iTeos Therapeutics ($306.5M market-cap) is a clinical-stage biopharmaceutical company engaging in the development of immuno-oncology therapeutics for patients aiming to restore the immune response against cancer. 

 

Earlier this morning, iTeos reported topline results from an interim analysis of the GALAXIES Lung-201 study. The trial was sponsored by GSK Plc and assessed the belrestotug + dostarlimab doublet drug in a previously untreated, and untraceable form of lung cancer. However, the trials did not meet the success criteria and based on the data, iTeos and GSK agreed to terminate the belrestotug development program and end their collaboration. All belrestotug-containing cohorts are ending, and any new enrollment in the ongoing Phase 3 trial will end.

 

iTeos Therapeutics also said it is taking immediate steps to preserve capital and has initiated a targeted process to identify opportunities that preserve and maximize shareholder value. iTeos has engaged TD Cowen to advise on this process. I particularly liked this language in the 8-K filed this morning:

 

“Since founding this company over a decade ago, I could not be prouder of the team we have built, the quality of science produced, and our collective commitment to improving the lives of cancer patients in need. However, given current market conditions and our appreciation of the responsibility to our valued shareholders, we believe the best path forward is to promptly evaluate a full range of strategic alternatives to unlock the value of our assets. With a strong balance sheet and a commitment to disciplined execution, we are well positioned to pursue opportunities that maximize shareholder value,” continued Dr. Detheux. 

 

The current shareholder base looks good with some familiar bio-funds in ECOR1, RA Capital, and the likes. I’m hoping others (like Tang, BML et. al.) might jump in following the announcement this morning. Here’s my back-of-the-envelope liquidation value:

 

 

Note that I took out $20M from the total liabilities due to the “unrecognized tax benefits” line item accounting for $47.72M. ITeos previously claimed a tax deduction, but there's a risk that the tax authorities could disallow it during an audit.

 

Disclosure: I own shares of ITOS