INmune Bio Q1 2023 Earnings Call Transcript

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Provided by Quartr
May 3, 2023

Key Takeaways

  • The FDA’s clinical hold on EXPAREL Phase 2 in early Alzheimer’s has slowed patient enrollment despite management’s plan to lift the hold by year-end.
  • Consolidating the mild ADI and MCI cohorts into a single early ADI Phase 2 trial is expected to save ~$8 million, align with industry standards, and accelerate enrollment.
  • Australian R&D tax rebates reduced Q1 cash burn to ~$1.2 million, leaving $51 million in cash—enough to fund operations through 2024.
  • ImmuBio created DN02 Inc to advance its DNTNF platform in Duchenne muscular dystrophy, with preclinical data showing muscle fiber regeneration and potential to replace corticosteroids.
  • An IND for IncImmune’s memory-like NK cell therapy in metastatic castration-resistant prostate cancer has been filed, backed by solid tumor preclinical data and a completed cGMP manufacturing scale-up.
AI Generated. May Contain Errors.
Earnings Conference Call
INmune Bio Q1 2023
00:00 / 00:00

There are 7 speakers on the call.

Operator

Good day, and welcome to the Immune Bio First Quarter 2023 Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask Please note, today's event is being recorded. I would now like to turn the conference over to David Moss, Chief Financial Officer. Please go ahead, sir.

Speaker 1

Thank you, And good afternoon, everybody. We thank you for joining us for the call for ImmuBiO's Q1 2023 financial results. With me on the call is Doctor. R. J.

Speaker 1

Tessie, CEO of Immune Bio and Doctor. Mark Lodell, Chief Scientific Officer of Immune Bio, We will provide an update on IncBune, our memory like natural killer cell oncology platform. Before we begin, I remind everyone that except for statements of historical facts, The statements made by management and responses to questions on this conference call are forward looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that can cause actual results to differ materially from those Please see the forward looking statements disclaimer on the company's earnings press release as well as risk factors in the company's SEC filings, including our most recent quarterly filing with the SEC. There is no assurance of any specific outcome.

Speaker 1

Undue reliance should not be placed on forward looking statements, which speak only as of the date they are made as the facts and circumstances underlying these forward looking statements may change. Except as required by law, Immune Bio disclaims any obligation to update these forward looking statements to reflect future information, events or circumstances. With that behind us, now I'd like to turn the call over to Doctor. R. J.

Speaker 1

Tessie, CEO of ImmuneBio. R. J?

Speaker 2

Thank you, David, and thank you, everyone, for joining the call. I will arrange my remarks to highlight the key takeaways for the Q1 and the subsequent period and also provide updates on our platform programs. I will start by reviewing developments And with EXPAREL, the DNTNF program, and then hand the call to Mark Liddell, our CSO, Who will speak about the developments in Incmium before I pass it back to David to discuss financial results and provide an update on upcoming milestones. Then we will move to Q and A. During the Q1, our primary focus has been to accelerate recruitment into our international blinded, randomized Phase 2 trial in patients with early Alzheimer's disease.

Speaker 2

We are working to develop the infrastructure needed to Regulatory jurisdictions beyond North America. In Australia, we continue to see patients opting to continue treatment After the Phase 2 program and joining the Phase 2 open label extension program, Although frustrated by the clinical hold, we remain we continue to move forward with the blinded randomized Phase 2 trial in patients with early ADI, and we have reached an understanding with the FDA regarding what is needed to lift the clinical hold and are on track to meet those commitments before the end of the year. Although the FDA hold has affected the pace of enrollment of patients Into the clinical trial, there have been tangible financial benefits. David Mas, our CFO, will provide more details shortly. But because a meaningful portion of the trial thus far has occurred in Australia, we have received a Sizable research and development rebate in February and expect to continue to receive additional rebates as we continue to invest There, these rebates significantly lowered our cash burn in the Q1 to roughly US1.2 million dollars On our last call, we announced a change in the scope of the Phase 2 program in patients with ADI.

Speaker 2

As a reminder, ADI is Alzheimer's disease in patients with biomarkers of inflammation, our target population that is about 50% At least of patients with Alzheimer's disease. Based on new data and a desire to streamline The clinical operations of the trial, we combined the 2 blinded randomized Phase 2 trials into a single program. Originally, there was a trial in mild ADI patients and a trial in MCI patients. MCI is mild cognitive impairment, the prodromal Alzheimer's disease syndrome. These are now combined into a single trial of early ADI that includes both mild ADI and MCI patients.

Speaker 2

This format has not compromised the trials, but is a benefit. Consolidation of the mild ADI and MCI patients into a single trial improves the Probability of success comes with significant cost savings, conforms with the industry standard and aligns the program with the expected design of a pivotal Phase III trial. This change is not easy, but the complex regulatory process is beginning to bear fruit. Once fully implemented, the pace of enrollment should increase in Australia and Canada and should energize enrollment in newly added regulatory jurisdictions. Currently, the Phase 2 is a blinded randomized placebo controlled study in early AD patients with biomarkers of inflammation that uses a validated measure of cognitive function as the primary endpoint.

Speaker 2

The Phase 2 is a Test run for a pivotal trial and based on data from the Phase 1 trial, our goal is to stop cognitive decline. That is, we don't want to just decrease the rate of cognitive decline, we want to stop cognitive decline in patients that received EXPAREL. Patients who are treated with EXPAREL in this trial are treated for 6 months. After that 6 month period, the patients are offered the opportunity to enroll in a 12 month open label extension trial. The open label extension trial is a 12 month study where safety and efficacy of the Xpro treatment in patients with early ADI will continue to be evaluated.

Speaker 2

Efficacy will be assessed every 3 months by MRI and clinical rating scales. All the patients that enroll in the open label extension receive EXPAREL regardless of previous treatment assignment. The open label extension serves multiple purposes. 1st, it provides long term safety data. We believe the regulatory authorities expect 2nd, the open label extension provides long term efficacy data.

Speaker 2

Finally, the open label extension is a recruitment tool. Guaranteed access to 18 months of treatment following a 6 month study provides significant advantages to patients and their clinical teams. So far, participation in the open label extension is high And the clinical teams are enthusiastic. We expect to share some data in due time. We signaled our interest in the use of DNTNF, our dominant negative TNF platform for the treatment of Duchenne muscular dystrophy or or DMD.

Speaker 2

As highlighted in the January 25 press release, we established DN02 Inc, A separate wholly owned subsidiary that will hold the intellectual property needed to facilitate partnering and business development activities for treating DNP with our dominant negative TNF compounds. This structure allows us to focus on our core mission, which is the treatment of Alzheimer's disease without leaving a valuable asset on the shelf, so to speak. Our confidence in a DMD A treatment is based on preclinical data. The ticket for entry into DMD As a therapy, it must decrease inflammation in the muscle and decrease muscle fiber destruction. In the animal models, DNTNF does this and more.

Speaker 2

The most interesting and novel attribute is that DNTNF treatment Promotes Muscle Fiber Regeneration. To our knowledge, muscle fiber regeneration has not been seen in any small molecule, Biologic or gene therapies being tested to date. A therapy that promotes muscle fiber regeneration may change the course of the disease And these boys, some of you are wondering why we are promoting a biologic therapy at the dawn of the gene therapy era In DMD, the answer is simple. Gene therapies may work, but the durability of the therapy And who will benefit is unknown and complicated. Furthermore, we suspect gene therapies may benefit from an anti inflammatory boost That also has regenerative medicine effects.

Speaker 2

Today, most patients are treated with corticosteroids, a time worn and Steroids, a time worn and dangerous standard of care. Corticosteroids slow the progression of DMD, but at Most of the metabolic and cosmetic problems in boys with DMD are related to corticosteroid use. If the only benefit of DNPNF therapy is to replace corticosteroids, it is a big win for patients Who currently suffer from insulin resistant diabetes, obesity, cardiovascular disease, short stature, hirsutism And muscle weakness due to the promiscuous use of corticosteroids to treat the disease. Like the DMD program, we use NbO3, our cancer program using a DNTNF compound as a partnering program. I don't need to tell dedicated biotech investors the oncology drug development space is changing.

Speaker 2

Typically, innovation in Cancer therapy comes in 2 forms, development of new therapies or the better use of existing therapies. Inventing new drugs is hard and the number of unclaimed Pathways in cancer therapies are few. Although, IMVO-three acts as an innate immune checkpoint inhibitor, It is ideally used as part of combination therapy to make existing drugs better. We are focused on using NbO3 to treat MUT4 expressing cancers to decrease resistance to existing therapies such as InHER2, immune checkpoint inhibitors and Tyrosine Kinase inhibitors. Adding MBO3 to the therapeutic cocktail treating MUT4 positive cancer should improve patient survival.

Speaker 2

Our goal is to find a partner for IMbio3 to allow this promising asset to benefit patients and allow Immune Bio to focus on our Killer cell priming program and pass the call to Mark Liddell, CSO to describe this in more detail. Mark?

Speaker 3

Thank you, RJ, and thank you all for joining this call. And I'm looking forward to your questions Later. So in early April, we took our 1st Immune clinical expansion step towards the treatment of solid tumors via the filing of an IND for the use of IMMUNE to treat patients with metastatic castration resistant prostate cancer and in the U. S. The filing was supported by our positive preclinical solid tumor data in prostate, renal cell carcinoma, ovarian cancer and indeed It should take place at 4 or more medical centers in the U.

Speaker 3

S. And it uses a Bayesian Optimal Interval Phase III trial design. The trial is expected to roll up to 30 patients and along with safety the open label trial will evaluate tumor progression using traditional efficacy endpoints of disease burden, PSA and CT scans, as well as non traditional measures of disease burden, ctDNA and 18F PSMA PET scans. So by the end of this open label trial, we will understand firstly the safety of IMMUNE in this new patient population, the dose to be used In a subsequent blinded randomized pivotal trial and have some indication of the ability of Immune to control disease in patients with metastatic prostate cancer. We're excited about the potential of IMMUNE as we expand into the treatment of solid tumors.

Speaker 3

These are those which account for approximately 90% of human cancers. The challenges of treating solid tumors are considerable And it's understandable that most cellular immunotherapies are focused on the 10% of cancers that are hematological tumors. So what is it about Incynium which leads us to believe it can treat solid tumors? The microenvironment of solid tumors is hypoxic and contains immunoregulatory cells which inhibit T cells and indeed NK cell function. IMGUNE not 20 Prime is the patient's own natural killer cells to override the immunosuppression of hypoxia and the regulatory cells in the tumor microenvironment.

Speaker 3

It induces differentiation of the NK cells into a memory like phenotype. This memory like phenotype NK cells are not susceptible to the immunosuppressive signals from cancer cells and they express proteins on their surface which protect them for exhaustion and senescence. Uniquely, these memory like NK cells secrete a protein, which can remove inhibitory signals from tumor cells and at the same time increase the strength of the bond between the NK cell and the cancer cell. All of this occurs even in extreme hypoxia. I presented most of these data at the Innate Killer Summit in Europe last year and a video of the presentation is currently available on the company's website under the Therapies tab, immune videos or via the company's YouTube channel.

Speaker 3

Meanwhile, we continue to treat patients in the MDS AML Phase 1 trial and have recruited the 1st patient at the 2nd UK clinical site and opened our first site in Mainland Europe. 4 UK patients have received the complete 3 dose regimen so far and the immune therapy has been safe at the dose tested. Indeed, the 4th patient to be treated receiving immuno on an outpatient basis, which is our planned treatment scenario for the prostate cancer trial in the U. S. 2 of the 4 patients with hematological cancer treated so far have shown evidence of NK cell activation and we're analyzing the biomarker data to identify those which could best predict outcome.

Speaker 3

Of the 4 patients treated, one remains alive 20 months post treatment So whilst very early in the clinical trials of IMMUNE and being restricted to using the lowest dose at this stage, The trial chief investigator who has treated the 4 patients with hematological disease stated, and I'm quoting him here, all enjoyed An improvement in general fitness with resolution of fevers, stabilized or even improved blood counts, and we were able to give breaks from the low dose chemotherapy they had been receiving. Definite improvement in subjective parameters of well-being, mood, appetite and clinical performance status. The clinical experience was presented at the American Society of Hematology in the Annual Conference in New Orleans last December. Now in preparation for the increased recruitment into the LAUREL NVS trial and the opening of our new trial in metastatic castration resistant prostate cancer, The company has invested in upscaling the manufacturing process of Inpune and the validation of that new process to cGMP is now complete. This increases capacity and reduces costs substantially.

Speaker 3

The new manufacturing process forms the basis of the current IND application to the FDA. And this investment paves the way for ambitious plans for trials in other solid tumors, including ovarian cancer, renal and nasopharyngeal cancer, as we acquire the relevant supporting data from my R and D team. Thank you, Fellow Immune shareholders for the trust you've instilled in the company and for the opportunity to provide you with this update on the Immune platform. I look forward to speaking to you again in the next quarterly call in 3 months. RJ,

Speaker 4

after you. At this point,

Speaker 2

I'd like to turn the call over to David Moss, our CFO, to review certain financial terms. Thank you.

Speaker 1

Thank you, RJ and Mark for the update. I'll provide a brief overview of our financial results Net loss attributable to common stockholders for the quarter ended March 31, 2023 was approximately $6,500,000 compared with approximately $6,900,000 for the comparable period In 2022, research and development expense totaled approximately $4,100,000 for the quarter ended March 31, 2023 compared with approximately $4,300,000 for the comparable period in 2022. General and administrative expense was approximately $2,300,000 for the quarter ended March 31, 2023 compared with approximately 2,300,000 for the comparable period in 2022. At March 31, 2023, the company had cash and cash equivalents of approximately 51,000,000 Based on our current operating plan, we believe our cash is sufficient to fund our operations through 2024. As of May 3, 2023, the company had approximately 17,900,000 shares of common stock outstanding, the same number as the last two quarters.

Speaker 1

As RJ previously mentioned, we continue to focus on achieving our primary clinical trial objectives, while remaining cost prudent. To reiterate a key cash management point highlighted in the Q4 call, the previously announced consolidation of the AD And MCI trials will reduce overall previously forecasted budget outlays for the 2 combined trials by approximately $8,000,000 Further, as we continue to dialogue with the FDA, our budgeted spend in the U. S. Is not occurring as forecasted, thus resulting in less capital As highlighted in both the specific press release and the Q4 call, we expect to continue to receive further Cash rebates as we spend on international trials based particularly in Australia. In sum, these events and actions along with longer term strength of the U.

Speaker 1

S. Dollar reduced our base currency costs in foreign jurisdictions such as Australia, have significantly reduced our expenses with the Q1 to roughly $1,200,000 cash burn. We're particularly pleased with our progress during the quarter on all fronts and all of the aforementioned items better position us to manage our cash runway more efficiently to reach our targeted goals Now I'd like to move on to our list of upcoming important milestones. Top line results for our Phase 2 early Alzheimer's disease trial in patients with inflammation and Alzheimer's disease is We will initiate a Phase 2 trial of EXPAREL in patients with treatment resistant depression Upon resolution of the FDA manufacturing review, additional open label Phase 1 Trial data of INKBN in high risk AMDS AML in 2023. Initiation of a Phase onetwo program in metastatic castration resistant prostate cancer upon the acceptance of the IND by the FDA, which should occur in the first half of twenty twenty three.

Speaker 1

Finally, as R. J. Had mentioned, we are pursuing business development opportunities There could be no assurance that the company can complete any of the transactions as they are complex and difficult. We have 2 platforms and as a small company, we will Naturally, we will update investors should material business development occur. In summary, we are pleased with our progress during the quarter, Continue to overcome obstacles and are grateful for our shareholders' trust and support in our company as we continue to work hard to bring value to our from our platforms by carefully managing our shareholder resources.

Speaker 1

At this point, I'd like to thank you for your time and attention. I'd like to turn the call back to the operator

Operator

Today's first question comes from Tom Schrader with BTIG. Please go ahead.

Speaker 5

Good afternoon. Thanks for Taking my questions. I actually have a question first for Mark. One of the biggest surprises in IO is that it works With chemo, do you have any sense of your approach? Do you have preclinical data?

Speaker 5

Does chemo get the Immune fire is burning or does it just kill your stealth propagation? Do you know yet?

Speaker 4

Mark?

Speaker 5

All right. I guess it's a bad question.

Speaker 2

Yes, let's see if we can fix the thing

Speaker 1

that will come.

Speaker 4

There he is. Can anyone go

Speaker 3

yes, hello. Sorry, I was muted. Yes, it's a great question. It's not something that we can test in vitro And the animal models for don't really exist outside of a non human primate, but you're quite right. My biggest fear is the effects of chemo on the NK cells in the patient.

Speaker 3

And obviously, we need EndoGen's NK cells to respond The trick is to target diseases where there are a lot of NK cells even in The setting of chemotherapy and that prostate cancer is one of those. So that's one of the reasons we've gone down that route.

Speaker 5

Okay. And then kind of I think an obvious one for RJ. It looks like the abeta antibodies are here to say. How do you think about developing a drug that's quite different in the presence of what is Probably going to be a piece of the treatment landscape. Just your interest, your initial thoughts as you think about your timing and where That treatment paradigm is likely to be when you are reaching the market?

Speaker 5

Thanks.

Speaker 2

Yes, good question. And obviously, we think about this a lot. I mean, we now have 2 pivotal trials using anti amyloid Therapies, they gave consistent results. And I think the best way to describe it is, if I may paraphrase Lilly's leadership today is, These drugs may stall progression for 6 or 7 months. Although we don't know Everything about the Lilly trial, we'll learn more at AAIC in July.

Speaker 2

I believe we understand the benefits and liabilities of this class of drugs. But I think there's 3 more main issues and this is where opportunities exist. I don't think delaying progression is not where It's where we need to be to start, but I believe we need to stop dementia in its tracks. And so I think That we can do better, for sure. I personally and I think many in the field are confused by the Safety profile of these drugs, what will happen when amyloid drug gets in the hands of community neurologists?

Speaker 2

Why does the brain volume continue to shrink? These are answers to questions that are needed. I'm sure we'll get them over time. But the safety issues are real and this is a fragile population that you're Treating. And then finally, what happens with patients that progress on the anti amyloid drugs?

Speaker 2

I mean, the majority of patients continue to progress. I mean Lilly has built its whole program around stopping the drug when you get below a certain threshold of amyloid. If patients progress, what do you do? And I think this is where combination or sequential therapy will be needed and that will play very well To EXPAREL. So I actually believe that there's a lot of opportunity For EXPAREL in the space either as therapy alone or part of combination or sequential therapy, 5 years from now treatment of amyloid treatment of Alzheimer's disease is going to look a lot like the treatment of cancer.

Speaker 2

Those biomarkers dictate who could benefit from EXPAREL and who what that benefit looks like. But let's be real. Well done to Lilly. Kudos. They had a great result.

Speaker 2

Today's news is great for patients. It's great for Alzheimer's And it's great news for Immune Bio. So thanks for the question, Tom.

Speaker 5

Sure. Thank you.

Operator

Thank you. Our next question comes from Daniel Carlson with Tailwinds Research.

Speaker 4

Just a couple here. First off, Can you talk a little bit about the timing of the IND for prostate?

Speaker 2

Yes. So, I see I'm sitting here on pins and needles. I mean, if you guys do the math, we're supposed to hear this week. I can honestly say as of 2 seconds ago when I checked my e mail, we have not heard, but it will be this week. And So you will learn probably early next week where we stand on that.

Speaker 2

I will say that we had very, what's Very vibrant dialogue between the FDA and the manufacturing team led by Mark, The clinical team led by me on the IND, which is a sign that at least they're reading it. So all I can say is, it's you're going to hear one way or the other next week for sure. For sure.

Speaker 4

Awesome. And then about the patients on the extension trial, I know you're going to come out with data at some point To be determined, but I'm wondering if there's anything you can sort of say tangentially about what you're seeing from the patients there?

Speaker 2

So the problem with the extensions trial is we don't know what they were on coming into the trial. And we're kind of struggling. We haven't yet figured out what this looks like because you've got 2 out of 3 patients come in having had 6 months of 1 out of 3 come in having had placebo. So what happens in the 1st 3 months or Based on the Phase I trial, it's going to be meaningful. So we're trying to figure out how to unravel this in a way that we can provide meaningful data So we can understand it, also not compromise the blinding of the trial.

Speaker 2

So it's a little bit Obviously, it's a little bit complicated until we unblind it, but we'll get you something when the time is right and we make sure, 1, We're not compromising the blinded randomized Phase 2. And 2, we can make accurate statements that aren't going to confuse things down the line.

Speaker 4

Got you. Got you. And then last question for me, just you guys talked a fair amount about DMD. So I'm just wondering if you can Sort of give us any input into how the partnering process is going, anything you can add there?

Speaker 2

Yes. So David is running the he now wears the hat of both CFO and Business Development. So I will let him answer this question. Please, David.

Speaker 1

Thanks, RJ, and thanks, Dan, for the question. Best thing I can do is tell you exactly what I said on the call, Dan, unfortunately, We'll update you on it. I think that the industry right now is on pins and needles to see what happens with Sarepta, which is going to happen this month. And then based on whatever direction happens, I think it will be a very good time for Immune to have a number of conversations with all of the key players in the industry. Pretty excited about the data that we've generated thus far.

Speaker 1

We have a little bit more data that's to come And we will update you accordingly when we have something material to talk about.

Speaker 4

All right. Great. Look forward to that. Thank you. Thanks guys.

Speaker 4

Keep up the good work.

Speaker 1

Appreciate it, Dan. Thanks for your patience.

Operator

Thank you. And our next question today comes from Jason McCarthy with Maxim Group. Please go ahead.

Speaker 6

Hi. This is Chad on for Jason. I was just wondering if you could expand a little bit on the importance of the Biomark directed imaging as it relates to the prostate program?

Speaker 2

Yes. Thank you. I mean, we Actually, and this is really Matt Redig talking. I mean, you'll get a chance to hear from him directly. He's our PI.

Speaker 2

He's the Head of GEO Oncology at the UCLA University and Cancer Center. But he's really one of the leaders in clinical trials in prostate cancer in the U. S. And the key element is the F-eighteen PMSA PSMA scan developed by Lantheus. This is a very sensitive assay.

Speaker 2

Now as you know, prostate cancer Has a good biomarker with blood PSA, but blood PSA doesn't give you as clean a look at tumor volume. And the PSMA scan, it's a nuclear medicine scan, is very sensitive at letting you Really quantified tumor volume much more accurately than either CT scan or the traditional bone scan. So We think that this is going to be the future of this disease. We're not alone. I'm sure you'll hear this from Matt, Professor Redig, when you get a chance to speak with him, which will hopefully be very soon.

Speaker 2

But the bottom line is, As we've done with Alzheimer's, as we've done with the LaurelScan and MDS, Biomarkers are the key to how we select these patients and follow their response. And one of the reasons we selected prostate cancer as our first foray into solid tumors is we think that the biomarker, shall we, tools that we have at our disposal will allow us to really know whether we're seeing effect after 6 months of therapy.

Speaker 6

Great, great. Thanks for taking the question.

Operator

Thank you. And ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to Doctor.

Speaker 2

Yes. So thank you for listening to the call. I mean, we grow More excited about our lead platforms every day. As you know, Alzheimer's and Incmune are both novel strategies that have risks and reward. But the bottom line is that we are targeting neuroinflammation, which is now recognized As an important part of CNS pathology and NK cells, at least the way Mark goes after them is Novel.

Speaker 2

And in fact, if you listen to what he said closely, you know that he has been hard at work on the R and D front And he has hinted at new findings on how Incimmune works, and he will explain these once we get the IP in place. And finally, today, I think we really want to emphasize that we really have a 2 pronged approach at Immune Bio. 1 Is that we focus like a laser on our core missions in Nexpro and CNS and inkmute and solid tumors. And secondly, we have this business development effort or a partnering effort ongoing because we have valuable assets that we don't want to Waste, so to speak. We are looking to find partners for these assets to allow their development to benefit Both the patients and Immune Bio's shareholders, while providing non dilutive capital for the development of our core assets.

Speaker 2

So thank you for listening and thank you for your continued support. Goodbye.

Operator

Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

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