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, 2023
☐
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)
225
NE Mizner Blvd, Suite 640
Boca
Raton, FL33432
(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 $106 million as of the last business day of the registrant’s most recently
completed second fiscal quarter (June 30, 2023), based upon the closing sale price for the registrant’s common stock on that day
as reported by the NASDAQ Capital Market. For purposes of this computation only, all executive officers and directors have been deemed
affiliates.
As
of March 27, 2024, there are 18,026,473 shares of common stock, $0.001 par value per share outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
Certain information in Part III of this Annual Report on Form 10-K
is incorporated by reference to our definitive Proxy Statement for the 2024 Annual Meeting of Shareholders to be filed with the Securities
and Exchange Commission within 120 days after the fiscal year ended December 31, 2023.
FORM
10-K
FOR
THE YEAR ENDED DECEMBER 31, 2023
TABLE
OF CONTENTS
Item Number and Caption Page
Forward-Looking Statements ii
PART I 1
1. Business 1
1A. Risk Factors 33
1B. Unresolved Staff Comments 58
1C. Cybersecurity 58
2. Properties 58
3. Legal Proceedings 58
4. Mine Safety Disclosures 58
PART II
6. [Reserved] 59
7A. Quantitative and Qualitative Disclosures About Market Risk 68
8. Financial Statements and Supplementary Data F-1
9A. Controls and Procedures 69
9B. Other Information 69
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 69
PART III 70
10. Directors, Executive Officers, and Corporate Governance 70
11. Executive Compensation 70
13. Certain Relationships and Related Transactions, and Director Independence 70
14. Principal Accounting Fees and Services 70
PART IV
Signatures 75
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 or 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 seen in cancer where
Natural Killer (“NK”) cells are impaired and facilitate a tumor’s evasion of the immune system and subsequent disease
progression. Further, immunologically-mediated chronic inflammation causes expression of MUC4, inducing immunosuppressive cells of the
tumor microenvironment to proliferate and protect the tumor from attack by the patient’s immune system. Chronic inflammation is
implicated in neurologic and metabolic diseases where it impairs the innate immune system. Our initial focus is on the treatment of cancer,
Alzheimer’s Disease (“AD”), Treatment Resistant Depression (“TRD”) and an out-licensing strategy. In cancer,
we plan to pursue two parallel development programs: (1) with INKmune we are treating men with castration-resistant, metastatic prostate
cancer (“mCPRC”); (2) with INB03, we plan to develop pre-clinical data in cancers that express MUC4, a mucinous polyglucan
on the surface of some epithelial cancer cells with a goal to out-license the program. MUC4 expression appears to predict resistance 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 a Phase II trial
is open in, UK, EU, Australia and Canada. XPro for TRD is being prepared for Phase II trials and will start after the current AD global
Phase II trial has completed recruitment. In early 2023, the Company also announced pre-clinical data in Duchene’s Muscular Dystrophy
(“DMD”) including new intellectual property for the purpose of trying to seek partnership for the development of this program.
DMD is an 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 typically 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 pre-clinical development strategies to facilitate out-licensing INB03;
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 program to treat castration resistant prostate cancer 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 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, 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, societal 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
developed a way to manufacture human mesenchymal stromal cells for the medical research and biotech community that offers large volumes
of high-quality, low passage human umbilical cord mesenchymal stromal 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 from US sources in the future. We have developed a validated manufacturing process that reliably produces clinical
grade (“cGMP”) quality mesenchymal stromal cells that we call CORDstrom. The manufacturing process is currently performed
at a contract manufacturing site under the direction of Mark Lowdell, the Company’s CSO. To date, we are supporting a multicenter
academic clinical trial in the UK with CORDstrom. This is a Phase I/IIb trial sponsored by the Great Ormond Street Children’s Hospital
in London treating children with the most severe form of Erythematous Bullosa (“EB”), a disfiguring and sometimes fatal skin
disease that is similar to a second degree burn. INmune Bio is supplying the clinical product for treatment of these patients. The Company
does not know the results of this trial 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 stromal 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. FDA-approved dendritic cell therapies such as 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 in the future.
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 alters the immunologic environment of the TME to promote
tumor killing. 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-durextecn;
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 current priority. We continue
to produce pre-clinical data for use of INB03 in cancer indications with a goal to find a development partner or out-license the program.
The Company does not have plans to perform clinical trials with INB03 at this time.
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. 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 was 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), EEG 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 is enrolling a global blinded randomized Phase II trial in ADi patients with Early AD in Australia (“AUS”), Canada
(“CAN”), the United Kingdom (“UK”), Spain (“ES”), France (“FR”), Germany (“DE”),
Poland (“PO”), the Czech Republic (“CZ”), Slovakia (“SL”) and the United States (“US”).
Early AD is patients that have MCI (Mild Cognitive Impairment) or mild AD. The XPro produced by KBI is being used in the Phase II trial.
After completion of the Phase II trial, patients will be offered to enroll in the Phase II open label extension trial (OLE). An Expanded
Access Scheme in patients who completed the Phase I trial in AUS. 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.
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. Additional data was presented on January 21, 2021CSF 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).
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%. 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 AD2). 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 AD3). The CSF proteome data is only partially analyzed.
Additional data may result from these ongoing analytics.
8
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 ongoing blinded randomized
global Phase II 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. Exploratory structural and function biomarkers of brain function
and structural integrity using EEG and MRI DTI will be used in some or all patients. All patients will be eligible to continue XPro for
12 additional months in the Open Label Extension trial. 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 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 2H24. 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 or anti-obesity GLP-1 drugs, is given once a week. More frequent treatment
cannot be ruled out for future indications. 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.
9
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. One lot has been converted into drug product using the US fill/finish facility of Vetter Pharma. Half of the first lot is frozen
as drug substance at -80C with a plan to convert to drug product as clinical supplies are needed to support the AD and TRD Phase II trials
in May 2024. The unfrozen drug product is being used in the ongoing AD02 AD trial. The remainder of the original fermentation runs is
frozen as a cell paste with a plan to process to drug substance. The company expects to convert the drug substance to drug product 1H25.
Downstream processing to drug product and fill/finish to drug product of the cell paste will occur in 2025 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. The company has two
Phase III readiness programs in progress in preparation for the Phase III pivotal trial in patients with AD. The Company is working on
the yield of the drug product using the existing E.coli-based system. A second program is focused on down-stream process improvements
in the drug manufacturing program. Once the new strain and 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. At this time we do not plan additional clinical trials with INB03 in oncology. A Phase I trial with XPro
in patients with Alzheimer’s disease is underway. 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 and the Expanded
Access Scheme.
INB03 Product Development Path: Continued pre-clinical
studies to find a partner or out-license the progam
Phase I open label study in
patients with advanced solid tumors has been completed. All future cancer studies 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. The Company does not plan to perform further clinical studies with INB03 in oncology at this time. We continue to support pre-clinical
studies as we search for a partner or an out-licensing opportunity.
10
INB03 Pre-clinical 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.
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.
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 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. A partner or licensee of INB03 may take a similar path to registration as XPro. The Company cannot
predict details of any INB03 registration strategy.
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. Experient biomarkers including MRI measures of white matter tract
neuroinflammation, axonal quality and axon myelin, and MRI measures of gray matter quality were included. 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 informed the design of the Phase II trials described above.
11
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 2024. We have an active partnering position as it relates to XPro development
in neurodegenerative and neuropsychiatric 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.