Our 12-month target price for IPHA is $8, derived using a discounted cash flow (DCF) analysis. We use a weighted average cost of capital (WACC) of 13% and a -90% terminal growth rate post 2030. Innate’s issued and pending patents are expected to begin expiring in 2027 for monalizumab, 2032 for avdoralimab, and 2034 for lacutamab. Additional pending patents and patent extension programs such as Hatch-Waxman could extend Innate’s patent protection.

We rate IPHA High Risk based on a quantitative screen of volatility in the stock. We see the following sources of risk to our target price. 1) Monalizumab fails to replicate positive Ph2 data in the ongoing Ph3 PACIFIC-9 study in Stage III NSCLC, 2) Updated data for lacutamab in MF or Sѐzary syndrome from the Ph2 TELLOMAK trial underperform expectations, and 3) Lacutamab does not show competitive efficacy in PTCL.