10-K
1
f10k2020_inmunebioinc.htm
ANNUAL REPORT
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
☒
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended: December 31, 2020
☐
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ____________ to ____________
Commission
file number: 001-38793
INMUNE
BIO INC.
(Exact
name of registrant as specified in its charter)
INMUNE
BIO INC.
David
Moss
1200
Prospect Street, Suite 525
La
Jolla, CA 92037
Phone:
(858) 964 3720
(Address
of principal executive offices)(Zip Code)
(858)
964 3720
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act:
Title of each class Name of Market Where Traded
Common Stock ($.001 par value) The Nasdaq Stock Market LLC
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
☐ No ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☒
Indicate
by checkmark 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 and post 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.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging Growth Company ☒
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 ☒
The
aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $21.2
million as of the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2020), based
upon the closing sale price for the registrant’s common stock on that day as reported by the NASDAQ Capital Market. Shares
of common stock held by each officer and director of the registrant on June 30, 2020 have been excluded in that such
persons may be deemed to be affiliates.
As
of March 4, 2021, there are 14,932,638 shares of common stock, $0.001 par value per share outstanding.
FORM
10-K
FOR
THE YEAR ENDED DECEMBER 31, 2020
TABLE
OF CONTENTS
Item Number and Caption Page
Forward-Looking Statements ii
PART I
1. Business 1
1A. Risk Factors 40
1B. Unresolved Staff Comments 63
2. Properties 63
3. Legal Proceedings 63
4. Mine Safety Disclosures 63
PART II
6. Selected Financial Data 64
7A. Quantitative and Qualitative Disclosures About Market Risk 75
8. Financial Statements and Supplementary Data 76
9A. Controls and Procedures 77
9B. Other Information 77
PART III
10. Directors, Executive Officers, and Corporate Governance 78
11. Executive Compensation 78
13. Certain Relationships and Related Transactions, and Director Independence 79
14. Principal Accounting Fees and Services 79
PART IV
Signatures 83
i
PART
I
All
brand names or trademarks appearing in this report are the property of their respective holders. Unless the context requires otherwise,
references in this report to “INmune Bio” the “Company,” “we,” “us,” and “our”
refer to INmune Bio, Inc., a Nevada corporation.
FORWARD-LOOKING
STATEMENTS
This
Annual Report on Form 10-K (this “Annual Report”) contains “forward-looking statements” Forward-looking
statements reflect our current view about future events. When used in this Report, the words “anticipate,” “believe,”
“estimate,” “expect,” “future,” “intend,” “plan,” or the negative
of these terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Such statements
include, but are not limited to, statements contained in this Report relating to our business strategy, our future operating results
and liquidity and capital resources outlook. Forward-looking statements are based on our current expectations and assumptions
regarding our business, the economy and other future conditions. Because forward–looking statements relate to the future,
they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results
may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact
nor guarantees of assurance of future performance. We caution you therefore against relying on any of these forward-looking statements.
Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without
limitation, our ability to raise capital to fund continuing operations; our ability to protect our intellectual property rights;
the impact of any infringement actions or other litigation brought against us; competition from other providers and products;
our ability to develop and commercialize products and services; changes in government regulation; our ability to complete capital
raising transactions; and other factors (including the risks contained in the section of this Annual Report entitled “Risk
Factors”) relating to our industry, our operations and results of operations. Actual results may differ significantly from
those anticipated, believed, estimated, expected, intended or planned.
Factors
or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict
all of them. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable
law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform
these statements to actual results.
ii
PART
I
Item
1. Business
Our
Strategy
Our
objective is to develop and commercialize our product candidates to treat diseases where the innate immune system is not functioning
normally and contributing to the patient’s disease. This can be in cancer where Natural Killer (“NK”) cells
are inactive and contribute to a tumor’s evasion of the immune system and/or disease progression while expression of MUC4
and cells of the tumor microenvironment such as Myeloid Derived Suppressor Cells (“MDSC”) proliferate to protect the
tumor from attack by the patient’s immune system or this can be other diseases such as neurologic and metabolic diseases
where chronic inflammation results in innate immune system dysfunction and disease progression or infectious disease where cytokine
storm causes a hypermetabolic state that causes the need to seek medical attention. Our initial focus will be the treatment of
cancer, treatment of Alzheimer’s Disease (“AD”), treatment of Treatment Resistant Depression (“TRD”),
treatment of immune mediated complications due to COVID-19 and non-alcoholic steatohepatitis (“NASH”). In cancer,
we plan to pursue two parallel development programs: (1) with INKmune we will initially focus on treating resistant disease women
with relapse refractory ovarian carcinoma and patients with high-risk myelodysplastic syndrome (high risk MDS); (2) with INB03,
we will treat patients with advanced cancers with elevated biomarkers of inflammation in their blood and evidence of disease that
is resistant to immunotherapy including women with MUC4 expressing HER2+ breast cancer. Our third drug candidate XPro1595, targets
Alzheimer’s Disease and TRD. XPro1595 for AD is progressing through Phase I trials and is being prepared for Phase II trials.
XPro1595 for TRD is being prepared for Phase II trials. Our fourth drug candidate, LIVNate, will be used to treat patients with
NASH. Our final drug, Quellor is in Phase II trials for the treatment of pulmonary complications due to COVID-19 infection. The
principal components of our strategy to achieve this objective are to:
Pursue
development and regulatory approval pathways. We believe Quellor, INKmune, INB03 and XPro1595 may be approvable under pathways
that are potentially shorter than those typically available for drug products based on novel active ingredients, including as
an orphan drug under the Orphan Drug Act and approval under the Food and Drug Administration (the “FDA”) Accelerated
Approval Program (see “Government Regulation”). We have not yet had a discussion with the Medicines and Healthcare
Products Regulatory Agency (“MHRA”) and/or FDA regarding such designation, but plan to do so in the future. We believe
both our INB03 HER2+ metastatic breast cancer program, high risk MDS and ovarian carcinoma treatment programs and our program
Quellor to treat respiratory complications due to COVID19 infection fit the criteria used by the FDA to grant these regulatory
designations. We believe that it would take a minimum of six months to receive Orphan Drug status once we submit an application
and a minimum of 12 months to receive a designation once we submit an application. We might never have these discussions, submit
applications under the Orphan Drug Act as the FDA Accelerated Approval Program or have these applications approved if we do.
1
Adopt
a two-pronged patent strategy. We are pursuing a two-pronged product development strategy that will seek to solidify our existing
IP to prevent competition and expand our IP suite into related therapeutic areas. We are confident that our core in-licensed IP
(see “Intellectual Property”) will allow us both freedom-to-operate and provide robust protection from outside competition.
We will continue to invest in expanding our patent suite. We will also seek to further to strengthen our IP position by looking
to in-license IP related to our focus on the innate immune system.
Provide
clear value propositions to third-party payors to merit reimbursement for our product candidates. We are designing our clinical
development programs to demonstrate compelling, competitive advantages to patients and prescribers, and to demonstrate value propositions
to third-party payors. We believe the use of INKmune and/or INB03 in patients with a high risk of tumor progression and death
from tumor should prolong survival, improve the patient’s quality of life and decrease the total cost of care for patients
with these lethal malignancies. For example, ovarian cancer patients relapse frequently. Each relapse requires an expensive, hospital-based
treatment regimen that has decreasing benefits. Treatment with INKmune as an out-patient may provide a more durable remission
and limit the need for treatment-associated hospitalizations. At the patient level, we believe INKmune and INB03 therapy, once
approved, should improve survival and quality of life. At the payor level, we believe INKmune, once approved, should provide more
predictable costs and outcomes. Therapies for Alzheimer’s disease are needed for medical, social and economic reasons. The
cost of Alzheimer’s disease to the government is large and growing. The cost to families and care givers is real and burdensome.
We believe treatment of patients with dementia, including Alzheimer’s disease, may provide a strategy to alter the costly
dynamic of this disease in society today. NASH, a silent epidemic in the US due to the high incidence of obesity, is expected
to be the most common cause of liver transplant 2030. There are no approved therapies for the NASH at this time. We believe treatment
of patients requiring hospitalization due to medical complications of COVID-19 infection may alter the arc of the pandemic. If
effective, Quellor should allow patients to be discharged from the hospital more quickly and decrease the risk of respiratory
failure requiring mechanical ventilation.
Collaborate
to maximize the value of our technology. We believe there are two reasons for us to enter collaborations with other companies.
The first is the further development of INKmune, INB03, Quellor, LIVNate and XPro1595 by either providing additional innovations
to the product, including combination therapy strategies, and/or providing resources to improve the speed and breadth of the development
process. The second is to optimize the commercialization of our products either globally or regionally. The ideal partner will
benefit us in both ways.
We
continue to look for ways to utilize our unique capabilities to optimize clinical application of cell therapies. We believe that
we have identified a way to manufacture human mesenchymal stem cells for the medical research and biotech community that offers
large volumes of high-quality, low passage human umbilical cord mesenchymal stem cells with minimal batch-to-batch variability.
We believe this may solve the problem associated with supplying an adequate supply of human mesenchymal stem cells for clinical
applications. The process to produce pooled, human umbilical cord mesenchymal stem cells was developed at University College London.
We have established a reliable supply of human umbilical cords based on our agreement with the Anthony Nolan Cord Blood Bank in
the United Kingdom. We have developed a validated manufacturing process that reliably produces contract manufacturer of the clinical
grade (“cGMP”) quality mesenchymal stem cells. The manufacturing process can be performed at a contract manufacturing
site under the direction of Mark Lowdell, the Company’s CSO. We have negotiated an exclusive 10-year license to the manufacturing
process from University College London Business, the licensing organization of University College London. We will seek academic
laboratories and biopharma companies who need a reliable source of high quality pooled human umbilical cord mesenchymal stem cells
for research of and development of clinical products. Once identified, we plan to act as a cGMP for the development of therapeutic
products by utilizing contract manufacturers. Because the production of the product is not continuous, we do not expect to engage
a contract manufacturer until we have a customer identified. We have identified several contract manufacturers in the UK that
have the capability to produce cGMP stem cells. We expect the commercial arrangement with academic laboratories or biopharma companies
to be a combination of fee-for-service and licensing that does not require additional investment by us. We will be opportunistic
in pursuing therapeutic opportunities for our own portfolio with this platform in the future if resources become available. The
regulatory path for therapeutic applications of the mesenchymal stem cell products is well established and similar to the regulatory
approval process for other cell therapies. We will only be responsible for regulatory compliance related to manufacturing of the
mesenchymal stem cells when the product is being developed by a third party. When developing a therapeutic product for the Company’s
commercial portfolio, the Company will be responsible for all aspects of the regulatory process.
2
Overview
of Immunotherapy for Cancer
The
immune system has two parts, innate and adaptive. The innate immune system is the body’s first line of defense against an
infection, providing immediate, non-specific responses to eliminate harmful cells in the body. Components of the innate immune
system include cytokines, chemokines, macrophages, neutrophils and NK cells, among others.
The
adaptive immune system is often initially triggered by the innate immune system, mounts a delayed response against diseased cells
and plays a role protecting against re-infection. An adaptive immune response is highly specific to a pathogen or antigen and
is developed or learned from prior exposure. Key components of the adaptive immune system include antibodies which bind to antigens
and mark them for destruction by other immune cells, B-cells which produce these antibodies upon exposure to antigens, and T-cells
which attack and eliminate the diseased cells.
The
biopharmaceutical industry has made significant advances in harnessing specific components of innate and adaptive immune systems
for therapeutic use. Some of these approaches are summarized below.
Cytokines.
One of the early applications of immunotherapy is the use of cytokines, including interferons and interleukin-2 (“IL-2”).
Interferons are molecules that inhibit the growth and replication of diseased cells and stimulate innate immune cells to attack
them. They have been used as standard of care for hepatitis B and C and multiple sclerosis, and to a lesser extent, as treatment
for certain cancers, including chronic myeloid leukemia, cutaneous T-cell lymphoma, myeloma and non-Hodgkin’s lymphoma.
However, the use of interferons has generally decreased over the years due to serious adverse events (e.g., flu-like symptoms
and dramatic weight loss) and introduction of new therapies with higher efficacy, better safety profiles and more convenient administration
although Alpha-interferon remains the treatment of choice for some hematological conditions such as polycythemia. IL-2 activates
T-cells and NK cells to attack diseased cells. IL-2 has been used to treat select cancers, but due to its relatively poor safety
profile, physicians often only resort to this therapy for the most advanced settings. Tumor Necrosis Factor alpha (“TNF”)
is the focus of INB03. TNF biology has four elements that include two cytokines, soluble TNF and trans-membrane TNF (“sTNF”
and “tmTNF,” respectively), and two receptors, TNF Receptor 1 and 2 (“TNFR1” and “TNFR2”).
The biology of TNF ligation of TNFR varies dramatically based on what elements of the TNF system that are used. sTNF binding to
TNFR1 is responsible for inflammation and cell death while sTNF binding to TNFR2 promotes proliferation of regulatory T cells
(“Treg”). In patients with advanced cancers, increased sTNF is not favorable to long-term survival because it promotes
epithelial-mesenchymal transformation and metastasis while making the tumor microenvironment more immunosuppressive promoting
resistance to therapy. In the CNS, sTNF promotes neuronal cell death, demyelination and synaptic pruning while tmTNF promotes
nerve cell survival, improves synaptic function and stimulates remyelination. In brief, sTNF is the “bad” TNF and
tmTNF is the “good” TNF. In patients with cancer, infection or neurologic disease, blockade of tmTNF function has
negative consequences such as immunosuppression, increased infection, synaptic dysfunction and demyelination.
Antibody
therapy. Antibodies exist in three formats: monoclonals (“mAbs”), oligo/polyclonal and antibody-drug conjugates.
mAbs represent an effective therapeutic modality and are important to the treatment paradigm of various diseases. Drug manufacturers
have leveraged mAbs’ ability to induce an antibody-dependent cell-mediated cytotoxicity, or ADCC effect to develop better
treatments that prolong survival and quality of life of patients. In addition, mAbs designed to inhibit specific checkpoints in
the immune system have overcome in vivo immune suppression and the resulting immune responses have led to profound therapeutic
benefit in some patients. However, the degree of efficacy of these therapies is heavily reliant on the immune system of patients,
many of whom are severely immuno-compromised. For example, despite over $1.0 billion of sales generated by recently launched PD-1
and PDL1 checkpoint inhibitors, they are reported to be generally only effective in approximately 10% to 25% of the addressable
patient population. In addition, mAbs are manufactured through a complex process that requires purification of cell products created
from a cell line. Polyspecific antibodies, for example bi-specific antibodies, are able to target more than one antigen. These
are often used to bring and effector T cell in contact with a target cell. Antibody drug conjugates are mAbs attached to a toxin,
chemotherapy or radio therapy that delivers the cancer killing payload directly to the cancer.
3
Dendritic
Cell Therapies. This approach is designed to indirectly stimulate a patient’s T-cells by leveraging the role of
dendritic cells in presenting antigens to T-cells. Cancer vaccines are the most common application of dendritic cells. The only
FDA-approved dendritic cell therapy is PROVENGE, which entails collecting monocytes from the patient, maturing them into dendritic
cells, “loading” ex vivo with the patient’s cancer antigens, and then re-infusing in the patient. Currently,
this process is cumbersome and expensive, and again, relies on an intact and effective immune system of the patient. There are
additional ongoing preclinical studies and clinical trials being conducted by our competitors aimed at addressing certain of the
limitations associated with this approach. To date, current clinical results of dendritic cell therapies have been mixed.
CAR-T
and TCR Therapies. T-cells recognize diseased cells by receptors engaging with antigens that are present on or inside
the diseased cells. CAR-T therapy entails genetically engineering T-cells to express synthetic CARs that direct T-cells to antigens
on the surface of cancer cells. TCR therapy modifies T-cells to express high-affinity tumor specific TCRs that recognize intra-cellular
antigens that must be presented on the surface of target cells. In early clinical trials, CAR-T and TCR therapies have demonstrated
impressive anti-tumor activity in a narrow spectrum of hematologic cancers and garnered significant attention by research institutions
and biopharmaceutical companies. We believe a key limitation of adaptive autologous immunotherapy is the need to retrieve non-compromised
immune cells from a cancer patient which requires a complex and costly manufacturing process to develop the therapy. The complexity
of this personalized process is reflected in the price of the two approved therapies. CAR-T therapies - tisagenlecleucel and axicabtagene
ciloleucel for advanced leukemia and lymphoma respectively. The cost of a single therapy is many hundreds of thousands of dollars.
As a consequence of this need to harvest active T-cells, current Phase I clinical trials for autologous CAR-T cell therapy in
large part enroll patients from highly selected, often relatively early-stage disease in a narrow spectrum of cancers, including
bulky hematological cancers. In addition, Phase I clinical trials of CAR-T cell immunotherapy have reported severe adverse toxicities
of cytokine release syndrome and neurotoxicity, requiring hospitalization, pre-conditioning and, in some instances, intensive
care unit admission following side effects associated with cytokine release syndrome. As a result, though our competitors continue
to develop their CAR-T and TCR product candidates with the goal of addressing certain of the limitations associated with these
approaches, we believe these serious challenges may limit their potential and use in a variety of indications, including solid
tumors.
Checkpoint
Inhibitors. Immune cells express proteins that are immune checkpoints that control and down-regulate the immune response.
These are best defined in T lymphocytes and include PD-1, CTLA-4, TIM-3 and LAG3. Tumor cells express the ligands to these receptors.
When T cells bind the ligand to these proteins on the tumor cells, the T cell is turned off and does not attempt to attack the
tumor cell. Thus, checkpoint inhibitors (“CPI”) are part of the complex strategy used by the tumor to evade the patient’s
immune system and are responsible for resistance to immunotherapy. Biopharmaceutical companies have successfully developed CPI
that block the receptor/ligand interaction to promote the adaptive immune response to the tumor. Six CPI are currently approved,
pembrolizumab, nivolumab, atezolizumab, avelumab, durvalumab, and ipilimumab for a wide variety of solid tumors including melanoma,
lung, bladder, gastric cancers and others. More CPI are in development and more tumor types will be added to the list of sensitive
tumors over the next years. CPI have become the backbone of cancer therapy and are expected to be the best -selling class of drugs
by 2027.
NK
Cells. NK cells typically represent approximately 2% to 13% of circulating lymphocytes and are a critical component of
the immune system responsible for innate immunity. Unlike adaptive immune cells, they are ever present and ready to attack, having
the inherent ability to detect and eliminate diseased cells without the need for antigen presentation, which is why they are called
“natural killers.”
NK
cells bind to stress ligands expressed by the diseased cells and directly eliminate them. This binding induces NK cells to release
cytokines, including, interferons and GM-CSF, which are integral in recruiting additional innate and adaptive immune responses
by the host. NK cells also represent a critical effector cell for ADCC, whereby target cells bound with human antibodies, whether
made by the patient’s body or administered, are selectively destroyed by the NK cells.
4
MDSC
Cells: MDSC are present in very low quantities in healthy patients. MDSC develop and proliferate in patients with chronic
infection and with cancer. In cancer, MDSC are a unique and well-defined cell population that home to the cancer and secrete immunosuppressive
cytokines that provide a protective, immunosuppressive shield to the tumor. This protective immunosuppressive shield prevents
the patient’s immune system from attacking the tumor. The presence of MDSC in the tumor microenvironment and/or circulating
in the patient’s blood predict for more advanced disease, resistance to immunotherapy and a worse patient survival.
Our
Innate Immune Dominant-Negative TNF product candidate
We
renamed XPro1595, which we license from Xencor, to INB03 when it is used for cancer related indications. We will continue
to call the drug XPro1595 when used for treatment of neuropsychiatric diseases, including Alzheimer’s disease and TRD discussed
below. We call the drug Quellor and LIVNate respectively for treatment of pulmonary complications of COVID-19 and NASH respectively.
Quellor, LIVNate, INB03 and XPro1595 are the same drug with different names for marketing purposes. INB03 is a novel innate immune
system check-point inhibitor that we believe decreases expression of MUC4 by the tumor, an important resistance mechanism to immunotherapy,
decreases proliferation of MDSC and decreases the secretion of immunosuppressive cytokines that protect the tumor from the patient’s
immunologic attack and help make the tumor resistant to immunotherapy. INB03, by inhibiting soluble TNF without inhibiting trans-membrane
TNF or TNF receptors (“tmTNF” and “TNFR” respectively), decreases expression of MUC4, alters the immunoregulatory
cell and cytokine profile of the tumor microenvironment to decrease the population of MDSC, decrease immunosuppressive cytokines
and increase immunoregulatory cytokines that changes the patient’s immune response to their tumor with improved NK/DC crosstalk
that causes expansion of the immune response including recruitment of the adaptive immune system with an increase in effector
and cytotoxic T cells that attack the cancer allowing for decreased resistance to immunotherapy including immune checkpoint inhibitors
(CPR), anti-HER2 immunotherapy such as Herceptin and kinase inhibitors such as lapatinib. By using INB03 as part of combination
therapy for cancer, we believe the patient’s dysregulated immune response, a hallmark of cancer progression and resistance
to therapy, to be converted to a coordinated immune response that can overcome resistance mechanisms to immunotherapy. These immune
responses have been studied in two animal models. In a murine model of an inflammatory cancer, where 3-methylcholanthrese is given
to mice in a subcutaneous injection that causes the development of multiple cutaneous fibrosarcoma. This model was developed by
Y Akamatsu in 1967 while working at the National Cancer Institute of the NIH. In research published by Professor Nikola Vujanovic
in Cancer Immunology Research in 2016, treatment with INB03 resulted in smaller and fewer cancers with increased
survival. INB03 is an engineered PEGylated protein that neutralizes human soluble TNF, a human inflammatory cytokine that is increased
in patients with advanced cancer. By specifically neutralizing the cytokine, there is decreased phosphorylation of STAT3, an essential
step required for the proliferation of the MDSC population, and secretion of the immunosuppressive cytokines. The combination
of decreased MDSC proliferation and decreased immunosuppressive cytokines allows the immune system to respond to the tumor. This
data was published in an article entitled Inhibition of Soluble Tumor Necrosis Factor Prevents Chemically Induced Carcinogenesis
in Mice in Cancer Immunology Research in Cancer Immunology Research 2016. In summary, INB03 functions as an innate
immune system checkpoint inhibitor by eliminating the population of MDSC that provides an immunosuppressive shield protecting
the tumor, the patient’s immune system is able to function normally to the benefit of the patient – it can attack
the tumor. TNF plays an important role in breast cancer (Schillaci R, Front. Oncol., 22 April 2020 | https://doi.org/10.3389/fonc.2020.00584).
In a murine model of trastuzumab resistant breast cancer using JMIT-1 cells, a human cell line of HER2 positive breast cancer
resistant to trastuzumab placed into immunocompromised mice, INB03 downregulates MUC4 from the surface of the JMIT-1 HER2+ breast
cancer cells to allow the trastuzumab resistant cells to become trastuzumab sensitive (Figure A from Bruni, NYAS 2020) to decrease
tumor growth (from Schillaci SABCS 2018, Figure B). JMIT-1 cells are also resistant to lapatinib, a TKI inhibitor used as a second
line therapy in women with trastuzumab resistant HER2+ breast cancer. The addition of INB03 to lapatinib in the animal model reverses
lapatinib resistance in part by decreasing expression of MUC4 (from Bruni NYAS 2020, Figure C). In addition to decreasing resistance
to trastuzumab by decreasing MUC4 expression, INB03 decreases the immunosuppressive tumor microenvironment (Schillaci SABCS 2018,
Bruni NYAS 2020). These data are relevant to all tumors that express HER2 and MUC4 including upper gastrointestinal malignancies
such as gastric and pancreatic cancer.
5
6
Because
INB03 targets the patient’s immune system and not the tumor, we believe INB03 is an immunotherapy that can be used to treat
many types of hematologic malignancies and solid tumors as part of combination therapy. The decision to use INB03 in a patient
will be based on biomarkers that should predict that a patient will benefit from treatment with the drug. MDSC rarely exist in
patients without cancer or chronic inflammation. Because MDSC can be measured in the tumor and/or blood of patients with immune
dysregulation and chronic inflammation caused by their cancer, MDSC blood levels i) have prognostic value predicting cancer stage
and risk of dying from cancer; ii) may be used as a biomarker to target patients who will benefit from INB03 therapy and iii)
should be biomarkers demonstrating a pharmacodynamic effect of INB03. Other biomarkers of inflammation may be useful in predicting
if a patient will benefit from therapy with INB03 such as Our Phase I clinical trial focused on using INB03 as monotherapy. This
is a typical Phase I clinical trial design for first-in-man trials in cancer. We expect to use INB03 as part of combination therapy
with approved cancer therapies as part of Phase II development. We do not expect to need to modify INB03 therapy to treat each
different type of cancer, because INB03 therapy targets the immune system, not the cancer. We do expect to develop the INB03 beyond
Phase II to target a specific type of cancer to meet the current system of regulatory approval. For instance, INB03 may be approved
to treat patients with elevated MDSC who have lung cancer. To get subsequent approval for the treatment of patients with renal
cell cancer who have increased MDSC, we will need to perform a pivotal trial in patients with renal cancer. Likewise, if we want
to get approval of treatment of women with HER2 positive breast cancer who express MUC4, we will need to perform a trial in those
patients and the results of that trial may be independent of MDSC levels. After the first regulatory approval, if and when achieved,
we believe the difficulty and cost of achieving these labels extensions will decline with each successive approval. At this time,
we cannot predict if patients without biomarkers of inflammation, elevated MDSC or cytokines, or increased expression of MUC4
will benefit from treatment with INB03. Those studies may be performed in the future, but they are not a priority.
XPro1595
neutralizes soluble TNF in the brain in exactly the same way INB03 neutralizes soluble TNF in the tumor microenvironment but the
effects of soluble TNF neutralization in the brain are different. The cause of the destructive neuroinflammation in the brain
are microglial and astroglial cells. The glial cell are two of four cells in the neural unit that also includes oligodentrocytes
and nerve cells. Activated microglial cells are considered the resident macrophages of the brain. The primary role of microglial
cells is to protect the neural unit from infection. When innate immune dysfunction causes chronic inflammation, activated microglial
cells produce soluble TNF that activates astrocytes. Activated glial cells cause nerve cell and oligodrocyte dysfunction that
results in synaptic pruning, nerve cell death and demyelination of neurons. These pathologies contribute, in part, to neurodegenerative
diseases such as AD, Parkinson’s disease, ALS, MS, Huntington’s disease, glaucoma and TBI (traumatic brain injury)
may contribute to neuropsychiatric diseases such as depression, bi-polar disease, sleep disorders, autism, schizophrenia and PTSD.
In the setting of AD, microglial activation causes dendritic pruning, synaptic dysfunction and nerve cell death that contributes
to cognitive decline and the behavioral manifestations of AD including depression, aggressiveness, sleep disorders, hallucinations
and anhedonia. Elimination of microglial activation should reverse these symptoms. Because soluble TNF is the apex cytokine in
the inflammatory cytokine cascade, neutralization of soluble TNF with XPro1595 should prevent glial activation and normalizes
function of the neural unit.
7
The
Company has an on-going Phase I trial using XPro1595 to reverse neuroinflammation in patients with Alzheimer’s disease.
The trial is being performed in Australia and is partially funded by a $1M USD Part-the-Cloud Award from the Alzheimer’s
Association. The clinical trial is the first in the Company’s development program for the treatment of dementia. The open
label, dose escalation trial in patients with Alzheimer’s disease with biomarkers of peripheral inflammation (one of CRP>1.5mg/L,
HgbA1c>6.0, ESR>10sec or have ApoE4) treats the patients with XPro1595 as a once-a-week subcutaneous injection for 3 months.
Patients have multiple biomarkers of neuroinflammation tested before and during therapy including soluble biomarkers in blood
and cerebral spinal fluid, volatile biomarkers in breath, behavioral biomarkers (neuropsychiatric symptoms of AD) and neuroimaging
biomarkers using MRI. The primary goal of this short, open label study is to demonstrate that treatment with XPro1595 decreases
neuroinflammation safely and to define the dose of XPro1595 to use in the Phase II trial. Studies of cognitive function are performed
on the patients but are not expected to show significant change because of the short duration of the trial and the wide range
of disability in patients enrolled in the clinical trial (MMSE range: 24-12). The goal of the planned Phase II trial will be to
demonstrate the prolonged control of neuroinflammation in patients with dementia will help control cognitive decline. Although
the trial has not been designed, we expect the trial be of a longer duration than the Phase I trial.
The
trial continues to enroll patients. More than half of the expected 18 patients have been enrolled. Preliminary data was presented
in a webinar on 13 July 2020. Neuroimaging data from six patients were presented in the figure below. In summary, treatment with
XPro1595 at either 0.3 or 1.0mg/kg once-a-week as a subcutaneous injection (low and high dose respectively) decreased white matter
free water (WMFW) as measured by MRI. WMFW is a validated biomarker of neuroinflammation. Although the number of patients is low,
there was a dose response with a greater decrease in WMFW in the high dose compared to the low dose group. An analysis of inflammation
in white matter tracts demonstrated a significant decrease in WMFW (40%; range 20-52%) in the arcute fasciculus, a white matter
tract important in the control of language and short-term memory (Figure D). These data suggest XPro1595 is decreasing neuroinflammation
in patients with Alzheimer’s disease who have biomarkers of peripheral inflammation.
8
Additional
data was presented on January 21, 2021. The goal of the January 21 data release was to show a correlation between the white matter
free water, a novel biomarker of inflammation with cerebral spinal fluid (“CSF”) cytokines and chemokine levels, a
traditional measure neuroinflammation. CSF cytokine/chemokines were measure in 9 patients before and after 12 weeks of weekly
therapy with XPro1595 using a panel from OLINK Target 48 Cytokine (https://www.olink.com/products/olink-target-48-cytokine/),
that measures 45 (Figure AD1).
In
the 6 patients in the 1mg/kg per week dose, only one cytokine and chemokine, interferon gamma (INFg) did not change in the CSF
of patients, the remainder all decreased on average of 15%. Using data from all patients treated for 12 weeks (3 low dose, 6 high
dose), a high correlation (R2=.7561) between the white matter free water safe mase and the inflammation composite score
is shown in figure AD2. The data analyzed provides evidence that XPro1595 decreases neuroinflammation in patients with Alzheimer’s
disease.
9
We believe these data
support the use of XPro1595 to treat other diseases where neuroinflammation is a part of the pathophysiology of the disease. The
company studied the consequences of decreasing neuroinflammation in the 6 patients from high dose group (XPro1595 1mg/kg for 12
weeks) be looking at the CSF proteome using technology for Proteome Sciences using their TMT CalibratorTM platform (https://www.proteomics.com/services/tmtcalibrator-workflow).
A large data set of proteins were identified. Early analysis of the data focusing on 26 AD related proteins demonstrated changes
in inflammation, neuronal and synaptic proteins caused by decreasing neuroinflammation after treatment with XPro1595 (Figure AD3).
The proteome also demonstrated a clear dose response with a greater number of proteins being affected by the high dose compared
to low dose XPro1595 therapy (0.3 vs 1.0 mg/kg/week for 12 weeks) (Figure AD4). The CSF proteome data is only partially analyzed.
Additional data may result from these ongoing analytics. In summary, these data allow the Company to commit to initiating a blinded
randomized Phase II trial in Alzheimer’s disease patients with peripheral biomarkers of inflammation in the second half of
2021. The design of the trial has not been finalized nor has the Company had discussions with the FDA. Hence the precise start
date depends on gaining regulatory approval for trial initiation by the FDA and resolution of the COVID19 pandemic.
COVID-19
infection causes a cytokine storm in many patients. The cytokine storm includes elevated levels of TNF, IL6, IL1 and other pro-inflammatory
cytokines in the patient’s blood. The cytokine storm correlates with symptoms of COVID19 of one or more organ systems -
neurologic, gastrointestinal, pulmonary, cardiovascular and renal. In 20% of patients, the cytokine storm causes severe enough
symptoms to require hospitalization. Targeting soluble TNF may have benefit in hospitalized patients with cytokine storm for two
reasons. TNF may be the “master cytokine”. Up-regulation of TNF is required for expression of IL6 and IL1, the two
other prominent cytokines of the cytokine storm. TNF activates endothelial cells to upregulate Tissue Factor that cause the formation
of blood clots. Aberant blood clots contribute to the pathology in patients with COVID-19 infection.
The
Company initiated a blinded randomized trial using Quellor to treat hospitalized patients with respiratory symptoms due to a COVID-19
infection. The 366-patient trial is being perform under an FDA IND#151,834 in multiple centers in the US. The trial includes a
Go/NoGo decision by the Data Safety Monitoring Board (“DSMB”) after the first 100 patients. No data will be released
by the DSMB other than the trial should continue or be closed. The trial enrolls patients admitted to the hospital who are considered
high risk for developing the need for mechanical respiratory support. Patients are randomized to receive a single dose of Quellor,
1mg/kg as a subcutaneous injection or placebo. If patients remain in the hospital for one week, they may get a second dose of
the investigational product. The primary end-point is the need for mechanical ventilation or death by 28 days. The final safety
visit is at or about day 40. Quellor is identical to XPro1595, INB03 and LIVNate. The trial is listed on www.clinicaltrials.gov.
10
Effective
therapy for TRD is a large unmet need. Twenty percent of patients with a Major Depressive Disorder have TRD. Once third of TRD
patients have peripheral biomarkers to inflammation (elevated CRP). This is a large patient population. The role of TNF and anti-TNF
therapeutics was explored in a small open label clinical trial by Prof. Andrew Miller, MD of Emory University demonstrated the
patients have elevated TNF levels and treatment with infliximab treated their depression (Miller, 2011).
The Company received
a $2.9M USD award from the National Institute of Mental Health (“NIMH”) to treat TRD with XPro1595. The blinded, randomized
Phase II trial will use a biomarkers of peripheral inflammation to select patients with TRD for enrollment. Patients will be treated
for 6 weeks. Primary end-points include both clinical and neuroimaging measures. The final trial design is ongoing and discussions
with the FDA are not complete. The Company anticipates receiving authorization to initiate the clinical trial in the second half
of 2021.
LIVNate
neutralizes soluble TNF in the treatment of NASH the same way that INB03 and XPro1595 neutralize soluble TNF for the treatment
of cancer and neurodegenerative diseases respectively. NASH is a complex disease with inflammatory, metabolic and fibrotic components
that contribute to disease progression. The effects of LIVNate on NASH are diverse. Based on murine data, we believe there are
3 major pathologic cycles that contribute to NASH. The peripheral pathologic cycle is metabolic with obesity and insulin resistance
contributing to the inflammatory and metabolic process that drives NASH. The regional pathologic cycle includes intestinal inflammation
with resulting leaky gut that drives the development mesenteric fat. All three elements contribute to a highly inflammatory mileau
delivered directly to the liver via the portal vein. The local pathologic loop includes lipotoxicity and innate immune dysfunction
caused by activated hepatic stellate cell, natural killer cells and hepatocytes. These pathologic cycles cause hepatocyte death,
inflammation and fibrosis – the pathologic hallmarks of NASH. In murine models of NASH, LIVNate has effects on each pathologic
cycle decreasing insulin resistance, intestinal inflammation and leak, hepatic inflammation, hepatocyte death and fibrosis. These
results must be confirmed in humans.
INB03,
XPro1595, Quellor and LIVNate, are delivered as a subcutaneous injection, similar to an insulin treatment, given one to three
times per week. Because this is a simple subcutaneous injection similar to an insulin injection (the therapy patients give themselves
for treatment of Type 1 diabetes mellitus), we expect patients to administer the therapy to themselves and not require expensive
or logistically challenging clinic visits to receive the therapy.
Three
step process to preparation for INB03, XPro1595, Quellor and LIVNate for human clinical trials:
Release
of INB03, XPro1595, Quellor and LIVNate drug supply
GMP
DN-TNF product (INB03, XPro1595, Quellor and LIVNate) are available for clinical development after completion of release testing.
The annual process for release testing was completed in February 2018, January 2019, December 2019 and November 2020. The supply
of DN-TNF product is limited, but enough to complete the planned Phase I study in Alzheimer’s disease and Phase II studies
in hospitalized patients with COVID-19. The re-release dossier has been submitted to the regulatory authorities in Australia and
the US (the FDA). We received notification on May 2018 that the INB03 can be used for oncology clinical trials and in May 2019
that XPro1595 can be used in Alzheimer’s disease clinical trials in AUS and in August 2020 that Quellor can be used for
the COVID-19 clinical trial in the US. For future trials, new batches of INB03, XPro1595, Quellor and LIVNate will need to be
produced. We plan to use a two-step approach to production of the new drug supply. We hope to improve the yield of the drug product
using the existing E.coli based system. Once the new process is validated and functional, we will perform a manufacturing
campaign drug for future clinical trials. This process has started at our manufacturing vendor KBI. The company expects the first
batches of new drug to be available 4Q21 assuming that manufacturing materials remain available and are not consumed by COVID-19
vaccine manufacturers. We expect the existing drug supply to support clinical development program until mid-2021. New drug supply
may not be available before the existing drug supply has been exhausted.
11
Interaction
with Regulatory Authorities Regarding INB03, XPro1595 and LIVNate Development
We have completed a
Phase I trial with INB03 in oncology. We are enrolling patients in a Phase I trial with XPro1595 in patients with Alzheimer’s
disease and a Phase II trial with Quellor to treat hospitalized patients with respiratory complications from COVID-19. The Phase
II program with Alzheimer’s disease will start after completion of the on-going Phase I program. The Phase I trial with XPro1595
in patients with Alzheimer’s disease is performed in Australia under the regulatory authority of the TGA using the Clinical
Trials Exemption (“CTX”) scheme. Our first interaction with the regulatory body occurred in March 2018. The Company
received approval to initiate the Phase I trial with INB03 in patients with advanced solid tumors on May 21, 2018. The second
interaction with the regulatory body occurred in March 2019. The Company received approval to initiate the Phase I trial with
XPro1595 in patients with Alzheimer’s disease in May 2019. Our first interaction with the FDA occurred in July 2020.
We received authorization to begin enrolling patients in the COVID19 trial late August 2020. We plan to discuss the Phase II Alzheimer’s
disease and Phase II TRD clinical trials with the FDA during the first half of 2021.
INB03
Product Development Path: Proposed Phase II Studies in patients with cancer
Phase
I open label study in patients with advance solid tumors has been completed. All future studies cancer will use INB03 as part
of combination therapy. Based on the results of the Phase I study and work performed and reported by Prof. Roxana Schillaci, we
are planning a study of INB03 in combination with currently approved second line therapy for treatment of tumors that express
MUC4. This may include a study in women with trastuzumab resistant HER2+ metastatic breast cancer where primary or secondary resistance
to trastuzumab is common and may include women with brain metastasis. Alternatively, a combination therapy trial in MUC4 expressing
tumors of the upper gastrointestinal tract such as gastric or pancreatic cancer may be performed. These trials will not be initiated
until the COVID-19 pandemic has run its course. We do not expect to treat patients in a Phase II trial with INB03 before 2022.
INB03
Registration Studies and/or Partnering
We
plan to pursue an efficient registration strategy using INB03 to improve the lives of patients with cancer and biomarkers of inflammation.
We believe that this strategy has use across many types of solid tumors including patients who have failed CPI, tyrosine kinase
inhibitors (“TKI”) and anti-cancer antibody therapy We have an active partnering position as it relates to INB03 development
in cancer, although no partnering discussion are underway at this time. We do not expect partnering discussions to begin until
Phase II data demonstrating efficacy of INB03 as part of combination therapy for cancer are available.
Our
INB03 platform can be used in cancer patients in many ways. The Phase I trial suggests the drug should not be used alone to treat
cancer but used in combination with, but not limited to, other cancer therapies including cytotoxic chemotherapy, immunotherapy,
radiation and surgery. We believe that INB03 can also be used to treat many types of hematologic and epithelial cancers.
INB03,
XPro1595, Quellor and LIVNate Regulatory Strategy
Drugs
from the DN-TNF platform will be developed using adequately powered, well designed studies with the goal to demonstrate a meaningful
clinical benefit to patients. In general, these will be blinded, randomized clinical trials using validated end-points that have
been authorized by a regulatory authority – the FDA, TGA, MHRA, EMA, etc. Currently, all planned studies will be performed
in North America, AUS and/or the UK. Studies will be expanded to Europe and beyond as resources permit and development needs expand.
Because there are no therapies similar to INB03, XPro1595, Quellor or LIVNate approved in any market and no therapies approved
for the treatment of the diseases we are pursuing, we plan to take advantage of the regulatory opportunities afforded to therapies
that treat markets with a high unmet need. In the U.S., this includes Orphan Drug Designation and expedited programs for approval
including Accelerated Approval, Breakthrough Therapy Designation, Fast Track Designation, and priority review (see “Government
Regulation”), and in the setting of COVID-19, Emergency Use Authorization. We cannot predict which, if any, of these programs
we will benefit from without further discussions with the FDA. Similar programs exist in the EU with the EMA. We will engage the
EMA once we have initiated Phase II trials in the United States and Australia.
12
Immunotherapy
for Treatment of Alzheimer’s Disease
XPro1595
is being developed for the treatment of Alzheimer’s disease. XPro1595 is identical to INB03, Quellor and LIVNate in every
way but name. The name XPro1595 will be used as the drug name in the Alzheimer’s disease development program. Microglial
activation and neuroinflammation are important causes of the synaptic dysfunction and nerve cell death that causes cognitive decline
in patient with dementia and Alzheimer’s disease. The relationship between β amyloid plaques and tau neurofibrillary
tangles, the traditional targets in AD drug development and neuroinflammation is complex. We believe targeting plaques and tangles
is not an effective treatment strategy, but that targeting neuroinflammation, the final common pathway of synaptic dysfunction
and nerve cell death is. Substantial direct pre-clinical data supports the use of XPro1595 in murine models of AD. Substantial
indirect data supports use of XPro1595 in humans including a decreased risk of AD in patients treated with non-selective TNF inhibitors
for rheumatoid arthritis and treatment using direct injection into paraspinous venous plexus. Because of different mechanism of
action of XPro1595 compared to the non-selective TNF inhibitors, we expect a lower risk of immunosuppression and demyelinating
diseases such as MS. The Company reported preliminary data on July 13, 2020 and January 21, 2021 supporting the use of XPro1595
to decrease neuroinflammation in patients with Alzheimer’s disease and biomarkers of peripheral inflammation (see above)
We
continue to enroll patients into an open label, biomarker directed, Phase I clinical trial in AUS that approaches AD as an immunologic
disease. Patients with dementia who have the diagnosis of AD with biomarkers of chronic inflammation that includes at least one
of a hs-CRP>1.5 mg/L, a ESR>10 mm/h, a HbgA1C>6.0% or are ApoE4 positive will be treated with XPro1595 for 12 weeks.
Three dosing cohorts were planned – 0.3, 1.0 and 3 mg per week as a subcutaneous injection. Patients will have 5 groups
of inflammatory biomarkers test before therapy, at 6 weeks and at 12 weeks. Biomarkers will be tested in blood and cerebral spinal
fluid, white matter free water will be determined by MRI and a “breath test” measuring exhaled volatile organ compounds