INmune Bio Q2 2023 Earnings Call Transcript

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Provided by Quartr
August 7, 2023

There are 2 speakers on the call.

Operator

Greetings, and welcome to the Immune Bio Second Quarter 2023 Earnings Call. As a reminder, this conference is being recorded. A transcript will follow within 24 hours of this conference call. At this time, it is my pleasure to introduce to you Mr. David Moss, CFO of ImmuneVaya.

Operator

David, thank you. The floor is yours.

Speaker 1

Thank you, John, and good afternoon, everybody. We thank you for joining us for the call for Immubio's Q2 2023 financial With me on the call, actually sitting right next to me is Doctor. R. J. Tessie, CEO of Immune Bio, who will provide an update on our 2 Before we begin, I remind everyone that except for statements of historical facts, the statements made by management and responses Questions on this conference call are forward looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Speaker 1

Please see the forward looking statements disclaimer in the company's earnings press releases as well as risk factors in the company's SEC filings, including our most 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. Tessie, CEO of ImmuneBio.

Speaker 1

R. J? J.

Operator

Sass:] Thank you, David, and thank you everyone for joining the call. As usual, I will arrange my remarks to highlight the key takeaways for the Q2 and subsequent period and provide updates on our platform programs. I will start by reviewing our developments with Xpro and Incmune before I pass it back to David to discuss financial results and provide an update on upcoming and new milestones. We will then move to Q and A. During the Q2, our primary focus remained enrollment of patients into the Phase 2 blinded randomized trial in patients with early Alzheimer's disease with inflammation.

Operator

And increasing the geographic footprint of that trial, We are going global. Expanding the geographic footprint has been slowed by staffing problems at regulatory authorities in some jurisdictions. I believe this is a hangover from the COVID era. For instance, one country has is 120 days past the response time required by law. But there's nothing you can do about the problem.

Operator

We just deal with it and answer their requests as needed. Enrollment continues to accelerate and we are encouraged to see patients finish the trial and opt to continue treatment under the Phase 2 open label extension program. I remind you the OLE or the open label extension provides 2 additional bites at the apple if I may. 1 third of the patients entering the open label extension have been on placebo that is they've not received EXPAREL. These patients now have an opportunity to respond to EXPAREL therapy.

Operator

We should be able to capture that data. Patients who received EXPAREL, the 2 thirds who had been on active drug during the trial will continue on the drug and provide data for long term efficacy and safety follow-up. Important issues for the company, Investors, Clinical Teams, Potential Partners and the Regulatory Authorities. Finally, we remain on track with the FDA to meet the conditions necessary to lift the clinical manufacturing hold before the end of the year. This long and frustrating process is nearing its end, we hope.

Operator

The just completed annual Alzheimer's Association International Conference was filled with both promise and pragmatism. The promise was the release of data from the lelyodonimimab study in patients with early AD. With the release of that data, there are now 3 large Phase 3 studies performed with different anti amyloid antibodies. The 3 studies showed consistent efficacy and safety. Put another way, wearing my commercial hat, Clinicians and patients will see similarities.

Operator

There is a class effect. That is reflected by the pragmatism seen by the clinical Alzheimer's disease professionals. It was palpable that they want more. A multi day survey confirmed there was no need in their opinion for additional drugs targeting amyloid, But there was plenty room for employment for improvement in the drugs treating Alzheimer's disease. Clinical teams and the clinical experts want 3 things.

Operator

1st, additional drugs that improve outcomes and that do not target amyloid. Drugs targeting tau and neuroinflammation are on top of that list. 2nd, there is a desire for better biomarkers to identify patients early in the disease process when they can be best treated and help select what drugs the patient should receive. The preference is for easily obtained blood tests. Finally, combination therapy has become a serious topic of discussion.

Operator

No one is satisfied with the results of the monotherapy anti amyloid trials. Alzheimer's disease is a complex disease. In modern medicine, complex diseases often require treatment with combination There was much head scratching about what to do with patients after the amyloid is gone. In fact, the Lilly trial with onimab, they stop the drug once the amyloid is gone, but the patients continue to show progressive cognitive decline. Clearly, there is a need for something to solve this problem.

Operator

Like with combination therapy, we believe EXPAREL is well positioned to fulfill this new cognitive decline without amyloid problem. Some may be scratching your heads trying to understand the data the company presented at the meeting in Amsterdam. The posters on the effects of EXPAR on gray matter microstructure elements for complicated and a little bit data dense and I'll attempt to integrate these highly technical data into our overall program We have presented extensively on the benefits of EXPAREL treatment on in white matter on white matter pathology in patients with Because the brain has both white and gray matter some of that, well, what about gray matter? And these data we presented show that EXPAREL does affect positively the microstructural elements of gray matter in the brain in the areas where Alzheimer's pathology is most severe. That is EXPAREL helps normalize the microstructural elements of both white and gray matter and that is the whole brain.

Operator

So we have already shown that EXPAREL changes the biology of neuroinflammation, neurodegeneration, selective function and myelin. These data suggest that remodeling and repair of the aging in the brain the curse when you control destructive non information with EXPAREL. What remains to be shown is the impact of these changes on cognitive In the open label Phase 1 trial 8 of 9 patients treated with, Shall we say full dose EXPAREL has stable or improved cognition on EXPAREL therapy. We have been vocal in our belief that EXPAREL will flatline But we won't We have signaled our interest in using the DNPMF for the dominant negative TNF platform for the treatment of Duchenne the area that will hold the intellectual property to facilitate partnering and business development activities for treating DMD with our dominant negative TNF. This business structure allows us to focus on our core mission that is the treatment of Alzheimer's Z without leaving a valuable asset on the shelf, so to speak.

Operator

Our confidence in DMD is based on the preclinical data. The ticket for entry into DMD is clear. A therapy must decrease inflammation and decrease muscle fiber destruction. DNTNF does that and more. The most interesting and novel attribute is that treatment improves muscle fiber regeneration.

Operator

To our knowledge, muscle fiber regeneration has not been seen in any small molecule, biologic or gene therapies. A therapy that promotes muscle fiber regeneration may change the course of disease in these boys. As part of the preclinical effort, we are performing molecular studies to understand the advantage of DNTNF therapy compared to standard of care corticosteroid therapy. We are working hard to find a potential partner for this promising Moving from DNT and F to the Incoming platform. You recall in May that the FDA or we received from the FDA safe to proceed letter, actually it's an e mail these days for the Phase onetwo clinical trial using Incline to that is used.

Operator

This simple e mail formalized our decision to pivot from using Acumen to treat hematologic diseases to treating solid tumors. The decision for this pivot was based on the unique biology of inkvian primed NK cells. Inkvium primed NK cells undergo changes that allow the NK cells to function in the immunologically hostile and hypoxic TME. To our knowledge, cytokine primed NK cells or genetically modified NK cell do not undergo these changes that are critical for successful treatment in solid tumors. The choice of metastatic castrate resistant prostate cancer as our first tumor target was carefully considered.

Operator

Prostate cancer specimens have a robust NK cell infiltrates, but cells are resting NK cells that do not kill Prostate cancer is well established biomarkers that allow us to determine if And finally metastatic castrate resistant prostate cancer is one of the few tumors that have not benefited from the immunotherapy revolution of the last 5 or 6 years. We believe we can change that. Finally, the health of men with metastatic castrate resistant prostate cancer ranges from very active, let's say, normal to sedentary. INFINE is given as an outpatient without the need for pre medication, static. Castrate resistant prostate cancer will often live a long time with their disease and value a high quality of life.

Operator

The trial is a novel Bayesian design that is expected to enroll 30 men. And the trial will take place at a minimum of 6 sites in the U. S. And we plan to enroll the 1st patient by the end of the year. Patients will receive 1 of 3 doses of incognunus in outpatient during the 6 month trial.

Operator

Immunologic and therapeutic efficacy will be measured by the increase in memory like NK cells in the blood and how long these cells are present in the patient's circulation. We expect this to correlate with therapeutic effects. Therapeutic efficacy or tumor response to ancillary will be Measured using traditional biomarkers of prostate cancer tumor burden, including blood PSA, a CT scan and bone scans as well as novel biomarkers of tumor burden, which include the PMSA PET scan end circulating tumor DNA. We continue to treat patients in the LAUREL trial. That's the ongoing Phase 1 trial in high risk 3 of the 4 patients showed evidence of NK cell activation.

Operator

Of the 4 patients, one remains alive 20 months post treatment with having received no other therapy and has enjoyed an improved quality of life. 2 patients were bridged to transplant and 1 patient actually dialed while waiting for a transplant. We've opened a 3rd clinical site in Athens. The first great patient has been identified and treatment is planned for the end of August. There have been 2 major barriers to recruitment of patients The first was COVID-nineteen.

Operator

The original sites were all in the U. K. And the U. K. Is National Health Service second problem is related to the enrollment conservative enrollment criteria we use for the 1st cohort.

Operator

With experience that enrollment criteria can be made more liberals. We believe this will solve some of the enrollment problems. The company remains committed Q on its vision of moving EXPAREL and INKEMU towards commercialization. Both platforms offer unique therapeutic options to treat more than one disease in their respective therapeutic silos. We are excited about the prospects of both forms and are working hard to make a difference at the bedside, while building shareholder value.

Operator

I return this to David Moss to review certain financial items.

Speaker 1

Thank you, RJ. I'll provide a brief overview of our financial results and upcoming milestones was approximately $6,500,000 compared with approximately $6,800,000 for the comparable period in 2020 Research and development expenses totaled approximately $4,100,000 for the quarter ended June 30, 20 3 compared with approximately $4,200,000 for the comparable period in 2022. General and administrative expense approximately $2,300,000 for the quarter ended June 30, 2023 compared with approximately $2,200,000 for the comparable period in 20 2. At the end of June 30, 2023, the company had cash and cash equivalents of approximately 47,800,000 Based on our current operating plan, we believe our cash is sufficient to fund our operations into late 2024. As of August 7, 2023, the company had approximately 18,000,000 shares of common stock outstanding.

Speaker 1

As highlighted in the prior quarter's investor call, we continue to focus on achieving our primary clinical trial objectives, while remaining cost prudent with the potential to recover a portion of R and D expenses in Australia and to a lesser extent the U. K. Now I'd like to move on and list our upcoming important milestones. Top line results for our Phase 2 early ADE trial in patients with inflammation and Alzheimer's disease is expected in late 2024. We will initiate a Phase 2 trial of EXPAREL in patients with treatment resistant depression upon resolution of the the manufacturing review.

Speaker 1

We've been working relatively hard on that. Additional open label Phase 1 trial of Incubune high risk MDS AML in 2023 early 2024. Initiation of a Phase onetwo program star. In metastatic castration resistant prostate cancer will begin in the second half of this year. Finally, We continue to pursue business development partnership opportunities and there can be no assurances that the company will complete any transactions as they're complex and very We have 2 great platforms and as a small company, we will try to expand the applications of these platforms in areas we do not have the resources or expertise to 2 ourselves in order to benefit shareholders.

Speaker 1

Naturally, we'll update investors should material business development events occur. At this point, I'd like to thank you for your time and attention. And I'd like to turn it back to John, our operator to poll for questions.

Operator

And the first question comes from the line of Joel Beatty with Baird. Please proceed with your question. Great. Thanks for the update and for taking the questions. The first one is on the ongoing FDA manufacturing review.

Operator

Could you provide a little bit more detail there on what is needed to get that resolved? Yes. So thanks, Joel. So It's now 15 months since we received maybe 14 months since we received the clinical hold. And really I divide this into 2 halves.

Operator

As you know, both Canada and Australia were are fine with the new XPRO that we've made. It's being used to treat patients and both of those are regulatory jurisdictions. And we The way the communication happens with the FDA, which is not very efficient, it took 7 months for us to reach an agreement with the FDA what the problem was and what the solution was. So I can promise you that was cleanly frustrating for us and as it was for investors. Since then, we have been executing against their request.

Operator

Once again, scratching our heads a little confused of why they are preventing us from treating patients in the U. S. Despite the fact the drug has been used in the U. S. Before for our COVID trials and it's being used in both in Canada and Australia, but that is the nature of working under the regulatory authority of the 3.

Operator

We expect to give them everything they need to get us off clinical hold And time for us to receive that hoped for safe to proceed e mail before the end of the year. If I sound a little bit less than hyper confident, it's just because it's the FDA and you never know the score until the end of the whistle is blown. So It's been frustrating for you. It's frustrating for us. But the drug is fine.

Operator

We're using it in 2 venues and And the next question comes from the line of Thomas Schraeder with BTIG. Please proceed with your question. Hey, good afternoon. This is calling in for Tom and thanks for taking our questions. So I have two questions.

Operator

First is regarding Alzheimer's more of a big picture question. Thinking about pricing for a new drug, if a new drug does not require ARIA monitoring, do you believe that that will allow for premium pricing And then the second question is following the recent FDA decision on the competitor's drug in MDD over the weekend, Yeah. So thank you. There are 2 good questions. So the current estimate for the cost of care, The cost of receiving an anti amyloid drug for the 1st year is $82,000 a little more than $82,000 that's only a third of that is the cost of the drug.

Operator

So 2 thirds of that is really all of the safety monitoring and what's needed for diagnosis of the disease. We believe that EXPAREL will not have that burden. In other words, right now, our enrollment criteria include basically a set of blood tests, Which are all relatively cheap, nothing fancy can be done virtually in any lab in the country. And an MRI scan that requires some special bleeding, but that is not expensive. There's no PET scans and there's no need for at least as we envision it today, there's no need for additional follow-up MRI scans.

Operator

So, yeah, You know how pharmaceutical pricing works. The 1st drug company sets the price, which has been done. And then you can adjust the pricing based on whether you're better. We think if we do meet our clinical goal of stabilizing cognitive decline that allows us for premium pricing. And I would expect that premium pricing would come well within that 82,000 dollar bracket, although don't hold me to that.

Operator

We're a little ways off from that decision. But the bottom line is the current drugs are difficult to use. They're complicated. I think their uptake is going to be somewhat such as MRI scans, which are going to be needed for those managing those patients. As far as the more recent events with major depressive disorder, I found that very interesting and actually quite validating about how we do our CNS drug development.

Operator

Clearly, although I've not seen the data, I'm not going to comment on We are very sensitive to the fact that particularly in depression, but in all central nervous system diseases, placebo effects always are what catches you by surprise. And the way to eliminate surprises on the placebo side is to better control your patient enrollment criteria using enrichment factors. The oncologists learned this 20 years ago. The CNS drug developers have not yet learned it. We take this seriously.

Operator

And in our Alzheimer's trials, these patients all have neuroinflammation. And actually in the trial that we planned in treatment resistant depression, they will all have neuroinflammation. We believe by Using that kind of, shall we say, discipline in enrollment, it will prevent surprises on the placebo end At this time, there are no further questions. And I would like to turn the floor back over to RJ for any closing comments. Yes.

Operator

Thank you. So just in summary, 2 is a unique asset in the Alzheimer's therapeutic space. And this became particularly clear But as many of you know C. J. Likes to say, CJ is our VP of CNS Drug Development for those of you who don't know CJ.

Operator

It's not treating neuro inflammation that's important. It's how you treat neuro Many of the anti inflammatory strategies are what we call glial suppressive. In other words, they turn off glial cells, both gastroglial and microglial And while that may prevent production of destructive inflammatory cytokines, it doesn't fix the problem because Glial cells play a very, very important and active role in the remodeling and repair needed to control and reverse CNS diseases including Alzheimer's disease. So turning off a dysfunctional glial cell is not a winning strategy. Converting a dysfunctional destructive glial cell into functioning normally functioning glial cells.

Operator

The phagocytized myelin degree, promotes synaptic plasticity and improve neuronal function, is needed for success. So far, we have evidence that EXPAREL plays this role well. And as far as we know, we're the only drug that plays this 12. And finally, why is the NSA case base so confusing? We believe it's a pretty simple reason.

Operator

Everybody has 2. NK cells are like T cells, when in fact the how and why of NK cells in oncology is a separate and distinct scientific discipline. IncyMune is a therapy that solves the 3 major problems facing today's NK therapies. IncyMune therapy leverages the patient's own NK cells to treat their disease. Why make new NK cells when the patient has plenty?

Operator

Inc. Immune converts the patient's own NK cells into cancer killing memory like NK cells that are present for months after inking and therapy. And it does this in the patient's circulation without the need for complex manufacturing or concomitant cytokine supplementation. Finally, incoming primed NK cells survive and thrive and kill cancer in the hospital tumor microenvironment of solid tumors. You can't control cancer if the cells can't play on cancer's turf.

Operator

So these are the reasons why insulin should succeed in solid tumors and why others are stuck treating hematologic malignancies. I remind you that 90% of cancers are solid tumors. When will we have the data to support this bold talk? Well, because the CAR PC trial, which is the open label Phase 1, Phase 2 trial, if it is open label, we should be able to see snippets of patient responses during 2024 and you will hear about them. Our corporate focus is in delivering Phase 2 data with EXPAREL in Alzheimer's disease and We are positioning other valuable assets in our pipeline such as NvO3 and DMTNF for DMD for partnering.

Operator

Our goal is to partner seeing these promising assets to allow them to be to benefit patients while providing non dilutive capital for the development of our core On behalf of Mark and David, CJ, Tara and the entire Immune team, we thank you for your support for continued support and we look forward to speaking to you in the near future and providing further updates. Ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.

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Key Takeaways

  • The company is advancing its global Phase 2 blinded trial of EXPAREL in early Alzheimer’s patients with inflammation, with enrollment accelerating despite regulatory delays, and expects to lift the FDA manufacturing hold before year-end.
  • Data presented at the Alzheimer’s Association Conference showed EXPAREL positively remodels microstructural elements in both gray and white brain matter, reinforcing its potential as a neuroinflammation-targeted therapy in combination regimens.
  • In preclinical Duchenne muscular dystrophy studies, their dominant-negative TNF platform not only reduced inflammation and muscle fiber destruction but also uniquely promoted muscle fiber regeneration, and the company is seeking a partner to advance this asset clinically.
  • The INKEMUNE NK-cell program has pivoted to solid tumors, receiving FDA “safe to proceed” for a Bayesian Phase 1/2 trial in metastatic castrate-resistant prostate cancer using primed autologous NK cells, with 30 patients slated to enroll by year-end at six U.S. sites.
  • Financially, Q2 R&D and G&A expenses remained stable year-over-year, with cash and equivalents of $47.8 million expected to fund operations into late 2024; upcoming milestones include late-2024 top-line Phase 2 Alzheimer’s results and new Phase 2 and Phase 1/2 trial initiations.
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Earnings Conference Call
INmune Bio Q2 2023
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