IN8BIO, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. IN8BIO is a clinical-stage biopharmaceutical company developing gamma-delta T-cell cancer therapies. Its lead candidates, INB-200 for newly diagnosed glioblastoma and INB-100 for leukemia patients undergoing stem-cell transplantation, were in Phase 1 trials. The company had no approved products and generated no revenue.
Financial performance and position
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $3.504m | $2.064m | $5.885m | $3.310m |
| General and administrative expense | $3.675m | $0.986m | $7.439m | $2.103m |
| Total operating expense and net loss | $7.179m | $3.050m | $13.324m | $5.413m |
| Net loss per share, basic and diluted | $(0.38) | $(1.00) | $(0.71) | $(1.82) |
| Net cash used in operating activities | — | $10.431m | $4.968m |
Margins are not meaningful because the company had no revenue. At June 30, 2022, cash was $25.742m, down from $37.021m at December 31, 2021; total assets were $30.988m, total liabilities $4.420m, and stockholders’ equity $26.568m. Accumulated deficit was $46.015m. Cash and restricted cash totaled $25.994m. The company reported no long-term debt; its former $0.2m PPP loan was repaid in August 2021. Lease liabilities totaled $1.861m, and fixed lease payments were $2.4m, including $0.7m due within 12 months.
Changes versus prior comparable periods
- Six-month net loss increased to $13.324m from $5.413m. R&D rose $2.575m, which management primarily attributed to clinical and contract-manufacturing activity, higher headcount and facility costs. INB-400 accounted for $1.100m of six-month direct R&D expense, compared with none in the prior-year period.
- Six-month G&A increased $5.336m, primarily from higher personnel costs, legal expenses, insurance and public-company costs following the 2021 IPO.
- Operating cash use more than doubled year over year. Investing used $0.678m, primarily for Alabama laboratory leasehold improvements; financing used $0.169m, primarily for finance-lease payments.
- Cash declined $11.278m during the first half of 2022. The company had $25.742m cash at quarter-end, compared with $37.021m at year-end 2021.
Outlook, developments and risks
- Management said June 30 cash was expected to fund operating expenses and capital requirements for at least 12 months from the financial statements’ issuance. IN8BIO nonetheless expects rising expenses and losses as it advances trials, expands its pipeline and builds capabilities; it expects to need additional capital.
- On August 11, 2022, after quarter-end, the company announced pricing of an offering of 5,394,737 shares at $1.90 per share, for expected gross proceeds of approximately $10.3m before costs. Underwriters had a 30-day option for an additional 657,894 shares. At the filing date, closing was expected around August 16, subject to customary conditions.
- Management expected initial INB-200 Phase 1 topline results in the second half of 2022; initial INB-100 first-cohort results in 2022 and topline results across cohorts in 2023; and an INB-400 IND filing by year-end 2022. It also expected several pipeline IND filings through 2023.
- Company-reported interim updates: five of six fully dosed INB-200 patients exceeded median and expected progression-free survival benchmarks, and two exceeded expected overall-survival benchmarks as of June 3, 2022. The company reported manageable toxicity and no CRS, TLS or ICANS in these patients. In a July update, it said all three first-cohort high-risk AML patients in the INB-100 trial remained alive and progression-free with morphologic complete responses for more than a year; two remained in response for more than two years, with no dose-limiting toxicities reported. These are early, limited-patient observations, not definitive trial outcomes.
- A June pre-IND meeting with FDA provided guidance for INB-400. Separately, an August 4 manufacturing agreement with the University of Louisville provided exclusive laboratory access and manufacturing services for INB-400; stated consideration was $0.7m annually for six years.
- Key risks include continued operating losses and financing needs; clinical, regulatory and manufacturing uncertainty; limited early-stage patient data; patient-enrollment and supply-chain constraints; dependence on third-party suppliers, including a single supplier for the automated manufacturing device and lentiviral vectors; and potential COVID-19, inflation, market and geopolitical disruptions. The filing said the available vector supply covered approximately 29 patients.
- The company reported no material legal proceedings. Management concluded disclosure controls were effective at the reasonable-assurance level as of June 30, 2022; it had not yet completed the required management evaluation of internal control over financial reporting.
Important facts for investors to verify
- Whether the August 2022 offering closed on the announced terms, the net proceeds after expenses, and the resulting share count and dilution.
- Actual cash burn and updated cash runway, including the impact of the University of Louisville agreement and planned clinical and manufacturing spending.
- Final, audited and sufficiently mature INB-200 and INB-100 clinical data, including safety, durability, patient numbers and whether interim benchmarks hold as follow-up continues.
- The status and timing of the INB-400 IND and clinical-program launch. The filing describes INB-400 as planned for a Phase 1b/2 program, yet also attributes costs to an “ongoing INB-400 clinical trial”; this wording is not fully reconciled in the filing text.
- Whether manufacturing capacity, lentiviral-vector supply and clinical-site operations can support planned trials without material delay or added cost.