Inmune Bio, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; unaudited. The clinical-stage biotechnology company is developing DN-TNF therapies, including XPro for Alzheimer’s disease and treatment-resistant depression, and INKmune, an NK-cell platform for cancer. No product candidates are approved for sale.
Financial performance and liquidity
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Revenue | $14,000 | $38,000 |
| Research and development expense | $8.693 million | $4.133 million |
| General and administrative expense | $2.338 million | $2.328 million |
| Operating loss | $11.017 million | $6.423 million |
| Net loss | $11.025 million; $0.61 per share | $6.536 million; $0.36 per share |
| Cash used in operating activities | $7.476 million | $1.141 million |
| Cash and cash equivalents | $26.002 million at March 31 | $35.848 million at Dec. 31, 2023 |
| Total assets / stockholders’ equity | $46.833 million / $28.224 million | $57.001 million / $37.340 million at Dec. 31, 2023 |
| Term loan | $7.5 million principal; $7.455 million net current balance | All outstanding principal due Jan. 1, 2025 |
Revenue was immaterial relative to expenses, so operating margins are not meaningful. R&D expense more than doubled, primarily from $4.0 million of additional Alzheimer’s program costs and $0.7 million of additional INKmune costs. Other expense declined to $8,000 from $113,000, mainly reflecting lower interest expense. The company repaid $2.5 million of debt during the quarter. The loan carried a 13.0% interest rate at quarter-end and includes a 6.5% final payment fee.
Material developments, outlook and risks
- Going concern: Management states that cash and projected liquidity are insufficient to fund operations through one year after issuance of the financial statements. The filing concludes substantial doubt exists; management’s potential financing plans do not alleviate that doubt. The company expects continued losses and cash use and may need to delay, reduce or discontinue programs if financing is unavailable.
- Subsequent financing: After quarter-end, the company reported approximately $2.095 million of gross ATM proceeds from 198,364 shares sold April 4–May 6. It also reported April offerings totaling approximately $14.473 million gross, comprising 571,592 shares and warrants in one offering and 986,000 shares and warrants in another. These transactions provide capital but involve dilution and warrant overhang.
- Clinical plans: The filing says the Phase II Alzheimer’s trial was enrolling 201 patients, with enrollment expected to finish around mid-2024 and top-line cognitive data expected six months after the last patient is enrolled. Management planned to pursue an accelerated pathway and seek Fast Track status in 2024; these are plans, not assured outcomes. The treatment-resistant depression trial design and FDA discussions remained ongoing. The company ended further enrollment in its MDS/AML INKmune trial in March and continued a separate prostate cancer trial; Phase I enrollment was expected in September 2024.
- Other risks and contingencies: Product candidates require further clinical and regulatory development, and commercialization timing and success are uncertain. The company relies on a small number of manufacturing vendors and is exposed to foreign exchange fluctuations. The filing identifies potential rescission claims or regulatory action relating to 75,697 shares sold in July 2023 under an expired registration statement; no claims or demands had been made by March 31, 2024, and the shares remain classified as temporary equity. Ordinary-course claims are also possible; management did not expect them to have a material adverse effect.
- Related-party and control notes: INKmune’s licensor, Immune Ventures, is owned by company officers/directors; a $25,000 milestone payable was recorded. Management reported disclosure controls were effective and no material change in internal control during the quarter.
Key facts for investors to verify
- Actual cash runway, subsequent cash balances, and the amount and terms of any further financing.
- Completion and timing of Alzheimer’s Phase II enrollment, top-line results, and regulatory pathway milestones.
- Progress, enrollment and data from the INKmune prostate cancer trial, and implications of ending MDS/AML enrollment.
- Debt repayment capacity before the January 2025 maturity, including interest and final payment obligations.
- Potential claims or regulatory consequences from the July 2023 ATM share sale and the dilution from post-quarter offerings and warrants.