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What changed in Inmune Bio, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Inmune Bio, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+287 added−273 removedSource: 10-K (2024-03-28) vs 10-K (2023-03-02)

Top changes in Inmune Bio, Inc.'s 2023 10-K

287 paragraphs added · 273 removed · 198 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

96 edited+18 added−32 removed299 unchanged
Biggest changeIn early 2023, the Company also announced pre-clinical data in DMD including new intellectual property for the purpose of trying to seek partnership for the development of this program. DMD is a X-linked genetic disease that occurs most often in young boys. People with DMD do not produce dystrophin, a protein necessary for normal skeletal muscle function.
Biggest changeDMD 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.
We will continue to invest in expanding our patent suite. We will also seek to further to strengthen our IP position by looking to in-license IP related to our focus on the innate immune system. Provide clear value propositions to third-party payors to merit reimbursement for our product candidates .
We 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 .
The glial cell are two of four cells in the neural unit that also includes oligodendrocytes and nerve cells. Activated microglial cells are considered the resident macrophages of the brain. The primary role of microglial cells is to protect the neural unit from infection. When innate immune dysfunction causes chronic inflammation, activated microglial cells produce soluble TNF that activates astrocytes.
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.
The Company received a $2.9M USD award from the National Institute of Mental Health (“NIMH”) to treat TRD with XPro. The blinded, randomized Phase II trial will use a biomarkers of peripheral inflammation to select patients with TRD for enrollment. Patients will be treated for 6 weeks. Primary end-points include both clinical and neuroimaging measures.
The 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.
Among the provisions of the ACA of importance to our potential drug candidates are: ● an annual, nondeductible fee on any entity that manufactures, or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs; ● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively; ● a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; ● a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D; ● extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; 32 ● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; ● expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; and ● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
Among the provisions of the ACA of importance to our potential drug candidates are: ● an annual, nondeductible fee on any entity that manufactures, or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs; ● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively; ● a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; ● a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D; ● extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; ● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; 31 ● expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; and ● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
To our knowledge, there are no innate immune check-point inhibitors in development that have the unique characteristics of INB03 that neutralize sTNF to: i) decreases the proliferation of MDSC; ii) decreasing local and systemic immunosuppression caused by MDSC by stopping production of immunosuppressive cytokines and; iii) improving NK/DC cross-talk to recruit the adaptive immune system to fight the cancer. 20 Intellectual Property We seek to protect our therapeutic programs by continuously developing patent properties covering novel compositions, formulations, purpose-limited compositions, combination treatments, methods of medical treatment, and other inventions, whether created internally or in-licensed, in the United States Patent & Trademark Office (the “USPTO”), the World Intellectual Property Organization (“WIPO”) under the Patent Cooperation Treaty (“PCT”), and in patent offices for various foreign jurisdictions.
To our knowledge, there are no innate immune check-point inhibitors in development that have the unique characteristics of INB03 that neutralize sTNF to: i) decreases the proliferation of MDSC; ii) decreasing local and systemic immunosuppression caused by MDSC by stopping production of immunosuppressive cytokines and iii) improving NK/DC cross-talk to recruit the adaptive immune system to fight the cancer. 19 Intellectual Property We seek to protect our therapeutic programs by continuously developing patent properties covering novel compositions, formulations, purpose-limited compositions, combination treatments, methods of medical treatment, and other inventions, whether created internally or in-licensed, in the United States Patent & Trademark Office (the “USPTO”), the World Intellectual Property Organization (“WIPO”) under the Patent Cooperation Treaty (“PCT”), and in patent offices for various foreign jurisdictions.
Item 1. Business Our Strategy Our objective is to develop and commercialize our product candidates to treat diseases where the innate immune system is dysfunctional causing and contributing to the patient’s disease. Innate immune dysfunction can occur for a variety of reasons including genetics, lifestyle, and other factors however, age plays a significant role in the development of immune dysfunction.
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.
Other solid cancers are of interest including nasopharyngeal cancer (“NPC”) which is a known target for NK cells and an important unmet clinical need in emerging markets such as mainland China. Renal cell carcinoma is also a known target for INKmune. We may seek partner or sell INKmune.
Other solid cancers are of interest including nasopharyngeal cancer (“NPC”) which is a known target for NK cells and an important unmet clinical need in emerging markets such as mainland China. Renal cell carcinoma is also a known target for INKmune. We may seek to partner or sell INKmune.
(Biol Blood Marrow Transplant. 2018 Mar 26. pii: S1083-8791(18)30132-0. doi: 10.1016/j.bbmt.2018.03.019.) The results of the laboratory and Phase I studies provide evidence that our strategy for treating residual disease is sensible but unproven. 15 Because INKmune primes NK cells to target naturally occurring antigens, we believe INKmune can be used in to treat a wide variety of cancers including hematologic malignancy (AML, MM, CML, high risk MDS) and solid tumors (renal, prostate, breast, ovarian, pancreas and lung).
(Biol Blood Marrow Transplant. 2018 Mar 26. pii: S1083-8791(18)30132-0. doi: 10.1016/j.bbmt.2018.03.019.) The results of the laboratory and Phase I studies provide evidence that our strategy for treating residual disease is sensible but unproven. 14 Because INKmune primes NK cells to target naturally occurring antigens, we believe INKmune can be used in to treat a wide variety of cancers including hematologic malignancy (AML, MM, CML, high risk MDS) and solid tumors (renal, prostate, breast, ovarian, pancreas and lung).
At this time, we cannot predict if patients without biomarkers of inflammation, elevated MDSC or cytokines, or increased expression of MUC4 will benefit from treatment with INB03. Those studies may be performed in the future, but they are not a priority.
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.
The regulatory path for therapeutic applications of the mesenchymal stem cell products is well established and similar to the regulatory approval process for other cell therapies. We will only be responsible for regulatory compliance related to manufacturing of the mesenchymal stem cells when the product is being developed by a third party.
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.
The company estimates this group of patients includes at least 40% of patients with AD. Patients have multiple biomarkers of neuroinflammation tested before and during therapy including soluble biomarkers in blood and cerebral spinal fluid, behavioral biomarkers (neuropsychiatric symptoms of AD) and neuroimaging biomarkers using MRI.
The 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.
Licensor may terminate the PITT Agreement upon written notice if: (i) the Company defaults as to performance of material obligations which have not been cured within 60 days after receiving written notice; or (ii) the Company ceases to carry out its business, becomes bankrupt or insolvent, applies for or consents to the appointment of a trustee, receiver or liquidator of its assets or seeks relief under any law for the aid of debtors. 23 Xencor License Agreement On October 3, 2017, the Company entered into a license agreement with Xencor, Inc.
Licensor may terminate the PITT Agreement upon written notice if: (i) the Company defaults as to performance of material obligations which have not been cured within 60 days after receiving written notice; or (ii) the Company ceases to carry out its business, becomes bankrupt or insolvent, applies for or consents to the appointment of a trustee, receiver or liquidator of its assets or seeks relief under any law for the aid of debtors. 22 Xencor License Agreement On October 3, 2017, the Company entered into a license agreement with Xencor, Inc.
Because this is a simple subcutaneous injection similar to an insulin injection (the therapy patients give themselves for treatment of Type 1 diabetes mellitus), we expect patients to administer the therapy by themselves or caregivers and not require expensive or logistically challenging clinic visits to receive the therapy. 10 Release of INB03 and XPro drug supply GMP DN-TNF product (INB03 and XPro) used in the oncology Phase I, AD Phase I and COVID-19 Phase II trial were manufactured by Lonza at a site in New Hampshire.
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.
Additionally, either party may terminate the agreement on 30 days prior written notice to the other if that other party materially breach any term of the agreement and such breaches (to the extent it is remediable) is not remedied within 30 days of the written request to the other party to do so. 25 Challenges in the Market for Immunotherapy Products Government Regulation The FDA and other federal, state, local and foreign regulatory agencies impose substantial requirements upon the clinical development, approval, labeling, manufacture, marketing, and distribution of drug products.
Additionally, either party may terminate the agreement on 30 days prior written notice to the other if that other party materially breach any term of the agreement and such breaches (to the extent it is remediable) is not remedied within 30 days of the written request to the other party to do so. 24 Challenges in the Market for Immunotherapy Products Government Regulation The FDA and other federal, state, local and foreign regulatory agencies impose substantial requirements upon the clinical development, approval, labeling, manufacture, marketing, and distribution of drug products.
The trial was performed in Australia and is partially funded by a $1M USD Part-the-Cloud Award from the Alzheimer’s Association. The clinical trial was the first in the Company’s development program for the treatment of dementia.
The 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.
In addition, certain states have their own laws that govern the privacy and security of health information in certain circumstances, many of which differ from each other and/or HIPAA in significant ways and may not have the same effect, thus complicating compliance efforts. 31 Coverage and Reimbursement Sales of pharmaceutical products depend significantly on the extent to which coverage and adequate reimbursement are provided by third-party payors.
In addition, certain states have their own laws that govern the privacy and security of health information in certain circumstances, many of which differ from each other and/or HIPAA in significant ways and may not have the same effect, thus complicating compliance efforts. 30 Coverage and Reimbursement Sales of pharmaceutical products depend significantly on the extent to which coverage and adequate reimbursement are provided by third-party payors.
Many states have similar laws that apply to their state health care programs as well as private payors. 30 Federal false claims and false statement laws, including the federal civil False Claims Act, or FCA, imposes liability on persons or entities that, among other things, knowingly present or cause to be presented claims that are false or fraudulent or not provided as claimed for payment or approval by a federal health care program.
Many states have similar laws that apply to their state health care programs as well as private payors. 29 Federal false claims and false statement laws, including the federal civil False Claims Act, or FCA, imposes liability on persons or entities that, among other things, knowingly present or cause to be presented claims that are false or fraudulent or not provided as claimed for payment or approval by a federal health care program.
Additional data may result from these ongoing analytics. 9 The results of the Phase I study demonstrated that XPro safely decreases neuroinflammation in patients with ADi who have biomarkers of peripheral inflammation or are ApoE4 positive when given for at least 3 months at the 1mg/kg once a week dose.
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.
We have validated storage of INKmune for up over 3 years in vapor phase nitrogen and have a fully scalable, closed system manufacturing process in validation which can produce up to 6 patient doses per week during phase I and II trials. At intermediate scale we can manufacture 40 doses per week in a single 80-liter bioreactor.
We have validated storage of INKmune for up over 3 years in vapor phase nitrogen and have a fully scalable, closed system manufacturing process in validation which can produce up to 6 patient doses per week during phase I and II trials. At intermediate scale we can manufacture 40 doses per week in a single 15-liter bioreactor.
We cannot predict if or when or under what terms a partnership will be formed. 13 INKmune: Our NK cell Directed Product Candidate INKmune is our lead product candidate that converts the patient’s resting NK cells into cancer memory like NK cells, an essential step to allow them to participate in the immune control of the patient’s cancer.
We cannot predict if or when or under what terms a partnership will be formed. 12 INKmune: Our NK cell Directed Product Candidate INKmune is our lead product candidate that converts the patient’s resting NK cells into cancer memory like NK cells, an essential step to allow them to participate in the immune control of the patient’s cancer.
We plan to use a combination of publication, presentation and investor relations to discuss INKmune and INB03 and to educate the clinical, biopharma and investor community on the value of these novel therapeutic approaches. 18 DN-TNF Competition To our knowledge, there are no other companies developing a therapy to treat patients with MUC4+HER2+ tumors.
We plan to use a combination of publication, presentation and investor relations to discuss INKmune and INB03 and to educate the clinical, biopharma and investor community on the value of these novel therapeutic approaches. 17 DN-TNF Competition To our knowledge, there are no other companies developing a therapy to treat patients with MUC4+HER2+ tumors.
The list of companies with poly-specific antibodies that attempt to link the cancer with a cytotoxic T cell is long, includes both private and public companies (Amgen, Xencor, F-Star, Merus and many others). Finally, two CAR-T cell therapies were just approved for the treatment of ALL – Kymriah™ (Novartis) and Yescarta™ (Gilead).
The list of companies with poly-specific antibodies that attempt to link the cancer with a cytotoxic T cell is long, includes both private and public companies (Amgen, Xencor, F-Star, Merus and many others). Finally, two CAR-T cell therapies were recently approved for the treatment of ALL – Kymriah™ (Novartis) and Yescarta™ (Gilead).
In consideration for the INKmune License, we are obligated to pay Immune Ventures certain milestone and royalty payments. 22 The term of the Immune Ventures Agreement began on October 29, 2015, and, if not terminated sooner pursuant to the agreement, ends on a country-by-country basis on the date of the expiration of the last to expire patent rights where patent rights exist.
In consideration for the INKmune License, we are obligated to pay Immune Ventures certain milestone and royalty payments. 21 The term of the Immune Ventures Agreement began on October 29, 2015, and, if not terminated sooner pursuant to the agreement, ends on a country-by-country basis on the date of the expiration of the last to expire patent rights where patent rights exist.
If our future suppliers are not able to comply with these requirements, the FDA may, among other things, halt our clinical trials, require us to recall a product from distribution, or withdraw approval of the product. 29 The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
If our future suppliers are not able to comply with these requirements, the FDA may, among other things, halt our clinical trials, require us to recall a product from distribution, or withdraw approval of the product. 28 The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
The proteome also demonstrated a clear dose response with a greater number of proteins being affected by the target dose compared to low dose XPro therapy (0.3 vs 1.0 mg/kg/week for 12 weeks) (Figure AD4). The CSF proteome data is only partially analyzed.
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.
We believe ADi is not the only indication for XPro in neurodegenerative and neuropsychiatric diseases. We plan to pursue other indications in neurodegenerative diseases as resources become available. We have received NIMH funding to support a Phase II TRD program that hopes to start patient enrollment in 2023.
We 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.
The master cell bank, working cell bank and individual product doses were completed in July 2018. This clinical material is planned for use in the Phase I/II clinical trials in ovarian cancer. As we progress in our clinical programs, additional working cell banks and therapeutic product will be produced from the existing master cell bank.
The master cell bank, working cell bank and individual product doses were completed in July 2018. This clinical material is planned for use in the Phase I/II clinical trials. As we progress in our clinical programs, additional working cell banks and therapeutic product will be produced from the existing master cell bank.
Therapies for Alzheimer’s disease are needed for medical, social and economic reasons. The cost of Alzheimer’s disease to the government is large and growing. Recently approved therapies that target amyloid have a modest impact on disease progression and are difficult to use due to side-effects in some patients.
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.
Treatment with INKmune as an out-patient may provide a more durable remission and limit the need for treatment-associated hospitalizations. At the patient level, we believe INKmune and INB03 therapy, if approved, should improve survival and quality of life. At the payor level, we believe INKmune, if approved, should provide more predictable costs and outcomes.
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.
We have an active partnering position as it relates to XPro development in neurodegenerative and neuropshyciatric diseases, although limited partnering discussion are underway at this time. There are two partnering opportunities with this novel immunotherapy for the treatment of neurologic and psychiatric diseases.
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.
Companies in the personalized immune-oncology business; and 3. Companies in the precision immuno-oncology business. 19 We are not aware of any approved treatments that are classified as NK cell therapies. We are aware of public companies in the NK cell therapy business such as Century Therapeutics, Immunity Bio, Nkarta, Fate Therapeutics, Glycostem and others.
Companies in the personalized immune-oncology business; and 3. Companies in the precision immuno-oncology business. 18 We are not aware of any approved treatments that are classified as NK cell therapies. We are aware of public companies in the NK cell therapy business such as Century Therapeutics, Immunity Bio, Nkarta, Fate Therapeutics, Glycostem and others.
In consideration of the Xencor Agreement, we agreed to royalty payments and a percentage of any payments received in exchange for a sub-license. 24 INKmune Research and Development We expect to use third parties to conduct our preclinical and clinical trials under the direct supervision of management.
In consideration of the Xencor Agreement, we agreed to royalty payments and a percentage of any payments received in exchange for a sub-license. 23 INKmune Research and Development We expect to use third parties to conduct our preclinical and clinical trials under the direct supervision of management.
The overall principal components of our business strategy to achieve these objectives are to: ● pursue development strategies and regulatory approval pathways that allow the treatment of oncology patients with our lead product candidates, INKmune and INB03; ● pursue development strategies and regulatory approval pathways that allow the treatment of neurodegenerative diseases in patients with our lead product candidates, XPro; ● Pursue development strategies with a dominant-negative tumor necrosis factor (“DN-TNF”) compound for the treatment of DMD; ● adopt a product development strategy that solidifies our existing intellectual property (“IP”) to prevent competition and expand our IP suite into related immunotherapeutic areas; ● provide clear value propositions to third-party payers, such as managed care companies or government programs like Medicare, to merit reimbursement for our product candidates; and ● Collaborate with other pharmaceutical companies with respect to, among other things, our INKmune and the DN-TNF platform that includes INB03 and XPro product candidates, our DMD DN-TNF candidate and other products that will benefit from development or marketing beyond our current resources.
The overall principal components of our business strategy to achieve these objectives are to: ● pursue development strategies and regulatory approval pathways that allow us to expand the treatment of oncology patients with our lead product candidate INKmune; ● pursue pre-clinical development strategies to facilitate out-licensing INB03; ● pursue development strategies and regulatory approval pathways that allow the treatment of neurodegenerative diseases in patients with our lead product candidate, XPro; ● Pursue development strategies with a dominant-negative tumor necrosis factor (“DN-TNF”) compound for the treatment of DMD; ● adopt a product development strategy that solidifies our existing intellectual property (“IP”) to prevent competition and expand our IP suite into related immunotherapeutic areas; ● provide clear value propositions to third-party payers, such as managed care companies or government programs like Medicare, to merit reimbursement for our product candidates; and ● Collaborate with other pharmaceutical companies with respect to, among other things, our INKmune and the DN-TNF platform that includes INB03 and XPro product candidates, our DMD DN-TNF candidate and other products that will benefit from development or marketing beyond our current resources.
The final trial design is ongoing and discussions with the FDA are not complete. The Company anticipates receiving authorization to initiate the clinical trial in 2023 at which point the Company may begin to request funds from the NIMH pursuant to the award.
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.
In addition to decreasing resistance to trastuzumab by decreasing MUC4 expression, INB03 decreases the immunosuppressive tumor microenvironment (Schillaci SABCS 2018, Bruni NYAS 2020). Recently, Dr. Schillaci reported the MUC4 expressing triple negative breast (TNBC) cancer patients have a worse overall survival. (Schillaci SABCS 2021). More recently, Schillaci has shown that MUC4 causes resistance to trastuzumab ADC (trastuzumab-XXX and TDxd).
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).
Early analysis of the data focusing on 26 AD related proteins demonstrated changes in inflammation, neuronal and synaptic proteins caused by decreasing neuroinflammation after treatment with XPro (Figure AD3).
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 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.
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.
More CPI are in development and more tumor types will be added to the list of sensitive tumors over the next years. CPI have become the backbone of cancer therapy and are expected to be the best -selling class of drugs by 2027. NK Cells.
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.
The only FDA-approved dendritic cell therapy is PROVENGE, which entails collecting monocytes from the patient, maturing them into dendritic cells, “loading” ex vivo with the patient’s cancer antigens, and then re-infusing in the patient. Currently, this process is cumbersome and expensive, and again, relies on an intact and effective immune system of the patient.
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.
We believe that we have identified a way to manufacture human mesenchymal stem cells for the medical research and biotech community that offers large volumes of high-quality, low passage human umbilical cord mesenchymal stem cells with minimal batch-to-batch variability.
We believe 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.
Our first interaction with the FDA occurred in July 2020 as part of the Phase II Quellor program to treat respiratory failure in patients hospitalized with COVID-19 infection. The newly manufactured XPro is being used to support the Phase II AD trial in AUS and CAN, the extension trial in AUS, and the Expand Access Scheme in AUS.
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.
We have not yet had a discussion with the Medicines and Healthcare Products Regulatory Agency (“MHRA”) and/or FDA regarding such designation, but plan to do so in the future. We believe the INKmune MDS cancer program may qualify for orphan status.
We 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.
The following table summarizes current IP covering our DN-TNF Platform Technology: Subject Matter / Compound # Pending Applications # Issued Patents Geographical Scope Nominal Patent Term DNTNF compositions and formulations 2 4 global 2024-2041 Use of DNTNF for treating disease 31 3 global 2033-2041 INB-16 / INKmune (Oncology) INKmune is a replication-incompetent derivative of our proprietary INB-16 cell line.
The following table summarizes current IP covering our DN-TNF Platform Technology: Subject Matter / Compound # Pending Applications # Issued Patents Geographical Scope Nominal Patent Term DNTNF compositions and formulations 2 0 global 2024-2044 Use of DNTNF for treating disease 39 9 global 2033-2041 INB-16 / INKmune (Oncology) INKmune is a replication-incompetent derivative of our proprietary INB-16 cell line.
The Company engaged KBI Biopharma to manufacture 6 lots of XPro/INB03 at the Boulder, Colorado facility using the original master cell bank and updated manufacturing process. Two lots have been converted into drug product using the US fill/finish facility of Vetter Pharma.
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.
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.
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.
We have established a reliable supply of human umbilical cords based on our agreement with the Anthony Nolan Cord Blood Bank in the United Kingdom and may seek additional supplies in the future. We have developed a validated manufacturing process that reliably produces contract manufacturer of the clinical grade (“cGMP”) quality mesenchymal stem cells that we call CORDstrom.
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.
Patients had multiple inflammatory biomarkers test before therapy, at 6 weeks and at 12 weeks. Biomarkers were reported in blood and cerebral spinal fluid, MRI measures of white matter tract neuroinflammation, axonal quality and axon myelin, and MRI measures of gray matter quality after XPro therapy.
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.
This process takes approximately 6 months and is not anticipated to delay the initiation of the high-risk MDS Phase I/II trials. We may transfer the manufacturing to a different commercial contract manufacturing organization after completion of these Phase II studies.
This process takes approximately 6 months and is not anticipated to delay the initiation or enrollment of the Phase I/II trials. We may transfer the manufacturing to a different commercial contract manufacturing organization after completion of these Phase II studies.
Patients in the 10mg/kg group were offered extended use of the drug for up to 12 months. Three patients remained on XPro for 12 months. Preliminary data was presented in a webinar on 13 July 2020. Neuroimaging data from six patients were presented in the figure below.
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.
(Figure 1 below). 14 The ability of NK cells to kill tumor cells depends on the strength and duration of the cell-cell interaction. This is call avidity. The higher the avidity the greater the tumor cell killing.
(Figure 1 below). 13 The ability of NK cells to kill tumor cells depends on the strength and duration of the cell-cell interaction. This is called avidity. The higher the avidity the greater the tumor cell killing.
The data from the Phase I trial allowed the Company to choose a design the Phase II trials described above. 12 XPro Registration Studies and/or Partnering We plan to aggressively pursue an efficient registration strategy using XPro to improve the lives of patients with ADi. We define ADi as Alzheimer’s disease with biomarkers of inflammation.
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.
The following table summarizes current IP covering INB-16 / INKmune: Subject Matter / Compound # Pending Applications # Issued Patents Geographical Scope Nominal Patent Term INB-16 / INKmune compositions 2 0 global 2036-2040 Use of INKmune for treating disease 10 4 global 2036-2040 Use of INKmune for enhancing NK cell therapeutics 2 0 global 2036-2040 21 General IP Disclosures Our commercial success depends in part on obtaining and maintaining patent and trade secret protections, where applicable, of our current and future product candidates and the methods used to manufacture them, as well as successfully defending our patents against third-party challenges.
The following table summarizes current IP covering INB-16 / INKmune: Subject Matter / Compound # Pending Applications # Issued Patents Geographical Scope Nominal Patent Term INB-16 / INKmune compositions 1 0 global 2036-2043 Use of INKmune for treating disease 2 6 global 2036-2043 20 General IP Disclosures Our commercial success depends in part on obtaining and maintaining patent and trade secret protections, where applicable, of our current and future product candidates and the methods used to manufacture them, as well as successfully defending our patents against third-party challenges.
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.
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.
While each invention is unique and territories for protection are decided on a case-by-case basis, we generally pursue patents in Australia, Canada, Europe, Japan, and the United States, and sometimes in Brazil, China and/or Korea. We currently have in our portfolio eleven (11) issued patents and forty-seven (47) pending patent applications, including both company-owned and in-licensed properties.
While each invention is unique and territories for protection are decided on a case-by-case basis, we generally pursue patents in Australia, Canada, Europe, Japan, and the United States, and sometimes in Brazil, China and/or Korea. We currently have in our portfolio fifteen (15) issued patents and twenty-three (23) pending patent applications, including both company-owned and in-licensed properties.
For example, if INKmune is proven to be effective therapy in patients with ovarian cancer and high-risk MDS, we will need to perform separate pivotal trials for approval in lung, prostate or renal cancer.
For example, if INKmune is proven to be effective therapy in patients with castration resistant prostate cancer, we will need to perform separate pivotal trials for approval in lung, prostate or renal cancer.
INB03 Product Development Path: Proposed Phase II Studies in patients with cancer Phase I open label study in patients with advanced solid tumors has been completed. All future studies cancer will use INB03 as part of combination therapy. The evolution of oncology standard of care occurs quickly. Immune checkpoint inhibitors (“CPI”) were introduced 5 years ago.
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 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).
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).
Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our drugs. Human Capital Resources As of December 31, 2022, we had 10 full-time employees.
Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our drugs.
INmune Bio is supplying the clinical product for treatment of these patients. The Company does not know the results of these trials until they are announced by the principal investigators at the clinical sites. We have identified contract manufacturers in the UK that have the capability to produce cGMP stem cells.
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.
Lecanemab (Leqembi™; Eisai) was approved for the treatment of patients with Early AD in January 2023 This is this the second anti-amyloid drug for the treatment of ealy AD to be approved. Donanemab (Lilly), a third drug anti-amyloid therapy for early AD is expected to be approved in the second half of 2023.
Lecanemab (Leqembi™; Eisai) was approved for the treatment of patients with Early AD in January 2023 This is this the second anti-amyloid drug for the treatment of early AD to be approved. Donanemab (Lilly), a third drug anti-amyloid therapy for early AD is expected to be approved 2Q24. These two drugs have similar efficacy and safety profiles.
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.
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.
Because there are no therapies similar to INB03 or XPro approved in any market, we plan to take advantage of the regulatory opportunities afforded to therapies that treat markets with a high unmet need.
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.
The blinded randomized trial in patients with early ADi will enroll 201 patients in a 2:1 ratio (XPro:placebo) at 1mg/kg once a week. The trial is currently enrolling study subjects. Patients will be treated for 6 months. The primary end-point is Early/Mild Alzheimer’s Cognitive Composite (EMACC), a sensitive cognitive end-point validated for use in patients with early AD.
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.
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.
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.
The United States, European Union and other jurisdictions may grant orphan drug designation to drugs intended to treat a “rare disease or condition,” which, in the United States, is generally a disease or condition that affects no more than 200,000 individuals.
These include accelerated approval under Subpart H of the agency’s NDA approval regulations, fast track drug development procedures and priority review. 25 The United States, European Union and other jurisdictions may grant orphan drug designation to drugs intended to treat a “rare disease or condition,” which, in the United States, is generally a disease or condition that affects no more than 200,000 individuals.
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.
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.
The primary goal of this short, open label study was to demonstrate that treatment with XPro decreases neuroinflammation safely and to define the dose of XPro to use in the Phase II trial. The Company has opened a Phase II trial in ADi in Australia (“AUS”) and Canada (“CAN”). We anticipate opening additional countries including the US in 2023.
The 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.
Interaction with Regulatory Authorities Regarding INKmune Development The INKmune Phase I studies in high-risk MDS are being performed in the UK and Greece. We met with the Medicines and Healthcare Products Regulatory Agency (“MHRA”), the UK version of the FDA as part of a Scientific Advice Meetings in preparation for submitting the CTA for our first planned program.
We met with the Medicines and Healthcare Products Regulatory Agency (“MHRA”), the UK version of the FDA as part of a Scientific Advice Meetings in preparation for submitting the CTA for our first planned program. 15 INKmune Product Development Path Proposed Phase I Study in patients with high-risk MDS During 2021, we initiated an open label Phase I cancer study in patients with high-risk myelodysplastic syndrome (“MDS”).
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.
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.
For financial and technical reasons, the Company will perform the Phase I clinical trials of our programs in the United Kingdom and Australia. The US will be included in the Phase II programs. Other venues such as Europe, Canada, Japan and other Pacific Rim countries may be included in the development program in the future.
For financial and technical reasons, the Company will perform the Phase I clinical trials of our programs in the United Kingdom and Australia. The US will be included in the Phase II and//or Phase III programs.
These three drugs have similar efficacy and safety profiles. One of the common safety problems is the development of ARIA (Alzheimer’s Related Imaging Abnormality) that causes a delay or discontinuation of therapy. ARIA is neuroinflammation related side-effect more common in patients expressing ApoE4.
One of the common safety problems is the development of ARIA (Alzheimer’s Related Imaging Abnormality) that causes a delay or discontinuation of therapy. ARIA is neuroinflammation related side-effect more common in patients expressing ApoE4. The modest efficacy, sub-optimal safety and difficulty of use makes combination therapy for the treatment of early AD an attractive development and therapeutic strategy.
All manufacturing has been under the direction of Professor Mark Lowdell. The Company can produce enough INKmune to complete both Phase I clinical trials in women with ovarian cancer and in patients with high-risk MDS.
All manufacturing has been under the direction of Professor Mark Lowdell. The Company can produce enough INKmune to complete its Phase I clinical trial in men with metastatic castrate resistant prostate cancer (mCRPC)..
The XPro produced by KBI is being used in the Phase II trial in AUS and CAN, the Phase II extension trial in patients that have completed the Phase II trial in AUS and the Expanded Access Scheme in patients who completed the Phase I trial in AUS.
The 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 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.
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.
We consider the intellectual capital of our employees to be an important driver of our business and key to our future prospects. We monitor our compensation programs closely and provide what we consider to be a very competitive mix of compensation and insurance benefits for all our employees, as well as participation in our equity programs.
We monitor our compensation programs closely and provide what we consider to be a very competitive mix of compensation and insurance benefits for all our employees, as well as participation in our equity programs. None of our employees is subject to a collective bargaining agreement or represented by a trade or labor union.
CSF cytokine/chemokines were measured in 9 patients before and after 12 weeks of weekly therapy with XPro using a panel from OLINK Target 48 Cytokine ( https://www.olink.com/products/olink-target-48-cytokine/ ), that measures 45 (Figure AD1). 8 In the 6 patients in the 1mg/kg per week dose, only one cytokine and chemokine, interferon gamma (“INFg”) did not change in the CSF of patients, the remainder all decreased on average of 15%.
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).
A decision on the clinical trial will not be made until the pre-clinical work has been completed and the data has been presented to an Advisory Board of clinical experts. 11 INB03 Registration Studies and/or Partnering We plan to pursue an efficient registration strategy using INB03 to improve the lives of patients with cancer and biomarkers of resistance such as MUC4.
We 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.
One program is a Phase 2 trial sponsored by the Great Ormond Street Children’s Hospital in the UK treating children with Erythematous Bullousa (“EB”), a disfiguring skin disease in children that is similar to a second degree burn and the second program is treatment of system lupus in adults. Both these studies are ongoing.
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 patients develop weakness of skeletal muscles initially seen as weakness in standing and walking. Over time, the disease progresses forcing the patient to be wheelchair bound by early teens. The patients die young due to respiratory and cardiac failure before they reach thirty years old. Therapies for DMD delay progression, there is no cure.
The 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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAdditional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock. ● We have incurred significant losses since our inception and anticipate that we will continue to incur losses for the foreseeable future. ● Our ability to successfully engage with, and satisfactorily respond to, requests for additional information from the FDA concerning the clinical hold on our investigational new drug application for XPro and the timing and outcomes of such interactions, including our plans to engage the FDA in order to lift the clinical hold. ● We will require additional capital to fund our operations and if we fail to obtain necessary financing, we will not be able to complete the development and commercialization of our product candidates. ● We have a substantial amount of debt, and we may be unable to make required payments of interest and principal as they become due. ● We are significantly dependent on the success of our DN-TNF product platform and Natural Killer Cell Priming Platform (INKmune) and our product candidates based on these platforms. ● We need to attract and retain highly skilled personnel; we may be unable to effectively manage growth with our limited resources. ● We depend upon our senior management and key consultants and their loss or unavailability could put us at a competitive disadvantage. ● The biotechnology and immunotherapy industries are characterized by rapid technological developments and a high degree of competition.
Biggest changeAs a result, we may not complete the development and commercialization of our product candidates or develop new product candidates and have substantial doubt about our ability to continue as a going concern. ● Our ability to successfully engage with, and satisfactorily respond to, requests for information from the FDA in the future. ● We will require additional capital to fund our operations and if we fail to obtain necessary financing, we will not be able to complete the development and commercialization of our product candidates. ● We have a substantial amount of debt, and we may be unable to make required payments of interest and principal as they become due. ● We are significantly dependent on the success of our DN-TNF product platform and Natural Killer Cell Priming Platform (INKmune) and our product candidates based on these platforms. ● We need to attract and retain highly skilled personnel; we may be unable to effectively manage growth with our limited resources. ● We depend upon our senior management and key consultants and their loss or unavailability could put us at a competitive disadvantage. ● The biotechnology and immunotherapy industries are characterized by rapid technological developments and a high degree of competition.
If we do not obtain such licenses, we could encounter delays in the introduction of products, or could find that the development, manufacture or sale of products requiring such licenses could be prohibited.
If we do not obtain such licenses, we could encounter delays in the introduction of products, or could find that the development, manufacture or sale of products requiring such licenses could be prohibited.
The USPTO is currently developing regulations and procedures to govern administration of the AIA, and many of the substantive changes to patent law associated with the AIA. It is not clear what other, if any, impact the AIA will have on the operation of our business.
The USPTO is currently developing regulations and procedures to govern the administration of the AIA, and many of the substantive changes to patent law associated with the AIA. It is not clear what other, if any, impact the AIA will have on the operation of our business.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent marketing approval of any of our product candidates, including: ● clinical trials of our product candidate may produce unfavorable or inconclusive results; ● we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; ● the number of patients required for clinical trials of our product candidate may be larger than we anticipate, patient enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials at a higher rate than we anticipate; ● data safety monitoring committees may recommend suspension, termination or a clinical hold for various reasons, including concerns about patient safety; ● regulators or institutional review boards, or IRBs, may suspend or terminate the trial or impose a clinical hold for various reasons, including noncompliance with regulatory requirements or concerns about patient safety; ● patients with serious, life-threatening diseases included in our clinical trials may die or suffer other adverse medical events for reasons that may not be related to our product candidate; ● participating patients may be subject to unacceptable health risks; ● patients may not complete clinical trials due to safety issues, side effects, or other reasons; ● changes in regulatory requirements and guidance may occur, which require us to amend clinical trial protocols to reflect these changes; ● our third-party contractors, including those manufacturing our product candidate or components or ingredients thereof or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner or at all; ● regulators or IRBs may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; ● we may experience delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; ● patients who enroll in a clinical trial may misrepresent their eligibility to do so or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the clinical trial, increase the needed enrollment size for the clinical trial or extend the clinical trial’s duration; ● we may have to suspend or terminate clinical trials of our product candidate for various reasons, including a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of a product candidate; 44 ● the FDA or comparable non-U.S. regulatory authorities may disagree with our clinical trial design or our interpretation of data from preclinical studies and clinical trials; ● the FDA or comparable non-U.S. regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for clinical and commercial supplies; ● the supply or quality of raw materials or manufactured product candidate or other materials necessary to conduct clinical trials of our product candidate may be insufficient, inadequate, delayed, or not available at an acceptable cost, or we may experience interruptions in supply; and ● the approval policies or regulations of the FDA or comparable non-U.S. regulatory authorities may significantly change in a manner rendering our clinical data insufficient to obtain marketing approval.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent marketing approval of any of our product candidates, including: ● clinical trials of our product candidate may produce unfavorable or inconclusive results; ● we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; ● the number of patients required for clinical trials of our product candidate may be larger than we anticipate, patient enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials at a higher rate than we anticipate; ● data safety monitoring committees may recommend suspension, termination or a clinical hold for various reasons, including concerns about patient safety; ● regulators or institutional review boards, or IRBs, may suspend or terminate the trial or impose a clinical hold for various reasons, including noncompliance with regulatory requirements or concerns about patient safety; ● patients with serious, life-threatening diseases included in our clinical trials may die or suffer other adverse medical events for reasons that may not be related to our product candidate; ● participating patients may be subject to unacceptable health risks; ● patients may not complete clinical trials due to safety issues, side effects, or other reasons; ● changes in regulatory requirements and guidance may occur, which require us to amend clinical trial protocols to reflect these changes; ● our third-party contractors, including those manufacturing our product candidate or components or ingredients thereof or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner or at all; ● regulators or IRBs may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; ● we may experience delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; ● patients who enroll in a clinical trial may misrepresent their eligibility to do so or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the clinical trial, increase the needed enrollment size for the clinical trial or extend the clinical trial’s duration; ● we may have to suspend or terminate clinical trials of our product candidate for various reasons, including a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of a product candidate; 43 ● the FDA or comparable non-U.S. regulatory authorities may disagree with our clinical trial design or our interpretation of data from preclinical studies and clinical trials; ● the FDA or comparable non-U.S. regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for clinical and commercial supplies; ● the supply or quality of raw materials or manufactured product candidate or other materials necessary to conduct clinical trials of our product candidate may be insufficient, inadequate, delayed, or not available at an acceptable cost, or we may experience interruptions in supply; and ● the approval policies or regulations of the FDA or comparable non-U.S. regulatory authorities may significantly change in a manner rendering our clinical data insufficient to obtain marketing approval.
We may be unable to compete with more substantial enterprises. ● We can provide no assurance that our clinical product candidates will obtain regulatory approval or that the results of clinical studies will be favorable. ● Drug discovery and development is a complex, time-consuming and expensive process with a high rate of failure. ● We may face legal claims; legal disputes are expensive, and we may not be able to afford the costs. ● We can provide no assurance of the successful and timely development of new products. ● We must comply with significant government regulations. ● We rely upon patents to protect our technology.
We may be unable to compete with more substantial enterprises. ● We can provide no assurance that our clinical product candidates will obtain regulatory approval or that the results of clinical studies will be favorable. ● Drug discovery and development is a complex, time-consuming and expensive process with a high rate of failure. ● We may face legal claims; legal disputes are expensive, and we may not be able to afford the costs. ● We can provide no assurance of the successful and timely development of new products. ● We must comply with significant government regulations. 33 ● We rely upon patents to protect our technology.
The degree of market acceptance of INmune or any other product candidate we develop, if approved for commercial sale, will depend on a number of factors, including: ● the efficacy and safety of the product; ● the potential advantages of the product compared to alternative treatments; ● the prevalence and severity of any side effects; ● the clinical indications for which the product is approved; ● whether the product is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy; ● limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling; ● our ability to offer the product for sale at competitive prices; ● our ability to establish and maintain pricing sufficient to realize a meaningful return on our investment; ● the product’s convenience and ease of administration compared to alternative treatments; 47 ● the willingness of the target patient population to try, and of physicians to prescribe, the product; ● the strength of sales, marketing and distribution support; ● the approval of other new products for the same indications; ● changes in the standard of care for the targeted indications for the product; ● the timing of market introduction of our approved products as well as competitive products and other therapies; ● availability and amount of reimbursement from government payors, managed care plans and other third-party payors; ● adverse publicity about the product or favorable publicity about competitive products; and ● potential product liability claims.
The degree of market acceptance of INmune or any other product candidate we develop, if approved for commercial sale, will depend on a number of factors, including: ● the efficacy and safety of the product; ● the potential advantages of the product compared to alternative treatments; ● the prevalence and severity of any side effects; ● the clinical indications for which the product is approved; ● whether the product is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy; ● limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling; ● our ability to offer the product for sale at competitive prices; ● our ability to establish and maintain pricing sufficient to realize a meaningful return on our investment; ● the product’s convenience and ease of administration compared to alternative treatments; 46 ● the willingness of the target patient population to try, and of physicians to prescribe, the product; ● the strength of sales, marketing and distribution support; ● the approval of other new products for the same indications; ● changes in the standard of care for the targeted indications for the product; ● the timing of market introduction of our approved products as well as competitive products and other therapies; ● availability and amount of reimbursement from government payors, managed care plans and other third-party payors; ● adverse publicity about the product or favorable publicity about competitive products; and ● potential product liability claims.
We have not previously submitted an NDA to the FDA or similar drug approval filings to comparable non-U.S. regulatory authorities for any product candidate. Any inability to successfully complete preclinical and clinical development could result in additional costs to us and impair our ability to generate revenues from product sales, regulatory and commercialization milestones and royalties.
We have not previously submitted an NDA to the FDA or similar drug approval filings to comparable non-U.S. regulatory authorities for any product candidate. 42 Any inability to successfully complete preclinical and clinical development could result in additional costs to us and impair our ability to generate revenues from product sales, regulatory and commercialization milestones and royalties.
We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year during which we have total annual gross revenues of $1.07 billion or more, (2) December 31, 2024 (the last day of the fiscal year following the fifth anniversary of the completion of our initial public offering), (3) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt, and (4) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act (i.e., the first day of the fiscal year after we have (a) more than $700.0 million in outstanding common equity held by our non-affiliates, measured each year on the last day of our second fiscal quarter, and (b) been public for at least 12 months).
We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year during which we have total annual gross revenues of $1.235 billion or more, (2) December 31, 2024 (the last day of the fiscal year following the fifth anniversary of the completion of our initial public offering), (3) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt, and (4) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act (i.e., the first day of the fiscal year after we have (a) more than $700.0 million in outstanding common equity held by our non-affiliates, measured each year on the last day of our second fiscal quarter, and (b) been public for at least 12 months).
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: ● changes in our industry; ● competitive pricing pressures; 57 ● our ability to obtain working capital financing; ● additions or departures of key personnel; ● limited “public float” in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common stock; ● sales of our common stock; ● our ability to execute our business plan; ● operating results that fall below expectations; ● loss of any strategic relationship; ● regulatory developments; ● economic and other external factors; ● period-to-period fluctuations in our financial results; and ● inability to develop or acquire new or needed technology or products.
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: ● changes in our industry; ● competitive pricing pressures; 56 ● our ability to obtain working capital financing; ● additions or departures of key personnel; ● limited “public float” in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common stock; ● sales of our common stock; ● our ability to execute our business plan; ● operating results that fall below expectations; ● loss of any strategic relationship; ● regulatory developments; ● economic and other external factors; ● period-to-period fluctuations in our financial results; and ● inability to develop or acquire new or needed technology or products.
In addition, later discovery of previously unknown problems with our products, manufacturing processes, or failure to comply with regulatory requirements, may lead to various adverse results, including: ● restrictions on such products, manufacturers or manufacturing processes; ● restrictions on the labeling or marketing of a product; ● restrictions on product distribution or use; 49 ● requirements to conduct post-marketing clinical trials; ● requirements to institute a risk evaluation mitigation strategy, or REMS, to monitor safety of the product post-approval; ● warning letters issued by the FDA or other regulatory authorities; ● withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products, fines, restitution or disgorgement of profits or revenue; ● suspension, revocation or withdrawal of marketing approvals; ● refusal to permit the import or export of our products; and ● injunctions or the imposition of civil or criminal penalties.
In addition, later discovery of previously unknown problems with our products, manufacturing processes, or failure to comply with regulatory requirements, may lead to various adverse results, including: ● restrictions on such products, manufacturers or manufacturing processes; ● restrictions on the labeling or marketing of a product; ● restrictions on product distribution or use; 48 ● requirements to conduct post-marketing clinical trials; ● requirements to institute a risk evaluation mitigation strategy, or REMS, to monitor safety of the product post-approval; ● warning letters issued by the FDA or other regulatory authorities; ● withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products, fines, restitution or disgorgement of profits or revenue; ● suspension, revocation or withdrawal of marketing approvals; ● refusal to permit the import or export of our products; and ● injunctions or the imposition of civil or criminal penalties.
Our ability to generate material revenue and achieve profitability will depend on, among other things, successful completion of the preclinical and clinical development of our product candidate; obtaining necessary regulatory approvals from the FDA and international regulatory agencies; implementing successful manufacturing, sales, and marketing arrangements; and raising sufficient funds to finance our activities.
Our ability to generate material revenue and achieve profitability will depend on, among other things, successful completion of the preclinical and clinical development of our product candidate(s); obtaining necessary regulatory approvals from the FDA and international regulatory agencies; implementing successful manufacturing, sales, and marketing arrangements; and raising sufficient funds to finance our activities.
We must complete extensive preclinical development and clinical trials to demonstrate the safety and efficacy of our product candidate in humans before we will be able to obtain these approvals. 43 Clinical testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome.
We must complete extensive preclinical development and clinical trials to demonstrate the safety and efficacy of our product candidate in humans before we will be able to obtain these approvals. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome.
This severely limits the liquidity of the common stock and would likely reduce the market price of our common stock and hamper our ability to raise additional capital. There is a limited market for our securities. Accordingly, investors may therefore bear the economic risk of an investment in the Securities thereof, for an indefinite period of time.
This severely limits the liquidity of the common stock and would likely reduce the market price of our common stock and hamper our ability to raise additional capital. There is a limited market for our securities. Accordingly, investors may therefore bear the economic risk of an investment in our securities for an indefinite period of time.
Thus, even if we or our licensors are able to obtain patents, the patents may be substantially narrower than anticipated. Our success depends on patent applications that are licensed exclusively to us and other patents to which we may obtain assignment or licenses.
Thus, even if we or our licensors are able to obtain patents, the patents may be substantially narrower than anticipated. 36 Our success depends on patent applications that are licensed exclusively to us and other patents to which we may obtain assignment or licenses.
These competitors may successfully market products that compete with our products, successfully identify drug candidates or develop products earlier than we do, or develop products that are more effective, have fewer side effects or cost less than our products, if any. 36 Additionally, if a competitor receives FDA approval before we do for a drug that is similar to one of our product candidates, FDA approval for our product candidate may be precluded or delayed due to periods of non-patent exclusivity and/or the listing with the FDA by the competitor of patents covering its newly-approved drug product.
These competitors may successfully market products that compete with our products, successfully identify drug candidates or develop products earlier than we do, or develop products that are more effective, have fewer side effects or cost less than our products, if any. 35 Additionally, if a competitor receives FDA approval before we do for a drug that is similar to one of our product candidates, FDA approval for our product candidate may be precluded or delayed due to periods of non-patent exclusivity and/or the listing with the FDA by the competitor of patents covering its newly-approved drug product.
Further, the seven-year marketing exclusivity would not prevent competitors from obtaining approval of the same product candidate as ours for indications other than those in which we have been granted orphan drug designation, or for the use of other types of products in the same indications as our orphan product. 46 If the market opportunities for our product candidates are smaller than we believe they are, our revenues may be adversely affected, and our business may suffer.
Further, the seven-year marketing exclusivity would not prevent competitors from obtaining approval of the same product candidate as ours for indications other than those in which we have been granted orphan drug designation, or for the use of other types of products in the same indications as our orphan product. 45 If the market opportunities for our product candidates are smaller than we believe they are, our revenues may be adversely affected, and our business may suffer.
Our competitors may succeed in developing, acquiring or licensing technologies and drug products that are more effective, have fewer or more tolerable side effects or are less costly than any product candidates that we are currently developing or that we may develop, which could render our product candidates obsolete and noncompetitive. 50 We rely on key personnel and, if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow effectively.
Our competitors may succeed in developing, acquiring or licensing technologies and drug products that are more effective, have fewer or more tolerable side effects or are less costly than any product candidates that we are currently developing or that we may develop, which could render our product candidates obsolete and noncompetitive. 49 We rely on key personnel and, if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow effectively.
This may cause our reputation in the marketplace to suffer or subject us to lawsuits, including class action suits. 48 If our product candidates receive marketing approval and we, or others, later discover that the drug is less effective than previously believed or causes undesirable side effects that were not previously identified, our ability to market the drugs could be compromised.
This may cause our reputation in the marketplace to suffer or subject us to lawsuits, including class action suits. 47 If our product candidates receive marketing approval and we, or others, later discover that the drug is less effective than previously believed or causes undesirable side effects that were not previously identified, our ability to market the drugs could be compromised.
If investigators or institutions breach their obligations with respect to the clinical trials of our product candidate, or if the data proves to be inadequate, then our ability to design and conduct any future clinical trials may be adversely affected. 52 Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of our responsibilities.
If investigators or institutions breach their obligations with respect to the clinical trials of our product candidate, or if the data proves to be inadequate, then our ability to design and conduct any future clinical trials may be adversely affected. 51 Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of our responsibilities.
Similarly, in our clinical trials we may fail to detect toxicity of, or intolerability caused by our product candidates, or mistakenly believe that our product candidates are toxic or not well tolerated when that is not in fact the case. 42 The outcome of preclinical studies and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results.
Similarly, in our clinical trials we may fail to detect toxicity of, or intolerability caused by our product candidates, or mistakenly believe that our product candidates are toxic or not well tolerated when that is not in fact the case. 41 The outcome of preclinical studies and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results.
Further, our business may be adversely affected by competitors who independently develop competing technologies, especially if we obtain no, or only narrow, patent protection. 40 We are subject to various government regulations. The manufacture and sale of human therapeutic products in the U.S. and foreign jurisdictions are governed by a variety of statutes and regulations.
Further, our business may be adversely affected by competitors who independently develop competing technologies, especially if we obtain no, or only narrow, patent protection. 39 We are subject to various government regulations. The manufacture and sale of human therapeutic products in the U.S. and foreign jurisdictions are governed by a variety of statutes and regulations.
While we cannot predict what impact on federal reimbursement policies this legislation will have in general or on our business specifically, ACA may result in downward pressure on pharmaceutical reimbursement, which could negatively affect market acceptance of any of our products, if they are approved. 53 We cannot predict what healthcare reform initiatives may be adopted in the future.
While we cannot predict what impact on federal reimbursement policies this legislation will have in general or on our business specifically, ACA may result in downward pressure on pharmaceutical reimbursement, which could negatively affect market acceptance of any of our products, if they are approved. 52 We cannot predict what healthcare reform initiatives may be adopted in the future.
If we lose any of our right to use third-party intellectual property, it could adversely affect our ability to commercialize our technologies, products or services, as well as harm our competitive business position and our business prospects. 38 We are dependent on our licensing agreement with Xencor, and the termination of this agreement could a have an adverse effect on our business.
If we lose any of our right to use third-party intellectual property, it could adversely affect our ability to commercialize our technologies, products or services, as well as harm our competitive business position and our business prospects. We are dependent on our licensing agreement with Xencor, and the termination of this agreement could have an adverse effect on our business.
Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent infringement suit and providing opportunities for third parties to challenge any issued patent in the USPTO. This applies to all of our U.S. patents, even those issued before March 16, 2013.
Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent infringement suit and provide opportunities for third parties to challenge any issued patent in the USPTO. This applies to all of our U.S. patents, even those issued before March 16, 2013.
Product liability lawsuits against us could divert our resources, cause us to incur substantial liabilities and limit commercialization of any products that we may develop. We face an inherent risk of product liability claims as a result of the clinical testing of our product candidate despite obtaining appropriate informed consents from our clinical trial participants.
Product liability lawsuits against us could divert our resources, cause us to incur substantial liabilities and limit commercialization of any products that we may develop. We face an inherent risk of product liability claims as a result of the clinical testing of our product candidate despite obtaining appropriate informed consent from our clinical trial participants.
Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish and maintain pricing sufficient to realize a meaningful return on our investment. 39 There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved drugs.
Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish and maintain pricing sufficient to realize a meaningful return on our investment. 38 There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved drugs.
Preliminary or top-line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available.
Preliminary or top-line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, interim and preliminary data should be viewed with caution until the final data is available.
Receiving priority review from the FDA does not guarantee approval within an accelerated timeline or thereafter. 41 We believe we may in some instances be able to secure approval from the FDA or comparable non-U.S. regulatory authorities to use accelerated development pathways.
Receiving priority review from the FDA does not guarantee approval within an accelerated timeline or thereafter. 40 We believe we may in some instances be able to secure approval from the FDA or comparable non-U.S. regulatory authorities to use accelerated development pathways.
To execute our business plan, we will need to rapidly add other management, accounting, regulatory, manufacturing and scientific staff. We currently have 11 full time employees and retain the services of additional personnel on an independent contractor basis.
To execute our business plan, we will need to rapidly add other management, accounting, regulatory, manufacturing and scientific staff. We currently have 11 full-time employees, 6 part-time employees and retain the services of additional personnel on an independent contractor basis.
From time to time, we may publish interim top-line or preliminary data from our planned clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
From time to time, we may publish interim top-line or preliminary data from our planned clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data becomes available.
These risks and uncertainties include the following: patents that may be issued or licensed may be challenged, invalidated, or circumvented, or otherwise may not provide any competitive advantage; our competitors, many of which have substantially greater resources than us and many of which have made significant investments in competing technologies, may seek, or may already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell our potential products either in the United States or in international markets; there may be significant pressure on the United States government and other international governmental bodies to limit the scope of patent protection both inside and outside the United States for treatments that prove successful as a matter of public policy regarding worldwide health concerns; countries other than the United States may have less restrictive patent laws than those upheld by United States courts, allowing foreign competitors the ability to exploit these laws to create, develop, and market competing products. 37 Moreover, any patents issued to us may not provide us with meaningful protection, or others may challenge, circumvent or narrow our patents.
These risks and uncertainties include the following: patents that may be issued or licensed may be challenged, invalidated, or circumvented, or otherwise may not provide any competitive advantage; our competitors, many of which have substantially greater resources than us and many of which have made significant investments in competing technologies, may seek, or may already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell our potential products either in the United States or in international markets; there may be significant pressure on the United States government and other international governmental bodies to limit the scope of patent protection both inside and outside the United States for treatments that prove successful as a matter of public policy regarding worldwide health concerns; countries other than the United States may have less restrictive patent laws than those upheld by United States courts, allowing foreign competitors the ability to exploit these laws to create, develop, and market competing products.
If we are unable to obtain or maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the development and commercial production and sale of our product candidate, which could adversely affect our business, financial condition, results of operations and prospects. 51 We will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.
If we are unable to obtain or maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the development and commercial production and sale of our product candidate, which could adversely affect our business, financial condition, results of operations and prospects. 50 We will need to increase the size and capabilities of our organization, and we may experience difficulties in managing this growth.
The widespread use of technology, including mobile devices, cloud computing, and the internet, give rise to cybersecurity risks, including security breach, espionage, system disruption, theft and inadvertent release of information.
The widespread use of technology, including mobile devices, cloud computing, and the internet, gives rise to cybersecurity risks, including security breach, espionage, system disruption, theft and inadvertent release of information.
Such actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions. 55 A cybersecurity incident and other technology disruptions could negatively affect our business and our relationships with customers. We use technology in substantially all aspects of our business operations.
Such actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions. 54 A cybersecurity incident and other technological disruptions could negatively affect our business and our relationships with customers. We use technology in substantially all aspects of our business operations.
We expect that all of our product candidates under development, if approved, will face intense competition from existing and future drugs marketed by large companies.
We expect that our product candidates under development, if approved, will face intense competition from existing and future drugs marketed by large companies.
If any of the assumptions proves to be inaccurate, the actual markets for our product candidate could be smaller than our estimates of the potential market opportunities.
If any of the assumptions prove to be inaccurate, the actual markets for our product candidate could be smaller than our estimates of the potential market opportunities.
Patient enrollment is a significant factor in the timing of clinical trials, and is affected by many factors, including: ● have the FDA clinical hold on XPro lifted; ● the size and nature of the patient population; ● the severity of the disease under investigation; ● the proximity of patients to clinical sites; ● the eligibility criteria for the trial; ● the design of the clinical trial; ● efforts to facilitate timely enrollment; ● competing clinical trials; and ● clinicians’ and patients’ perceptions as to the potential advantages and risks of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating. 45 Our inability to enroll a sufficient number of patients for our clinical trials could result in significant delays or may require us to abandon one or more clinical trials altogether.
Patient enrollment is a significant factor in the timing of clinical trials, and is affected by many factors, including: ● the size and nature of the patient population; ● the severity of the disease under investigation; ● the proximity of patients to clinical sites; ● the eligibility criteria for the trial; ● the design of the clinical trial; ● efforts to facilitate timely enrollment; ● competing clinical trials; and ● clinicians’ and patients’ perceptions as to the potential advantages and risks of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating. 44 Our inability to enroll a sufficient number of patients for our clinical trials could result in significant delays or may require us to abandon one or more clinical trials altogether.
The rights under the plan will expire on December 30, 2023, subject to a possible earlier expiration to the extent provided in the stockholder rights plan, unless extended. 58
The rights under the plan will expire on December 30, 2024, subject to a possible earlier expiration to the extent provided in the stockholder rights plan, unless extended.
You should carefully consider the risks described below as well as other information provided to you in this document, including information in the section of this document entitled “Information Regarding Forward Looking Statements.” If any of the following risks actually occur, the Company’s business, financial condition or results of operations could be materially adversely affected, the value of the Company’s Common Stock could decline, and you may lose all or part of your investment. 34 RISKS RELATED TO OUR BUSINESS We will need additional capital.
You should carefully consider the risks described below as well as other information provided to you in this document, including information in the section of this document entitled “Information Regarding Forward Looking Statements.” If any of the following risks actually occur, the Company’s business, financial condition or results of operations could be materially adversely affected, the value of the Company’s Common Stock could decline, and you may lose all or part of your investment.
If we breach this Agreement Xencor may be able to terminate it and as a result of this terminate our business could be negatively impacted. Our officers and Directors own the company that we license our INKmune patent from. On October 29, 2015, we entered into an exclusive license agreement with Immune Ventures, LLC (Immune Ventures).
If we breach this Agreement, Xencor may be able to terminate it, which could be negatively impact our business. Our officers and Directors own the company that we license our INKmune patent from. On October 29, 2015, we entered into an exclusive license agreement with Immune Ventures, LLC (Immune Ventures). The license agreement relates to our natural killer program, INKmune.
We may be eligible for priority review designation for our product candidate if the FDA determines such product candidate offers major advances in treatment or provides a treatment where no adequate therapy exists. A priority review designation means that the goal for the FDA to review an application in six months, rather than the standard review period of ten months.
We may be eligible for priority review designation for our product candidate if the FDA determines such product candidate offers major advances in treatment or provides a treatment where no adequate therapy exists.
We expect to incur substantial additional operating expenses over the next several years as our research, development, and commercial activities increase. The amount of future losses and when, if ever, we will achieve profitability are uncertain.
Our prospects must be considered in light of the uncertainties, risks, expenses, and difficulties frequently encountered by companies in their early stages of operations. We expect to incur substantial additional operating expenses over the next several years as our research, development, and commercial activities increase. The amount of future losses and when, if ever, we will achieve profitability are uncertain.
Any of these events could have a material adverse effect on our business, prospects, operating results and financial condition and could adversely affect the price of our common shares. 56 Risks Related to our Common Stock We do not intend to pay dividends for the foreseeable future.
Any of these events could have a material adverse effect on our business, prospects, operating results and financial condition and could adversely affect the price of our common shares.
Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. 54 Deterioration in general economic conditions in the United States, Canada and globally, including the effect of prolonged periods of inflation on our suppliers, third-party service providers and potential partners, could harm our business and results of operations.
Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.
Because our officers and directors also own Immune Ventures there may be an inherent conflict of interest which could result in unanticipated actions that adversely affect us. We have a limited operating history and expect to incur significant additional operating losses. We are an early-stage company formed in September 2015 and have only a limited operating history.
We have a limited operating history and expect to incur significant additional operating losses. We are an early-stage company formed in September 2015 and have only a limited operating history. Therefore, there is limited historical financial information upon which to base an evaluation of our performance.
Patent protection and other intellectual property protection is crucial to the success of our business and prospects, and there is a substantial risk that such protections will prove inadequate. We license our patents from others. If such owners do not properly maintain or enforce the intellectual property underlying such licenses, our competitive position and business prospects could be harmed.
Patent protection and other intellectual property protection is crucial to the success of our business and prospects, and there is a substantial risk that such protections will prove inadequate. By working with research collaborators patent rights may be jointly owned by different parties.
Our business and results of operations could be adversely affected by changes in national or global economic conditions.
Deterioration in general economic conditions in the United States, Canada and globally, including the effect of prolonged periods of inflation on our suppliers, third-party service providers and potential partners, could harm our business and results of operations. Our business and results of operations could be adversely affected by changes in national or global economic conditions.
The license agreement relates to our natural killer program, INKmune. Immune Ventures is owned by our RJ Tesi, our CEO and Chairman of the Board of Directors, David Moss, our Chief Financial Officer and Treasurer and Mark Lowdell, our Chief Scientific Officer.
Immune Ventures is owned by our RJ Tesi, our CEO and Chairman of the Board of Directors, David Moss, our Chief Financial Officer and Treasurer and Mark Lowdell, our Chief Scientific Officer. Because our officers and directors also own Immune Ventures there may be an inherent conflict of interest which could result in unanticipated actions that adversely affect us.
Third parties may also independently develop products similar to our products, duplicate our unpatented products or design around any patents on products we develop. Additionally, extensive time is required for development, testing and regulatory review of a potential product.
Additionally, extensive time is required for development, testing and regulatory review of a potential product.
Removed
If additional capital is not available or is available at unattractive terms, we may be forced to delay, reduce the scope of or eliminate our research and development programs, reduce our commercialization efforts or curtail our operations. As of December 31, 2022, we had cash and cash equivalents of $52.2 million and we had $15 million of outstanding debt.
Added
Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock. ● We will require additional capital to finance our operations to continue as a going concern, which may not be available to us on acceptable terms, if at all.
Removed
In order to develop and bring our product candidates to market, we must commit substantial resources to costly and time-consuming research, preclinical and clinical trials and marketing activities. We anticipate that our existing cash and cash equivalents will enable us to maintain our current operations for at least the next twelve months.
Added
RISKS RELATED TO OUR BUSINESS There is doubt about our ability to continue as a going concern. As of December 31, 2023, the Company had an accumulated deficit of $121,022,000.
Removed
We anticipate using our cash and cash equivalents to fund further research and development with respect to our lead product candidates. We may, however, need to raise additional funding sooner if our business or operations change in a manner that consumes available resources more rapidly than we anticipate.
Added
Losses have principally occurred as a result of the substantial resources required for research and development of the Company’s product candidates which included the general and administrative expenses associated with its organization and product development as well as the lack of sources of revenues until such time as the Company’s products are commercialized.
Removed
Our requirements for additional capital will depend on many factors, including: ● successful commercialization of our product candidates; ● the time and costs involved in obtaining regulatory approval for our product candidates; ● costs associated with protecting our intellectual property rights; ● development of marketing and sales capabilities; ● payments received under future collaborative agreements, if any; and ● market acceptance of our products, if any.
Added
These factors raise substantial doubt about the Company’s ability to continue as a going concern for the 12 months from the issuance date of these financial statements.
Removed
Issuances of additional debt or equity securities could impact the rights of the holders of our common stock and will dilute their ownership percentage. Moreover, the establishment of other funding facilities may impose restrictions on our operations.
Added
These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties.
Removed
These restrictions could include limitations on additional borrowing and specific restrictions on the use of our assets, as well as prohibitions on our ability to create liens, pay dividends, redeem our stock or make investments. We may also raise additional capital by pursuing opportunities for the licensing or sale of certain intellectual property and other assets.
Added
Management intends to pursue additional funding and implement its strategic plan to allow the opportunity for the Company to continue as a going concern, however, there cannot be any assurance that we will be successful in doing so.
Removed
We cannot offer assurances, however, that any strategic collaboration, sales of securities or sales or licenses of assets will be available to us on a timely basis or on acceptable terms, if at all.
Added
The opinion of our independent registered public accounts on our audited financial statements for the year ended December 31, 2023, contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. There is no assurance that we will be successful in raising the additional funds needed to fund our business plan.
Removed
We may be required to enter into relationships with third parties to develop or commercialize products or technologies that we otherwise would have sought to develop independently, and any such relationships may not be on terms as commercially favorable to us as might otherwise be the case.
Added
If we are not able to raise sufficient capital in the near future, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise transfer all or substantially all of our remaining assets. 34 To fund our operations and service our debt, we will be required to generate a significant amount of cash.
Removed
In the event that sufficient additional funds are not obtained through strategic collaboration opportunities, sales of securities, funding facilities, licensing arrangements, borrowing arrangements and/or asset sales on a timely basis, we may be required to reduce expenses through the delay, reduction or curtailment of our projects, or further reduction of costs for facilities and administration.
Added
Moreover, any patents issued to us may not provide us with meaningful protection, or others may challenge, circumvent or narrow our patents. Third parties may also independently develop products similar to our products, duplicate our unpatented products or design around any patents on products we develop.
Removed
We cannot provide assurances that changed or unexpected circumstances will not result in the depletion of our capital resources more rapidly than we currently anticipate. There can be no assurances that we will be able to raise additional capital in sufficient amounts or on favorable terms, or at all.
Added
Certain of our licensors may have relied on third-party consultants or collaborators such that our licensors are not the sole and exclusive owners of the patents we in-licensed. If other third parties have ownership rights to our in-licensed patents, the license granted to us for such jointly owned patents may not be valid.
Removed
If we are unable to raise adequate additional capital when required or in sufficient amounts or on terms acceptable to us, we may have to delay, scale back or discontinue one or more product development programs, curtail our commercialization activities, significantly reduce expenses, sell assets (potentially at a loss), enter into relationships with third parties to develop or commercialize products or technologies that we otherwise would have sought to develop or commercialize independently, cease operations altogether, pursue an acquisition of our company at a price that may result in up to a total loss on investment for our stockholders, file for bankruptcy or seek other protection from creditors, or liquidate all of our assets. 35 To fund our operations and service our debt, we will be required to generate a significant amount of cash.
Added
Absent an agreement, each joint owner can independently sell, license, or otherwise exploit the jointly owned patent without the approval of the other joint owner(s) and without having to account to each other for their revenues. Without the cooperation of all joint owners, none can grant an exclusive license to a third party.
Removed
The Company violated certain non-financial debt covenants during 2022 and obtained a waiver from its lender for the violations during February 2023. The FDA has placed a clinical hold on XPro.
Added
Further, a jointly owned patent cannot be enforced unless all of the owners join in the lawsuit. If a co-owner refuses to participate, the lawsuit cannot proceed. Certain of our in-licensed patents from Xencor show joint ownership between Xencor and a third party. Xencor provided representations and warrants as to its ability to grant the rights provided in the license.
Removed
If the FDA does not remove the clinical hold on a timely basis, or at all, our development timelines and our business may be adversely affected, and our stock price may decline.
Added
In addition, Xencor is required to indemnify us as to any breach of its representations, warranties and covenants made in the agreement. Further, our rights to current or future in-licensed patents and patent applications may be dependent, in part, on inter-institutional or other operating agreements between the joint owners of such in-licensed patents and patent applications.
Removed
As previously announced by the Company in a press release dated on May 23, 2022, the FDA placed a full clinical hold on XPro, requesting additional information around the Company’s chemistry manufacturing and controls for the treatment.
Added
If one or more of such joint owners breaches such inter-institutional or operating agreements, our rights to such in-licensed patents and patent applications may be adversely affected. Any of these events could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.
Removed
The Company is working with the regulatory body to have the current hold removed as soon as possible, but it is not yet clear when the hold will be lifted.
Added
Intellectual property discovered through government funded programs may be subject to federal regulations such as “march-in” rights, certain reporting requirements and a preference for U.S.-based companies. Compliance with such regulations may limit our exclusive rights and limit our ability to contract with non-U.S. manufacturers.
Removed
If the FDA does not lift the clinical hold in a timely manner, or at all, our long-term development timeline for XPro and our business, financial condition or results of operations, may be adversely affected. The trial for XPro in Alzheimer’s disease is currently open in Australia and Canada.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES The Company leases approximately 5,000 square feet of office space in Boca Raton, Florida from a third-party, which serves as the headquarters of the Company. We currently pay approximately $15,000 per month for this lease which expires in January 2027. We believe our current facilities are suitable and adequate to meet our current needs.
Biggest changeITEM 2. PROPERTIES The Company leases approximately 5,000 square feet of office space in Boca Raton, Florida from a third-party, which serves as the headquarters of the Company. We currently pay approximately $16,000 per month for this lease which expires in March 2027. We believe our current facilities are suitable and adequate to meet our current needs.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2022, there were 28 holders of record of our common stock. Because shares of our common stock are held by depositories, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of record holders.
Biggest changeAs of December 31, 2023, there were 26 holders of record of our common stock. Because shares of our common stock are held by depositories, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of record holders.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur research and development expense primarily consist of: ● clinical trial and regulatory-related costs; ● expenses incurred under agreements with investigative sites and consultants that conduct our clinical trials; ● manufacturing and testing costs and related supplies and materials; and ● employee-related expenses, including salaries, benefits, travel and stock-based compensation We typically use our employee, consultant and infrastructure resources across our development programs.
Biggest changeOur research and development expense primarily consist of: ● clinical trial and regulatory-related costs; ● expenses incurred under agreements with investigative sites and consultants that conduct our clinical trials; ● manufacturing and testing costs and related supplies and materials; and ● employee-related expenses, including salaries, benefits, travel and stock-based compensation The following table summarizes our research and development expenses by product candidate for the periods indicated (in thousands): Year Ended December 31, 2023 2022 External Costs DN-TNF – Alzheimer’s disease $ 13,817 $ 12,573 INKmune – High Risk MDS/AML & Prostate Cancer 3,296 1,495 Preclinical and other programs 921 1,903 Accrued research and development rebate (3,040 ) (3,531 ) Total external costs 14,994 12,440 Internal Costs 5,279 4,627 $ 20,273 $ 17,067 We typically use our employee resources across our development programs.
These provisions include: ● only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure; ● reduced disclosure about our executive compensation arrangements; ● no non-binding advisory votes on executive compensation or golden parachute arrangements; ● exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting; and ● delaying the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.
These provisions include: ● only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure; ● reduced disclosure about our executive compensation arrangements; 61 ● no non-binding advisory votes on executive compensation or golden parachute arrangements; ● exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting; and ● delaying the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.
INKmune is designed to be given to patients after their immune system has recovered after cytotoxic chemotherapy to target the residual disease the remains after treatment with cytotoxic therapy. We believe INKmune can be used to treat numerous hematologic malignancies and solid tumors including leukemia, multiple myeloma, lymphoma, lung, ovary, breast, renal and prostate cancer.
INKmune is designed to be given to patients after their immune system has recovered after cytotoxic chemotherapy to target the residual disease that remains after treatment with cytotoxic therapy. We believe INKmune can be used to treat numerous hematologic malignancies and solid tumors including leukemia, multiple myeloma, lymphoma, lung, ovary, breast, renal and prostate cancer.
We anticipate that our expenses will increase substantially as we: ● continue research and development, including preclinical and clinical development of our existing product candidates; ● potentially seek regulatory approval for our product candidates; 65 ● seek to discover and develop additional product candidates; ● establish a commercialization infrastructure and scale up our manufacturing and distribution capabilities to commercialize any of our product candidates for which we may obtain regulatory approval; ● seek to comply with regulatory standards and laws; ● maintain, leverage and expand our intellectual property portfolio; ● hire clinical, manufacturing, scientific and other personnel to support our product candidate’s development and future commercialization efforts; ● add operational, financial and management information systems and personnel; and ● incur additional legal, accounting and other expenses in operating as a public company.
We anticipate that our expenses will increase substantially as we: ● continue research and development, including preclinical and clinical development of our existing product candidates; ● potentially seek regulatory approval for our product candidates; 63 ● seek to discover and develop additional product candidates; ● establish a commercialization infrastructure and scale up our manufacturing and distribution capabilities to commercialize any of our product candidates for which we may obtain regulatory approval; ● seek to comply with regulatory standards and laws; ● maintain, leverage and expand our intellectual property portfolio; ● hire clinical, manufacturing, scientific and other personnel to support our product candidate’s development and future commercialization efforts; ● add operational, financial and management information systems and personnel; and ● incur additional legal, accounting and other expenses in operating as a public company.
The successful completion of the Phase I trial in AD has informed the design of a blinded randomized, placebo controlled Phase II trials in patients with early ADi. Early ADi includes patients with AD and MCI who have at least one biomarker of inflammation (ADi and MCI 2 respectively).
The successful completion of the Phase I trial in AD has informed the design of a blinded randomized, placebo-controlled Phase II trial in patients with early ADi. Early ADi includes patients with AD and MCI who have at least one biomarker of inflammation (ADi and MCI 2 respectively).
Currently approved non-selective TNF inhibitors treat autoimmune disease, but are contraindicated in patients with infection, cancer and neurologic diseases because they increase the risk of infection, cancer and demyelinating neurologic diseases, respectively; all the safety problems are due to off-target effects on inhibiting tmTNF. The NK platform targets the dysfunctional natural killer cells in patients with cancer.
Currently approved non-selective TNF inhibitors treat autoimmune disease, but are contraindicated in patients with infection, cancer and neurologic diseases because they increase the risk of infection, cancer and demyelinating neurologic diseases, respectively; these safety problems are due to off-target effects on inhibiting tmTNF. The NK platform targets the dysfunctional natural killer cells in patients with cancer.
Significant management judgment is required in the forecast of future operating results that are used in the preparation of expected undiscounted cash flows. 66 IPR&D assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. During the period the assets are considered indefinite-lived, they are tested for impairment.
Significant management judgment is required in the forecast of future operating results that are used in the preparation of expected undiscounted cash flows. 64 IPR&D assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. During the period the assets are considered indefinite-lived, they are tested for impairment.
The early ADi trial is a blinded randomized trial to test if treatment of early AD patients with neuroinflammation with XPro will affect cognitive decline. The Phase II trial in early ADi has six important elements. Two hundred patients are being enrolled in a 2:1 ratio (XPro vs placebo).
The early ADi trial is a blinded randomized trial to test if treatment of early AD patients with neuroinflammation with XPro will affect cognitive decline. The Phase II trial in early ADi has six important elements. Two hundred and one patients are being enrolled in a 2:1 ratio (XPro vs placebo).
We would cease to be an emerging growth company if we have more than $1.07 billion in annual revenues, we have more than $700 million in market value of our stock held by non-affiliates, or we issue more than $1 billion of non-convertible debt over a three-year period.
We would cease to be an emerging growth company if we have more than $1.235 billion in annual revenues, we have more than $700 million in market value of our stock held by non-affiliates, or we issue more than $1 billion of non-convertible debt over a three-year period.
The higher the avidity, the greater the bond between the NK cell to cancer cell and thus the greater NK killing of cancer cells. INKmune increase NK avidity and further improves mitochondrial function and upregulates nutrient receptors. These metabolic changes may help the INKmune primed NK cell to function in the hostile tumor microenvironment and persist much longer.
The higher the avidity, the greater the bond between the NK cell to cancer cell and thus the greater NK killing of cancer cells. INKmune increases NK avidity and further improves mitochondrial function and upregulates nutrient receptors. These metabolic changes may help the INKmune primed NK cell to function in the hostile tumor microenvironment and persist much longer.
Personnel expenses relate primarily to salaries, benefits and share-based compensation. R&D expenditures are charged to operations as incurred. We recognize R&D tax credits receivable from the United Kingdom and Australian government for spending on R&D as a reduction of R&D expenses.
Personnel expenses relate primarily to salaries, benefits and share-based compensation. R&D expenditures are charged to operations as incurred. We recognize R&D tax credits receivable from the Australian government for spending on R&D as a reduction of R&D expenses.
INKmune is being developed to treat NK sensitive hematologic malignancies and solid tumors. 60 We believe our DN-TNF platform can be used as a cancer therapy to reduce resistance in immunotherapy and as a CNS (“central nervous system”) therapy to target glial activation to prevent progression of Alzheimer’s disease (“AD”), and to target neuroinflammation in treatment resistant depression (“TRD”) and as a drug to prevent muscle degeneration, prevent fibrosis and promote muscle regeneration in Duchene muscular dystrophy (DMD).
INKmune is being developed to treat NK sensitive hematologic malignancies and solid tumors. 59 We believe our DN-TNF platform can be used as a CNS (“central nervous system”) therapy to target glial activation to prevent progression of Alzheimer’s disease (“AD”); to target neuroinflammation in treatment resistant depression (“TRD”); as a drug to prevent muscle degeneration, prevent fibrosis and promote muscle regeneration in Duchene muscular dystrophy (“DMD”); and as a cancer therapy to reduce resistance in immunotherapy.
Neutralizing sTNF reverses MUC4 expression converting a trastuzumab resistant breast cancer cell into a trastuzumab sensitive breast cancer cell. In addition, INB03 changes the immunobiology of the tumor microenvironment by decreasing the number of immunosuppressive myeloid cells, both myeloid derived suppressor cells and tumor active macrophages, and increasing the number of cytotoxic lymphocytes and phagocytic macrophages in the TME.
Neutralizing sTNF reverses MUC4 expression converting a trastuzumab resistant breast cancer cell into a trastuzumab sensitive breast cancer cell. In addition, INB03 may change the immunobiology of the tumor microenvironment by decreasing the number of immunosuppressive myeloid cells, both myeloid derived suppressor cells and tumor active macrophages, and increasing the number of cytotoxic lymphocytes and phagocytic macrophages in the TME.
The Company incurs the majority of its research and development expenses in Australia and the United Kingdom. Fluctuations in the rate of exchange between the United States dollar and the pound sterling as well as the Australian dollar could adversely affect our financial results, including our expenses as well as assets and liabilities.
The Company incurs significant research and development expenses in Australia and the United Kingdom. Fluctuations in the rate of exchange between the United States dollar and the pound sterling as well as the Australian dollar could adversely affect our financial results, including our expenses as well as assets and liabilities.
The United Kingdom research and development tax incentive is recognized when there is reasonable assurance that the incentive will be received, the relevant expenditure has been incurred and the amount of the consideration can be reliably measured. Substantially all of our research and development expenses to date have been incurred in connection with our current and future product candidates.
The Australian research and development tax incentive is recognized when there is reasonable assurance that the incentive will be received, the relevant expenditure has been incurred and the amount of the consideration can be reliably measured. 62 Substantially all of our research and development expenses to date have been incurred in connection with our current and future product candidates.
We currently do not hedge foreign currencies but will continue to assess whether that strategy is appropriate. As of December 31, 2022, the cash balance held by our foreign subsidiaries with currencies other than the United States dollar was approximately $0.1 million.
We currently do not hedge foreign currencies but will continue to assess whether that strategy is appropriate. As of December 31, 2023, the cash balance held by our foreign subsidiaries with currencies other than the United States dollar was approximately $0.5 million.
The increase in other expense is due to higher interest expense on the Company’s debt ($1.0 million higher), partially offset by $0.7 million higher interest income from money market investments. 68 Liquidity and Capital Resources Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis.
The decrease in other expense is due to the Company earning higher interest income from money market investments in 2023 ($1.3 million higher) partially offset by higher interest expense on the Company’s debt in 2023 ($0.3 million higher). 66 Liquidity and Capital Resources Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis.
Once third of TRD patients have peripheral biomarkers to inflammation (elevated CRP). This is a large patient population. The role of TNF and anti-TNF therapeutics was explored in a small open label clinical trial by Prof. Andrew Miller, MD of Emory University demonstrated the patients have elevated TNF levels and treatment with infliximab treated their depression (Miller, 2011).
This is a large patient population. The role of TNF and anti-TNF therapeutics was explored in a small open label clinical trial by Prof. Andrew Miller, MD of Emory University demonstrated the patients have elevated TNF levels and treatment with infliximab treated their depression (Miller, 2011).
General and Administrative General and administrative expenses were $9.3 million for the year ended December 31, 2022, compared to $8.8 million for the year ended December 31, 2021.
General and Administrative General and administrative expenses were $9.6 million for the year ended December 31, 2023, compared to $9.3 million for the year ended December 31, 2022.
Research and Development Research and development expenses decreased to $17.1 million for the year ended December 31, 2022 from $20.5 million for the year ended December 31, 2021.
Research and Development Research and development expenses increased to $20.3 million for the year ended December 31, 2023 from $17.1 million for the year ended December 31, 2022.
We recognize the fair value of stock options on a straight-line basis over the period during which a service provider is required to provide services in exchange for the award (generally the vesting period). We account for forfeitures as they occur.
We have never declared or paid dividends and have no plans to do so in the foreseeable future. We recognize the fair value of stock options on a straight-line basis over the period during which a service provider is required to provide services in exchange for the award (generally the vesting period). We account for forfeitures as they occur.
We anticipate that operating losses and net cash used in operating activities will increase over the next few years as we advance our products under development.
As of December 31, 2023, we had cash and cash equivalents of $35,848,000. We anticipate that operating losses and net cash used in operating activities will increase over the next few years as we advance our products under development.
The Company has initiated a Phase I trial using INKmune to treat patients with high risk MDS/AML, a form of leukemia. One patient has been treated in the Phase I trial for MDS and three patients have been treated compassionately in AML.
The Company had a Phase I trial using INKmune to treat patients with high risk MDS/AML, a form of leukemia. Two patients were treated in the Phase I trial for MDS, three patients have been treated compassionately in AML and another MDS patient is expected to be treated shortly.
Other Expense, net Other expense, net increased to $1.3 million during the year ending December 31, 2022, compared to $1.2 million during the year ending December 31, 2021.
Other Expense, net Other expense, net decreased to $0.3 million during the year ending December 31, 2023, compared to $1.3 million during the year ending December 31, 2022.
We also studied downstream benefits of decreasing neuroinflammation by measuring changes in the CSF proteome and quantifying changes in novel white matter MRI biomarkers. XPro significantly decreases biomarkers of neurodegeneration as measured by changes in the CSF proteome including neurofilament light chain, phospho Tau 217 and VILIP-1; decreases of 84%, 46% and 91% respectively after 3 months of therapy.
XPro significantly decreases biomarkers of neurodegeneration as measured by changes in the CSF proteome including neurofilament light chain, phospho Tau 217 and VILIP-1; decreases of 84%, 46% and 91% respectively after 3 months of therapy.
This exclusive, global, unrestricted license came with considerable know-how, intellectual property, pre-clinical data, regulatory documentation and product stocks. Currently, we are focused on the immune-oncology uses of this unique asset.
This exclusive, global, unrestricted license came with considerable know-how, intellectual property, pre-clinical data, regulatory documentation and product stocks. Currently, we are focused on using this asset in a neurological indication.
We track outsourced development costs by product candidate or development program, but we do not allocate personnel costs, other internal costs or external consultant costs to specific product candidates or development programs.
We track outsourced development costs by product candidate or development program, but we do not allocate internal costs personnel costs including salaries and stock-based compensation to specific product candidates or development programs.
In the future, we may develop the asset in a wide variety of therapeutic areas, with a variety of delivery techniques by ourselves or in conjunction with partners. 67 Results of Operations Comparison of the Years Ended December 31, 2022 and December 31, 2021 Year Ended (in thousands) December 31, 2022 December 31, 2021 Change Revenues $ (374 ) $ (181 ) $ (193 ) General and Administrative 9,258 8,791 467 Research and Development 17,067 20,543 (3,476 ) Other Expense, net 1,348 1,187 161 Net loss $ (27,299 ) $ (30,340 ) $ (3,041 ) Revenues During 2022 and 2021, the Company sold MSC’s to one and three customers, respectively, and recognized $374,000 and $181,000 of revenues, respectively.
In the future, we may develop the asset in a wide variety of therapeutic areas, with a variety of delivery techniques by ourselves or in conjunction with partners. 65 Results of Operations Comparison of the Years Ended December 31, 2023 and December 31, 2022 Year Ended (in thousands) December 31, 2023 December 31, 2022 Change Revenues $ (155 ) $ (374 ) $ 219 General and Administrative 9,623 9,258 365 Research and Development 20,273 17,067 3,206 Other Expense, net 267 1,348 (1,081 ) Net loss $ 30,008 $ 27,299 $ 2,709 Revenues During 2023 and 2022, the Company sold MSC’s to one customer and recognized $155,000 and $374,000 of revenues, respectively.
INKmune interacts with the patient’s NK cells to convert them from inert resting NK cells into memory-like NK cells that kill the patient’s cancer cells.
We believe that INKmune improves the ability of the patient’s own NK cells to attack their tumor. INKmune interacts with the patient’s NK cells to convert them from inert resting NK cells into memory-like NK cells that kill the patient’s cancer cells.
Operating activities used $28.5 million of cash for the year ended December 31, 2021, primarily resulting from our net loss of $30.3 million, a net cash outflow of $3.1 million for changes in our net operating assets and liabilities, and non-cash stock-based compensation charges of $4.8 million.
Operating activities used $12.0 million of cash for the year ended December 31, 2023, primarily resulting from our net loss of $30.0 million, partially offset by a net cash inflow of $10.4 million for changes in our net operating assets and liabilities, and non-cash stock-based compensation charges of $7.4 million.
The primary end-point will be Early/mild Alzheimer’s Cognitive Composite (“EMACC”), a validated cognitive measure that is more sensitive than traditional end-points used in many studies of patients with early AD. The trial is open in Australia and Canada and will open in the US pending the lift of a clinical hold by the US FDA.
The primary end-point will be Early/mild Alzheimer’s Cognitive Composite (“EMACC”), a validated cognitive measure that is more sensitive than traditional end-points used in many studies of patients with early AD. The AD program is open in the United States, Australia, Canada, the United Kingdom, France, Germany, Spain, Czech Republic and Slovakia.
In the four patients, INKmune therapy is safe, produces memory-like NK cells that kill cancer in vitro, promotes development of cancer killing memory-like NK cells that can be found in the patient’s circulation of 4 months. The Company will continue to enroll patients in the Phase I trial.
During March 2024, the Company decided to terminate further enrollment in the MDS/AML trial. In the patients, INKmune therapy is safe, produces memory-like NK cells that kill cancer in vitro, and promotes development of cancer killing memory-like NK cells that can be found in the patient’s circulation of 4 months.
The change in our net operating assets and liabilities was primarily due to an increase in research and development tax credit receivable of $3.2 million and an increase in prepaid expenses and other current assets of $2.1 million, partially offset by an increase in accounts payable and accrued liabilities of $2.2 million. 70 Investing Activities Investing activities used $15.0 million of cash for the year ended December 31, 2021.
The change in our net operating assets and liabilities was primarily due to a decrease in research and development tax credit receivable of $6.2 million, a decrease in prepaid expenses and other current assets of $2.5 million and an increase in accounts payable and accrued liabilities of $2.7 million, partially offset by a decrease in accrued liability – long term of $0.6 million.
Net Cash Provided by Financing Activities During the year ended December 31, 2022, the Company sold 82,900 shares of its common stock to certain officers and directors for approximately $0.7 million. During the year ended December 31, 2021, the Company sold 1,439,480 shares of its common stock under its 2020 ATM agreement for net proceeds of approximately $28.4 million.
During the year ended December 31, 2022, the Company sold 82,900 shares of its common stock to certain officers and directors for approximately $0.7 million.
White matter free water; a validated measure of neuroinflammation in the brain. XPro, at the 1mg/kg/week dose decreased inflammatory cytokines in the CSF and decreased white matter free water in the brain demonstrating that XPro can decrease neuroinflammation in patients with AD.
XPro, at the 1mg/kg/week dose, decreased inflammatory cytokines in the CSF in the brain demonstrating that XPro can decrease neuroinflammation in patients with AD. We also studied downstream benefits of decreasing neuroinflammation by measuring changes in the CSF proteome and quantifying changes in novel white matter MRI biomarkers.
We incurred a net loss of $27,299,000 and $30,340,000 for the years ended December 31, 2022 and 2021, respectively. Net cash used in operating activities was $22,686,000 and $28,504,000 for the years ended December 31, 2022 and 2021, respectively.
We incurred a net loss of $30,008,000 and $27,299,000 for the years ended December 31, 2023 and 2022, respectively. Net cash used in operating activities was $11,980,000 and $22,686,000 for the years ended December 31, 2023 and 2022, respectively. Since inception, we have funded our operations primarily with proceeds from the sales of our common stock.
We believe XPro targets activated microglia and astrocytes of the brain that produce sTNF that promotes nerve cell loss and synaptic dysfunction, key elements in the development of dementia. In animal models, elimination of sTNF prevents nerve cell dysfunction and reverses synaptic pruning. The Phase I trial in patients with biomarkers of inflammation with AD has been completed.
XPro completed a Phase I trial treating patients with Alzheimer’s disease that was partially funded by a Part-the-Clouds Award from the Alzheimer’s Association. We believe XPro targets activated microglia and astrocytes of the brain that produce sTNF that promotes nerve cell loss, synaptic dysfunction and prevents myelin repair - key elements in the development of dementia.
The Company has completed an open label dose escalation trial in cancer patients with metastatic solid tumors that have failed multiple lines of therapy. The trial informs the design of the Phase II trial by demonstrating that INB03 was safe and well tolerated, defined the dose of INB03 to carry into Phase II trials, and demonstrated a pharmacodynamic end-point.
The pre-clinical data in MUC4+ expressing tumors and the clinical trial informs the design of a future Phase II trial by demonstrating that INB03 was safe and well tolerated, defined the dose of INB03 to carry into Phase II trials, and demonstrated a pharmacodynamic end-point.
The Company used the proceeds of the term loan to fund the cash consideration for the Option Cancellation Agreement with Xencor. 69 Cash Flows The following table provides information regarding our cash flows for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Net cash used in operating activities $ (22,686 ) $ (28,504 ) Net cash used in investing activities - (15,000 ) Net cash provided by financing activities 729 96,357 Impact on cash from foreign currency translation (700 ) (10 ) Net(decrease) increase in cash and cash equivalents $ (22,657 ) $ 52,843 Net Cash Used in Operating Activities Our cash used in operating activities was primarily driven by our net loss.
The Term loan is payable in 2024. 67 Cash Flows The following table provides information regarding our cash flows for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Net cash used in operating activities $ (11,980 ) $ (22,686 ) Net cash provided by financing activities (4,225 ) 729 Impact on cash from foreign currency translation (100 ) (700 ) Net decrease in cash and cash equivalents $ (16,305 ) $ (22,657 ) Net Cash Used in Operating Activities Our cash used in operating activities was primarily driven by our net loss.
A Phase II trial is planned in patients with advanced MUC4+ expressing cancer. Likewise, we believe the DN-TNF platform can be used to treat selected neurodegenerative diseases by modifying the brain microenvironment (“BME”). The Company believes the core pathology of cognitive decline is a combination of neurodegeneration and synaptic dysfunction. Neurodegeneration is nerve cell death that may include demyelination.
The company does not plan to commence a Phase II trial in patients with advanced MUC4+ expressing cancer until a partner can be found. Likewise, we believe the DN-TNF platform can be used to treat selected neurodegenerative diseases by modifying the brain microenvironment (“BME”).
The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield in effect at the time of grant. We have never declared or paid dividends and have no plans to do so in the foreseeable future.
We use the simplified approach to determine the expected term as we do not have sufficient data related to stock option exercises. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield in effect at the time of grant.
The increase in general and administrative expenses is largely due to higher compensation, including stock-based compensation ($1.5 million higher during the year ended December 31, 2022) and higher rent expense and right of use asset impairment ($0.2 million higher during the year ended December 31, 2022), partially offset by lower consulting expense ($1.5 million lower during the year ended December 31, 2022).
The increase in general and administrative expenses is due to higher stock-based compensation ($0.1 million higher during the year ended December 31, 2023), higher travel expense ($0.1 million higher during the year ended December 31, 2023) and higher professional fees ($0.1 million higher during the year ended December 31, 2023).
Synaptic dysfunction means the connections between nerve cells stop working efficiently and may decrease in number. The combination of neurodegeneration and synaptic dysfunction causes cognitive decline and behavioral changes associated with Alzheimer’s disease (AD. XPro completed a Phase I trial treating patients with Alzheimer’s disease that was partially funded by a Part-the-Clouds Award from the Alzheimer’s Association.
The Company believes the core pathology of cognitive decline is a combination of neurodegeneration and synaptic dysfunction. Neurodegeneration is nerve cell death that may include demyelination. Synaptic dysfunction means the connections between nerve cells stop working efficiently and may decrease in number. The combination of neurodegeneration and synaptic dysfunction causes cognitive decline and behavioral changes associated with Alzheimer’s disease (“AD”).
During June 2021, we entered into a Loan and Security Agreement with SVB and an affiliate of SVB, providing for a $15.0 million term loan. During the year ended December 31, 2021, the Company received approximately 1.2 million in connection with the exercise of stock options and warrants.
Term Loan On June 10, 2021, we entered into a Loan and Security Agreement with SVB and an affiliate of SVB, providing for a $15.0 million term loan.
The open label, dose escalation trial was designed to demonstrate that XPro can safely decrease neuroinflammation in patients with ADi. The endpoints of the trial are measures of neuroinflammation and neurodegeneration in blood and cerebral spinal fluid by measuring changes in inflammatory cytokine levels in the CNS and using MRI-DTI to measure white matter free water.
ADi is the term used to delineate patients with AD with biomarkers of inflammation. The endpoints of the trial were measures of neuroinflammation and neurodegeneration in blood and cerebral spinal fluid by measuring changes in inflammatory cytokine levels in the CNS and using MRI-DTI to measure brain microstructural changes.
The drug is named differently for the oncology and CNS indications; INB03™ or XPro™, respectively, but it is the same drug product. For DMD, the company is exploring DN-TNF compounds that is optimized for the treatment of DMD. This novel compound has the same mechanism of action but has novel IP protection.
For DMD, the company is exploring DN-TNF compounds that is optimized for the treatment of DMD. This novel compound has the same mechanism of action but has novel IP protection. In each case, we believe neutralizing sTNF is a cornerstone to the treatment of these diseases.
The decrease in research and development expenses during the year ended December 31, 2022 compared to 2021 is mainly due to the Company incurring $4.6 million of lower manufacturing costs in connection with producing its DN-TNF product and also due to incurring $2.6 million of lower expenses on the COVID-19 clinical trial, partially offset by the Company’s compensation (including stock-based compensation) which was $1.8 million higher in 2022 compared to 2021.
The increase in research and development expenses during the year ended December 31, 2023 compared to 2022 is mainly due to the Company incurring $1.8 million of higher costs in connection with our INKmune clinical trials, $1.2 million higher costs with our Alzheimer’s clinical trial, $0.7 million higher internal costs and $0.5 million lower accrued R&D rebate, partially offset by $1.0 million lower of preclinical and other expenses.
As of the date of issuance of Company’s financial statements, the extent to which the COVID-19 pandemic may materially impact the Company’s financial condition, liquidity or results of operations is uncertain. 63 As a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the JOBS Act.
To date, the Company has relied on equity and debt financing to fund its operations. As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the JOBS Act.
All patients will be offered to stay on therapy for at least 12 months in an extension trial. Clinical and biomarker data will be collected during the extension trial. 61 Effective therapy for TRD is a large unmet need. Twenty percent of patients with a Major Depressive Disorder have TRD.
All patients will be offered to stay on therapy for at least 12 months in an extension trial. Clinical and biomarker data will be collected during the extension trial. 60 There are at least 4 clinical milestones associated with the Phase II trial in AD. Enrollment of 201 patients in the Phase II AD trial should be complete by mid-year.
ATM Sales Agreements During the year ended December 31, 2021, we issued and sold 1,439,480 shares of common stock at an average price of $20.17 per share under the 2020 ATM agreement. The aggregate net proceeds were approximately $28.4 million after BTIG’s commission and other offering expenses.
Any of these events could significantly harm our business, financial condition and prospects. ATM Sales Agreement During July 2023, the Company sold 75,697 shares of its common stock at an average price of $ 10.56 per share under the ATM program. The aggregate net proceeds were approximately $ 775,000 after offering expenses.
We have incurred net losses in each year since our inception and, as of December 31, 2022, we had an accumulated deficit of approximately $91.0 million. Our net losses were $27,299,000 and $30,340,000 for the years ended December 31, 2022 and 2021, respectively.
We reported a net loss of $30.0 million and $27.3 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, we had cash and cash equivalents of $35.8 million and $52.2 million, respectively.
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In each case, we believe neutralizing sTNF is a cornerstone to the treatment of these diseases.
Added
The primary focus of the company’s development efforts for XPro is AD. The next indication to be developed with XPro will be TRD. Treatment of DMD and cancer will occur when partners for the programs are found. The drug is named differently for the oncology and CNS indications; INB03™ or XPro, respectively, but it is the same drug product.
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The final trial design is ongoing and discussions with the FDA are not complete. The Company anticipates receiving authorization to initiate the clinical trial once the pending clinical hold is lifted. We believe that INKmune improves the ability of the patient’s own NK cells to attack their tumor.
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The Company has completed an open label dose escalation trial in cancer patients with metastatic solid tumors that have failed multiple lines of therapy.
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The Company intends to initiate a separate Phase I/2 trial of INKmune in a solid tumor during 2023. 62 We believe that INKmune improves the ability of the patient’s own NK cells to attack their tumor.
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In animal models, elimination of sTNF prevents nerve cell dysfunction, reverses synaptic pruning and promotes myelin repair. The Phase I trial in patients with biomarkers of inflammation with AD has been completed. The open label, dose escalation trial was designed to demonstrate that XPro can safely decrease neuroinflammation in patients with ADi.
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INKmune interacts with the patient’s NK cells to convert them from inert resting NK cells into memory-like NK cells that kill the patient’s cancer cells.
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Six months after the last patient is enrolled, top line cognition data with EMACC will be available. Secondary end-points which include blood biomarker, neuroimaging and additional neuropsychiatric end-points will be available after data base lock 2-3 months after top line data.
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INKmune is a replication incompetent proprietary cell line that is given to the patient after determining that i) the patient has adequate NK cells in their circulation and ii) those NK cells are functional when exposed to INKmune in vitro.
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Finally, several months after all the data are analyzed, the Company plans an end-of-phase II meeting with the FDA to finalize plans for the pivotal Phase III trial. The Company plans to apply for an accelerated pathway during 2024. XPro for treatment of AD may be eligible for one or both accelerated approval pathways.
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INKmune is designed to be given to patients after their immune system has recovered after cytotoxic chemotherapy to target the residual disease the remains after treatment with cytotoxic therapy. We believe INKmune can be used to treat numerous hematologic malignancies and solid tumors including leukemia, multiple myeloma, lymphoma, lung, ovary, breast, renal and prostate cancer.
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The Company plans to submit of Fast Track status in 2024. We expect to be eligible for Break Through status after completion of the Phase II in 2025. 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).
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The Company has initiated a Phase I trial using INKmune to treat patients with high risk MDS/AML, a form of leukemia. One patient has been treated in the Phase I trial for MDS and three patients have been treated compassionately in AML.
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The final trial design is ongoing and discussions with the FDA are not complete. The Company received authorization to initiate a clinical trial in AD in the US during January 2024. The TRD trial is expected to start enrollment after the AD Phase II trial finishes patient enrollment.
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In the four patients, INKmune therapy is safe, produces memory-like NK cells that kill cancer in vitro, promotes development of cancer killing memory-like NK cells that can be found in the patient’s circulation of 4 months. The Company will continue to enroll patients in the Phase I trial.
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The Company initiated a separate Phase I/2 trial of INKmune in a metastatic castrate resistant prostate cancer. The open label trial enrolled the first patient in December 2023. The Phase I/II trial using INKmune to treat patients with metastatic castrate resistant prostate cancer (mCPRC) is an open label trial.
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Since our inception in 2015, we have devoted substantially all of our resources to the discovery and development of our product candidates, including clinical trials and preclinical studies as well as general and administrative support for these operations. To date, we have generated no significant revenue.
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Biomarker data from the patients will be visible as patients are treated. The Company will report data from each cohort as it becomes available. In addition to clinical data, the Company will communicate when the Phase I portion of the trial has completely enrolled. This is expected in September 2024.
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Substantially all of our net losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations, including stock-based compensation. The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic.
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Because of the modified Bayesian design, the Company estimates the trial will be completely enrolled 1H25 with top-line data available 6 months later. Topline data is divided into immunologic and tumor response variables. The most important immunologic response variable is related to memory like NK cell persistence.
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The extent of the impact of the COVID-19 pandemic on the Company’s business is highly uncertain and difficult to predict. Also, economies worldwide have also been negatively impacted by the COVID-19 pandemic, however policymakers around the globe have responded with fiscal policy actions to support the healthcare industry and economy as a whole.
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This is how long are the number of mlNK cells in patients blood compared to baseline. There are 3 important variables to tumor response: i) blood PSA changes; ii) change in PMSA scan and iii) change in circulating tumor DNA (ctDNA). Ideally, the levels of all three variables decrease with treatment.
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The magnitude and overall effectiveness of these actions remain uncertain. In addition, the Company’s clinical trials have been affected by and may continue to be affected by the COVID-19 pandemic. Clinical site initiation and patient enrollment have and may continue to be delayed due to prioritization of hospital resources toward the COVID-19 pandemic.
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We do not expect this 6 month trial to provide survival data. We continue to incur significant development and other expenses related to our ongoing operations. As a result, we are not and have never been profitable and have incurred losses in each period since our inception, resulting in substantial doubt in our ability to continue as a going concern.
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Some patients have not, and others may not be able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. Similarly, the ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19, may adversely impact the Company’s clinical trial operations.
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We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our research and development of, and seek regulatory approvals for, our product candidates.
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The severity of the impact of the COVID-19 pandemic on the Company’s business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company’s service providers, suppliers, contract research organizations (“CROs”) and the Company’s clinical trials, all of which are uncertain and cannot be predicted.
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The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues, if any.
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The Australian research and development tax incentive is recognized when there is reasonable assurance that the incentive will be received, the relevant expenditure has been incurred and the amount of the consideration can be reliably measured. 64 We participate, through our wholly-owned subsidiary in the United Kingdom, in the research and development program provided by the United Kingdom tax relief program, such that a percentage of our qualifying research and development expenditures are reimbursed by the United Kingdom government, and such incentives are reflected as a reduction of research and development expense.

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