iTeos Therapeutics: Buy-the-Dip Play on $624M War Chest and Hidden Pipeline Gems

Image Description:
A lab scientist analyzing data on a tablet, with a glowing "Strategic Reassessment" banner in the background, symbolizing iTeos’ pivot from TIGIT failure to value-creation mode.

The TIGIT Setback: A Speedbump, Not a Roadblock

On May 13, 2025, iTeos Therapeutics (NASDAQ: ITOS) announced the discontinuation of its lead asset, the anti-TIGIT antibody belrestotug, after Phase 2 trials failed to deliver meaningful progression-free survival (PFS) improvements in non-small cell lung cancer (NSCLC). The stock cratered temporarily, but investors should view this as a strategic reset opportunity rather than a terminal diagnosis.

While the $625M upfront payment from GSK in 2021 is now vaporized, iTeos retains $624.3 million in cash as of March 2025—enough to fund operations through 2027, even after halting belrestotug trials. This financial cushion positions the company as a "zombie" biotech survivor, able to monetize assets or pivot its pipeline without needing dilutive financing.

The Pipeline: More Than Just TIGIT

While belrestotug’s failure is devastating, iTeos’ earlier-stage pipeline holds untapped value:

1. EOS-984 (ENT1 Inhibitor):
2. A first-in-class inhibitor of ecto-5’-nucleotidase (ENT1), which blocks adenosine-driven immunosuppression in tumors.
3. Phase 1 data (expected H2 2025) could validate its role as a next-gen immuno-oncology platform, potentially combinable with checkpoint inhibitors.

4. Licensing potential: ENT1 is a hot target, with Merck’s MK-1026 in Phase 2. A partnership here could unlock $100M+ upfront payments.

5. EOS-215 (Anti-TREM2 Antibody):

6. Targets TREM2, a receptor linked to tumor-associated macrophage activity. Early Phase 1 data (ongoing) may reveal synergies with checkpoint therapies.
7. Undiscovered asset: TREM2’s role in cancer is underexplored, offering a rare chance to lead in a niche.

Both programs are pre-Phase 2, meaning they can be de-risked or sold at a fraction of their eventual value. With $624M on hand, iTeos can advance these assets selectively while exploring partnerships or outright sales.

The Strategic Reassessment: A Playbook for Survival

iTeos has already initiated a strategic review with financial advisor TD Cowen, signaling intent to:
- Monetize non-core assets: Sell EOS-215 or EOS-984 to a Big Pharma player for upfront cash.
- Licensing deals: Partner on ENT1 or TREM2 programs, leveraging industry interest in immunometabolism.
- M&A bait: With a $700M+ market cap post-dip, iTeos is an acquisition target for larger firms needing immuno-oncology assets.

In a consolidating biotech sector, where companies are forced to cut losses or partner up, iTeos’ liquidity and early-stage pipeline make it a prime candidate for strategic consolidation.

Catalysts to Watch: Data & Decisions

The next 6–12 months will clarify iTeos’ path:

1. EOS-984 Phase 1 Data (H2 2025):
2. A strong safety profile and tumor response signals could ignite partnership talks, boosting valuation.

3. Risk: If data is underwhelming, iTeos may pivot to focus on EOS-215 or seek a buyer.

4. Strategic Update by H1 2026:

5. Management must outline a clear path—whether through asset sales, partnerships, or a new pipeline focus—to justify its cash runway.

6. TIGIT Data Transparency:

7. Full GALAXIES Lung-201 data (to be presented at a conference) may uncover biomarker subsets where belrestotug still holds value, enabling a "regulatory salvage" play.

Why Buy the Dip Now?

• Valuation: ITOS trades at 4x its cash balance, implying the market has written off the pipeline entirely.
• Optionality: Investors get exposure to two high-potential programs plus a strategic review that could yield a windfall.
• Risk/Reward: A $624M cash fortress buffers against further setbacks, while upside catalysts (partnerships, data) could double the stock.

Conclusion: Positioning for the Turnaround

iTeos’ TIGIT failure is painful, but its financial resilience and hidden pipeline assets make it a zombie biotech primed for resurrection. With a strategic review underway and near-term catalysts looming, now is the time to buy the dip—before the market realizes the true value of what’s left.

Action Item: Accumulate ITOS ahead of H2 2025 data and strategic clarity. The risks are clear, but the upside—whether via a buyout, licensing deal, or pipeline revival—could make this a 50%+ return play by year-end.