things, those listed under the section titled “Risk factors” in this Quarterly Report on Form 10-Q and in any subsequent filings with the SEC. If one of these risks or uncertainties occur, or if underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the SEC as exhibits to this Quarterly Report on Form 10-Q, completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. Statements regarding our cash runway do not indicate when we may access the capital markets.

While we may elect to update these forward-looking statements at some point in the future, we undertake no obligation to do so except to the extent required by applicable law. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q.

iii

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and comprehensive loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION	35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 3.	Defaults Upon Senior Securities	68
Item 4.	Mine Safety Disclosures	68
Item 5.	Other Information	68
Item 6.	Exhibits	69
	Signatures	70

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

iTeos Therapeutics, Inc. and subsidiaries

Condensed consolidated balance sheets

(unaudited)


(in thousands, except share amounts)	June 30, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	251,098		$	251,177
Short-term investments (amortized cost of $320,709)		320,158			280,739
Grants receivable		393		—
Research and development tax credits receivable		727			135
Refundable income taxes		6,228			6,365
Unbilled milestone receivable		35,000		—
Prepaid expenses and other currents assets		13,001			12,236
Total current assets		626,605			550,652
Property and equipment, net		5,334			4,696
Long-term investments (amortized cost of $108,164)		107,846			100,539
Research and development tax credits receivable, net of current portion		5,465			4,508
Restricted cash		303			274
Right of use assets		5,500			6,036
Other assets		788			883
Total assets	$	751,841		$	667,588
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	11,055		$	11,293
Accrued expenses and other current liabilities		15,431			7,058
Accrued personnel expenses		5,299			8,562
Payable for investments		—			9,787
Deferred income		1,604			2,063
Lease liabilities		1,277			1,251
Total current liabilities		34,666			40,014
Grants repayable, net of current portion		6,028			6,609
Lease liabilities, net of current portion		4,239			4,807
Unrecognized tax benefits		43,040			40,930
Total liabilities		87,973			92,360
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock, $0.001 par value: 150,000,000 shares authorized at June 30, 2024 and December 31, 2023; 36,519,945 and 35,838,080 shares issued and outstanding, respectively		37			36
Additional paid-in capital		601,102			463,799
Accumulated other comprehensive loss		(16,560	)		(13,240	)
Retained earnings		79,289			124,633
Total stockholders’ equity		663,868			575,228
Total liabilities and stockholders’ equity	$	751,841		$	667,588

The accompanying notes are an integral part of these condensed consolidated financial statements.

iTeos Therapeutics, Inc. and subsidiaries

Condensed consolidated statements of operations and comprehensive loss

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except share and per share amounts)	2024			2023			2024			2023
Revenue:
License and collaboration revenue	$	35,000		$	—		$	35,000		$	12,595
Total revenue		35,000			—			35,000			12,595
Operating expenses:
Research and development expenses		36,709			29,186			71,238			54,885
General and administrative expenses		12,457			13,435			25,160			25,385
Total operating expenses		49,166			42,621			96,398			80,270
Loss from operations		(14,166	)		(42,621	)		(61,398	)		(67,675	)
Other income and expenses:
Grant income		522			799			1,472			1,534
Research and development tax credits		893			386			1,696			729
Interest income		7,817			8,042			15,203			15,893
Other income, net		67			326			2,158			2,099
Loss before income taxes		(4,867	)		(33,068	)		(40,869	)		(47,420	)
Income tax expense		(2,261	)		(1,232	)		(4,475	)		(2,431	)
Net loss	$	(7,128	)	$	(34,300	)	$	(45,344	)	$	(49,851	)
Basic net loss per common share	$	(0.18	)	$	(0.96	)	$	(1.20	)	$	(1.39	)
Diluted net loss per common share	$	(0.18	)	$	(0.96	)	$	(1.20	)	$	(1.39	)
Weighted-average common shares outstanding - basic		39,699,053			35,768,952			37,771,084			35,742,641
Weighted-average common shares outstanding - diluted		39,699,053			35,768,952			37,771,084			35,742,641

Net loss	$	(7,128	)	$	(34,300	)	$	(45,344	)	$	(49,851	)
Foreign currency translation adjustments		(151	)		104			(2,416	)		(1,902	)
Unrealized loss on available-for-sale securities		(72	)		(1,722	)		(906	)		(1,620	)
Comprehensive loss	$	(7,351	)	$	(35,918	)	$	(48,666	)	$	(53,373	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

iTeos Therapeutics, Inc. and subsidiaries

Condensed consolidated statements of stockholders’ equity

(unaudited)


							Accumulated
					Additional		other						Total
In thousands except share amounts	Common stock				paid-in		comprehensive			Retained			stockholders’
	Shares		Amount		capital		loss			earnings			equity
Balance at December 31, 2022		35,611,219	$	36	$	435,665	$	(9,644	)	$	237,275		$	663,332
Stock-based compensation		—		—		5,807		—			—			5,807
Common stock issued upon exercises of options		149,408		—		578		—			—			578
Currency translation adjustment		—		—		—		(2,006	)		—			(2,006	)
Unrealized gain on available-for-sale securities		—		—		—		102			—			102
Net loss		—		—		—		—			(15,551	)		(15,551	)
Balance at March 31, 2023		35,760,627	$	36	$	442,050	$	(11,548	)	$	221,724		$	652,262
Stock-based compensation		—		—		6,964		—			—			6,964
Common stock issued upon exercises of options		21,292		—		218		—			—			218
Currency translation adjustment		—		—		—		104			—			104
Unrealized loss on available-for-sale securities		—		—		—		(1,722	)		—			(1,722	)
Net income		—		—		—		—			(34,300	)		(34,300	)
Balance at June 30, 2023		35,781,919	$	36	$	449,232	$	(13,166	)	$	187,424		$	623,526


								Accumulated
						Additional		other						Total
In thousands except share amounts	Common stock					paid-in		comprehensive			Retained			stockholders’
	Shares			Amount		capital		loss			earnings			equity
Balance at December 31, 2023		35,838,080			36	$	463,799	$	(13,240	)	$	124,633		$	575,228
Stock-based compensation		—			—		7,263		—			—			7,263
Common stock issued upon exercises of options and release of restricted stock units		5,676			—		22		—			—			22
Currency translation adjustment		—			—		—		(2,265	)		—			(2,265	)
Unrealized loss on available-for-sale securities		—			—		—		(832	)		—			(832	)
Net loss		—			—		—		—			(38,216	)		(38,216	)
Balance at March 31, 2024		35,843,756			36	$	471,084	$	(16,337	)	$	86,417		$	541,200
Stock-based compensation		—			—		8,062		—			—			8,062
Common stock issued upon exercises of options, ESPP purchases, and release of restricted stock units		433,332			—		2,383		—			—			2,383
Issuance of common stock and pre-funded warrant, net of offering costs		1,142,857			1		119,573		—			—			119,574
Exchange of common stock for pre-funded warrant		(900,000	)		—		—		—			—			—
Currency translation adjustment		—			—		—		(151	)		—			(151	)
Unrealized loss on available-for-sale securities		—			—		—		(72	)		—			(72	)
Net loss		—			—		—		—			(7,128	)		(7,128	)
Balance at June 30, 2024		36,519,945			37	$	601,102	$	(16,560	)	$	79,289		$	663,868

The accompanying notes are an integral part of these condensed consolidated financial statements.

iTeos Therapeutics, Inc. and subsidiaries

Condensed consolidated statements of cash flows

(unaudited)


	Six Months Ended June 30,
(in thousands)	2024			2023
Cash flows from operating activities
Net loss	$	(45,344	)	$	(49,851	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		614			447
Stock-based compensation		15,325			12,771
Non-cash: Net accretion of available-for-sale debt securities		(5,527	)		(5,386	)
Change in operating lease right-of-use assets		(5	)		—
Changes in operating assets and liabilities:
Grants receivable		(397	)		584
Research and development tax credits receivable		(1,705	)		(729	)
Refundable income taxes		140			(1,839	)
Unbilled milestone receivable		(35,000	)
Prepaid expenses and other current assets		(1,051	)		702
Accounts payable		(218	)		(2,512	)
Accrued expenses and other liabilities		5,130			989
Income tax payable		—		—
Deferred income		(399	)		1,318
Deferred revenue		—			(12,595	)
Unrecognized tax benefits		2,110		—
Net cash used in operating activities		(66,327	)		(56,101	)
Cash flows from investing activities
Purchases of investments		(245,073	)		(139,037	)
Proceeds from maturities of investments		193,182			128,265
Purchase of property and equipment		(1,387	)		(819	)
Net cash used in investing activities		(53,278	)		(11,591	)
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of options and ESPP purchases		2,404			796
Proceeds from issuance of common stock and pre-funded warrant		119,994
Net cash provided by financing activities		122,398			796
Effects of exchange rate changes on cash, cash equivalents and restricted cash		(2,843	)		(1,659	)
Net decrease in cash, cash equivalents and restricted cash		(50	)		(68,555	)
Cash, cash equivalents and restricted cash at beginning of period		251,451			285,038
Cash, cash equivalents and restricted cash at end of period	$	251,401		$	216,483
Non-cash investing and financing activities
Capital expenditure included in accounts payable	$	2		$	20
Operating lease liabilities arising from obtaining right-of-use assets		235			1,059
Unrealized loss on available-for-sale securities		(906	)		(1,620	)
Offering costs included within accounts payable		277			—
Supplemental disclosure of cash flows
Cash paid for taxes	$	2,384		$	4,321

The accompanying notes are an integral part of these condensed consolidated financial statements.

iTeos Therapeutics, Inc.

Notes to condensed consolidated financial statements

(unaudited)

Note 1. Nature of Business and Basis of Presentation

Description of business

iTeos Therapeutics, Inc. (iTeos Inc. or the Company), a Delaware corporation headquartered in Watertown, Massachusetts (incorporated on October 4, 2019), is the successor to iTeos Belgium SA (iTeos Belgium) a company organized under the laws of Belgium in 2011 and headquartered in Charleroi, Belgium. The Company is a clinical stage biopharmaceutical company pioneering the discovery and development of a new generation of immuno-oncology therapeutics for people living with cancer. By leveraging its deep understanding of the tumor immunology and immunosuppressive pathways we design novel product candidates with optimized pharmacologic properties to improve clinical outcomes by restoring the immune response against cancer. The Company is focused on advancing its innovative pipeline of monoclonal antibodies (mAbs) and small molecules for the treatment of cancer, especially solid tumors. Our three clinical-stage programs target novel, validated immuno-oncology pathways, including the TIGIT/CD226 pathway with TIGIT (T cell immunoreceptor with lg and ITIM domains) and the adenosine pathway with A2AR (adenosine 2A receptor) and ENT1 (equilibrative nucleoside transporter 1).

The Company’s lead antibody product candidate, belrestotug, also known as EOS-448/GSK4428859A, is an antagonist of TIGIT, an immune checkpoint with multiple mechanisms of action. Belrestotug was selected for its target affinity with TIGIT, potency and potential to engage the Fc gamma receptor (FcγR), a key regulator of immune response which triggers a multi-faceted mechanism of action that improves antitumor efficacy. This multi-faceted mechanism includes the activation of dendritic cells, natural killer cells, and macrophages, and the promotion of cytokine release and antibody-dependent cellular cytotoxicity (ADCC) activity. In 2020, the Company 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.

On June 11, 2021, the Company's wholly owned subsidiary, iTeos Belgium S.A., and GlaxoSmithKline Intellectual Property (No. 4) Limited, or GSK, executed a Collaboration and License Agreement, or the GSK Collaboration Agreement, which became effective on July 26, 2021. Pursuant to the GSK Collaboration Agreement, the Company granted GSK a license under certain of its intellectual property rights to develop, manufacture, and commercialize products comprised of or containing belrestotug, which license is exclusive in all countries outside of the United States and co-exclusive, with iTeos, in the United States. GSK and iTeos intend to develop belrestotug in combination, including with other oncology assets of GSK, and iTeos and GSK will jointly own the intellectual property created under the GSK Collaboration Agreement that covers such combinations. In partnership with GSK, the Company is enrolling patients in a randomized, double-blind Phase 3 registrational trial, GALAXIES Lung-301, assessing the doublet of GSK's anti-PD-1 (Jemperli (dostarlimab-gxly)) with belrestotug versus placebo and pembrolizumab in patients with first-line PD-L1 high non-small cell lung cancer (NSCLC). The Company is also enrolling patients with first line PD-L1 high NSCLC in a randomized Phase 2 platform study, GALAXIES Lung-201, assessing dostarlimab with belrestotug and in combination with GSK'608, GSK's investigational anti-CD96 antibody, nelistotug. An interim assessment of the GALAXIES Lung-201 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, the Company is enrolling patients in a Phase 2 platform study, GALAXIES H&N-202, assessing the belrestotug and dostarlimab doublet and a triplet with GSK’s anti-CD96 antibody (GSK’608) with first-line, PD-L1 positive advanced or metastatic head and neck squamous cell carcinoma (HNSCC) and a Phase 2 expansion trial assessing belrestotug and dostarlimab with first-line, PD-L1 positive advanced or metastatic HNSCC. In the TIG-006 trial assessing the doublet of dostarlimab with belrestotug in patients with first-line HNSCC (Cohorts 2C and 2D), we completed enrollment in the first portion of the Phase 2 expansion part of the trial. We and GSK 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. The Company and GSK continue to explore two novel triplets in selected advanced solid tumors both in Phase 1b trials: belrestotug with dostarlimab and GSK’s investigational anti-CD96 antibody, and belrestotug with dostarlimab and GSK’s anti-PVRIG antibody (GSK’562).

The Company's next most advanced program is inupadenant, also known as EOS-850, a next-generation A2AR antagonist tailored to overcome the specific adenosine-mediated immunosuppression found in tumor microenvironment. The Company is investigating inupadenant in an open-label multi-arm Phase 1/2a clinical trial in adult cancer patients with advanced solid tumors. In April 2020, the Company reported preliminary safety data and early evidence of clinical activity as a single agent. The single-agent dose-escalation and expansion portions of the Company's Phase 1/2a clinical trial of inupadenant have demonstrated durable monotherapy antitumor activity in some patients with advanced solid tumors and safety consistent with previously reported results. The Company also completed enrollment of patients in the escalation

portion (Part 1) of an ongoing two-part Phase 2 trial in post-IO metastatic NSCLC to evaluate the combination of inupadenant with platinum-doublet chemotherapy compared to standard platinum-doublet chemotherapy.

The Company continues to progress research programs focused on additional targets that complement its TIGIT and adenosine pathway programs or address additional immunosuppressive pathways. The most recent program to enter the clinic is EOS-984, a potentially first-in-class small molecule focused on a new mechanism in the adenosine pathway by targeting ENT1, a dominant transporter of adenosine on lymphocytes involved in T cell metabolism, expansion, effector function, and survival. The Company's expertise also allows it to integrate a biomarker-rich strategy into its clinical programs to measure the activity of a product candidate in patients, seek to optimize combination agents and identify patients it deems most likely to benefit from treatment.

The Company began its research and development activities as a spin-off of Ludwig Cancer Research and have built significant expertise in designing novel cancer immunotherapies. The Company's internal research and development team has extensive expertise in tumor immunology, characterization of immunosuppressive mechanisms in the tumor microenvironment, pharmacology and translational medicine. The Company has also built discovery capabilities to develop both small molecules and antibodies with differentiated and optimized product profiles for targets validated by a strong scientific rationale.

On December 2, 2020, iTeos Securities Corporation (iTeos SC) was incorporated as a Massachusetts Security Corporation. It is a wholly-owned subsidiary of iTeos Inc. On July 27, 2021, iTeos BE, LLC (iTeos LLC) was incorporated as a Delaware Limited Liability Company. It is a wholly-owned subsidiary of iTeos Belgium.

Liquidity and capital resources

Since inception, the Company’s activities have consisted primarily of performing research and development to advance its product candidates. The Company had a net loss of $7.1 million and $45.3 million for the three and six months ended June 30, 2024, respectively. As of June 30, 2024, the Company had retained earnings of $79.3 million. As of August 8, 2024, the issuance date of the condensed consolidated financial statements for the period ended June 30, 2024, the Company expects that its cash and cash equivalents would be sufficient to fund its operating expenses, capital expenditure requirements and debt service payments for at least 12 months.

The Company may seek additional funding in order to reach its development and commercialization objectives. The Company may not be able to obtain funding on acceptable terms, or at all, and the Company may not be able to enter into collaborations or other arrangements. The terms of any funding may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects.

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty regarding results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s current or future product candidates, uncertainty of market acceptance of the Company’s product candidates, if approved, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals and sole source suppliers. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities and may not ultimately lead to a marketing approval and commercialization of a product.

The Company’s product candidates require approvals from the U.S. Food and Drug Administration ("FDA") and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. The Company's product candidates may fail to receive the necessary approvals. If the Company was denied approval, approval was delayed or the Company was unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. The Company will need to generate significant revenue to achieve sustained profitability, and it may never do so.

Basis of presentation

The accompanying condensed consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP").

The unaudited interim condensed consolidated financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the years ended December 31, 2023 and 2022, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K (File No. 001-39401). The results for any interim period are not necessarily indicative of results for any future period.

In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

Note 2. Summary of significant accounting policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2023, and notes thereto, which are included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March 6, 2024. Since the date of those financial statements, the Company issued pre-funded warrants to purchase up to a total of 6,614,285 shares of its common stock. The Company evaluated the pre-funded warrants under ASC 480, Distinguishing Liabilities from Equity, and determined that the pre-funded warrants did not meet the criteria for liability classification. As such, the pre-funded warrants are recorded as equity in the statement of stockholders' equity. The shares underlying the pre-funded warrants are included in the calculation of basic net loss per share because they are considered shares issuable for little or no consideration under ASC 260, Earnings Per Share. There have been no other material changes to significant accounting policies.

From time to time, new accounting pronouncements are issued that the Company adopts as of the specified effective date. The Company does not believe that the adoption of any recently issued standards have or may have a material impact on its condensed consolidated financial statements and disclosures.

Note 3. Investment securities and fair value measurements

The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy as of June 30, 2024 and December 31, 2023:


	June 30, 2024
(in thousands)	Level 1		Level 2		Level 3		Total
Money market funds	$	218,382	$	—	$	—	$	218,382
U.S. government agency bonds		—		93,411		—		93,411
U.S. treasury bonds		233,834		—		—		233,834
Corporate debt securities		—		105,739		—		105,739
Totals	$	452,216	$	199,150	$	—	$	651,366


	December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Money market funds	$	228,406	$	—	$	—	$	228,406
U.S. government agency bonds		—		193,076		—		193,076
U.S. treasury bonds		103,597		—		—		103,597
Corporate debt securities		—		84,605		—		84,605
Totals	$	332,003	$	277,681	$	—	$	609,684

Money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in an active market. U.S. treasury securities are also classified as Level 1 because they are valued using quoted prices. U.S. government agency and corporate securities are classified within Level 2 of the fair value hierarchy because they are valued using market-based models that consider inputs such as yield, prices of comparable securities, coupon rate, maturity, and credit quality.

During the periods presented, the Company has not changed the manner in which it values assets and liabilities that are measured at fair value. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the three and six months ended June 30, 2024 and 2023.

The Company's fixed income securities held as of June 30, 2024 and December 31, 2023 with original maturity dates beyond three months are classified as available-for-sale. The following table presents the amortized cost, fair value, and unrealized gains and losses by major security type, for the fixed income securities held by the Company:


	June 30, 2024
(in thousands)	Amortized cost		Gross unrealized gains in AOCI		Gross unrealized losses in AOCI			Fair value
U.S. government agency bonds	$	93,604	$	-	$	(193	)	$	93,411
U.S. treasury bonds		234,418		84		(668	)		233,834
Corporate debt securities		105,831		8		(100	)		105,739
Totals	$	433,853	$	92	$	(961	)	$	432,984


	December 31, 2023
(in thousands)	Amortized cost		Gross unrealized gains in AOCI		Gross unrealized losses in AOCI			Fair value
U.S. government agency bonds	$	193,231	$	90	$	(245	)	$	193,076
U.S. treasury bonds		103,476		156		(35	)		103,597
Corporate debt securities		84,536		114		(45	)		84,605
Totals	$	381,243	$	360	$	(325	)	$	381,278

The $5.0 million difference between the total amortized cost and total fair value as of June 30, 2024 in the table above and the total aggregate value of short-term and long-term investments on the balance sheet is due to a debt security for which the original maturity at purchase was less than three months, and is therefore classified as a cash equivalent on the balance sheet.

The following table presents the amortized cost and fair value of the Company's fixed income securities by maturity grouping. The $5.0 million reconciling difference between the total amortized cost and total fair value for the short-term investments, as noted in the above paragraph, also applies to the below table as of June 30, 2024.


	June 30, 2024
(in thousands)	Amortized cost		Fair value
Due in one year or less	$	325,690	$	325,138
Due after one year through five years		108,163		107,846
Due after five years through ten years		—		—
Due after ten years		—		—
Total	$	433,853	$	432,984


		December 31, 2023
(in thousands)