INmune Bio, Inc. — FY2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020; filed March 4, 2021. This is an annual report, not a standalone fourth-quarter report. INmune Bio is a clinical-stage biotechnology company developing innate-immune therapies; it had no approved products or meaningful commercial revenue.
Financial performance and position
| Metric | FY2020 / Dec. 31, 2020 | FY2019 / Dec. 31, 2019 |
|---|---|---|
| Revenue | $10,916 | $0 |
| Research and development expense | $5.92 million | $3.28 million |
| General and administrative expense | $6.32 million | $6.02 million |
| Net loss | $12.10 million | $7.68 million |
| Basic and diluted loss per share | $1.01 | $0.75 |
| Net cash used in operations | $8.94 million | $5.38 million |
| Cash and cash equivalents | $21.97 million | $7.00 million |
| Working capital | $22.21 million | Not stated in the filing text |
| Total liabilities | $1.90 million | $0.86 million |
| Accumulated deficit | $33.38 million | $21.28 million |
The $10,916 of revenue came from selling mesenchymal stem cells to one customer, not from the drug pipeline. Gross margin is not a meaningful measure of the company’s performance at this stage. The company reported no interest expense or income tax expense, and no material debt; reported liabilities were primarily payables, deferred grant amounts, and operating lease obligations.
Net loss increased by $4.42 million year over year. R&D expense rose by $2.64 million, reflecting increased development activity and manufacturing costs for the DN-TNF product. G&A increased by $0.31 million, partly offset by lower professional fees. The prior-year comparison included a $1.54 million expense reversal when a consultant waived a stock issuance; no comparable item occurred in 2020. Other income of $128,517 in 2020 included approximately $0.1 million from a vendor settlement.
Liquidity, cash flow, and financing
Cash from financing activities was $23.90 million in 2020, mainly from a July public offering that generated approximately $23.1 million net, plus ATM and Lincoln Park share sales. The company also spent approximately $1.01 million to repurchase and cancel 220,000 shares. Operating cash use increased by $3.56 million from 2019. Management said cash at year-end, together with January–February 2021 ATM proceeds, was expected to fund operations for at least 12 months after filing.
In January and February 2021, the company sold 1,439,480 shares through its ATM program for $29.0 million gross and approximately $28.4 million net. This subsequent financing strengthened liquidity but diluted existing shareholders. The company also reported 3.46 million options and 1.96 million warrants potentially exercisable at year-end 2020. No dividends are anticipated in the foreseeable future.
Business developments and outlook
- DN-TNF platform: The same licensed drug is marketed in development under different names: INB03 for cancer, XPro1595 for Alzheimer’s disease and treatment-resistant depression, Quellor for COVID-19 complications, and LIVNate for NASH. INB03’s Phase I oncology trial was completed; a Phase II combination study was planned, with treatment not expected before 2022. Management reported that an Alzheimer’s Phase I trial was enrolling and planned a randomized Phase II study in the second half of 2021, subject to regulatory and pandemic-related factors. A Phase II treatment-resistant depression study was also anticipated in the second half of 2021, supported by a potential NIH grant of up to $2.9 million. Quellor was being tested in a randomized, planned 366-patient trial of hospitalized COVID-19 patients, with a DSMB review after the first 100 patients. A NASH Phase II study was delayed, with enrollment not expected before 2022.
- INKmune: The company planned UK Phase I studies in relapsed/refractory ovarian cancer and high-risk MDS, targeting the third quarter of 2021, subject to pandemic conditions and adequate funding. The program is intended to prime patients’ natural killer cells.
- Manufacturing: Existing DN-TNF drug supply was expected to support development only until mid-2021. New batches were targeted for the fourth quarter of 2021, subject to manufacturing materials and process execution; a supply gap or delay could affect clinical programs.
- Commercial strategy: Management expects to rely on collaborations or partners to supplement its limited resources and potentially support commercialization. No partnering discussions were underway for the cited programs at the time of the filing. The company had five full-time employees.
These are management plans and expectations, not guaranteed milestones. The filing provides no revenue or earnings guidance and states that significant losses and operating cash use are expected to continue as development advances.
Risks, contingencies, and unusual matters
- The company has a history of losses, minimal revenue, and substantial continuing financing needs. Additional equity financing may dilute shareholders; debt or partnering could impose costs or require surrendering rights.
- All principal candidates remain investigational. Clinical efficacy, safety, regulatory approval, patient enrollment, reimbursement, and eventual commercialization are uncertain; early-stage results may not predict later outcomes.
- COVID-19 could delay clinical sites, enrollment, suppliers, or manufacturing. Drug supply was limited, and new production depended on vendor execution and materials availability.
- Key technologies are licensed. The INKmune license is from Immune Ventures, which is owned by company officers and directors; this creates a disclosed related-party conflict. The license also carries development milestones and potential termination or conversion to non-exclusive rights if obligations are not met. XPro1595 is licensed from Xencor and carries royalties and sublicensing payments.
- The company disclosed other related-party relationships, including office sublease and research arrangements. It reported no material litigation or off-balance-sheet arrangements.
- Foreign-currency fluctuations may affect results; the company did not hedge currency exposure. Healthcare pricing and reimbursement reform, competition, intellectual-property challenges, and regulatory requirements are additional risks.
- A shareholder rights plan adopted in December 2020 may dilute a person acquiring 20% or more of the common stock without board approval; it was scheduled to expire December 30, 2021 unless extended.
The independent auditor issued an unqualified opinion on the financial statements. Management concluded disclosure controls and internal control over financial reporting were effective as of year-end; the auditor did not provide an internal-control attestation, consistent with the company’s emerging-growth-company status.
Key facts for investors to verify
- Reconcile year-end cash and the stated 12-month runway with actual subsequent spending, the $28.4 million net ATM proceeds, and current cash needs.
- Track cash burn, R&D costs, and whether clinical and manufacturing plans remain funded without further dilutive financing.
- Confirm clinical-trial status, regulatory authorizations, enrollment, safety findings, and the evidentiary basis for preliminary Alzheimer’s biomarker claims.
- Check whether replacement DN-TNF supply was produced on schedule and whether existing inventory constrained trials.
- Review share-count growth, outstanding options and warrants, the remaining Lincoln Park facility, and the effect of the 2021 ATM issuance on dilution.
- Monitor INKmune license milestones and related-party governance, including terms and payments under material licenses and service arrangements.