iTeos: ESMO data shows signs of a real win for TIGIT (NASDAQ:ITOS)

Summary and topline update

iTeos Therapeutics (NASDAQ: ITOS) is an immunotherapy-focused biotech working on a molecule that targets TIGIT, an elusive checkpoint with a checkered past in clinical cancer research. In my last article about the company, I indicated growth optimism for the ITOS approach, particularly in lung cancer. I expected to see a reading of the data at this year’s ESMO meeting.

And here we are, ESMO 2024, and we have a few more discoveries to chew on. Let’s revisit the ITOS story to see if there are legs to this idea that they can improve immunotherapy in some tough malignancies.

Pipeline updates

Belrestotug

The most advanced product candidate ITOS is working on is belrestotug, an anti-TIGIT antibody that the company hopes will enhance anti-tumor immunity, particularly when paired with an anti-PD-1 antibody. For ITOS, that partner is dostarlimab, marketed as Jemperli by GSK (GSK).

Now, probably the biggest news of the year for ITOS, and something I covered in my last article, was the formal initiation of a randomized phase 3 trial called GALAXIES-Lung-301 comparing belrestotug versus placebo in combination with pembrolizumab. (Merck’s Keytruda) in patients with advanced non-small cell lung cancer (NSCLC) with high PD-L1. In this case, the cutoff for “high” is a tumor proportion score of 50% or greater, the current minimum cutoff for giving patients pembrolizumab alone as a standard of care approach. For patients with lower PD-L1 scores (and perhaps even for patients between 50% and 89%, according to some), pembrolizumab plus chemotherapy would be favored.

But coming out of ESMO 2024, ITOS presented findings that provide a solid first look at this combination. GALAXIES Lung-02 enrolled patients with advanced PD-L1 NSCLC to receive pembrolizumab alone, dostarlimab alone, or one of the multiple dosing regimens of dostarlimab plus belrestotug. The primary objective of this study was to evaluate the response rates of different treatment approaches.

Results from substudy 1 included data from 124 patients in the 4 dostarlimab-containing arms. Dostarlimab alone led to a clinical response in 37.5% of patients (12/32), while the 3 arms combining dostarlimab and belrestotug had response rates ranging from 63.3% to 76.7%. The “confirmed” response rates were 28.1% and 59.4%-63.3%, respectively.

For reference, the KEYNOTE-042 trial, which first established pembrolizumab as the standard of care, demonstrated a response rate of 44.8% compared to 27.8% for chemotherapy in this setting, indicating that only dostarlimab is generally consistent in terms of activity compared to pembrolizumab, and the addition of belrestotug appears to add to this activity as well. There is very little to say about these comparisons, due to the different study populations, but the picture is an interesting one.

According to Dr. Spigel, who presented the findings, the phase 3 dose of belrestotug in GALAXIES Lung-301 is 400 mg, which had a 59.4% response rate in this study. Also important was toxicity, with a fairly large increase in the rate of treatment-related adverse events (59% vs. 84% for dostarlimab and belrestotug 400 mg plus dostarlimab, respectively) and serious adverse reactions. One patient in 32 in the 400 mg arm died of a treatment-related AE.

ITOS is also exploring the use of belrestotug in other disease settings, most notably in first-line squamous cell carcinoma of the head and neck.

Financial overview

As of its most recent quarterly filing, ITOS held $251.1 million in cash and cash equivalents, with another $320.2 million in short-term investments.

The Company recognized $35 million in collaboration revenue related to a milestone payment for the initiation of the Phase 3 trial for belrestotug. Operating expenses reached $49.2 million. After accounting for other forms of income, the quarter’s net loss came to $7.1 million.

Given that the milestone payment was a one-off, the actual cash burn rate is closer to $42.1 million going forward, implying a cash runway for the company of between 14 and 15 quarters.

Strengths and risks

Power – Enough cash to hit critical milestones

With over 3 years of cash track, ITOS is currently sitting on a pile of cash that should see them through to the major data readings they would need to gain approval. This, combined with their potential for collaborative income, paints a very positive picture for the company’s financials, provided they don’t run into any major headwinds.

Strength – Strong indicators of clinical activity

TIGIT’s story has been marred by setbacks over the past 3 years, with too many high-profile trial failures in the lung cancer space, which has caused market sentiment toward the stock to be quite low. The ESMO data that ITOS presents here provides an important signal that there is indeed something to the TIGIT story in lung cancer, with pretty compelling response rates, at least by my count.

Risk – Response rates are a surrogate of concern, and safety is also of concern

That said, we have to be careful about overinterpreting GALAXIES Lung-02. Yes, it appears that response rates were improved, but the study is relatively small and that apparent improvement in activity may evaporate as you add more patients.

More importantly, response rate isn’t really the endpoint that can drive this to approval. Tiragolumab showed evidence of improving response rates in trials such as SKYSCRAPER-02, but survival was not improved, and tiragolumab has languished since then.

So looking forward to this data is a risky proposition with a lot of built-in potential. But these response rates may end up meaning nothing to patients in the end.

Furthermore, that increase in high-grade toxicities is something to watch very closely. Any risk of death from treatment-related side effects will give clinicians a lot of pause and could even kill a potential application for approval altogether, even if the treatment is effective.

Risk – Limited patient population

And even if successful, this study population of PD-L1 50% or higher is far from the majority of patients with advanced NSCLC. In KEYNOTE-042, 1653 patients had evaluable samples, and of these, only 30.2% had a PD-L1 score meeting the enrollment criteria.

It’s no small bean, but it would certainly be too far to imply that belrestotug will revolutionize the entire management of lung cancer, and they still have a long way to go in this high PD-L1 cohort and other treatment settings.

The final summary

ITOS presented a very important set of data at ESMO 2024. The clinical activity of add-on anti-TIGIT therapy looks as compelling as you’ll ever see from a phase 2 trial. Although there are substantial risks to the thesis, when you consider that ITOS is trading at a market cap of around $600M as I write this, there is upside potential if they can get a strong foothold with their immunotherapy.

Yes, these are preliminary findings, and yes, there are some safety concerns. But this is yet another data point from recent studies that indicates that you maybe improvement in anti-PD-1 therapy for these patients, similar in principle to Summit’s recent success in NSCLC, and a clinical trial for Chinese partner Summit (despite my concerns) sent their stock to over $20 billion in market cap of the market.

For this reason, and given the advanced stage of their pipeline, I continue to consider ITOS a company worthy of further exploration as an investment thesis. The upside is very real, despite the risks, and ESMO 2024 gives us some signals that they really have something in hand.