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, 2022
☐ 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
225 NE Mizner Blvd, Suite 640
Boca Raton, FL33432
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:
Title of each class Trading Symbol Name of Market Where Traded
Common Stock ($0.001 par value) INMB The Nasdaq Stock Market LLC
Securities
registered pursuant to Section 12(g) of the Act: None
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 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
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☐
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
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 $103 million as of the last business day of the registrant’s most recently
completed second fiscal quarter (June 30, 2022), 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, 2022
have been excluded in that such persons may be deemed to be affiliates.
As of March 2, 2023, there are 17,945,995 shares of common stock, $0.001
par value per share outstanding.
DOCUMENTS INCORPORATED
BY REFERENCE
Portions of the registrant’s definitive proxy statement to be
filed by the registrant in connection with its 2023 Annual Meeting of Shareholders are incorporated by reference in Part III.
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2022
TABLE OF CONTENTS
Item Number and Caption Page
Forward-Looking Statements ii
PART I
1. Business 1
1A. Risk Factors 34
1B. Unresolved Staff Comments 59
2. Properties 59
3. Legal Proceedings 59
4. Mine Safety Disclosures 59
PART II
6. [Reserved] 60
7A. Quantitative and Qualitative Disclosures About Market Risk 71
8. Financial Statements and Supplementary Data F-1
9A. Controls and Procedures 72
9B. Other Information 72
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 72
PART III
10. Directors, Executive Officers, and Corporate Governance 73
11. Executive Compensation 73
13. Certain Relationships and Related Transactions, and Director Independence 73
14. Principal Accounting Fees and Services 73
PART IV
Signatures 78
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 dysfunctional causing and contributing to
the patient’s disease. Innate immune dysfunction can occur for a variety of reasons including genetics, lifestyle, and other factors
however, age plays a significant role in the development of immune dysfunction. Innate immune dysfunction 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.
Further, chronic inflammation causes expression of MUC4 and immunosuppressive cells of the tumor microenvironment proliferate to protect
the tumor from attack by the patient’s immune system and can cause other diseases such as neurologic and metabolic diseases where
chronic inflammation results in innate immune system dysfunction. Our initial focus will be the treatment of cancer, treatment of Alzheimer’s
Disease (“AD”), the treatment of Treatment Resistant Depression (“TRD”) and an out-licensing strategy for Duchenne’s
Muscular Dystrophy (“DMD”). In cancer, we plan to pursue two parallel development programs: (1) with INKmune we will initially
focus on treating women with resistant disease relapse refractory carcinoma solid tumor and patients with high-risk myelodysplastic syndrome
(high risk MDS); (2) with INB03, we plan to treat patients with cancers that express MUC4, a mucinous polyglucan on the surface of some
epithelial cancer cells, that appears to predict resistant to immunotherapy including women with MUC4 expressing HER2+ breast cancer and
potentially other MUC4 resistant cancers. Our third drug candidate XPro1595 (“XPro”), targets Alzheimer’s Disease and
TRD. XPro for AD has completed Phase I trials and Phase II trials are underway in Australia and Canada. The Company is currently in discussions
with the US FDA to obtain approval to commence the Phase II AD trials in the U.S. which the FDA placed on full clinical hold on May 20,
2022. XPro for TRD is being prepared for Phase II trials and will start after the FDA has cleared XPro for use in the US. In early 2023,
the Company also announced pre-clinical data in DMD including new intellectual property for the purpose of trying to seek partnership
for the development of this program. DMD is a X-linked genetic disease that occurs most often in young boys. People with DMD do not produce
dystrophin, a protein necessary for normal skeletal muscle function. The patients develop weakness of skeletal muscles initially seen
as weakness in standing and walking. Over time, the disease progresses forcing the patient to be wheelchair bound by early teens. The
patients die young due to respiratory and cardiac failure before they reach thirty years old. Therapies for DMD delay progression, there
is no cure.
The overall principal components
of our business strategy to achieve these objectives are to:
Pursue development and
regulatory approval pathways. We believe INKmune, INB03 and XPro 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 the INKmune MDS cancer program may qualify for orphan status. We believe
that it would take a minimum of six months to receive Orphan Drug status once we apply for 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 or 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, cancer
patients relapse frequently. Each relapse requires a complex 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, if approved, should improve survival and quality of life. At the payor level, we believe INKmune,
if 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. Recently approved therapies that target
amyloid have a modest impact on disease progression and are difficult to use due to side-effects in some patients. The cost of AD
to families and care givers is real and burdensome. We believe treatment of dementia patients with XPro, including Alzheimer’s disease,
may provide a strategy to alter the costly dynamic of this disease in society today.
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, XPro and DN-TNF 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 have established a reliable supply of human umbilical cords based on our agreement
with the Anthony Nolan Cord Blood Bank in the United Kingdom and may seek additional supplies in the future. We have developed a validated
manufacturing process that reliably produces contract manufacturer of the clinical grade (“cGMP”) quality mesenchymal stem
cells that we call CORDstrom. The manufacturing process can be performed at a contract manufacturing site under the direction of Mark
Lowdell, the Company’s CSO. 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. To date, we are supporting two academic
clinical trials with CORDstrom. One program is a Phase 2 trial sponsored by the Great Ormond Street Children’s Hospital in the UK
treating children with Erythematous Bullousa (“EB”), a disfiguring skin disease in children that is similar to a second degree
burn and the second program is treatment of system lupus in adults. Both these studies are ongoing. INmune Bio is supplying the clinical
product for treatment of these patients. The Company does not know the results of these trials until they are announced by the principal
investigators at the clinical sites. We have identified 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. Tumor
Necrosis Factor alpha (“TNF”) is the focus of XPro and 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.
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.
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. 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
Our Innate Immune Dominant-Negative
TNF (“DN-TNF”) product candidate
We renamed XPro, which we license
from Xencor, to INB03 when it is used for cancer related indications. We will continue to call the drug XPro when used for treatment of
neurologic and psychiatric diseases, including Alzheimer’s disease and TRD discussed below. INB03 and XPro are the same drug with
different names. INB03 neutralizes soluble TNF in the tumor microenvironment (“TME”). Neutralizing sTNF in the TME has two main effects
– decreases expression of MUC4 by the tumor and converting the immunosuppressive cancer promoting TME that promotes tumor growth
to an immunologically active TME that promotes tumor cell death. INB03 decreases proliferation of MDSC, promotes recruitment of cytotoxic
T cells to the TME and may convert immunosuppressive tumor macrophages into tumor phagocytic macrophages. In murine models, these changes
make the tumor reverse resistance to treatment with immunotherapy alone or in combination with tyrosine kinase inhibitors (TKI) such a
lapatinib and tucatinib. MUC4 expression is increased by sTNF produced by the tumor. MUC4 causes resistance to trastuzumab therapy in
HER2+ breast and gastric cancer cells by preventing binding of trastuzumab to HER2 by steric hinderance. By neutralizing sTNF with INB03,
decreases MUC4 expression to allow trastuzumab to bind HER2. The importance of trastuzumab based immunotherapy in the treatment of HER2
expressing tumors has increased recently due to the success of trastuzumab-deruxtecan (Enhertu, TDxd). TDxd improves survival in women
with metastatic HER2+ breast cancer in both high and low HER2 expressing tumors. MUC4 expression inhibits the TDxd tumor killing in a
murine model of HER2+ trastuzumab resistant HER2+ breast cancer. The mechanism by which combination of INB03 with TKI improves efficacy
over TKI alone remains under investigation. 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 in MUC4 expressing cancers. These immune responses have been studied in at least 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). Recently, Dr. Schillaci
reported the MUC4 expressing triple negative breast (TNBC) cancer patients have a worse overall survival. (Schillaci SABCS 2021). More
recently, Schillaci has shown that MUC4 causes resistance to trastuzumab ADC (trastuzumab-XXX and TDxd). Combination therapy with INB03
overcomes resistance in this breast cancer model. These data may be relevant to all tumors that express HER2 or MUC4 including upper gastrointestinal
malignancies such as gastric and pancreatic cancer. We believe MUC4 expression is a biomarker of resistance that may improve therapeutic
decision making by clinical teams
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. We believe the ideal biomarker is easy to use and is determined
before treatment begins. MUC4 expression by epithelial tumors is an example of this type of biomarker. Our Phase I clinical trial preceded
the identification of MUC4 as a biomarker and focused on using determining the safety of INB03 as monotherapy in patients with advanced
solid tumors. 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 HER2+/MUC4+ breast cancer. To get subsequent approval for the treatment of patients with MUC4+ TNBC or MUC4+ pancreatic
cancer, we will need to perform a pivotal trial in patients with TNBC and pancreatic cancer respectively. 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.
XPro 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 oligodendrocytes 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 XPro should prevent glial activation and normalizes function
of the neural unit.
The Company has completed
a Phase I trial using XPro to reverse neuroinflammation in patients with Alzheimer’s disease. The trial was performed in Australia
and is partially funded by a $1M USD Part-the-Cloud Award from the Alzheimer’s Association. The clinical trial was 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 XPro as a once-a-week subcutaneous injection for 3 months. AD patients with one biomarker of inflammation are classified as having
AD with neuroinflammation (ADi). The company estimates this group of patients includes at least 40% of patients with AD. Patients have
multiple biomarkers of neuroinflammation tested before and during therapy including soluble biomarkers in blood and cerebral spinal fluid,
behavioral biomarkers (neuropsychiatric symptoms of AD) and neuroimaging biomarkers using MRI. The primary goal of this short, open label
study was to demonstrate that treatment with XPro decreases neuroinflammation safely and to define the dose of XPro to use in the Phase
II trial. The Company has opened a Phase II trial in ADi in Australia (“AUS”) and Canada (“CAN”). We anticipate
opening additional countries including the US in 2023. The Phase II ADi program is not yet open in the US. The FDA has placed a full
clinical hold on the program related to product characteristics in the product produced for the Phase II program at KBI Biosciences in
2021. The XPro produced by KBI is being used in the Phase II trial in AUS and CAN, the Phase II extension trial in patients that have
completed the Phase II trial in AUS and the Expanded Access Scheme in patients who completed the Phase I trial in AUS. The Company is
working closely with the FDA to reverse the clinical hold. We cannot predict when this will occur. Our plan is to continue to enroll
patients in the Phase II ADi trial in regulatory venues outside of the US while working to resolve the concerns of the FDA. The goal
of the Phase II trial will be to demonstrate the prolonged control of neuroinflammation in patients with dementia will help control cognitive
decline. The Company has review its two Phase II trials in dementia, one each in mild cognitive impairment due to neuroinflammation (“MCI”)
and mild ADi. New data supports combining the two trials into a single trial. Instead of having separate blinded randomized Phase II
clinical trials in mild ADi and MCI2, there will be one clinical trial in early ADi that will include patients with either
mild ADi or MCI. Combination of the two trials into a single clinical trial may speed enrollment and decrease costs and will likely mirror
the planned Phase III registration trial without increasing the risk of the clinical program.
7
The Phase I trial enrolled
18 patients at doses of 0.3, 0.6 and 1.0mg/kg given once a week as subcutaneous injection for three months. Patients in the 10mg/kg group
were offered extended use of the drug for up to 12 months. Three patients remained on XPro for 12 months. 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 XPro
at either 0.3 or 1.0mg/kg once-a-week as a subcutaneous injection (low and target 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 target 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 XPro is decreasing neuroinflammation in patients with Alzheimer’s
disease who have biomarkers of peripheral inflammation.
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 measured in 9 patients before and after 12 weeks of weekly therapy with XPro using a panel from OLINK Target
48 Cytokine (https://www.olink.com/products/olink-target-48-cytokine/), that measures 45 (Figure AD1).
8
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 target dose), a high correlation (R2=.7561)
between the white matter free water safe mask and the inflammation composite score is shown in figure AD2. The data analyzed provides
evidence that XPro decreases neuroinflammation in patients with Alzheimer’s disease.
We believe these data support the use of XPro 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 target dose group (XPro 1mg/kg for 12 weeks) be looking at the CSF proteome using technology for Proteome Sciences
using their TMT CalibratorTM platform. 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 XPro (Figure AD3). The proteome also demonstrated a clear dose response with a greater number of proteins being affected by the target
dose compared to low dose XPro 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.
9
The results of the Phase I
study demonstrated that XPro safely decreases neuroinflammation in patients with ADi who have biomarkers of peripheral inflammation or
are ApoE4 positive when given for at least 3 months at the 1mg/kg once a week dose. Decreasing neuroinflammation with XPro appears to
decrease neurodegeneration and improve synaptic function and promote remyelination. The effect of XPro on the biology and immunology of
the brain in patients with AD suggest XPro therapy in patients with peripheral biomarkers of inflammation or ApoE4 allele(s) may impact
cognitive decline. Although there were anecdotes of improved cognitive function in patients receiving the target dose of XPro, this cannot
be verified because the trial was not a blinded, randomized trial. The impact on cognition of controlling neuroinflammation with XPro
will be studied in the Phase II program which is a blinded randomized, placebo controlled clinical trial.
The Company has consolidated
the two Phase II trials into a single trial of early ADi. Early ADi patients have either mild AD or MCI with neuroinflammation. Mild
AD or MIC patients must with at least one of elevated CRP, hemoglobinA1c, ESR in blood or have an ApoE4 allele are eligible for the trial.
The blinded randomized trial in patients with early ADi will enroll 201 patients in a 2:1 ratio (XPro:placebo) at 1mg/kg once a week.
The trial is currently enrolling study subjects. Patients will be treated for 6 months. The primary end-point is Early/Mild Alzheimer’s
Cognitive Composite (EMACC), a sensitive cognitive end-point validated for use in patients with early AD. Secondary cognitive (ADAS-Cog13,
CDR-SB and NPI) and functional (GAS, ADCS-ADL) end-points will be measured. Biomarkers of inflammation using white and gray matter analytics
measured by MRI DTI similar to those used in the Phase I trial will also be used. All patients will be eligible to continue XPro for
at 12 additional months. Clinical and MRI metrics will be followed during the extension trial.
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 whereby it was demonstrated that patients which have
elevated TNF levels responded to treatment with infliximab (Miller, 2011).
The Company received a $2.9M USD award from the National Institute
of Mental Health (“NIMH”) to treat TRD with XPro. 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 2023 at which point the Company may begin to request funds from the NIMH pursuant to the
award.
INB03 and XPro 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 by themselves or caregivers and not require expensive or logistically challenging clinic visits to
receive the therapy.
10
Release of INB03 and XPro drug supply
GMP DN-TNF product (INB03 and XPro) used in the
oncology Phase I, AD Phase I and COVID-19 Phase II trial were manufactured by Lonza at a site in New Hampshire. The supply of Lonza DN-TNF
product is limited but allowed completion of the Phase I study in Alzheimer’s disease and support of patients in the extension
study for 12 months. New batches of XPro have been produced to support future clinical trials. The Company engaged KBI Biopharma to manufacture
6 lots of XPro/INB03 at the Boulder, Colorado facility using the original master cell bank and updated manufacturing process. Two lots
have been converted into drug product using the US fill/finish facility of Vetter Pharma. Two of the lots are frozen as drug substance
at -80C with a plan to convert to drug product the second half of 2023. The final two lots are frozen as a cell paste with a plan to
process to drug substance in during 2023 or 2024 as needed to support the clinical trials. We plan to use a two-step approach to improve
the yield of the drug substance from the fermentation process. 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. In
the future, the Company may consider a strain change to improve yield of the fermentation step further. The decision for strain improvements
and strain change will be made in the future as clinical development programs proceed.
Interaction with Regulatory Authorities Regarding
INB03 and XPro Development
We have completed a Phase I trial with INB03 in oncology and a Phase
I trial with XPro in patients with Alzheimer’s disease. The Phase II program with Alzheimer’s disease started during 2022.
The Phase I trial with XPro in patients with Alzheimer’s disease was 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
XPro in patients with Alzheimer’s disease in May 2019 and received authorization to start the Phase II trial in patients with mild
AD on January 5, 2022. Our first interaction with the FDA occurred in July 2020 as part of the Phase II Quellor program to treat respiratory
failure in patients hospitalized with COVID-19 infection. The newly manufactured XPro is being used to support the Phase II AD trial in
AUS and CAN, the extension trial in AUS, and the Expand Access Scheme in AUS. The FDA has not allowed the use of this drug in the US yet.
The FDA has asked for additional analytical testing to demonstrate comparability between the XPro used in the Phase I oncology, AD and
Phase II COVID-19 clinical trials with the drug planned to be used in the Phase II AD clinical trials. This comparability testing is underway.
We cannot predict when the FDA will release the US Phase II from clinical hold. The CAN and AUS regulatory authorities are aware of the
FDA clinical hold – they have not asked for similar information and allow the clinical program to proceed.
INB03 Product Development Path: Proposed Phase
II Studies in patients with cancer
Phase I open label study in
patients with advanced solid tumors has been completed. All future studies cancer will use INB03 as part of combination therapy. The evolution
of oncology standard of care occurs quickly. Immune checkpoint inhibitors (“CPI”) were introduced 5 years ago. The success of CPI change
the focus of cancer therapy from cytotoxic based cancer regimens to immunotherapy-based cancer regimens. The approval of Trastuzumab (“TDxd”)
in 2022 had a similar effect on HER2 expressing cancers. For example, use of trastuzumab based therapy in HER2+ breast cancer required
3+ expression of HER2. With TDxd, low HER2 expression (1+ or 2+ but not null) benefit for TDxd. This has dramatically expanded the number
of women eligible for trastuzumab based immunotherapy from 20% to half of women with breast cancer. This dramatic change in breast cancer
standard-of-care impacted our development plans for INB03 in breast cancer. The Phase II trial is planned to be in women who have failed
TDxd therapy. About half of women who receive TDxd are resistant to therapy. We believe, but need to confirm, that many of those women
express MUC4. We believe an exploratory, single arm open label Phase II in woman who progress after TDxd is warranted. We believe the
combination of TDxD, INB03 and TKI will be effective. We continue to conduct pre-clinical studies of INB03 in MUC4 expressing tumors.
A decision on the clinical trial will not be made until the pre-clinical work has been completed and the data has been presented to an
Advisory Board of clinical experts.
11
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 resistance such as MUC4. 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 such as trastuzumab monoclonal antibodies and trastuzumab based antibody drug conjugates. We have an
active partnering position as it relates to INB03 development in cancer, although limited partnering discussion are underway at this time
for INB03. 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 and XPro 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.
Beyond Phase I, these will most often 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, EU
and/or the UK. Because there are no therapies similar to INB03 or XPro approved in any market, 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). We cannot predict which, if any, of these programs we will benefit from without further discussions
with the FDA, EMA and other competent regulatory authorities.
Immunotherapy for Treatment of Alzheimer’s Disease
XPro is being developed for
the treatment of Alzheimer’s disease. 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 will have limited benefit. Targeting neuroinflammation, the common pathway leading to synaptic dysfunction
and nerve cell death, may be an effective treatment strategy. Substantial pre-clinical data supports the use of XPro in murine models
of AD. Substantial indirect data supports use of XPro 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 XPro compared to the non-selective TNF inhibitors, we expect a lower risk of immunosuppression and demyelinating complications
such as multiple sclerosis (MS). The Company reported preliminary data on July 13, 2020 and January 21, 2021 supporting the use of XPro
to decrease neuroinflammation in patients with Alzheimer’s disease and biomarkers of peripheral inflammation (see above).
We completed enrollment of
patients into an open label, biomarker directed, Phase I clinical trial in AUS that approaches AD as an immunologic disease. Patients
with dementia with 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 were treated with XPro for 12 weeks. Three dosing cohorts were preformed – 0.3, 0.6
and 1.0 mg per week as a subcutaneous injection. Patients had multiple inflammatory biomarkers test before therapy, at 6 weeks and at
12 weeks. Biomarkers were reported in blood and cerebral spinal fluid, MRI measures of white matter tract neuroinflammation, axonal quality
and axon myelin, and MRI measures of gray matter quality after XPro therapy. Cognitive end-points were not the focus of the Phase 1 clinical
trial because of the wide range of disease severity enrolled and lack of a placebo group. Patients enrolled in the Phase I trial had MMSE
ranging from 24 to 12. This wide range of disease severity at the time of enrollment and the lack of a blinded concurrent control group
did not allow for determination of cognitive benefit beyond several anecdotal reports. The first patient was enrolled in the low dose
0.3mg/kg/week cohort in the last week of November 2019. The Safety Review Committee met by teleconference on January 7, 2020, to review
the course of the patients in the first cohort and voted to open the second cohort, 1.0mg/kg/week, to enrollment. The first patients were
enrolled in the cohort the second week of February 2020. Based on preliminary data released on July 13, 2020, and January 21, 2021, we
closed after completion of a 0.6mg/kg treatment group. We canceled plans to treat patients with 3.0mg/kg. The data from the Phase I trial
allowed the Company to choose a design the Phase II trials described above.
12
XPro Registration Studies and/or Partnering
We plan to aggressively pursue an efficient registration
strategy using XPro to improve the lives of patients with ADi. We define ADi as Alzheimer’s disease with biomarkers of inflammation.
We believe ADi is not the only indication for XPro in neurodegenerative and neuropsychiatric diseases. We plan to pursue other indications
in neurodegenerative diseases as resources become available. We have received NIMH funding to support a Phase II TRD program that hopes
to start patient enrollment in 2023. We have an active partnering position as it relates to XPro development in neurodegenerative and
neuropshyciatric diseases, although limited partnering discussion are underway at this time. There are two partnering opportunities with
this novel immunotherapy for the treatment of neurologic and psychiatric diseases. The first is a traditional partnership focused on the
developing the drug for all neurodegenerative and neuropsychiatric applications. The second is a more focused partnership developing XPro
as part of a combination therapy for a company’s existing therapy. After completion of proof-of-concept Phase II studies, we will
decide what the most efficient registration strategy is available to the company with XPro.
DN-TNF for the treatment of Duchene Muscular
Dystrophy
The Company also is exploring partnership opportunities
outside of neurodegenerative disease with DN-TNF such as DMD. DMD is a X-linked muscular dystrophy that occurs in 1 in 3500 male births
in the US. The disease is caused by defects in dystrophin, a protein needed for efficient function of skeletal muscle. Boys with DMD develop
skeletal muscle weakness that manifests early on with difficult standing and walking. The boys become wheelchair bound by late adolescence
and die of respiratory and cardiac failure in their twenties. There is no cure. Symptomatic therapies include corticosteroids and novel
strategies to replace dystrophin including ASO and gene therapies. Better therapies are needed.
The pathology of DMD is inflammation, skeletal
muscle cell destruction, replacement of muscle fibers with fat and fibrosis. The most widely used therapy, corticosteroids are focused
on decreasing skeletal muscle inflammation. Although anti-inflammatory, corticosteroids cause metabolic and immunologic problems including
insulin resistance, obesity, hirsutism, short stature, depression and behavioral problems. Long term use of corticosteroids exacerbates
skeletal muscle weakness.
In collaboration with Professor
Armando Vallarta of University of California Irvine, the Company has completed and has ongoing studies with DN-TNF in murine models of
DMD. The animal models show that DN-TNF therapy decreases inflammation and muscle degradation, promotes muscle regeneration and decreases
fibrosis. This is a unique set of attributes compared to other therapies on the market or in development. Because muscle cells produce
TNF, we believe the benefits of DN-TNF therapy extends beyond the obvious immunologic attributes of modifying T cell and macrophage infiltrates.
Pre-clinical animal studies continue to better define the exact mechanism for these effects.
The Company has filed global
IP on the use of DN-TNF to treat muscular dystrophy. The Company has placed the IP and knowhow into a wholly owned subsidiary called DN02,
Inc. The purpose of this structure is to facilitate partnering and/or co-development of DN-TNF for DMD in a way that does not complicate
or compromise the development of XPro for CNS diseases. The Company is actively seeking a partner to develop DN-TNF for DMD. We cannot
predict if or when or under what terms a partnership will be formed.
13
INKmune: Our NK cell Directed Product Candidate
INKmune is our lead product